Deolal Soni vs Charanjeet Singh and another

N.K. Agarwal, J.—The instant appeal is directed against the award dated 1-7-2002, passed by the Commissioner for Workmen''s Compensation, Labour Court, Raipur, in Case No. 8-229/WC Act/Non-Fatal/2001, whereby and whereunder an amount of Rs. 62,107/- has been awarded as compensation in favour of appellant. The brief facts of the case are as under:

(i) The appellant sustained injuries in the accident on 16-6-2001, which arose out of and during the course of employment.

(ii) The fact of accident was known to the employer since inception.

(iii) The appellant preferred a claim petition before the Commissioner for Workmen''s Compensation, Raipur, claiming compensation for the injuries sustained by him in the said accident.

(iv) The respondent- No. 1 by filing his reply in the case, admitted the factum of accident; injuries sustained by the appellant in the said accident; and also pleaded that the appellant was getting salary of Rs. 4000/- per month.

(v) The respondent No. 2, by filing its written statement, denied the averments made in the claim petition. However, the factum of insurance was admitted.

(vi) The Commissioner for Workmen''s Compensation, on a close scrutiny of evidence led, material placed and submissions made, held said accident arise out of and during the course of employment; appellant sustained permanent disability to the extent of 15 percent; awarded Rs. 62,107/- as compensation in favour of the claimants holding respondents jointly and severally liable for its payment. However, the Commissioner did not award interest on the amount of compensation from the date it fell due.

Shri S.S. Rajput, learned counsel appearing for the appellant would submit that the Commissioner went wrong in not awarding the interest. It was incumbent upon the Commissioner to award interest in terms of mandatory provisions contained u/s 4A(3)(a) of the Workmen''s Compensation Act. 1923 (for short ''the Act''), and appeal deserves to be allowed on this count.

On the other hand, Shri Neeraj Pradhan, Learned counsel appearing for the respondent No. 2 supported the order and submitted that in the facts and circumstances of the case, the Commissioner has not erred in not awarding interest.

I have heard the counsel appearing for the parties and perused the award impugned.

This court admitted this appeal on the following substantial question of law;

Whether the learned Commissioner for Workmen''s Compensation was justified in not awarding the interest in terms of Sub-section 3(a) of Section 4-A of Workmen''s Compensation Act. 1923?

Undisputedly, the fact of accident was known to the respondent No. 1 since its inception. It is also not in dispute that the amount of compensation has not been deposited by the respondent No. 1 with the Commissioner within statutory period of thirty days from the date of accident.

As per Section 4A(3)(a) of the Act, 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 direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve percent per annum or at such higher rate not exceeding the maximum of the lending rates of any schedule bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due.

A bare perusal of the above provision would reveal that the provision is mandatory in nature. Once the employer is found liable for payment of compensation, then, the claimants shall also be entitled for interest from the date when it fell due.

Division Bench of this Court in case of ICICI Lombard General Insurance Co. Ltd. v. Hariram and others (MAC No. 1588 of 2009. decided on 8th March, 10). has held in para 14 as under:

We are not required to dilate much on the above issue in view of the recent dictum of the Apex Court in the case of Oriental Insurance Co. Ltd. Vs. Mohd. Nasir and Another, wherein after considering the decision of the Apex Court in the case of National Insurance Company Limited v. Mubasir Ahmed and another, it was held in para 47:

The second question which arises for consideration is with regard to the payment of interest. There cannot be any doubt whatsoever that interest would be from the date of default and not from the dale of award of compensation.

In view of dictum of above referred judgment, and looking to the mandatory nature of provisions contained in Section 4A(3)(a) of the Act, the Commissioner ought lo have granted 12 percent interest per annum from the date of application on the amount of award.

For the forgoing, the substantial question of law framed is answered in affirmative. The appeal is allowed in part. Apart from amount awarded by the Commissioner, the appellant is also entitled for the interest (a) 12 percent per annum from the date of application. The insurance company is granted three month''s time to deposit the above interest amount. No order as to costs.