The court held that under the Employees' Compensation Act, 1923, employers cannot refuse to pay interest on compensation for delays, mandating payment of 12% interest from 30 days post-incident.

JUDGMENT :

UMESH M ADIGA, J.

1. This is an appeal filed by the employee/petitioner in ECA No.22/2017 being aggrieved by the judgment and award dated 06.11.2019 passed by the I Additional Senior Civil Judge and Commissioner (for short 'Commissioner') under Employees Compensation Act, 1923.

2. For the sake of convenience, the parties are referred to as per their rankings before the Trial Court.

3. The brief facts of the case are that the petitioner was an employee of respondent No.1 and on 05.06.2017 at about 12.30 p.m., during the course of his employment, he met with an accident and sustained grievous injuries. He filed a claim petition before the 'Commissioner' for awarding compensation of Rs.15,00,000/-. Respondent No.1 is an employer and respondent No.2 is an Insurer. Both respondents have appeared and filed their respective written statements, putting forth their contentions. They have also denied their liability to pay the compensation etc.

4. The Commissioner framed necessary issues and recorded evidence and on appreciation of the materials available on record, by the impugned judgment and award, allowed the claim petition in part and held that the claimant - petitioner was entitled for compensation of Rs.3,78,355/- and respondent No.2 shall pay the said amount within a period of two months. The claim made against respondent No.1 was rejected and the same is challenged in the present appeal by the petitioner - employee on the ground that as per Section 4A(3) of the Employees' Compensation Act, 1923 (for short 'EC Act'), the Commissioner ought to have awarded interest at the minimum rate of 12% p.a. along with penalty, if any. But, the Commissioner, without any justifiable reasons, denied the interest and therefore, the claimant - petitioner prayed to direct the respondents to pay the interest at the rate of 12% per annum from 30 days after the incident till realization of the entire amount.

5. After the arguments were advanced by the learned counsel appearing for both the sides, it came to the knowledge that no substantial questions of law is framed at the time of admitting the appeal on 15.11.2023. Hence, substantial questions of law are framed. In the normal circumstances, if any substantial questions of law are framed on that day, the matter needs to be adjourned to give an opportunity to both parties to prepare to answer the said substantial questions of law and hear the matter. On enquiry, the learned counsel appearing for both sides submits that they have understood substantial questions of law involved and already argued the matter. They do not wish to add anything more and matter may be disposed of. In view of the same, this matter is taken up for final disposal.

6. This appeal is admitted to consider the following substantial questions of law;

1. Whether the Commissioner under the Employees' Compensation Act, 1923 has a discretion to refuse the interest even though there is a delay in payment of the compensation?

2. What order?

7. Point No.1:- The contention of the learned counsel for the claimant - petitioner is that as per Section 4A(3) of 'EC Act', it is duty of the employer to assess the compensation and thereafter, he has to deposit the amount within a period of 30 days. In the event, if the employer fails to do so, then he is liable to pay the interest and penalty. In this case, admittedly, the respondents have not deposited any amount before the Commissioner under the Employees' Compensation Act and it is a right given to the employee to receive the interest. Without any justifiable reasons, the respondents have not deposited the compensation amount. The Commissioner, without consid