Antar Singh vs United India Insurance Co. Ltd.

Yet again a member of marginalized section of the society is ELAMORING for enforcement of statutory rights conferred upon him by the

Workmen's Compensation Act, 1923 (for short Act of 1923) and grant of benefits accruing therefrom. The Appellant was employed by

respondent No. 2 as Conductor-cum-Cleaner. He had to discharge the duties and functions of Conductor-cum-Cleaner with truck bearing

Registration No. JK02 H-2685. September 18th, 2003 turned out be the unfortunate day in his life when in the course of his employment with

respondent No. 2, he suffered multiple fractures and grievous injuries as Conductor-cum-Cleaner of the aforementioned vehicle. He also sustained

injuries on his head which resulted in fracture of his temporal bone. The Appellant lapsed into coma due to the injuries and was treated at different

hospitals. He is disabled to do the job of Conductor-cum-Cleaner or the rest of his life. At the time of accident, he, as per his claim petition before

the Commissioner under the Act of 1923, (Deputy Labour Commissioner Jammu) (for short Commissioner), was 26 years old and his monthly

salary was Rs. 4000/-

He was not paid the compensation, which constrained him to approach the Commissioner. The Commissioner after considering the matter and

hearing the parties on 30-01-2006, recorded a finding that the Appellant succeeded in proving his claim and, accordingly, passed an award for an

amount of Rs. 5,16,672/- in favour of the Appellant against respondent No. 2. The respondent No. 2 was also held liable to pay simple interest

@7.5%. Since the vehicle was insured with respondent No. 1, the Commissioner directed the respondent No. 1 to indemnify respondent No. 2

and further directed respondent No. 1 to deposit the awarded amount along with interest within a period of 30 days from the date of

announcement of award.

Respondent No. 1, feeling aggrieved of the award, challenged the same in CIMA 124/2006. The Appellate Court, while upholding the award

passed by the Commissioner to the extent of directing for payment of compensation to the Appellant herein, set aside the award to the extent of

grant of interest of 7.5%. It is this order which is called in question in this Letters Patent Appeal (LPA) to the extent of denying interest @7.5% to

the Appellant.

Learned counsel for the Appellant referred to section 4A(3)(a) of the Act of 1923 and submitted that the Appellant is entitled to payment of

interest on the awarded amount as no compensation was paid to him by the employer within one month from the date it fell due and in the

submission of learned counsel for the Appellant, the expression ""date it fell due"" is the date of accident when the Appellant suffered the injuries.

Learned counsel in support of his contention referred to and relied upon the judgments of Hon'ble the Supreme Court rendered in the cases of

Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, . Fakir Chand and Another - Appellant v. Suraj Parkash and others - Respondents,

2012 (4) JKJ 380 [HC] and The Oriental Insurance Company Ltd. Vs. Siby George and Others, and submitted that the view taken by Hon'ble

the Supreme Court in the decision rendered by Hon'ble four Judges in Partap Narain Singh Deo's case has been followed in its latest decision in

Siby George's case as well. Learned counsel submitted that since the employer failed to pay the due compensation to the Appellant, he (employer)

was liable to pay the interest thereon. Learned counsel, accordingly, prayed for allowing of this LPA.

Learned counsel for the respondents, though, made effort to defend the impugned order but in view of the law laid down by Hon'ble the

Supreme Court, in Partap Singh and Siby George's cases (supra), prayed for disposal of the Appeal in accordance with law.

The Act of 1923 is a pre-Constitution legislation. This Act has been brought into existence when the country was ruled by external rulers. In

pre-constitutional era also, steps were taken to alleviate the sufferings of the marginalized class of the society. This duty to mitigate the hardships of

the marginalized section of the society and to enforce the rights which are conferred on them by the Constitution of India and State Constitution, is

cast on the statutory and administrative authorities, and they are responsibly to redress the grievances of the labour class/worker class in a very

efficient and accelerated manner. The laws, which are made for the benefit of marginalized class worker class/labour class of the society have to be

interpreted in a manner which results in betterment of these sections of the society. The laws, guaranteeing the rights of the aforesaid class of the

society and the provisions of these laws, which confer rights and benefits, have to be understood in the like manner arid implemented for the benefit

of these sections of the society.

