JUDGMENT : Sandeep Sharma, J. 1. Instant appeal filed under section 3Q of the Workmen's Compensation Act, 1923, lays challenge to order dated 18.01.2005, passed by Commissioner under Workmen's Compensation Act, 1923 (for short "Act") in case No. WCA-6/2002, whereby learned Court below while holding respondents/claimants No. 1 and 2 entitled for compensation to the tune of Rs. 4,22,585/- on account of death of late Sh. Vinod Kumar, who allegedly died on account of the injuries suffered by him at the construction site of respondent No. 8, held appellant-insurance company liable to pay the aforesaid amount of compensation. 2. Precisely, the facts of the case as emerge from the record are that on 8.7.2002, late Sh. Vinod Kumar, who was engaged as labourer on the construction site by the contractor Furpa Lama, suffered injuries after being hit by a stone. On account of aforesaid injury, deceased Vinod Kumar died on the spot. Respondents/claimants No. 1 and 2 being legal representatives of aforesaid deceased labourer filed a claim petition under Workmen's Compensation Act in the Court of learned Commissioner, under Workmen's Compensation Act, 1923, which ultimately came to be allowed vide order dated 18.1.2005. Learned Court below while holding respondents/claimants No. 1 and 2 entitled for compensation to the tune of Rs. 4,22,585/- held appellant-insurance company liable to pay the aforesaid amount to the respondents/claimants being insurer of contractor Furpa Lama. 3. Appellant-Insurance Company has primarily laid challenge to aforesaid order passed by the court below on the ground that it could not have been saddled with liability to pay penalty at the rate of 50% under section 4A(3)(b) of the Act on account of delay in making the payment. Since, there is no dispute inter se parties qua the facts of the case as well as amount awarded by the court below under various heads save and except penalty under section 4A(3)(b) of the Act, there is no reasons for this Court to take note of the facts of the case as well as evidence led on record by the respective parties. 4. On 11.4.2007, this Court admitted the appeal at hand on the following substantial questions of law:- 1. Whether the learned Commissioner was justified in imposing the interest @ 12% per annum and penalty on award amount upon the insurance company in the absence of any statutory provision empowering him to do so? 2. 4. On 11.4.2007, this Court admitted the appeal at hand on the following substantial questions of law:- 1. Whether the learned Commissioner was justified in imposing the interest @ 12% per annum and penalty on award amount upon the insurance company in the absence of any statutory provision empowering him to do so? 2. Whether in the absence of any clause or terms of insurance policy, the insurance company can be held liable to make the payment of interest and penalty? 3. Whether the award of the Commissioner suffers from illegality and is unsustainable? 5. Careful perusal of order impugned in the instant proceedings clearly reveals that court below has proceeded to award sum of Rs. 1,09,794/- on account of penalty under section 4A(3)(b) of the Act. Before ascertaining the genuineness of the claim put forth by the Insurance Company, it would be profitable to take note of section 4(A) of the Act herein:- [4A. Compensation to be paid when due and penalty for default.--(1) Compensation under section 4 shall be paid as soon as it falls due. (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the employee, as the case may be, without prejudice to the right of the employee to make any further claim. [(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall-- (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent, per annum or at such higher, rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette] on the amount due; and (b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent, of such amount by way of penalty: Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. 6. Careful perusal of aforesaid provisions of law that where any employer is in default in paying the compensation due under the Act ibid within one month from the date it fell due, the Commissioner shall direct that the employer in addition to the amount of the arrears shall pay simple interest thereon at the rate of 12% per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government by notification in the Official Gazette. Besides above, if Court comes to a conclusion and forms an opinion that there is no justification available on record qua the delay in making the payment, it can direct that employer to pay sum not exceeding 50% of such amount in addition to the amount of the arrears and interest thereon as penalty. However, such an order for payment of penalty cannot be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. 7. However, such an order for payment of penalty cannot be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. 7. In the case at hand, there is no dispute inter se parties that court below while awarding 50% penalty in favour of the claimants have completely ignored the provisions contained under section 4A(3)(b) of the Act, which clearly provides that penalty, if any, on account of delay in payment can be imposed upon the employer not on the insurer and as such, award made in this regard by the court below holding appellant-insurance company liable to pay the amount of penalty is not sustainable. 