New India Assurance Co. Ltd. vs Vinod Kumar and Another

Mohinder Pal, J.—This case is pending for the service of respondent No. 2. Counsel for the appellant has submitted that they are seeking

relief against respondent No. 1 and not against respondent No. 2. So service of respondent No. 2 is dispensed with.

New India Assurance Company Limited (hereinafter referred to as ''the Insurance Company'') has preferred this appeal against the order/award

dated 22.7.2010 passed by the Commissioner under Workmen''s Compensation Act, Panchkula (hereinafter referred to as ''the Commissioner'')

whereby Vinod Kumar (claimant-respondent No. 1) injured-workman, who had been employed as a Driver on Canter/Truck bearing registration

No. HR-09-A-3544 by its owner (respondent No. 2) was held entitled to the compensation to the tune of Rs. 1,89,177.60. He was held entitled

to receive the said amount of compensation from respondent No. 2. However, since the vehicle of respondent No. 2 had been insured with the

Insurance Company (appellant), the Commissioner held that the Insurance Company was liable to pay the said amount. The Insurance Company

was directed to deposit the amount of compensation within 30 days from the date of receipt of the copy of the award/order failing which it

(Insurance Company) was held liable to pay interest at the rate of 12 per cent from the date of the accident till the date of depositing the amount

before the Commissioner.

Vinod Kumar (respondent No. 1), aged about 35 years, who was admittedly working as a Driver on Canter/truck bearing registration No. HR-

09-A-3544 belonging to respondent No. 2, while on duty he was coming from Delhi to Kot Khai and at about 5.30 a.m. on 9.6.2006 the said

canter met with an accident and he suffered 40 per cent permanent disability. After appreciating the evidence and material produced before the

Commissioner, he was held entitled to compensation as noticed above.

Notice of motion in this case was issued on 11.11.2010 when it was submitted by the learned Counsel for the Insurance Company that award

of interest on the amount of compensation from the date of accident against the appellant is not legally sustainable, as it was the insured who was

liable to pay interest for this intervening period. The insurer is liable only to pay interest from the date of award.

As far as interest on payment of compensation amount is concerned, it is to be mentioned that earlier this Court is awarding interest at the rate of

9 per cent per annum instead of 12 per cent per annum in some of the cases keeping in view the facts and circumstances of those cases but the

position now becomes clear in view of the judgment of Kamla Chaturvedi Vs. National Insurance Co. and Others, ) and in this judgment reliance

was also placed to the decision rendered in National Insurance Co. Ltd. Vs. Mubasir Ahmed and Another, para 9 of the said judgment reads as

under:

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 Amending Act 14 of 1995, section 4A of the Act

was 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 a 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.

In the light of aforesaid position and relying upon the decision of Hon''ble Supreme Court in Kamla Chaturvedi''s case (supra), it is held that

interest awarded by the Commissioner would be payable at the rate of 12 per cent per annum on the compensation amount and that too after one

month from the date of adjudication i.e. date of award and not from the date of accident. The impugned award is modified to the extent indicated

above. With the above modification in the impugned award, this appeal is hereby disposed of.