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2023 Supreme(J&K) 518

IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU
SANJEEV KUMAR, J.
Mohd. Abdullah - Appellant
Versus
Manager, Trumboo Cement Industry Limited and Another - Respondents
MA No.155 of 2007 c/w MA Nos.152, 153, 154 of 2007, CCROS Nos.9900001, 9900002, 9900003, 9900004 of 2008
Decided On : 11-07-2023

Advocates Appeared:
For the Appellant : Mr. M.P. Gupta.
For the Respondent: Mr. Shafiq Ahmad Wani, Ms. Damini Chauhan, Mr. Vishnu Gupta.

The central legal point established in the judgment is the statutory obligation of the employer to compensate injured employees under the Employees’ Compensation Act, 1923, and the liability to pay interest and penalty in case of default.

Headnote:

Employees’ Compensation Act - Workmen's Claim Petitions - Section 3 of the Employees’ Compensation Act, 1923 - Summary of Acts and Sections: The court discussed the legal provisions of the Employees’ Compensation Act, 1923, particularly Section 4-A, which deals with the payment of compensation, interest, and penalty. The court emphasized the obligation of the employer to compensate the injured employees and the liability to pay interest and penalty in case of default.

Fact of the Case:

Four workmen filed claim petitions under Section 3 of the Employees’ Compensation Act, 1923, against their employer, seeking compensation for injuries sustained during blasting operations. The Commissioner awarded compensation to the workmen, but declined to pay interest, leading to appeals by both the workmen and the insurer.

Finding of the Court:

The court found that the Commissioner's omission to consider the claim for interest under Section 4-A of the Act was unjustified. It held the employer liable to pay interest at 12% per annum from the date of the accident and a penalty of 10% of the awarded amount. The court dismissed the insurer's appeals and allowed the workmen's appeals for interest and penalty.

Issues: The main issues revolved around the entitlement to interest and penalty under Section 4-A of the Act, and the liability of the employer and insurer in fulfilling the statutory obligations.

Ratio Decidendi: The court held that the compensation becomes payable to the injured workmen on the date of the accident, and the employer's default in payment within one month triggers the obligation to pay interest and penalty. It also determined that the insurer was not liable to indemnify the employer for interest and penalty unless specifically contracted.

Final Decision: The court allowed the workmen's appeals, directing the employer to pay interest at 12% per annum from the date of the accident and a penalty of 10% of the awarded amount. The appeals by the insurer were dismissed.

JUDGMENT :

1. Four persons namely Mohd Abdullah, Mohd Rafiq, Mohd Yousuf & Mr. Ab. Rashid Drabu claiming to be workmen of Trumboo Cement Industries Private Limited filed four different claim petitions under Section 3 of the Employees’ Compensation Act, 1923 [“ the Act for short”]. The claim petitions were filed against M/S Trumboo Cement Industries Private Limited [“the employer”], arraying also the United India Insurance Company Limited [“the insurer”] as party respondents.

2. The gravamen of their claim petition, to put it briefly, was that the workmen above named while being in the course of their employment with the employer received serious injuries on 26th July, 2004. The injuries were allegedly received by the workmen during blasting operations undertaken on the directions of the employer. The workman Mohd Abdullah sustained a fracture in his right arm, injury in left eye and some other physical injuries which rendered him permanently disabled. The workman Mohd Rafiq allegedly sustained injuries all over the body, face, legs, scalp and right hand etc. which also resulted in the permanent disablement. The workman Mohd Yousuf also allegedly sustained multiple injuries all over his body, arm, right eye and ear etc. etc., the injuries also resulted in permanent disablement of the workman. The workman Ab. Rashid Drabu also sustained multiple injuries in the same accident and was rendered permanently disabled.

3. The claim applications filed by the workmen were entertained by the Commissioner Workmens’ Compensation [“the Commissioner”] Ramban.

4. On being put on notice, the employer as well as the insurer caused their appearance before the Commissioner and submitted their written objections, wherein the claim of the workmen was denied in Toto. To substantiate their claims, the workmen produced their witnesses namely Abdul Aziz, Abdul Rashid and Dr. Mohd Iqbal Bhat, Assistant Surgeon. There was, however, no evidence in rebuttal lead either by the employer or the insurer. The employer had stopped appearing in the matter and, therefore, had already been proceeded ex-parte.

5. The Commissioner considered the claim of the workmen in the light of the evidence led by them and held all the four workmen entitled to different sums of compensation. An award for an amount of Rs.12,79,130/- (Rupees Twelve Lac Seventy-nine Thousand & one Hundred Thirty) in favour of all the four workmen came to be passed by the Commissioner vide its order dated 8th June, 2007. The insurer was directed to deposit the awarded amount of compensation with the Court of Assistant Labour Commissioner, Ramban, by way of indemnification to the employer.

6. The impugned award dated 8th June, 2007, is assailed by all the four workmen by filing appeals. The only ground of challenge urged by the learned counsel appearing for the appellant workmen is that though the Commissioner has allowed their claims for compensation, yet it has declined to pay interest for undisclosed reasons. The appeals preferred by the workmen are only restricted to the extent that the Commissioner has declined them interest which is mandatorily payable under Sub Section (a) of Section 4-A of the Act. It seems that when the notices of the appeals filed by the Workmen were served upon to the respondents including the insurer. The insurer also filed four cross objections which were later on treated as appeals by this Court vide order dated 14th September, 2022.

7. I have heard learned counsel appearing on both sides and perused the material on record. Since both the sides i.e., the workmen as well as the insurer are in appeals against the impugned order, as such, it would be appropriate to first deal with the appeals filed by the insurer

Appeals by the Insurer:-

8. Mr. Vishnu Gupta, learned counsel appearing for the insurer has projected following substantial questions of law.

    (i) That the award impugned in the present appeal is against the law and facts of the present case. The same is factually incorrect a

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