8. Hon'ble Apex Court in case titled Ved Prakash Garg vs. Premi Devi and others, AIR 1997 SC 3854 , has categorically held that once compensation falls due and within one month it is not paid by the employer then as per section 4A(3) (a) interest at the rate permissible rate gets added to the said principal amount of compensation as the claimants would stand deprived of their legally due compensation for a period beyond one month which is statutorily granted to the employer concerned to make good his liability for the benefit of the claimants. As far as interest is concerned it is almost automatic once default, on the part of the employer in paying the compensation due, takes place beyond the permissible limit of one month. However, no element of penalty is involved therein. It is statutory liabilities of the employer to make good the principal amount of compensation within permissible time during which interest may not run but otherwise liability of payment interest on delayed compensation will ipso facto follows. Similarly, consequence, as has been taken note hereinabove, is not to follow in case where additional amount is added to the principal amount of compensation by way of penalty to be levied on the employer under circumstances contemplated by section 4A(3)(b) of the Compensation Act after issuing show cause notice to the employer concerned. Similarly, consequence, as has been taken note hereinabove, is not to follow in case where additional amount is added to the principal amount of compensation by way of penalty to be levied on the employer under circumstances contemplated by section 4A(3)(b) of the Compensation Act after issuing show cause notice to the employer concerned. So far as 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, rather 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(1)(b) of the Motor Vehicles Act. If aforesaid provisions contained under Workmen's Compensation Act and Motor Vehicles Act are read in conjunction, it can be safely concluded that insurance company is liable to make good not only the principle amounts of compensation payable by insured employers but also interest therein, if ordered by the Commissioner, however penalty, if any, awarded by Court under section 4A(3)(b) shall not be payable by the insurance company, rather it is to be paid by the employer. At this stage, it would be relevant to take note of para-14 of the aforesaid judgment herein:- "14. On a conjoint operation of the relevant schemes, of the aforesaid twin Acts, in our view, there is no escape from the conclusion that the insurance companies will be liable to make good not only the principal amounts of compensation payable by insured employers but also interest thereon, if ordered by the Commissioner to be paid by the insured employers. Reason for this conclusion is obvious. As we have noted earlier the liability to pay compensation under the Workmen's Compensation Act gets foisted on the employer provided it is shown that the workman concerned suffered from personal injury, fatal or otherwise, by any motor accident arising out of and in the course of his employment, such an accident is also covered by the statutory coverage contemplated by section 147 of the Motor Vehicles Act read with the identical provisions under the very contracts of insurance reflected by the Policy which would made the insurance company liable to cover all such claims for compensation for which statutory liability is imposed on the employer under section 3 read with section 4A of the Compensation Act. All these provisions represent a well-knit scheme for computing the statutory liability of the employers in cases of such accidents to their workmen. As we have seen earlier while discussing the scheme of section 4A of the Compensation Act the legislative intent is clearly discernible that once compensation falls due and within one month it is not paid by the employer then as per section 4A(3) (a) interest at the permissible rate gets added to the said principal amount of compensation as the claimants would stand deprived of their legally due compensation for a period beyond one month which is statutorily granted to the employer concerned to make good his liability for the benefit of the claimants whose bread-winner might have either been seriously injured or might have lost his life. Thus so far as interest is concerned it is almost automatic once default, on the part of the employer in paying the compensation due, takes place beyond the permissible limit of one month. No element of penalty is involved therein. It is a statutory elongation of the liability of the employer to make good the principal amount of compensation within permissible time limit during which interest may not run but otherwise liability of paying interest on delayed compensation will ipso facto follows. Even though the Commissioner under these circumstances can impose a further liability on the employer under circumstances and within limits contemplated by section 4A(3)(a) still the liability to pay interest on the principal amount under the said provision remains a part and parcel of the statutory liability which is legally liable to be discharged by the insured employer. Consequently such imposition of interest on the principal-amount-would certainly partake the character of the legal liability of the insured employer to pay the compensation amount with due interest as imposed upon him under the Compensation Act. Thus the principal amount as well as the interest made payable thereon would remain part and parcel of the legal liability of the insured to be discharged under the Compensation Act and not de hors it. Thus the principal amount as well as the interest made payable thereon would remain part and parcel of the legal liability of the insured to be discharged under the Compensation Act and not de hors it. It, therefore, cannot be said by the insurance company that when it is statutorily and even contractually liable to reimburse the employer qua his statutory liability to pay compensation to the claimants in case of such motor accidents to his workmen, the interest on the principal amount which almost automatically gets foisted upon him once the compensation amount is not paid within one month from the date it fell due, would not be a part of the insured liability of the employer. No question of justification by the/insured employer for the delay in such circumstances would arise for consideration. It is of course true that one month's period as contemplated under section 4A(3) may start running for the purpose of attracting interest under sub-clause (a) thereof in case where provisional payment becomes due. But when the employer does not accept his liability as a whole under circumstances enumerated by us earlier then section 4A(2) would not get attracted and one month's period would start running from the date on which due compensation payable by the employer is adjudicated upon by the Commissioner and in either case the Commissioner would be justified in directing payment of interest in such contingencies not only from the date of the award but also from the date of the accident