1. This appeal by the insurance company has been directed against the order dated 21st November, 1977 passed by Commissioner for Workmen's Compensation in case No. 24 of 1977, whereby the appellant insurance company has been directed to pay the balance of Rs. 2,000/- towards the compensation.
2. Abdul Sattar, late husband of applicant-respondent No. 1, Jabunbi, was in the employment of non-applicant Nos.l and 2, who died on 24th September, 1972 due to injury sustained by him during the course of his employment. The applicant (respondent No. 1 herein) made an application for compensation. The Commissioner for Workmen's Compensation-cum-Labour Court, Jabalpur awarded compensation of Rs. 10,000/- against respondent Nos. 2 and 3 and as a sum of Rs. 8,000/- was already deposited by the employers, the balance of Rs. 2,000/- was directed to be paid by the respondent Nos. 2 and 3 as well as the appellant-insurance company. A sum of Rs. 5,000/- was also imposed as penalty for not depositing the compensation within 30 days of the dealth.
3. The contention of the learned Counsel for the appellant-insurance company is that in view of Section 14 of the Workmen's Compensation Act, 1923 no liability could be imposed against the insurer unless the employers are declared insolvent.
4. Section 14 of the Workmen's Compensation Act so far as it is relevant for the purpose of this appeal reads as under:
14. Insolvency of employer - (1) Where any employer has entered into a contract with any insurers in respect of any liability under this Act to any workman, then in the event of the employer becoming insolvent or making or composition or scheme of arrangement with his creditors or, if the employer is a company, in the event of the company having commenced to be wound up, the rights of the employer against the insurers as respects that liability shall, notwithstanding anything in any law for the time being in force relating to insolvency or the winding up of companies, be transferred to and vest in the workman, and upon any such transfer the insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employer, so, however, that the insurers shall not be under any greater liability to the workman than they would have under the employer.
A reading of the provisions of Section 14 makes it clear that it makes provision in case of an insolvency of an employer by giving worker the right to proceed against the insurance company in respect of liability insured by the insurance company. In view of this, the insurance company cannot be made liable unless the employers have become insolvent. In the present case, there is neither any plea nor any finding by the Commissioner that the employers have become insolvent. In view of this, no liability for payment of compensation or any part thereof would be fastened on the appellant-insurance company.
5. In the result, the appeal succeeds and is hereby allowed. The order of the Commissioner for Workmen's Compensation is modified to the extent that it is set aside in so far as it relates to the liability of the appellant-insurance company. There will be no order as to costs of this appeal.