A.K. Patnaik, J.
1. This is an appeal under Section 30(1)(aa) of the Workmen's Compensation Act, 1923 filed by M/s United India Insurance Company Ltd. against the order dated June 19, 1989 of the Commissioner, Workmen's Compensation, Kamrup awarding interest and penalty under Section 4A of the said Act.
2. The brief facts are that on July 24, 1986 a Truck bearing No. AMZ 5876 met with an accident at Bhangagarh and one Shri Sushanta Kumar Dey who was employed in the said Truck as a Handy-man died in the said accident. The father of Late Sushanta Kumar Dey, respondent No. 3 filed Workmen Compensation case before the Commissioner of Workmen's Compensation, Kamrup for compensation of Rs. 80,000/- against the Respondent No. 3 who was the owner of the Truck and the employer of Sushanta Kumar Dey and the appellant, who was the insurer of the Truck. Written statements were filed by the Respondent No. 3 and the appellant and on the said pleadings of the party 7 issues were framed by the Workmen's Compensation Commissioner,
Kamrup. By the impugned judgment dated June 19, 1989 the Commissioner, Workmen's Compensation, Kamrup held that the issues were not disputed and awarded an amount of Rs. 61,586/- as compensation, an amount of Rs. 10,469.62 as interest at the rate of six per cent per annum on the compensation and an amount of Rs. 15,396.50 as penalty at the rate of twenty-five per cent of the compensation to be paid by the appellant to the claimant within 7 days from the date of the order. In this appeal, the appellant has challenged only the interest and penalty amounts of Rs. 10,469.62 and Rs. 15,396.50 respectively. On September 15, 1989, this Court while admitting the appeal, rejected the prayer of the appellant for stay of the payment of interest, but allowed the prayer for stay of the penalty and directed that the penalty amount shall remain in deposit with the Commissioner, Workmen's Compensation. Kamrup, who shall keep in Bank so that interest may accrue and the amount with interest shall be paid to the party succeeding in this appeal.
3. At the hearing of the appeal, Mr. Barkataki,
learned counsel for the appellant submitted that under the policy of insurance, the appellant as the insurer was liable only for the compensation payable under Section 3 of the Workmen's Compensation Act and not for the interest and penalty awarded under Section 4A of the Act, for the employer's default to pay the compensation to the claimant within the stipulated time. In support of this submission Mr. Barkataki relied on a judgment of a Division Bench of this Court in the case of United India Insurance Company v. State of Assam 1992 2 GLR 260 in which it has been held that the liability of the insurer will depend on the terms of the insurance policy. In the appeal before this Court, a carbon copy of the certificate of insurance in respect of the Truck AMZ 5876 for the period January 2, 1986 to January 1, 1987 was produced by the appellant to show that the liability of the appellant did not extend to penalty and interest. He further stated that in the present case, the appellant was not informed of the accident by the insurer and the appellant came to know of the accident only on January 11, 1988 when it received a notice of the Workmen's Compensation case from the Commissioner of Workmen's Compensation, Kamrup, He accordingly argued that the impugned judgment insofar as it makes the appellant liable for the interest and penalty of Rs. 10,469.62 and Rs. 15,396.50 should be set aside or modified by this Court.
4. In reply to the aforesaid submissions, Mr. Jain, learned counsel for the Respondent No. 2 claimant, contended that no specific plea was raised by the appellant before the Commissioner, Workmen's Compensation that its liability was limited to the compensation only as per the terms of the insurance policy and that the policy of insurance was also not produced by the appellant before the Commissioner of Workmen's Compensation to show that its liability was restricted. At this appellate stage, only a copy of the certificate of insurance with standard clauses have been filed with no one taking the responsibility that the copy
of certificate of insurance was a genuine copy of the original. Mr. Jain also cited the decision of the Madhya Pradesh High Court in Omprakash v. Ramkali 1987 (2) ACJ 803 (MP) and the decision of the Orissa High Court in Khirod v. Commissioner 1992 (1) TAC 597, Orissa in support of his submission that the liability of the insurer is just limited to the principal amount of compensation but extends to the interest and penalty payable under the Act. He also relied on the decisions of this Court in the case of Oriental Insurance Company v. Nanibala Dev, 1987 1 GLR 271 and in the case of United Insurance Company v. Amitabha Dey, 1993 1 GLR 149. Mr. Jain further stated that pursuant to the stay order dated September 15, 1989 of this Court in this appeal, the appellant deposited the penalty amount by a cheque before the Commissioner of Workmen's Compensation, Kamrup but the Commissioner did not deposit the amount in bank as a result of which the cheque was not encashed and the appellant continued to enjoy the benefit of the amount covered by the cheque. Mr. Jain, therefore, submitted that the appeal should be dismissed and the appellant should be directed to pay the penalty amount with interest to the claimant.