Section 4A(3) of the Act of 1923 provides that where an employees is in default in paying the compensation due under the Act of 1923 within

one month from the date it fell due, the Commissioner shall direct the employer that in addition to the amount of arrears to pay simple interest

thereon @12% PA or at such higher rate not exceeding the maximum lending rates of any Scheduled Bank. The expression appearing in section

4A(3) viz. employer is in default in paying the compensation due under this Act within one month from the date it fell due"" would on its plain

interpretation, mean that the employee is entitled to receive the compensation in terms of Act of Act of 1923 from the ""date it fell due"" which would

mean the date of accident/the date on which he sustained injuries. The expression ""under the Act"" appearing in section 4A(3), would mean that in

view of the provisions of the Act of 1923 and the schedule appended thereto, he is entitled to get the compensation, The moment he is covered by

the Act of 1923, the expression date it fell due"" would relate to the date of accident/sustaining of injuries and in case the employer is in default in

paying the compensation from the date of accident/sustaining of injuries, then in terms of section 4A(3)(a) of the Act of 1923, the employer, in

addition to payment of arrears of compensation, shall be liable to pay simple interest also to the workman. The expression ""date it fell due"" in the

scheme of the Act of 1923 would not constitute the date of adjudication of the claim of workman by the Commissioner.

The Act of 1923 has to be considered and interpreted in the backdrop of scheme of the Act as also Constitution of India which, in its preamble,

makes promises to its citizens and part III thereof guarantees rights and part IV thereof ordains for betterment of the citizens.

One of the benches of this court has considered the issue of like nature in Fakir Chand's case supra reported in 2012 (4) JKJ 380 [HC]. We

approve the view taken by the Court in the said case. Paragraphs 4 & 6 to 8 of the said judgment are taken note of:

Section 4A of the Act of 1923 is taken note of:

4A. Compensation to be paid when due and penalty for default.-

(1) Compensation u/s 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 workman,

as the case may be without prejudice to the right of the workman 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.

Explanation--For the purposes of this sub-section, ""Scheduled bank"" means a bank for the time being included in the Second Schedule to the

Reserve Bank of India Act, 1934 (2 of 1934).

5.................

The expressions ""in default in paying compensation due"" from the date it fell due appearing in Sub-section 3 of Section 4A of the Act of 1923

have been interpreted by the Hon'ble Supreme court in the following manner:

(a) Hon'ble Supreme court in Partap Narain Sing Deo's case at paragraphs 6 and 7 have stated as under:

It has next been argued that the Commissioner committed a serious error of law in imposing a penalty on that appellant u/s 4A(3) of the Act as

the compensation had not fallen due until it was 'settled' by the Commissioner u/s 19 by his impugned order dated May 6, 1969. There is however

no force in this argument.

Section 2 of the Act deals with the employer's liability for compensation. Sub-section (1) of the section provides that the employer shall be liable

to pay compensation if ""personal injury is caused to a workman by accident arising out of and in the course of his employment."" It was not the case

of the employer that the right to compensation was taken away under sub-section (5) of section 3 because of the institution of a suit in a civil court

for damages, in respect of the injury, against the employer or any other person. The employer therefore because liable to pay the compensation as

soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the

employment. It is therefore futile to contend that the compensation did not fall due until after the Commissioner's order dated May 6, 1969 u/s 19

what the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as

to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner. There is therefore nothing to justify

the argument that the employer's liability to pay compensation u/s 3, in respect of the injury, was suspended until after the settlement contemplated

by section 10. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is

no justification for the argument to the contrary.

(b) Bench comprising of Hon'ble three Judges of Hon'ble Supreme Court in Kerala State Electricity Board's case, while relying upon Partap

Narain Sing Deo's case, have taken the same view. Paragraphs 2, 3, 4, and 5 are taken note of:

Various High Courts in the country, While dealing with the claim for compensation under the workmen's Compensation Act have uniformly

taken the view that the relevant date for determining the rights and liabilities of the parties is the date of the accident.

