1 F.A..No.424 of 1994 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD. FIRST APPEAL NO.424 OF 1994 1. Nasira Khalil Shaikh, age 27, Occ. Household work, 2. Reshma Khalil Shaikh, age 12, Occ. Nil 3. Yasmin Khalil Shaikh, age 16, Occ. Nil 4. Jabina Khalil Shaikh, age 8 yr Occ. Nil 5. Tanvir Khalil Shaikh, age 6 yr Occ. Nil 6. Asma Khalil Shaikh, age 4 yr Occ. Nil Nos.2 to 6 minors representative through their natural guardian mother applicant no.1 All r/o Beldar Lane, Ahmednagar ..APPELLANTS (Original Applicants) VERSUS 1. Shaikh Ayaz Abdul r/o 107, Laxminagar, Housing Society Aurangabad Road, Ahmednagar 2. The Oriental Insurance Co. Ltd., Summons to be served on the Branch Manager, II Floor, Kisan Kranti, Building Market Yard, Station Road, Ahmednagar ..RESPONDENTS (Original Respondents) 2 F.A..No.424 of 1994 Mr S.D. Pokharkar, Advocate for the appellants; Mr Anil A. Joshi, Advocate for respondent no.2 CORAM : MRS MRIDULA BHATKAR, J. DATE : 17th August, 2011 ORAL JUDGMENT : Appellant no.1 is a wife and 2 to 6 are the children of the deceased who died in a road accident. By judgment dated 23.3.1990, the Commissioner for Workmen's Compensation and Judge, Labour Court, Ahmednagar has passed the order that respondents no.1 & 2 are liable to pay amount of Rs.80,664/- to the applicants + penalty of Rs.500/- jointly and severally, with simple interest at the rate of 6% per annum from 18.5.1980 till the realisation of the entire amount of dues. Being aggrieved with the order passed by the Commissioner in respect of the amount of compensation, this appeal is preferred. 2. Learned Counsel for the appellants submitted that he wanted to confine his challenge only to the order of penalty passed by the Commissioner. Thus, the issue of determination is :- Whether the appellants are entitled to the amount of penalty not less than 25% and or to the maximum 50%. 3 F.A..No.424 of 1994 3. Learned Counsel has submitted that his submissions are based on paragraph 15 of the judgment of the Commissioner wherein the Commissioner has held that both owner and the insurance company had knowledge of the accident of the husband of appellant no.1 in motor accident on 17.4.1988. It is submitted that though respondent no.1 employer and respondent no.2 insurance company had full knowledge of the accident, they did not deposit any amount of the compensation within one month from the date of the accident before the Commissioner and, therefore, the Commissioner has rightly imposed penalty but the amount of penalty is too meager. Learned Counsel for the appellants on hearing the submissions of the learned Counsel appearing for the insurance company in reply has submitted that the insurance company cannot throw away its responsibility to pay the penalty. The Commissioner has held the insurance company and respondent no.1 jointly and severally responsible to pay the amount of the compensation and also to pay the amount of penalty. When the insurance company has not filed any cross objections, the question of diverting penalty to the owner will not arise. In support of his submissions, the learned Counsel for the appellants has filed the written arguments which are taken on record and marked as Exhibit 1. 4. Respondent no.1 employer though served and has filed appearance through the Counsel, none present. Hence appeal to proceed against respondent no.1 ex parte. 4 F.A..No.424 of 1994 5. Learned Counsel appearing for the insurance company, on the point of penalty, has submitted that the insurance company cannot be held liable to pay the penalty. He submitted that the amount of the penalty awarded by the Commissioner in the present matter was only Rs. 500/- and so, the insurance company did not challenge the same and has deposited the said amount of penalty along with the entire amount of the compensation awarded by the Commissioner. He submitted that under section 4-A (3) of the Workmen's Compensation Act, 1923 insurance company cannot be held liable for payment of penalty. In support of his submission he relied on Ved Prakash Garg vs. Premi Devi, reported in 1997 (8) (SC) 1 and L.R. Ferror Alloys Limited vs. Mahavir Mahato, reported in 2002 (9) SCC 450. 