FAO No. 480 of 1992 (1) In the High Court of Punjab & Haryana at Chandigarh FAO No. 480 of 1992 (O&M) Date of decision : 31.1.2011 National Insurance Company Limited ..... Appellant vs Master Sandeep Kumar and others .... Respondents Coram: Hon'ble Mr. Justice Rajesh Bindal Present: Mr. Inderjit Sharma, Advocate, for the appellants. Ms. Manisha Setia, Advocate for Mr. Ashit Malik, Advocate, for respondent nos. 1 to 4. Rajesh Bindal J. The present appeal has been filed by the Insurance Company against the order dated 7.8.1991, passed by the Commissioner under the Workman's Compensation Act, Karnal (for short, 'the Commissioner'). Briefly, the facts of the case are that Raj Pal, who was employed with respondent no. 5, as driver, died during the course of his employment. The claim petition filed by his wife and children under the Employees Compensation Act, 1923 (for short, 'the Act'), was allowed along with interest @ 12% per annum and penalty of 50% of the amount of compensation. It is this order which is impugned by the appellant Insurance company in appeal before this court. The first contention raised by learned counsel for the appellant is regarding levy of penalty on account of delayed payment. Relying upon judgment of Hon'ble the Supreme Court in Ved Prakash Garg vs Premi Devi and others (1997) 8 Supreme Court Cases 1, it was submitted that the penalty is the liability of the employer and not of the Insurance company as he was liable to deposit the amount of compensation payable to the family of the deceased within one month in terms of the provisions of the Act. Learned counsel for the appellant further submitted that the Commissioner has wrongly burdened the appellant company by imposing interest on the amount of compensation. FAO No. 480 of 1992 (2) Heard learned counsel for the parties and perused the paper- book. At the time of hearing, learned counsel for the appellant has not been able to point out any clause in terms of the policy which granted exemption to the appellant from liability from payment of interest on the amount of compensation. Reference can be made to judgment of Hon'ble the Supreme Court in Kamla Chaturvedi vs National Isurance Company Limited and others 2009 ACJ 115, wherein it was held that the Insurance company cannot avoid its liability to pay interest on the ground that there is no contract entered into by it with the insured for payment of interest as there is no exception stipulated in the policy for payment of interest by insurance company. The issue regarding entitlement of interest to the claimants on the amount of compensation, has also been gone into by this court in New India Assurance Company Limited vs Manphool Singh and others (2008- 1) PLR 706, wherein following judgment of Hon'ble the Supreme Court in Pratap Narain Singh Deo vs Srinivas Sabata (1976) 1 SCC 289, it has been opined that the claimants shall be entitled to interest not from the date of order/award of the Commissioner, but on expiry of one month from the date of accident. Accordingly, the claim made by the appellant to that extent is rejected. As regards the issue of levy of penalty is concerned, Hon'ble the Supreme Court in Ved Prakash Garg vs Premi Devi and others (1997) 8 Supreme Court Cases 1, held that insurance company cannot be made liable to reimburse the penalty imposed upon the employer. The relevant extract from the judgment is as under:- “19. As a result of the aforesaid discussion it must be held that the question posed for our consideration must be answered partly in the affirmative and partly in the negative. In other words the insurance company will be liable to meet the claim for compensation along with interest as imposed on the insured employer the Workmen's Commissioner under the Compensation Act FAO No. 480 of 1992 (3) on the conjoint operation of Section 3 and Section 4A sub-section (3) (a) of the Compensation Act. So far as additional amount of compensation by way of penalty imposed on the insured employer by the Workmen's Commissioner under Section 4-A (3) (b) is concerned, however, the insurance company would not remain liable to reimburse the said claim and it would be the liability of the insured employer alone.” Accordingly following the principles laid down in Ved Prakash Garg's case (supra), the levy of penalty on the insurance company is set aside. The appeal stands disposed of in the above terms. 31.1.2011 (Rajesh Bindal) vs. Judge