Oriental Insurance Co. Ltd. vs Md. Gulbahar Hussain

Mr. Suman Shyam, J. (Oral)—This appeal preferred against the judgment and award dated 27-12-2004 passed in Workmen�s Compensation Case No. 354/2001 by the Commissioner, Workmen�s Compensation, Nagaon, Assam was admitted by this Court by framing the following two substantial questions of law:

Whether Commissioner can on his own without any evidence on record accept the monthly income of the injured at Rs. 3500/-?

Whether learned Commissioner can impose interest from the date of accident in a injury case not earmarked under any of the schedule?

The brief facts of the case is that the respondent No. 1/claimant was employed as a driver of the vehicle number AS-01G-7420 (bus) owned by the respondent No. 2 which had met with an accident on 27-08-2001 when the vehicle was proceeding from Doboka towards Nagaon with passengers on board. In the said accident the respondent No. 1/claimant had suffered grievous multiple injuries on his person and had become permanently disabled due to the fracture in his right leg and chest resulting into loss of his earning capacity. Since the sustainance of grievous injury as well as the permanent disability suffered by the respondent No. 1/claimant resulting to his loss of his earning capacity is not in dispute, hence, recording of excruciating details covering the aforesaid aspects of the matter is not deemed necessary.

After hearing the parties and on appreciation of evidence available on record the learned Commissioner, Workmen�s Compensation had awarded an amount of Rs. 1,09,190/- as compensation to the respondent No. 1/claimant for the loss of earning suffered by him on account of permanent disability. It appears from the record that the amount of Rs. 1,09,190/- already been deposited by the insurance company on 21-10-2005 and the said amount since been withdrawn by the respondent No. 1/claimant. The grievance of the appellant in this appeal is that there was no evidence available before the learned Commissioner to arrive at a conclusion that the monthly income of the respondent No. 1/claimant was Rs. 3500/-, which amount forms the basis for calculation of the compensation. It is also the grievance of the appellant that the learned Commissioner had committed manifest illegality by awarding interest @ 12% per annum on the aforesaid amount w.e.f. 27-08-2001 i.e. the date of accident, in a manner which is not permissible in the eye of law.

Heard Ms. N. Modi, learned counsel for the appellant. Also heard Mr. A.K. Gupta, learned counsel appearing for the respondent No. 2 owner of the vehicle. None appears for the respondent No. 1/claimant.

Ms. Modi submits that a perusal of the evidence available on record would go to show that the claimant had failed to establish his claim of earning monthly wages of Rs. 4500/- by producing documentary evidence. The said fact bears special significance on account of the stand taken by the respondent No. 2 stating that the claimant was paid an amount of Rs. 1200/- per month as salary besides Rs. 30/- as daily allowance. In such view of the matter, submits Ms. Modi, there was no basis available for the learned Commissioner to presume that the monthly earning of the claimant was Rs. 3500/-.

Referring to the decision of the Hon�ble Apex Court in the case of Oriental Insurance Co. Ltd. v. Md. Nasir & Anr. reported in (2009) 6 SCC 280 as well as another decision of this Court rendered in the case of Oriental Insurance Co. Ltd. v. Paren Narzary & Anr. reported in 2012 (4) GLT 718, Ms. Modi submits that it is settled law that the Workmen�s Compensation Commissioner does not have the jurisdiction to grant interest from the date of accident. She further submits that interest, if any payable, would be applicable only after the expiry of the period within which the amount of compensation is required to be deposited by the insurance company under the award.

Mr. A.K. Gupta, learned counsel appearing for the respondent No. 2 adopts the arguments made by the appellant and submits that the amount of interest been erroneously awarded by the learned Commissioner.