6. The Commissioner for Workmen's Compensation and Judge of the Labour Court has saddled respondents no.1 & 2 both jointly and severally for the payment of compensation and also the penalty. Respondent no.2 has paid the amount of the compensation and also penalty of Rs.500/- as it was a joint liability imposed by the Commissioner. It is true that the penalty of Rs.500/- is not challenged by respondent no.2 insurance company by filing cross objections. Therefore, so far as the amount of the penalty of Rs.500/- which is awarded by the Commissioner is concerned, the insurance company has no claim and the said order cannot be disturbed by this Court. The stand of the insurance company 5 F.A..No.424 of 1994 that as the amount of Rs.500/- was meager, respondent no.2 opted to pay off the said amount and not to come in the appeal is found reasonable. It appears that respondent no.2 has adopted a practical view by paying the amount of the penalty along with the compensation amount and satisfied the claim. The submission of the learned Counsel for the appellants that once the insurance company is held liable to pay penalty, then the company cannot be absolved from paying penalty if the amount is increased in appeal, is not legal and hence not convincing. This Court has power in appeal under Order XLI Rule 33 of the Code of Civil Procedure to pass the orders which are necessary to meet the ends of justice. 7. As per section 4-A of the said Act, the provision of the penalty is made with a view to compel the owner or the employer to pay the amount of the compensation, so that the workman should get the timely financial help, therefore, the justification of delay on his part in making good the compensation amount to the claimant does not stand. I have gone through the rulings of Ved Prakash Garg vs. Premi Devi and L.R. Ferror Alloys Ltd. vs. Mahavir Mahato (cited supra). In both the cases, law in respect of payment of penalty under section 4-A (3) of the said Act is discussed at length. In L R Ferror Alloys Ltd., Supreme Court has relied and referred Ved Prakash Garg vs. Premi Devi. I place the reliance on both the rulings. It is held in the said case that :- 6 F.A..No.424 of 1994 "In Ved Prakash Garg v. Premi Devi and ors. 1997 (8) SCC 1 : 1998-I-LLJ-363, this Court 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 amount within one month. Therefore, claim for compensation along with interest will have to be made good jointly by the Insurance Company with the insured employer. But, so far as the penalty imposed on the insured employer is on account of his personal fault 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 penalty. " Learned Counsel for the appellants made submissions that these rulings are not applicable and he submitted that the case law cited by him and which is referred in paragraph 13 of the judgment of the Commissioner, i.e. Oriental Fire and General Insurance Co. Ltd. vs. Nani Bala Devi, reported in 1987 ACJ page 655 is applicable to the present matter. However, learned Counsel, though the opportunity was given, could not produce the said ruling and could not satisfy this Court on the point of fixing liability of the payment of the penalty on the insurance company. 8. The amount of penalty granted in the present case was of Rs. 500/-. In paragraph 15, as pointed out by the learned Counsel of the appellants, owner of the vehicle had received the information of the death of the husband of appellant no.1 on the same day of the accident 7 F.A..No.424 of 1994 and he informed the same to appellant no.2. Moreover, the police case was also registered. The appellant no.1 is a widow and at the relevant time was having five minor children. So, considering the casualty and the loss suffered and the knowledge the respondent no.1 had about the accident, respondent no.1 ought to have offered amount of compensation within one month, which he had not offered. As per section 4-A of the Act penalty may be granted upto 50% of the compensation amount and section does not say that it should be minimum 25%. The penalty of an amount of Rs.500/- is meager and increased to Rs.5,000/- and the same amount is to be deposited before the Commissioner under the Workmen's Compensation Act. It is directed that amount is increased to Rs.5,000/- and respondent no.1 is held liable to pay the said amount of Rs.5,000/- with 6% interest from the date of filing of appeal. Thus, appeal is partly allowed. ( MRS MRIDULA BHATKAR, J.) amj/fa424.94