HIGH COURT OF CHHATTISGARH AT BILASPUR APPELLANT Non-applicant RESPONDENT APPLICANT RESPONDENT NON-APPLICANT M.A.C. No. 825 OF 2009 M/s Rupi Venders, Dealer of Reliance petroleum Ltd. through partner Baljeet Singh Walia, aged 30 years, in front of Asiatic Oxygen, Ward no. 12, GE Road, Kumhari P.S. Kumhari, Distt. Durg Versus 2. Smt. Suloehana Deshmukh, aged about 51 years, W/o Shri Motilal Deshmukh Both R/o Purani Basti, Kohka, PS. Supela, Tah. And distt. Durg CG 3. United India Insurance Co. Ltd. through Branch Manager, Amar Complex, Jeevan Bima marg, Pandri P.S. and Distt. Raipur SB:- Hon. Shri N.K. Agarwal, J. PRESENT:- Shri Amrito Das, Adv for the appellant Shri Dashrath Gupta, Adv. for the respondent no. 2 ORAL ORDER (21-4-2010) 1. This is employer's appeal under Section 30 of the Workmen's Compensation Act, 1923 against the award dated 23-10-2008 passed in case No. 125/WC Act Fatal/2006 by the Commissioner for Workmen Compensation, Labour Court, Durg (briefly 'the Act^. 2. The only question raised by Shri Das in the instant appeal is that learned Commissioner has erred in fastening the liability of payment of penalty awarded upon the employer. According to him, the Insurance Company/ respondent No 3 ought to have been held liable for its payment in view of the fact that such risk has not been excluded under the policy of insurance. 3. On the other hand, Shri Gupta, learned counsel appearing for respondent No. 3 supported the award and submitted that it is settled law, the Insurance Company cannot be held liable for payment of award of penalty and learned 4. 5. 7. Tribunal has rightly fastened its UabUtty^^ u^ appellant. I have heard learned counsel for the parties. The question arises for determination of this court is whether the Insiirance Company can be held liable for payment of award of penalty under the Workmen's Compensation Act. Supreme Court in case of Ved Prakash Garg -v- Prenii Devi 1 has observed in para 14 as under:- "But similar consequence will not follow in case where additional arnount is added to the principal amount of compensation by way pf penalty to be levied on the employer under circumstances contemplated by Section 4-A (3)(b) of the Compensation Act after issuing show cause notice to the employer concerned who will have reasonable opportunity to show cause why on account of some justification on his part for the delay in payment of the compensation amount he is not liable for this penalty. However, if ultimately, the Commissioner after giving reasonable opportunity to the employer to show cause takes fhe view that there is no justification for such delay on the part of the insured employer and because of his unjustified delay and due to his own personal fault he is held responsible for the delay, then the penalty would get imposed on him. That would add a further sum up to 50% on the principal amount by way of pehalty to be made good by the defaulting employer. So far as this penalty amount is concerned it cannot be said that it automatically flows from the main liability incurred by the insured employer under the Workmen's compensation Act. To that extent such penalty amount as imposed upon the insured employer would get out of the sweep of the term "liability incurred" by the insured employer as contemplated by the proviso to Section 147(l)(b) of the Motor Vehicles Act as well as by the terms of the insiu-ance policy found in provisos (b) and (c) to sub-section (1) of Sectipn II thereof." The Supreme Court reiterated the same view in the case of L.R. Ferro AUoys Ltd. -v- Mahavir Mahto and another 2 and observed in para 5 as under:- "5. The only contention put forth before us is that the entire liability including penalty and interest will have to be reimbursed by the insurance company and this aspect has not been examined by the learned Single Judge in the High Court and needs examination at our ' (1997) 8 SCC 1 2 (2002)9.SCC 450 ^^fc ^Y' 8. 9. 10, hands. In Ved Prakash Garg v. Prerrd Dev& this Cou^ after examining the entire scheme of the Act held that payment of interest and penalty are two distinct liabilities arising under the Act, while liability to pay interest is part and parcel of legal liability to pay compensation upon default of payment of that ainount within one month. Therefore, claim for compensation along with interest will have to be made good jointly by the insurance corapany with the insured employer. But, so far as the penalty iraposed on the insured employer is on account of his personal fault the insurance company cannot be made liable to reimburse penalty imposed on the employer. Hence the compensation with interest is payable by the insurance company but not perialty. Following the said decision and for the reasons stated therein, we modify the order niade by the High Court to that extent. The appeal is allowed in part accordingly." It is also not the case of employer/appellant that the employer had entered into agreement with the Insurance Company and by virtue of such special contract the Insurance Company had agreed to indemnify the appellant/employer against the liability of penalty. In the absence of agreement, the liability of payraent of penalty cannot be fastened upon the Insurance Company and learned Commissioner has rightly fastened the liability of payment of penalty upon the appellant/employer. For the foregoing, the appeal being devoid of substance, deserves to be and is hereby dismissed. No order as to costs. Sd/- N.K. Agrawal Judge