LexVED PRAKASH GARG ETC. versus PREMI DEVI AND ORS. ETC.
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A VED PRAKASH GARG ETC. v. PREM! DEVI AND ORS. ETC. SEPTEMBER 25, I 997 B [S.B. MAJMUDAR AND V.N. KHARE, JJ.] Motor Vehicles Act, 1988 : C Sections 147(1)(b) proviso (i) and 167-Read with Sections 3, 4-A and 19(1) of Workmen's Compensation Act, 1923-/nsurance coverage to employer-owner of motor vehicles-Employer's liability arising under the Workmen's Compensation Act on account of death or bodily injuries caused to the workmen as a result of motor accidents-Scope of insurance company's liability to pay compensation in case of death or bodily injuries to the D employees of the insured employer, while such employees are on duty on the motor vehicle-Application moved by the legal heirs for compensation before Commissioner for workmen's compensation exercising option under Section 167 of the Motor Vehicles Act-Held, insurance company will not only be liable to pay the principal amount of compensation but also interest thereon, E if any, imposed by the Commissioner on the insured employer under Sections 3 and 4-A of the Worksmen's Compensation Act-However, insurance company will not be liable to reimburse the additional amount of compensation .by way of penalty imposed by the Commissioner on the insured employer under Section 4-A(3)(b) of the Workmen's Compensation Act. F labour law : Workmen's Compensation Act, 1923-Section 4-A(2)~Enjoins the employer to make provisional payment of compensation to the extent of the liability accepted by him-Sub-section (2) not attracted where the employer totally disputes his liability, in which case it would be adjudicated by the G Commissioner. Section 4-A(3) (as amended by Act 30 of 1995)-Payment of interest under Clause (a) and penalty under Clause (b) are two distinct liabilities imposed on the employer under sub-section (3)-Position same under sub- ' H section (3) as stood prior to the amendment in '/ 995-Liability to pay 250 - VED PRAKASH v.PREMI DEVI 251 interest is part and parcel of the legal liability to pay compensation and it A gets automatically foisted upon the employer on his default in payment of compensation within one monthfrom the date it fell due, without any penalty- Period of one month contemplated under sub-section (3) will start running for the purpose of attracting interest, where provisional payment made under sub-section (2) from the date such provisional payment became due-Where B the employer does not accept his liability, the one month period will start from the date of order of Commissioner-In either case Commissioner can direct payment of interest from date of award or from the date of accident- However, while imposing penalty under Clause (b), justification for delay would be a good defence for the employer for meeting the claim for penalty. The appellants, owners of respective motor trucks had employed drivers c and cleaners and had entrusted their trucks, for driving to their respective drivers along with the cleaners attached to the trucks. The trucks met with accident as a result of which the drivers as well as the cleaners died. The trucks were insured with insurance companies. The insurance companies insured the employer owners of the insured motor vehicles against all D liabilities arising under the Workmen's Compensation Act for which statutory coverage is required under Section 95 of the Motor Vehicles Act, 1939 which is analogous to Section 147 of the present Motor Vehicles Act, 1988. The heirs of the deceased drivers and cleaners filed claims under the Workmen's Compensation Act before the Commissioner for Workmen's Compensation by exercising options available under Section 167 of the Motor E Vehicles Act. These applications were in substitution and in place of otherwise legally permissible claims before the Motor Accidents Tribunal functioning under the Motor Vehicles Act. The question which arose for consideration was: "where an employee receives a personal injury in a motor accident arising out ofand in the course of his employment while working on the motor vehicles F of the employers, whether the insurance company, which has insured the employer owner of the vehicles against third party accident claim under Motor Vehicles Act, 1988 and against claim for compensation arising out of proceedings under the Workmen's Compensation Act, 1923 in connection with such motor accident, is liable to meet the awards of Commissioner G imposing penalty and interest against the insure
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