I have heard the submission made by and on behalf of the parties and have also perused the materials available on record as well as the decisions cited at the bar. As regards the first substantial question of law, it is discernable from the record that the claimant had led oral evidence in support of his claim that his monthly income was Rs. 4500/-. During the cross-examination the opposite party did not question the said testimony of the claimant nor did they produce any evidence to dispute the said claim of the respondent No. 1/claimant. The respondent No. 2, although have made statement in the written statement regarding the wages payable to the respondent No. 1/claimant, did not adduce any evidence in support of such pleading. As such, it is apparent that oral evidence of claimant No. 1 in support of his claim of have a monthly income of Rs. 4500/- had remained unimpeached. Taking note of such evidence the learned Commissioner had assessed the monthly income of the claimant as Rs. 3500/-. The assessment of the Commissioner appears to be on the basis of cogent materials available on record. As such, the same cannot be termed as perverse in the eye of law. Moreover, record reveals that the amount of compensation, which had been deposited by the insurance company already been withdrawn by the claimant on 01-12-2005. Therefore, at this distant point of time, there is no scope of recovery of the aforesaid amount from the respondent No. 1/claimant even if it held otherwise. In view of the above, the first substantial question of law is answered against the appellant and in favour of the respondent No. 1/claimant.

Coming to the 2nd substantial question of law, a perusal of the decision rendered in the case of Paren Narzary (Supra) goes to show that no interest can be awarded by the Commissioner w.e.f. from the date of accident. The aforesaid judgment been rendered by this Court after taking note of various judicial pronouncements on the aforesaid subject. Observations made by this Court in paragraphs 9, 10 and 12 of the aforesaid decision are quoted herein below for ready reference:

"(9) In Palraj v. Divisional Controller, North East Karnataka Road Transport Corporation, reported in (2010) 10 SCC 347, at paragraph 19, the Apex Court stated as follows:

"19. It will be evident that compensation assessed under Section 4 is to be paid as soon as it falls due and in case of default in payment of the compensation due under the Act within one month from the date when it falls due, Commissioner would be entitled to direct payment of simple interest on the amount of the arrears @ 12% per annum or at such higher rates which do not exceed the maximum lending rates of any scheduled bank as may be specified by the Central Government. Both the Commissioner, Workmen�s Compensation, as also the High Court, therefore, rightly held that interest under the 1923 Act cannot be claimed from the date of the filing of the application, but only after a default is committed in respect of the payment of compensation within 30 days from the date on which the payment becomes due."

(10) In New India Insurance Company Ltd. v. Abdul Kalam, reported in 2009 (1) GLT 138: (2009) 3 GLR 135, this Court had held that starting point of interest is on completion of 30 days from the date on which the payment of compensation falls due and it cannot be the date of accident.

(12) In view of the discussions aforesaid, the learned Commissioner was not correct in awarding interest in the instant case from the date of accident and as such, the interest from date of occurrence on 08.10.1999 to the date of judgment and order, which is 11.03.2002, quantified at Rs. 33,364/- is not payable by the Insurance Company. The learned Commissioner had also imposed additional simple interest @9% p.a. from 12.04.2002. Once a determination of compensation amount is made, Sub-Section 3(a) of Section 4-A of the Act envisages payment of simple interest @ 12% p.a. Even though no appeal been filed by the workman questioning the imposition of interest of only 9% p.a., the Act being a beneficial piece of legislation, this Court is of the opinion that it will not be unjustified if the Court directs payment of simple interest @ 12% p.a. form 12.4.2002, the date fixed by the learned Commissioner for payment, up to 5.10.2002, the date of deposit of compensation amount by the Insurance Company. Accordingly, the Insurance Company will pay interest @ 12% p.a. from 12.04.2002 to 05.10.2002 within a period of 45 days failing which interest @ 12% p.a. will accrue on the aforesaid sum till payment is made."

In view of what been observed hereinbefore, I am of the considered opinion that the learned Commissioner was not correct in the eye of law in awarding interest @ 12% per annum on the amount of compensation reckoned w.e.f. 27-08-2001 i.e. the date of accident. As such, the amount awarded by the learned Commissioner as interest with effect from the date of accident is hereby set aside.

Ms. Modi submits that the award have been made on 27-12-2004 and the compensation amount have been deposited by the appellant before the learned Commissioner on 21-10-2005, the respondent No. 1/claimant would at best be entitled to recovery of interest calculated at the simple rate of 12% per annum after deducting 30 days from the date of the award. Since the principal amount already been paid to the claimant, hence, it is now provided that the appellant would deposit the interest component payable on the aforesaid compensation amount @ 12% per annum calculated from 27-01-2005 till 20-10-2005 before the learned Workmen�s Compensation Commissioner within a period of 60 days from today.

This appeal stands allowed to the extent indicated herein above.

Send back the LCR.