In Brief
A commercial driver died during employment in 2017. His heirs claimed compensation under the Employees' Compensation Act, 1923. The Labour Commissioner awarded Rs. 7,36,680 as compensation with 12% interest and imposed a Rs. 2,57,838 penalty under Section 4A(3)(b) for the employer's delayed payment. The employer's insurer was holding a valid policy. The Delhi High Court held the insurer jointly liable for compensation, interest, and penalty. The Supreme Court reversed this, holding that insurers indemnify compensation and interest only, not statutory penalties. Statutory penalties arise from the employer's personal default, not from the insurer's contractual obligation, and cannot be shifted to insurers under established law.
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