A four judge Bench of this Court in Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, speaking through Shinghal, J. has held that an

employer becomes liable to pay compensation as soon as the personal injury is caused to the workmen by the accident which arose out of and in

the course of employment. Thus, the relevant date for determination of the rate of the compensation, is the date of the accident and not the date of

adjudication of the claim.

A two judge Bench of this Court in The New India Assurance Company Limited v. V.K. Neelakandan, Civil Appeal Nos. 16904 -16909 of

1996, decided on 6.11.1996, however, took the view that Workmen's Compensation Act, being a special legislation for the benefit of the

Workmen, the benefit as available on the date of adjudication should be extended to the workmen and not the compensation which was payable

on the date of the accident. Two judge Bench in Neelakandan's case (supra), however, did not take notice of the judgment of the larger Bench in

Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, as it presumably was not brought to the notice of their Lordships. Be that as it may, in

view of the categorical law laid down by the larger Bench in Pratap Naraian Sing Deo's case the view expressed by the two judge Bench in

Neelakandan's case is not correct.

(Emphasis supplied)

Our attention has also been drawn to a judgment of the Full Bench of the Kerala High Court in United India Insurance Co. Ltd. v. Alavi (1998)

1 Ker LT 951 (FB) wherein the Full Bench precisely considered the same question and examined both the above noted judgments. It took the

view that the injured workmen becomes entitled to get compensation the moment he suffers personal injuries of the types contemplated by the

provisions of the workmen's Compensation Act and it is the amount of compensation payable on the date of the accident and not the amount of

compensation payable on account of the amendment made in 1995, which is relevant. The decision of the Full Bench of the Kerala High Court, to

the extent it is in accord with the judgment of the larger bench of this Court in Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, lays

down the correct law and we approve it.

(c) This court in Divisional Manager's case, while following the judgments rendered in Pratap Naraian Sing Deo's case and Kerala State Electricity

Board's case has also held that the claimant workman is entitled to interest from the date of receipt of injury.

(d) Paragraphs 5 and 6 of Satnam Singh's case, a decision handed down by Bench comprising of Hon'ble two Judges of Hon'ble Supreme Court

are taken note of:

The only contention urged this is that the direction given to the appellant to pay interest at the rate of 6% on the amount of compensation from

the date of the accident deserves to be set aside in view of the decision of this court in National Insurance Co. Ltd. Vs. Mubasir Ahmed and

Another, , wherein it is held that liability to pay the interest begins after one month from the date on which the compensation falls due and the

compensation falls due on the date on which claim of the workman is adjudicated.

This court has heard learned counsel for the parties. In National Insurance Co. Ltd. Vs. Mubasir Ahmed and Another, , this court has held that

there is no indication in section 4A(1) as to when the compensation payable u/s 4 falls due and, therefore, it has to be taken that compensation

becomes due on the date on which the claim for compensation is adjudicated. In view of the above mentioned judgment of this court, the direction

given by the Workmen's Compensation Commissioner which is confirmed by the High Court, requiring the appellant to pay the amount of

compensation with 6% interest from the date of the accident will have to be sustained by the direction to the appellant to pay the amount of

compensation with 6% interest from the date of the awarded made by Workmen's Compensation Commissioner.

(e) Likewise paragraph 9 of the Judgment in Mubasir Ahmad's case, rendered by Bench Comprising of Hon'ble two Judges of Hon'ble Supreme

Court is taken Note of:

9 Interest is payable u/s 4A(3) if there is default in paying the compensation due under this Act within one month from the date it fell due. The

question of Liability u/s 4A was dealt with by this Court in Maghar Singh Vs. Jashwant Singh, . By Amended, inter alia, fixing the minimum rate of

interest to be simple interest @ 12%. In the instant case, the accident took place after the amendment and, therefore, the rate of 12% as fixed by

the High Court cannot be faulted. But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it

fell due. Obviously it cannot be the date of accident. Since no indication is there as when it becomes due, it has to be taken to be the date of

adjudication of the claim. This appears to be so because Section 4A(1) prescribes that compensation u/s 4 shall be paid as soon as it falls due. The

compensation becomes due on the basis of adjudication of the claim made. The adjudication u/s 4 in some cases involves the assessment of loss of

earning capacity by qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The

position becomes clearer on a reading of sub-section (2) of Section 4A. It provides that provisional payment to the extent of admitted liability has

to be made when employer does not accept the liability for compensation to the extent claimed.

