The liability to pay compensation arises from the date of the accident itself, and interest should be charged from the expiry of one month after it had fallen due, as per Sec.4-A(3) of the Workmen's Compensation Act, 1923.

1. This Civil Miscellaneous Appeal is filed by the appellants/claimants against the order made in W.C.No.27 of 2001 dated 04.03.2003 passed by the Commissioner for Workmen's Compensation-I, Chennai-6.

2. The Commissioner for Workmen's Compensation awarded a sum of Rs.1,97,060/- as compensation with a direction upon the first respondent to pay the said amount within 30 days from the date of receipt of the copy of the award with a further stipulation that in default of such payment within the said period, the awarded sum would carry a simple interest at the rate of 12 per cent p.a. from the date of receipt of a copy of the order till the date of realisation.

3. Being dissatisfied with the award of interest in default, the claimants have come up with the present appeal.

4. The only point taken by Mr.A.Shanmugaraj, the learned counsel appearing on behalf of the appellants in this appeal is that in view of the provision contained in Sec.4-A(3) of the Workmen's Compensation Act, it was the duty of the Commissioner to award interest at the rate of 12 per cent p.a. from the expiry of one month from the date of accident till the actual deposit of amount irrespective of the fact whether there was default on the part of the respondents in making payment of the awarded sum within the time stipulated in the award.

5. The question that arise for determination in this appeal is what should be the starting point of computation of the amount of interest in a proceeding for compensation under the Workmen's Compensation Act, 1923.

6. In order to appreciate the aforesaid question, it will be appropriate to refer to the provision contained in Sec.4-A (3) of the Act which is quoted below:-

"(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 12 per cent per annum or at such higher rate not exceeding the maximum of the lending 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 the 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)."

7. A plain reading of the aforesaid provision makes it abundantly clear that if the employer is in default in paying compensation due under the Act within one month from the date it fell due, the Commissioner should pass order of payment of interest in addition to the amount of arrears at the rate of interest at 12 per cent p.a. or at such higher rate not exceeding the maximum of the lending rate of any schedule bank as may be specified by the Central Government by notification in the Official Gazette on the amount due.

8. At this stage, it will not be out of place to refer to Sec.3 of the Act which deals with the employer's liability to the Workmen's Compensation. Sub Sec.(1) of that Section provides the employer should be liable to pay compensation if personal injury is caused to the workman by an accident arising out of or in course of his employment. The employer, therefore, becomes liable to pay compensation as soon as the aforesaid personal injury is caused to the workman in the above said accident. Therefore, the liability to pay compensation arises not from the date of order of assessment but from the date of accident itself. As provided in Sec.4-A(3) of the