5. In deciding this matter I will have to be guided by decisions of this Court on the point as to whether an insurer was liable for interest and penalty awarded under Section 4A of the Workmen's Compensation Act, 1923 in favour of a claimant. In the case of Oriental Insurance Co. v. Nanibala Dey, (Supra) Hansaria J, as he then was, did not decide the question as to whether the insurer was liable for penalty and interest awarded by the Commissioner under Section 4A of the Workmen's Compensation Act, 1923 but held that an award for compensation under the Workmen's Compensation Act, 1923 in a case of a motor accident may be made against the employer as well as the insurer of the vehicle involved in the accident. But in the case of United India Insurance Co. Ltd. v. State of Assam (Supra) the question
as to whether an insurer was liable for interest and penalty under Section 4A of the Workmen's Compensation Act, 1923 arose for determination and a Division Bench of this Court taking support from the decision of the Karnataka High Court in the case of Oriental Insurance Co. Ltd v. Jevaramma (1994-III-LLJ-(Suppl.)-1036) held:
'A reading of the sub-section (3) of Section 4A indicates that penalty or interest is to be awarded when the employer is in default in paying compensation due under the Act within one month from the date it fell due. In other words, interest and penalty are payable for the breach of duty to pay the compensation within the statutory period. Therefore, the penalty or interest under Section 4A is not an integral part of the compensation. This being the situation the question, whether the insurer is to indemnify the employer (insured) against the liability to pay penalty and/or interest depends upon the terms of the policy. Under the policy, the insurance company shall indemnify the insured against all the sums which the insured shall become legally liable to pay in respect of death or bodily injury to any person arising out of the use of motor.vehicle. Therefore, the liability to be indemnified must be in respect of death or bodily injury arising out of the use of the motor vehicle, and not default of the employer in paying the compensation. In the above view of the matter, the insurance company cannot be saddled with liability to pay interest and penalty.'
In the aforesaid decision relied on by Mr. Barkataki, learned counsel for the appellant, therefore, this Court took the view that the liability of the insurer to pay penalty or interest under the Workmen's Compensation Act, 1923 would depend on the terms of the policy in a given case, but as per the terms of the insurance policy in that particular case, the Court was of the opinion that the insurer was not liable to pay interest and penalty.
6. Although objections were raised by Mr. Jain, learned counsel for the Respondent No. 2-claimant, that the appellant should not be allowed to produce the policy of insurance at this appellate stage and that nobody has taken responsibility of the genuineness of the copy of the certificate of issuance now produced by the appellant, since the liability of the insurer for interest and penalty could only be decided on the terms and conditions of the policy of insurance as per the aforesaid decision in the case of United India Insurance Co. v. State of Assam, (supra) this Court, allowed Mr. Barkataki, learned counsel for the appellant to file the policy of insurance before this Court by order dated August 18, 1994 and pursuant to the said order, Mr. Barkataki has filed a carbon copy of the original certificate of insurance along with standard clauses of the policy issued by the appellant in respect of the Truck AMZ 5876 for the period January 2, 1986 to January 1, 1987 and there is good reason for me to doubt the genuineness of the said document. The relevant terms of the said certificate of insurance and the standard clauses of the policy are quoted herein below :-
Limits of Liability - Limit of the amount of the Company's liability under Section 11-1(i) in respect of any one accident. Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. Limits of the amount of the Company's liability under Section II-1(ii) in respect of any one claim or series of claims arising out of one event Rs. 50,000/-.
Section II- Liability to third parties -
1. Subject to the Limits of Liability the Company will indemnify the insured against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of-
(i) Death or bodily injury to any person caused by or arising out of the use including the load-
ing and/or unloading of the Motor Vehicle.
(ii) Damage to property caused by the use including the loading and/or unloading of the Motor Vehicle. Provided always that :-
(a) The Company shall not be liable in respect of death, injury or damage caused by or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the Motor Vehicle for loading thereon or the taking away of the load from the Motor Vehicle after unloading therefrom.
(b) Except so far as is necessary to meet the requirements of Section 92A and 95 of the Motor Vehicles Act, 1939, the Company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment.
(c) Except so far as is necessary to meet the requirements of Section 92A and Section 95 of the Motor Vehicles Act, 1939 in relation to the liability under Workmen's Compensation Act 1923, the Company shall not be liable in respect of death of/or bodily injury to any person other than a passenger carried by reason of or in pursuance of a contract of employment being carried in or upon of entering or mounting or alighting from the Motor Vehicle at the time of the occurrence of the event out of which any claim arises.
(d) The Company shall not be liable in respect of damage to property belonging to or held insist by or in the custody or control of the insured of a Member of the insured's household or being conveyed by the Motor Vehicle.
(e) The Company shall not be liable in respect of damage to any bridge and/or weigh bridge and /or viaduct and/or to any road and/or anything beneath by vibration or by the weight of the Motor Vehicle and/or load carried by the Motor Vehicle.
(f) The Company shall not be liable in respect of damage to property caused by sparks or ashes from the Motor Vehicle or caused by or arising out of the explosion of the boiler of the Motor Vehicle.
