(1.) ONE Ram Niwas Rathore, husband of respondent No. 1 and father of respondent No. 2 and son of respondent No. 3, was employed as a driver on truck No. MKH 7948. On October 10, 1990 he met with an accident and lost his life Respondent Nos. 1 to 3 moved a petition under the Workmens Compensation Act, 1923, which was allowed and a sum of Rs. 86,764/- together with 50 per cent penalty and interest at the rate of 8 per cent was awarded by order dated November 17, 1992 passed by the Commissioner, Workmens Compensation No. 1 Gwalior, against the insurance company. Feeling aggrieved the insurance company has preferred this appeal under the Workmens Compensation Act.

(2.) THE learned counsel for the appellant raised three submissions before me. Firstly, he argued that under Section 4-A (3) of the Workmens Compensation Act the appellant is not covered within the meaning of employer and as such he cannot be fastened with the liability to pay compensation and penalty provided in this clause. The next argument of the learned counsel is that the rate of interest provided for compensation under the said clause is also not payable. Lastly, he contended that the amount calculated 1 by the learned Commissioner is not correct. According to the learned counsel, the correct amount which could have been awarded was Rs. 85,428/- and not Rs. 86,764/ -. The learned counsel for the respondents contended that the liability of the insurance company flows from the contract entered into by the appellant on the one hand and the employer on the other, A perusal of condition No. 17 shows that the insurance company is liable for all legal liability of the employer. Consequently, the first contention of the learned counsel for the appellant is not correct. He relied on Om Parkash v. Ramkali, 1987 ACJ 803 (MP). As regards the second contention relating to interest, he also relied on the said authority. Regarding the last contention about calculation, the learned counsel frankly conceded that there is a mistake in calculation of the amount and accepted the amount as contended by the learned counsel for the appellant. In view of the submissions made before me by the learned counsel for the parties the most important point which is to be determined is as to whether the appellant is liable under Section 4-A (3) or not and whether he is covered within the meaning of employer used in this clause. In order to dispose of this point, we have to look to the provisions of the contract entered into between the insurance company, on the one hand, and the employer, on the other, which is Exh. D-1 on record. The relevant portion of this condition reads as follows:

" (17) Legal liability to persons employed in connection with the operation and/or maintaining and/or loading/unloading of motor vehicles. In consideration of the payment of an additional premium it is hereby understood and agreed mat notwithstanding anything contained herein to the contrary the company shall indemnify the insured against his legal liability under the Workmens Compensation Act, 1923. . . "

Thus, under this clause the insurance company has agreed to indemnify the insured against his legal liability. It is, therefore, clear that the insurance company steps into the shoes of the employer mentioned in Section 4-A (3) of the Act. In the aforesaid ruling relied upon by the learned counsel for the respondents the question raised was as to whether the insurance company was liable for payment of penalty and interest and this question was answered in the affirmative. The learned counsel for the appellant referred to Oriental Insurance Co. Ltd. v. Jevaramma, 1988 ACJ 671 (Karnataka), a decision of the Karnataka High Court, In that case it was held that unless the terms of the policy specifically include payment of penalty, the insurance company is not liable for penalty. Similarly, it was held in Jayantilal and Co. v. Garasia Rajvirba Udesinh, 1992 ACJ 286 (Gujarat), that the insurance company is not liable for penalty, penalty imposed on the owner is for default in making payment within the prescribed time. Some other rulings of the other High Courts have also been cited by the learned counsel for the appellant. With utmost regard I find myself unable to agree with the principles laid down by these rulings. Rights and liablities flow from the agreement entered into between the insurance company, on the one hand, and the employer, on the other, A careful perusal of the above mentioned clause No. 17 shows that there is a specific agreement to the effect that the Insurance Company has taken responsibility to indemnify all legal liabilities. No exception whatsoever has been provided in it. If the insurance company intended that it will not be liable for the penalty in case of default in making payment within the prescribed time, it should have made a provision in the contract itself. In the absence of any such clause in the insurance policy I am unable to accept the contention of the learned counsel for the appellant that the insurance company is not liable for the penalty. In this view of the matter I find myself in agreement with the decision passed by this court in the case of Om Parkash v. Ramkali (supra). Consequently, I agree with the learned counsel for the appellant, I may mention that the learned counsel has relied on New India Assurance Co. Ltd. v. Prema Bai, 1993 ACJ 75 (MP), in which a single Judge of this Court held that interest at the rate of 12 per cent cannot he granted in view of the statutory fetters, there was no scope of discretion of the court. The learned counsel for the respondents relied upon a Division Bench decision given in M. A. No. 114 of 1990 on November 23, 1993. In this case this court awarded interest at the rate of 15 per cent per annum after enhancing the rate of interest awarded by the Commissioner. The learned counsel for the appellant contended that there is no reason to enhance the rate of interest in this case. In this case the learned Commissioner has awarded interest at the rate of 8 per cent which cannot be said to be unreasonable. In view of this I find no force to accept the contention. As regards calculation mistake, I have already said that the learned counsel for the respondents has frankly conceded that there is a mathematical error.

(3.) THE learned counsel for the parties inform that the amount has been deposited in the shape of F. D. R. The appellant shall be entitled to a refund of Rs. 1,336/- with proportionate interest and penalty.

(4.) CONSEQUENTLY, the appeal is to be dismissed with the modification that the amount may be modified accordingly. It is, now fixed at Rs. 85,428/ -. The appeal is, therefore, dismissed accordingly. Excess amount deposited shall be refunded to the appellant.