IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.747 of 1997 Date of decision:30.06.2010 New India Assurance Company Limited ....Appellant versus Shish Pal and another ...Respondents II. FAO No.751 of 1997 The New India Assurance Company Limited ....Appellant versus Pirthi Singh and another ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. Ashwani Talwar, Advocate, for the appellant in FAO No.747 of 1997. Mr. L.M. Suri, Senior Advocate, with Mr. Neeraj Khanna, Advocate, for the appellant in FAO No.751 of 1997 None for the respondents. ---- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. (Oral) 1. Both the appeals address the same point of law and hence taken up together with the consent of the counsel. I. FAO No.747 of 1997 2. The issue raised in appeal is a liability of the Insurance Company for payment of interest and penalty by the workman as ordered FAO No.747 of 1997 - 2 - by the Workmen Compensation Commissioner. In a claim by the workman for compensation for injury suffered, the Commissioner had assessed the compensation to be Rs.52947.50 and directed the amount to be paid with interest from 14.09.1992 the date of accident to 04.11.1996 the date when the award was passed with 6% interest. It also assessed the penalty at 25% and directed the interest and penalty to be paid by the Insurance Company. 2. The learned counsel relied on a judgment of the Hon'ble Supreme Court in Ved Parkash Garg Versus Premi Devi and others- (1997) 8 SCC 1 that dealt with the issue of payment of interest and penalty. The liability itself cannot commence from the date of the accident when there had been no default by the Insurance Company. The contention of the Insurance Company merits partial acceptance in the light of judgment of the Hon'ble Supreme Court, referred to above, as regards the award as regard penalty only and penalty if at all would be directed to be paid only by the employer. The award by the Commissioner in so far as the directions obtained to make the payment of penalty is set aside. The owner and insurer knew about the accident and the non-satisfaction of the claim immediately after the accident was unjustified. The liability for interest ought to be fastened both against the employer and the insurer. Penalty could not have been imposed against the employer and insurer without prior notice by the Commissioner. The award stands modified and the appeal is allowed to the extent excluding liability for penalty only. FAO No.747 of 1997 - 3 - II. FAO No.751 of 1997 3. The appeal in FAO No.751 of 1997 addresses the same issue of the liability of the Insurance Company for interest and penalty and the distinction of the fact is that the owner, in this case, had actually denied the employment itself but still the owner was made liable subsequently after evidence. The liability for the Insurance Company could not therefore exist before the determination of such a liability through the award. The direction for payment of interest and penalty against the Insurance Company is, therefore, untenable. The award of the Commissioner in so far as it directs interest and penalty also against the Insurance Company, is set aside. The claim would survive for the workman among the above two heads only in respect of interest against the employer. The appeal is allowed to the above extent. (K.KANNAN) JUDGE 30.06.2010 sanjeev