(g) The Company shall not be liable in respect of death or bodily injury caused by or arising out of the explosion of the boiler of the Motor Vehicle unless such death or injury is caused-by or arising out of the use of the vehicle in a public place in India within the meaning of the Motor Vehicles Act, 1939'
Thus under the aforesaid terms of the certificate of insurance and the standard clauses of the policy of insurance produced by the appellant and in particular the proviso(c) of Section 11 (1), the insurer is liable to meet the requirements of Sections 92-A and 95 of the Motor Vehicles Act, 1939 in relation to the liability under the Workmen's Compensation Act, 1923. Section 92-A of the Motor Vehicles Act, 1939 deals with no fault liability and is not relevant to the present case. Section 95 of the said Act which specifies the requirements of the policy and the limits of liability is quoted herein below :-
95. Requirements of policies and limits of liability (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which -
(a) is issued by a person who is an authorised insurer or by a co-operative society allowed under Section 108 to transact the business of an insurer, and
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) -
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place ;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;
Provided that a policy shall not be required -
(i) to cover liability in respect of the death, arising out of and in the course of his employment of the employee of a person injured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee-
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle, engaged as aconductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods vehicle, being carried in the vehicle, or
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or
(iii) to cover any contractual liability.
(2) Subject to the proviso to Sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely-
(a) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen's Compensation Act, 1923 (8 of
1923), in respect of the death of. or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle;
(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of contract of employment-
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all ;
(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;
(c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred ;
(d) irrespective of the class of the vehicle, a limit of rupees (six thousand) in all in respect of damage to any property of a third party.
(4) A policy shall be of no effect for the purposes of this Chapter unless and until that (sic) is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4.A) Where a cover note issued by the insurer under the provisions of this Chapter or rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period, of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates had been registered or to such other authority as the State Government prescribe.
(5) Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this Section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person orthose classes of persons.
A plain reading of Section 95 of the Motor Vehicle Act, 1939 as well as the aforesaid proviso (c) of Section 11(1) of the Policy of insurance would show that the insurer has agreed to indemnify the insured in relation to the liability under the Workmen's Compensation Act, 1923 in respect of death of an employee of the person insured by the policy and there is nothing in the aforesaid standard clauses of the insurance policy or Section 95 of the Motor Vehicles Act, 1939 to show that the insurer has agreed to indemnify the person insured only in relation to compensation payable under Section 3 of the Workmen's Compensation Act, 1923 and not in relation to other liabilities under the Workmen's Compensation Act, 1923 such as penalty and interest in respect of death of an employee of the person insured. In my view, therefore, the terms and conditions of the policy of the insurance in the present case did not limit the liability of the insurer to that for compensation under Section 3 of the Workmen's Compensation Act, 1923 as submitted by Mr Barkataki, learned counsel for the appellant.
7. In a particular case, however, it is open for the insurer to plead and establish on facts that the compensation could not be paid to the claimant within the due date for the fault of the employer and hence the liability of penalty and interest under Section 4A of the said Act should not be fixed on the insurer but on the employer in which event the Commissioner, Workmen's Compensation will have to decide as to whether the payment was not made on the due date on account of the fault of the employer or that of the insurance company and fix or apportion the liability for penalty and interest on the party according to his fault. But in the present case, the appellant has not taken any
plea in its written statement tiled before the Commissioner of Workmen's Compensation, Kamrup that the compensation could not be paid to the claimant within the due date as the insurer did not intimate the appellant about the accident and that the appellant came to know of the accident only on January 11, 1988 when it received the notice of the compensation case from the Commissioner, Workmen's Compensation. Kamrup and instead has taken a stand that the claim petition was not maintainable under law and under the policy of the insurance its liability, if any. is limited to the extent provided under the Workmen's Compensation Act, 1923. On the other hand, the employer who was insured by the appellant has specifically pleaded in paragraph 6 of the written statement that he intimated the fact of the death of his employee to the appellant on July 31, 1986 and since then the claim is pending before the appellant. The appellant cannot at this appellate stage raise this factual plea that it did not have any knowledge of the accident until it received notice of the claim from the Commissioner, Workmen's Compensation. Kamrup on January 11, 1988. Even after January 11, 1988 the appellant did not promptly offer to pay any compensation amount to the Respondent No. 2 claimant and it is only when compensation, penalty and interest were awarded by the impugned order on June 19, 1989 that the appellant deposited the compensation amount of Rs. 61,586/-by cheque No. 903232 dated June 28, 1989 before the Commissioner, Workmen's Compensation, Kamrup. On these facts, I am inclined to hold that the appellant itself was at fault for not paying the compensation under Section 3 of the Workmen's Compensation Act, 1923 to the claimant within the due date and was liable to indemnify the employer under the policy of insurance not only the compensation awarded under Section 3 of the Act but also the interest and penalty determined by the Commissioner, Workmen's Compensation, Kamrup under Section 4A of the Act for the delay in payment of the Compensation to the
claimant.
8. In the result, therefore, this appeal fails and is dismissed and the Commissioner of Workmen's Compensation, Kamrup, Guwahati is directed to
disburse the amount of penally and the interest on such penally amount to the Respondent No. 2-claimant as per the order dated September 15, 1989 of this Court.