Workmen compensation policy - agreement required ?

prashant1314 (Querist) 09 September 2011 This query is : Resolved
Dear Sir,

Lately I have read in case " CLR HC of Gujarat Page 21 " New India Assurance Co Limited V/s Hiralal Gomaji Moriya ( Regar ) & 03 Others

that , Incurance Company is not liable to pay interest & pealty of the Compensation amount

In the above scenario does it require by Employer to Draft separate Agreement with the insurance company for all the amount to be payable under Workmen Compensation Act?

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prabhakar singh (Expert) 09 September 2011
OF course if the citation finally stands then

it would be required as conceived by you.

ajay sethi (Expert) 09 September 2011
yes interest and penalty should be covered under the insurance policy .

2)
the
Supreme Court in Ved Prakash Garg v Premi Devi and Ors. 1998 (1) ACJ 1has held that if there is a clause in the insurance policy that the insurance
company would not take on the liability for the interest then alone the insurance company is not
liable to pay the interest.

3)Penalty is not a part and parcel of the legal
liability of the employer to compensate his employee and since the insurer is under contractual
obligation to indemnify the employer for his legal liability the insurer is not liable to pay the
penalty.

Raj Kumar Makkad (Expert) 09 September 2011
I do agree with the advice of Ajay.

prashant1314 (Querist) 09 September 2011
Thanks a lot!!!

Shastri J.K. (Expert) 09 September 2011
I also do agree with the advice of Ajay.

Guest (Expert) 09 September 2011
I also agree with the advice of Shri Ajay Sethi.

M/s. Y-not legal services (Expert) 09 September 2011
Am also agree with mr.ajay. Nothing more to say regard this issue.

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