1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : J U D G M E N T : United India Insurance Company Ltd. Versus Smt. Kanwari Devi & Others (S.B. Civil Misc. Appeal No.37/1997) DATE OF JUDGMENT : November 17, 2009. P R E S E N T HON’BLE MR. JUSTICE GOPAL KRISHAN VYAS ____________________________________ Mr. R.K. Mehta for the appellant. Mr. A.K. Khatri for the respondents. None is present for the employer. BY THE COURT : In this appeal, appellant United India Insurance Company is challenging the judgment and award dated 04.05.1996 passed by the Commissioner, Workmen's Compensation, Jodhpur in W.C. Case No.25/90 and prayed that judgment and award passed by the learned Commissioner may be set aside and claim petition filed by the respondent-claimants may be dismissed. In the alternative, it is submitted that the amount of compensation may be reduced and, in any case, the appellant may be exempted from the liability of payment of interest. During the course of arguments, learned counsel 2 for the appellant restricted his prayer to the extent of liability as to payment of interest and penalty imposed by the Commissioner, Workmen's Compensation. Learned counsel for the appellant submits that the insurance company is not liable to pay any penalty in view of the judgment of the Division Bench of this Court, reported in 2008 ACJ 1745, United India Insurance Co. Ltd. Vs. Sira Kanwar & Others, in which, while following the judgment of the Hon'ble Supreme Court in the case of Ved Prakash Garg Vs. Premi Devi & Others (1997) 8 SCC 1{= 1998 ACJ 1 (SC)}, it has been held by the Division Bench that insurance company cannot be held liable to indemnify the owner of the vehicle in respect of penalty payable on default of timely payment of compensation which does not fall within the ambit of legal liability. Para 12 of the said judgment reads as under : “In view thereof, it must be held that the insurance company cannot be held liable to indemnify the owner of the vehicle in respect of penalty payable on default of timely payment of compensation which does not fall within the ambit of 'legal liability' in view of the decision rendered in Ved Prakash's case, 1998 ACJ 1 (SC), by 3 the Supreme Court.” In my opinion, the controversy with regard to liability of penalty is set at rest now because in principle it is held that the liability of payment of penalty lies upon the owner/employer and not against the insurance company, as has been held in the aforesaid case. Therefore, the order of penalty against the appellant insurance company is illegal and deserves to be set aside. Accordingly, to the aforesaid extent, judgment under challenge is modified and, instead of insurance company, the employer is hereby held liable for payment of amount of penalty to the claimants. With regard to the interest part, the controversy now sets at rest in view of the judgment of the Supreme Court in the case of Kamla Chaturvedi Vs. National Insurance Co. & Others, reported in MACD 2009 (SC) 4 {=(2009) 1 SCC 487}, in which the apex Court has held that insurance company is liable to pay interest. In this view of the matter, the prayer of the appellant insurance company with regard to liability of payment of interest is rejected. In the facts and circumstances of the present case, the insurance 4 company is liable to pay the amount of interest which is not deposited till today. Consequently, ad interim stay order dated 15.01.1997 is vacated and it is ordered that the appellant insurance company shall pay the amount of interest to the claimants. This appeal is accordingly partly allowed to the extent of payment of penalty and it is held that claimant-respondents are entitled to recover the amount of penalty from employer respondent No.5 M/s Gulabdas Jagannath. (Gopal Krishan Vyas) J. Ojha, a.