concerned. Such an order passed by the Commissioner would remain perfectly justified on the scheme of section 4A(3)(a) of the Compensation Act. But similar consequence will not follow in case where additional amount is added to the principal amount "of compensation by way of penalty to be levied on the employer under circumstances contemplated by section 4A(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 the 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 upto 50% on the principal amount by way of penalty 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(1)(b) of the Motor Vehicle Act as well as by the terms of the Insurance Policy found in provisos (b) and (c) to sub-section (1) of section II thereof. On the aforesaid interpretation of these two statutory schemes, therefore, the conclusion becomes inevitable that when an employee suffers from a motor accident injury while on duty on the motor vehicle belonging to the insured-employer, the claim for compensation payable under the Compensation Act along with interest thereon, if any, as imposed by the Commissioner section 3 and 4A(3)(a) of the Compensation Act will have to be made good by the insurance company jointly with the insured employer. But so far as the amount of penalty imposed on the insured employer under contingencies contemplated by section 4A(3)(b) is concerned as that is on account of personal fault of the insured not backed up by any justifiable cause, the insurance company cannot be made liable to reimburse that part of the penalty amount imposed on the employer. The latter because of his own fault and negligence will have to bear the entire burden of the said penalty amount with proportionate interest thereon if imposed by the Work-men's Commissioner." 9. Reliance is also placed upon the judgment passed by this Court in case titled National Insurance Company vs. Karnail Singh, II (2009) ACC 642, wherein it has been held as under:- "6. Reliance is also placed upon the judgment passed by this Court in case titled National Insurance Company vs. Karnail Singh, II (2009) ACC 642, wherein it has been held as under:- "6. The apex Court in L.R. Ferro Alloys, Ltd. vs. Mahavir Mahto and another (2002) 9 SCC 450 , after referring to and relying upon the earlier decision rendered by the Apex Court in Ved Prakash Garg vs. Premi Devi, (1997) 8 SCC 1 , has held 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 at our hands. In Ved Prakash vs. Premi Devi, this court after examining the entire scheme of the Act held that the 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 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 penalty. Following the said decision and for the reasons stated therein, we modify the order made by the High Court to that extent. The appeal is allowed in part accordingly." (Emphasis supplied) 7. Even this Court in Ram Dulari Kalia vs. H.P. State Electricity Board and another, ILR 1986 H.P. 842 has held that the employer is liable to pay the amount and if it is not paid within one month from the date it fell due, the Commissioner shall if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, also pay a further sum of such penalty as may be imposed. 8. Ved Parkash Garg (supra) and L.R. Ferro Alloys Ltd. (supra) were later considered by the apex Court in New India Assurance Co. 8. Ved Parkash Garg (supra) and L.R. Ferro Alloys Ltd. (supra) were later considered by the apex Court in New India Assurance Co. Ltd. vs. Harshadbhai Amratbhai Modhiya and another (2006) 5 SCC 192 and the ratio of law laid down by the court holds good even now. Thus the amount of penalty shall be paid by the employer and not the Insurance Company. The question of law is answered accordingly. 9. Ms. Sunita Sharma learned counsel for the appellant, at the time of hearing further argued that the amount awarded towards reimbursement of medical expenses incurred by the claimant was not covered within the ambit and scope of the Workmen's Compensation Act, 1923. The issue which is now sought to be urged was neither raised nor pressed either at the time of the admission of the appeal or even subsequently thereafter till the matter came up for final hearing today. Keeping in view the paltry sum involved, I am not inclined to consider the same at this stage." 10. Consequently, in view of the detailed discussion made hereinabove and law laid down by the Hon'ble Apex Court as well as this Court, the impugned order passed by Court below saddling appellant-Insurance Company with liability to pay 50% penalty under section 4A(3)(b) of the Act, is not sustainable and accordingly same is quashed and set-aside, however, it is clarified that remaining amount of compensation excluding 50% penalty under section 4A(3)(b) shall be paid by the appellant-insurance company to the claimants/respondents forthwith, if not already paid. Amount deposited by the appellant-Insurance Company in terms of order impugned in the instant proceedings is ordered to be released in favour of the claimants/respondents forthwith on their making formal application. Amount, if any, on account of penalty deposited by the insurance company at the time of appeal may be refunded to the appellant insurance company, by remitting the same in its saving bank account, details whereof shall be furnished by learned counsel for the appellant insurance company within a period of ten days. 11. Learned Court below is directed to decide the issue with regard to liability, if any, to pay 50% penalty under section 4A(3)(b) of the Act afresh after affording an opportunity of being heard to the parties. 12. 11. Learned Court below is directed to decide the issue with regard to liability, if any, to pay 50% penalty under section 4A(3)(b) of the Act afresh after affording an opportunity of being heard to the parties. 12. Learned counsel representing the parties undertake to appear before the learned Court below on 29.7.2021, enabling it to do the needful in terms of the instant judgment. 13. Needless to say, court below before making order of penalty under section 4(A) of the Act, would issue show cause notice to the employer in terms of the provisions contained under section 4(A)3(b) of the Act. 14. The present petition stands disposed of in the aforesaid terms alongwith pending applications, if any.