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2017 Supreme(Bom) 2269
IN THE HIGH COURT OF BOMBAY
KUM. INDIRA K. JAIN, J.
SHIVA S/o LAKHAJI SAKHARE - Appellant
Vs.
PRESIDENT, INDO RAMA SYNTHETICS (I) LTD., NAGPUR AND ANOTHER - Respondents
F. A. No. 126 of 2008
Decided On : 27-09-2017
For the Appellant : S.A. Kalbande.
For the Respondent: M.R. Puranik.
The main legal point established in the judgment is the determination of the date from which interest on compensation is payable under the Workmen’s Compensation Act, emphasizing the statutory obligation to pay compensation within the specified time and the liability to pay interest in case of default.
Headnote:
Workmen’s Compensation Act - Compensation - Section 22 - 4-A(3)(a) - 4-A(1) and (3) - [1923 (the Act)] - The court discussed the provisions of the Workmen’s Compensation Act, particularly sections 22, 4-A(3)(a), 4-A(1) and (3), and their interpretation in relation to the payment of compensation and interest. The court emphasized the statutory obligation to pay compensation within the specified time and the liability to pay interest in case of default. The judgment highlighted the importance of the date from which interest on compensation is payable, as determined by the Hon’ble Supreme Court in Oriental Insurance Company Limited vs. Siby George and others, and its application to the present case.
Fact of the Case:
The appellant, a worker in a synthetic yarn manufacturing establishment, suffered a permanent disability due to a workplace accident. The appellant filed a compensation claim under the Workmen’s Compensation Act, which was allowed by the Commissioner. The dispute arose regarding the payment of interest on the compensation amount.
Finding of the Court:
The court found that the appellant was entitled to simple interest at the rate of 12% per annum from the date of the accident, as per the statutory requirement of the Act. The court held that the liability to pay interest arises from the date the compensation fell due, and not from the date of the Commissioner's order.
Issues: The main issue revolved around the date from which interest on the compensation amount should be calculated, i.e., from the date of the accident or from the date of the Commissioner's order. The court also considered the employer's immediate conduct and the applicability of the statutory provisions.
Ratio Decidendi: The court relied on the interpretation of the relevant provisions of the Workmen’s Compensation Act and the precedent set by the Hon’ble Supreme Court in Oriental Insurance Company Limited vs. Siby George and others. The court emphasized the statutory obligation to pay compensation within the specified time and the liability to pay interest in case of default.
Final Decision: The court modified the operative part of the impugned judgment and directed the non-applicants to pay interest at the rate of 12% per annum from the date of the accident. The substantial question of law was answered accordingly, and the appeal was disposed of in the above terms.
This appeal takes an exception to the judgment and award dated 09-12-2004 passed by the Commissioner under the Workmen’s Compensation Act, First Labour Court, Nagpur in W.C.A. Case No. 104/1997 thereby allowing an application filed by appellant under section 22 of the Workmen’s Compensation Act, 1923 (for short ‘the Act’) claiming compensation of Rs. 2,67,252/- from the employer and the insurer. The learned Commissioner directed respondents to jointly and severally deposit compensation within one month from the date of order passed by the Commissioner. Being dissatisfied with the award of interest from the date of order, appellant has preferred this appeal.
2. For the sake of convenience, appellant and respondents are referred in their original status as applicant and non-applicants as they were referred before the Labour Court.
3. The facts giving rise to the appeal may be stated in nutshell as under :
i. Appellant was working since about three years before filing the application on the establishment of non-applicant No.1. He was paid Rs.72.20 per day wages. Non-applicant No. 1 was manufacturing synthetic yarn and more than 4000 workers were working on its establishment.
ii. According to applicant, he was working on permanent basis, but his name was not maintained on muster roll. Non-applicant No. 1 on paper had shown that applicant was working through a contractor viz. M/s Loknath Security Services. It was submitted that applicant is an employee of non-applicant No. 1 and not of the so called contractor.
iii. On 04-08-1997, applicant was working in Coal Handling Plant of Boiler House as usual at the Coal Conveyor Belt in second shift. He met with an accident. He received crush injuries to his right hand as it came in the Coal Conveyor Belt. His right hand was required to be cut off from elbow portion. He was admitted to the Medical College and Hospital, Nagpur. His right hand was amputated by the machine at the time of occurrence of accident. He became permanently disable and was not able to perform his duties due to accident.
iv. At the time of accident, applicant was 21 years old. He served notice through his Counsel to non-applicant No.1 on 22-09-1997. Non-applicant No.1 replied the notice and raised a contention that risk of the applicant being covered under the insurance policy, he would receive compensation accordingly. After receipt of notice, non-applicant No.1 paid Rs. 50,000/- towards ex gratia payment to applicant.
v. Applicant then filed an application under the Act claiming compensation of Rs. 2,67,252/-. During pendency of W.C.A. No. 104/1997, non-applicant No. 2 deposited an amount of Rs. 78,839/-. Applicant also claimed interest at the rate of 12% per annum and the penalty on the amount of compensation.
vi. Non-applicant No. 1 resisted the application by filing reply. It was the defence of non-applicant No. 1 that applicant was never the employee of non-applicant-establishment. It was submitted that applicant was in the employment of a contractor and was not a workman within the meaning of section 2(1)(n) of the Act. According to non-applicant No.1, as per the certificate of Civil Surgeon, 50% permanent disability came to be assessed and compensation to the extent of 50% disability was already paid to applicant. The submission was that application is not maintainable and if at all is maintainable, applicant was not entitled to receive compensation as claimed by him.
vii. Non-applicant No. 2 filed reply at Exh.22 and submitted that non-applicant No. 1 is exclusively liable to pay compensation.
viii. Upon rival pleadings of the parties, Commissioner framed issues at Exh.13. Applicant examined himself. Non-applicant No.1 examined Prabhakar Yashwant Koltewar. Non-applicant No. 2 did not adduce any oral evidence. Considering the oral and documentary evidence, Commissioner came to the conclusion that at the time of occurrence of accident on 04-08-1997, applicant was in the employment of non-applicant No.1, accident
