Shantabai Devabhai Koli vs New Kandla Salt and Chemicals Pvt. Ltd. and 1

K.S. Jhaveri, J.—By way of these petitions, the petitioners have challenged the common judgment and order dated 05.04.2005, passed by the Commissioner for Workmen''s Compensation and Labour Court, Kutchh in W.C. (Fatal) Application No. 45/1998, 28/1999, whereby the Labour Court has partly allowed the claims of the petitioners. The short facts leading to filing of this petition are that the petitioners are the dependent of the deceased-workman, who were working with the respondent-Company and died in an accident occurred on 09.06.1998. It is the case of the petitioners that since no compensation had been given to the petitioners, they sent legal notice to the respondent but the said amount of compensation has not been paid to the petitioners. Therefore, the petitioners filed W.C. (Fatal) applications before the Commissioner for Workmen''s Compensation. The Labour Court, Kutchh vide impugned order dated 05.04.2005 directed the respondents to deposit an amount of Rs. 07,70,000/- before it on or before 6.5.2005. It is further directed that if the said amount is not paid within stipulated time, the petitioners will be entitled for interest at the rate of 6% per annum from the date of accident. Being aggrieved by the same, the present petitions have been filed by the petitioners.

Learned counsel for the petitioners submitted that the Labour Court has erred in law and facts in not considering the object of the Section 4A of the Workmen Compensation Act, 1923 while deciding the claim of the petitioners. Therefore, he prayed to allow these petitions.

Learned counsel for the respondent submitted that the impugned judgment and award of the Labour Court is just and proper. She further submitted that the Labour Court after appreciating the evidence on record has passed the impugned judgment and order, therefore, no interference is required to be called for by this Court. In support of her contention, she relied upon the decision of the Apex Court in the case of New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and Another, .

I have heard learned counsel appearing for both the parties and perused the material on record. Considering the facts of this case, it is relevant to reproduce Section 4A of the Workmen Compensation Act, 1923, which reads as under:-

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 case 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 to 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 landing 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 purpose 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)

[(3A) The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be.

In so far as the aspect of penalty is concerned, since the main matters are pending for adjudication before the competent Court, the issue of penalty kept open and no order is required to be passed in this regard. However, I find that the Labour Court has committed error in not directing the respondent-company to deposit the interest on the amount of compensation since as per Section 4A of the Workmen Compensation Act, 1923, the respondent-Company was duty bound to pay the compensation within one month from the date of accident, which has not been done by the respondent-Company. Therefore, the petitioners are entitled for interest at the rate of 12% per annum on the amount of compensation.

The decision relied upon by the learned advocate for the respondent will not apply to the facts of the present case. For the foregoing reasons, the present petition is partly allowed. The respondent-Company is directed to deposit the amount as directed by the Labour Court along with interest at the rate of 12% per annum from the date of accident till the date of depositing the same before the Labour Court. The impugned judgment and order of the Labour Court is modified accordingly. Rule is made absolute to the aforesaid extent.