The crucial expression is ""falls due"". Significantly, legislature has not used the expression ""from the date of accident"". Unless there is an

adjudication, the question of an amount falling due does not arise.

(f) And further paragraphs 9 and 10 of the judgment in Kamla Chaturvedi's case, a decision rendered by Bench comprising of Hon'ble two Judges

of Hon'ble Supreme Court:

In view of what has been stated in Mubasir Ahmed's case (supra) the liability for interest would be in terms of what has been stated in

paragraph 9 of the judgment.

The appeal is allowed to the aforesaid extent. There shall be no order as to costs.

Bench comprising of Hon'ble four Judges of Hon'ble Supreme Court in pratap Narains Case have specifically ruled at paragraph 7 that

employer would be liable liable to pay compensation as soon as the personal injury was caused to the workman by the accident which, admittedly,

arose out of and in the course of the employment. It was emphatically stated that it would be, therefore, futile to contend that the compensation did

not fall due until after the Commissioner's order was passed u/s 19 of the Act of 1923. Hon'ble Supreme Court having held that the employer

would become liable to pay the compensation when the personal injury caused to the workman by an accident and that payment could not be

deferred until such time it was adjudicated upon by the Commissioner u/s 19 the Act of 1923, leaves no room for this court but to follow the law

laid down in Narian Singh Deo's case a decision handed down by Hon'ble Bench of Hon'ble four Judges of Hon'ble Supreme Court. The said

judgment has been followed by Bench comprising of Hon'ble three judges of Hon'ble Supreme Court in Kerala State Electricity Board's case.

Hon'ble Supreme Court at paragraph 4 of the judgment has referred to Neelakandan's case decided on 06.11.1996, where, in Hon'ble Supreme

Court had taken a view that the benefit as available on the date of adjudication should be extended to the workman and not from the date of the

accident. Hon'ble Supreme Court specifically ruled that in view of the categorical law laid down by the larger Bench in Pratap Narain Singh Deo's

case, View expressed by Hon'ble two Judges Bench in Neelakandan's case, is not correct. This judgment is referred to and relied upon by Mr.

R.K. Gupta learned Sr. counsel appearing for insurance company. 8. The point is no longer res integra that decision rendered by the larger Bench

of the Hon'ble Supreme Court is to be followed, and not of the smaller Bench of the Hon'ble Supreme Court on the same point of Law. Bench

comprising of Hon'ble three Judges of Hon'ble Supreme Court in Kerala State Electricity Board's case have categorically stated that view

expressed by Bench of two Judges in Neelakandan's case is not correct. The judgment referred to and relied upon by R.K. Gupta has been

rendered by Bench of Hon'ble two Judges. This court has to follow the view taken by Bench comprising of Hon'ble four Judges of Hon'ble

Supreme Court in pratap Narain Sing Deo's case and decision rendered by the Hon'ble three Judges of Hon'ble Supreme Court in Kerala State

Electricity Board's case.

The issue is further settled by Hon'ble the Supreme court in Siby George's case supra, which is latest in point of time, wherein partap Narain

Deo's case has been followed.

In view of law laid down by Hon'ble the Supreme court and for our aforesaid reasons, we hold that the interest is payable on the awarded

amount in terms of section 4A(3)(a) of the Act of 1923 within one month from the date of the accident. The view taken by the learned Single

Judge, in the impugned order, is, thus, not sustainable in law.

For our above recorded reasons. We allow this Letters patent Appeal and set aside the order of the learned Single Judge dated 30-10-2007

passed in CIMA 124/2006 and uphold the Award of the Commissioner. LPA is, accordingly, disposed of along with connected CMPs.