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2014 Supreme(Bom) 225

In the High Court of Bombay at Nagpur
S.B. SHUKRE, J.
Subhash & Another
Versus
The National Insurance Co. Ltd. Through its Divisiona Manager & Another
First Appeal No. 751 of 2013
Decided On : 30-01-2014

Advocates Appeared:
For the Appellants:D. C. Navkarkar, Advocate.
For the Respondents:R1, Hitesh Verma, R2, S.S. Ghate, Advocates.

Headnote:EMPLOYEES COMPENSATION ACT, 1923 - Section 22(2) - Payment of interest on compensation. - Since legal liability of employer to pay compensation accrues on date of accident hence starting point for payment of interest is date of accident. - In the cases of Udhav Rangnathrao Pawar v. Sheshrao Ramji Jogdand, 2009 (6) All MR 117. Single Judge, while summarizing these principles, has observed that merely because the dispute is raised in respect of the liability to pay the compensation by the employer and the same is the subject-matter of determination by the Commissioner under Section 19 of the Act, the employer is not absolved from his liability to pay the amount of interest with effect from the date of incident or accident. The Judge has further observed that in such a situation, though the liability to pay is determined on any date subsequent to the date of occurrence of an accident, the payment of interest is automatic and it becomes a part and parcel of the legal liability of the employer, which accrued to him on the date of the accident. Thus, the substantial question of law involved in this case has to be answered in terms that the starting point for payment of interest is the date of accident and not the date of adjudication and, therefore, the impugned judgment and award insofar as they grant interest from the date of award cannot be sustained in law. To this extent, the appeal succeeds.

Judgment

Heard.

2. This appeal is directed against the judgment and order dated 21.2.2013 passed by Labour Court, Wardha in WCA No. 1/2011. The appellants are the original applicants, who had filed an application under Section 22(2) of the Employees Compensation Act, 1923 for determination of amount of compensation payable to them for the accidental death of their son, Suresh, during the course of the employment. Respondent no. 1, the insurance company is the original non-applicant no. 2 and respondent no. 2, the employer of deceased Suresh Tiwade is the original non-applicant no. 1.

3. The appellants claimed that death of Suresh Tiwade, who was the driver employed on the truck bearing registration no. MH-32-B-4685 owned by respondent no. 2 and insured with respondent no. 1, occurred on 17-11-2010 during the course and from out of the employment. Therefore, they filed an application before the Labour Court for determination of compensation payable to them.

4. Respondent no. 2 resisted the application by denying the fact that deceased Suresh Tiwade was an employed by him as a driver on the truck. However, it was admitted by him that the truck was insured with respondent no. 1.

5. Respondent no. 1 admitted the ownership and insurance of truck, but denied that the deceased was in the employment of respondent no. 2. He denied that the death occurred during the course of the employment and it arose out of the employment.

6. On these rival pleadings, several points were framed by the Labour Court and after considering evidence available on record, the learned Judge came to the conclusion that deceased Suresh died during the course of and from out of the employment with respondent no. 2 and that both the respondents were liable to pay compensation jointly and severally to the appellants. The compensation amount was fixed at Rs.7,15,761/- and it was directed to be paid with interest at the rate of 12% per annum from the date of award till its realization.

7. Since the period of interest awarded on the compensation amount was not acceptable to the appellants, the appellants filed the present appeal. This is how the parties are before this Court in this appeal.

8. The appellants have challenged the impugned judgment and order only on a limited aspect relating to the period for which the interest ought to have been granted by the learned Judge. Having heard the submissions made on this aspect by both the sides, I find that the appeal deserves to be admitted on a substantial question of law. Hence, admit on the following substantial question of law. What should be the point from which interest should be awarded on the amount of compensation under Section 4(A)(3)(a) of the Employees Compensation Act, 1923 ?

9. Finally heard by consent.

10. Shri Navkarkar, learned counsel for the appellants has submitted that the interest payable on the amount of compensation, which has not been paid within a period of one month from the time it has fallen due, must relate back to the date of accident and therefore, learned Judge ought to have granted interest not from the date of award or from the date of adjudication but from the date of accident. In support, he has placed reliance on following cases.

(i) Pratap Narain Singh Deo Vs. Shrinivas Sabata and anr. [AIR 1976 SC 222(1)],

(ii) Kerala State Electricity Board and anr. Vs. Valsala K. and anr. [AIR 1999 SC 3502(1)],

(iii) Oriental Insurance Co. Ltd. Vs. Siby George and ors. [AIR 2012 SC 3144],

(iv) Oriental Insurance Co. Ltd., through Regional Manager, Akola Vs. Sunita wd/o Gajanan Kale and ors. [2013 III CLR 362] and

(v) Udhav Rangnathrao Pawar Vs. Sheshrao Ramji Jogdand and anr. [2009 AC 33(Bom)(AB)]

11. Shri Hitesh Verma, learned counsel for respondent no. 1 as well as Shri S.S. Ghate, learned counsel for respondent no. 2, are in disagreement with the contention so raised by learned counsel for the appellants. They submit that although in Pratap Narain Singh Deo case (supra), Hon’ble Supreme Court h








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