IN THE HIGH COURT OF ALLAHABAD
KAUSHAL JAYENDRA THAKER, J.
Smt. Ombiri and Others - Appellants
Versus
Shankar Singh and Another - Respondents
First Appeal From Order No. 3824 of 2009
Decided On : 12-05-2023
Employee's Compensation Act, 1923 – Section 4A – Claiming Compensation – First Appeal – Challenged judgment and award – Claim petition – Held, Court not convinced as statute demands that claimant becomes entitled to interest within a period of one month from date amount accrues to him – In court case, amount accrued to him one month after accident took place, and owner, who was insured by respondent no.2 did not make payment – Judgment and award impugned herein is modified – If Insurance Company has not yet deposited amount, it shall deposit amount with interest at rate of 12% from one month from date of accident – Appeal partly allowed.
JUDGMENT :
1. Heard Sri Nigamendra Shukla, learned counsel for the appellants and Sri Aditya Singh Parihar, learned counsel for respondent-Insurance Company.
2. By way of this appeal, the claimants have challenged the judgment and award dated 15.05.2009 passed by Workmen's Compensation Commissioner, Meerut in Case No. W.C.A. 45 of 2007 wherein the learned Commissioner has awarded Rs.2,96,520/- as compensation. However, the Commissioner has awarded 10% conditional interest namely if the awarded amount is not deposited within thirty days, then only the amount would carry interest at the rate of 12% from the date of filing of the claim petition till the amount is deposited.
3. The appellants have challenged the award on the following substantial question of law :
4. Learned counsel for the appellant has submitted that the learned Commissioner could not have granted interest below statutory limit and that too with condition. Learned counsel has relied on the decision in First Appeal From Order No. 1553 of 2020 (Sanju Kushwaha vs. Vimal Kumar and Anr.) decided on 3.12.2020.
5. While going through the above question of law the Commissioner could not have granted interest at dehors the provisions of Section 4A of the Employee's Compensation Act, 1923, it would be pertinent to reproduced the above provision which is as under :
(1) Compensation under Section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(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, play simple interest thereon at the rate of twelve 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 purposes of this 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).
[(3A) The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be.]]"
6. The grant of interest below the statutory rate of interest and that too, with a condition that if there is no payment within one month, is against the mandate of the Court. This Court is fortified in its view by the decision of this Court passed in First Appeal From Order No.2126 of 2019 (Sunita Mishra and another Vs. M.T.G. Infra Power Pvt. Ltd and another) & d
The court held that the liability for interest on compensation lies with the Insurance Company, affirming a statutory interest rate of 12% under the Workmen's Compensation Act if not paid within a mo....
The insurance company is not liable for interest payments under the Workmen's Compensation Act; liability rests with the employer to pay compensation and associated interest.
Claimants entitled to interest at 12% from the date of the accident under the Workmen’s Compensation Act, ensuring fairness and adherence to beneficial legislation.
The main legal point established in the judgment is the liability of the Insurance Company to pay interest imposed upon the insured employer by the Workmen's Commissioner under Sec. 4A(3) of the Empl....
Employers are liable to pay statutory interest on compensation from the date of the accident if payment is delayed, and Disability Certificates from Medical Boards take precedence over private assess....
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