IN THE HIGH COURT OF JUDICATURE AT PATNA M.A. No.557 of 2001 DIVISIONAL MANAGER, NATIONAL INSURANCE CO. LTD., MUZAFFARPUR DIVISION OFFICE, KRISHNA MARKET, MOTI JHEEL, MUZAFFARPUR .. APPELLANT Versus 1. SHOBHA DEVI, W/O LATE RAJ NARAYAN SINGH, AT + P.O. JAGDISHPUR, P.S. SAHEBGANJ, DISTRICT MUZAFFARPUR .. APPELLANT-RESPONDENT 2. BAL KRISHNA PRASAD @ THAKUR, S/O MANMOHAN PRASAD THAKUR, AT + P.O. RATANPUR, P.S. KAMTAUL, DISTRICT DARBHANGA .. (DRIVER OF THE TRUCK No. BR-06g-1154) **** /9/ 9 August 2010 Heard the learned counsel for the parties. 2. This Miscellaneous Appeal is directed against the order, dated 25.09.2001, passed by the Deputy Labour Commissioner – cum - Workmen’s Compensation Commissioner, Muzaffarpur, by which the petition to withdraw the order regarding the direction respondent no. 2 to deposit the penalty of Rs.50,000/- on the amount of grant with interest on payment, which has been passed by order, dated 08.09.2001. 3. The learned counsel for the appellant contended that it is the duty of the employer to make provisional payment to the extent of his liability regarding 2 the compensation claim accepted or directed by the Commissioner Workmen’s Compensation-cum-Deputy Labour Commissioner and contended that Section 4(A)(3) of the Workmen's Compensation Act, 1923, the duty has been caste on the employer to pay the compensation within thirty days or one month from the date it fall due and if the said amount is not paid by the employer then the employer is liable for penalty to the extent of fifty per cent and interest thereon and contends that if the employer has not paid, the liability can not be shifted on the insurance company for which relied upon decisions reported in 2003(3) P.L.J.R., 748 (The Divisional Manager, Oriental Insurance Co. Ltd Vrs. Naseema Khatoon & Anr.), (1997) 8 S.C.C., 1 (Ved Prakash Garg Viscera report. Premi Devi & Ors.) and (2006) 5 S.C.C., 192 (New India Insurance Co. Ltd. Vrs. Harshadbhai Amrutbhai Modhiya & Anr.). 4. The learned counsel for the opposite party, however, appeared and submitted that if the awarded amount would have been paid by the insurance company earlier within thirty days then the penalty would not have 3 been imposed. However, that is not question for consideration, but, the law cast a duty on employer to pay within time to ensure payment to the employee in time the factual matrix is established that for the accident the Tribunal passed order for payment of Rs.1,17,410/- as amount due to the employee. The said amount though have paid by the insurance company on 08.11.2001, however, the responsibility has been fixed on the employer to pay the amount within thirty days and it is the laches on the part of the employer and for that the insurance company submits that it is not liable. 5. However, in this regard, Section 4(A)(3) of the Workmen's Compensation Act, 1923, is relevant for consideration and, further, taking into consideration the decision reported in (1997) 8 C.C.C., 1 (supra) where it has been held that the penalty can not be fastened with the liability of the insurance company and the penalty can only be imposed on the employer as the primary liability remains with the employer and relied on a decision of the Hon’ble High Court setting aside the impugned or imposing penalty of insurance company held to be void. 4 6. In decision reported in (1997) 8 S.C.C., 1 (supra) while interpreting Section 4(a)(3) of the Workmen's Compensation Act, 1923, the Hon’ble Apex Court held “thus, even in the scheme of unamended Section 4-A(3) or as per the amended Section 4-A(3) read with clauses (a) and (b) thereof, it becomes clear that additional amount of compensation can be levied against the defaulting employer by way of penalty if it is shown that there is no justification for the delay on his part in making good the compensation amount to the claimant”. 7. However, the Hon’ble Supreme Court also took into consideration about the liability under Workmen's Compensation Act, 1923 and the learned counsel for the appellant has, further, relied upon a decision reported in (2006) 5 S.C.C., 192 (supra) where it has been held that however, a contract of insurance is entered into by and between the employer and the insurer, the insurer shall be liable to indemnify the employer. The insurer, however, unlike under the provisions of Motor Vehicles Act does not have a statutory liability. The Act does not contain a provision like Section 147 of the Motor Vehicles Act. 5 Section 17 of the Act does not provide for any restriction in the matter of contracting out by the employer vis-a-vis the insurer. The terms of a contract of insurance would depend upon the violation of the parties. Hence, the insurer is not liability to pay the interest for the mistake of the employer. 8. Hence, having regard to the facts and the submissions, I find and held that the appellant are not liable to pay the penalty imposed under Section 4(a)(3) of the Workmen's Compensation Act, 1923, and it is the employer who is liable to pay the amount of penalty imposed and, hence, the impugned order is set aside and the Appeal is allowed. Cp:2/S.A. ( Gopal Prasad, J. )