Research › Search › Judgment

Himachal Pradesh High Court · body

2005 DIGILAW 412 (HP)

NATIONAL INSURANCE CO. LTD. v. GULABA RAM

2005-11-08

V.M.JAIN

body2005
JUDGEMENT V.M. Jain J. (Oral).: This appeal has been filed by the appellant Insurance Company against the order dated 29.11.2004 passed by the Commissioner under the Workmens Compensation Act, 1923 (hereinafter referred to as the Act), vide which a sum of Rs.1,42,680/- besides interest at the rate of 12% pa. amounting to Rs.26,620/- total amounting to Rs.1,69,300/- was awarded to the claimants for the death of Parkash Chand deceased during the course of his employment. After hearing both sides, the Commissioner under the Act awarded the aforesaid amount of compensation including interest of the claimants to be paid by the appellant Insurance Company, being the insurer of the vehicle, which had met with an accident on 10.4.2003, resulting in the death of Parkash Chand deceased who was working as a conductor on the said vehicle at the time of the accident. The appellant Insurance Company was further directed by the Commissioner under the Act to deposit the aforesaid amount of Rs.1,69,300/- within one month from the date of the award failing which it shall be liable to pay simple interest at the rate of 18% p.a. from the date of the award till the date of deposit. Aggrieved against the award of the Commissioner under the Act the appellant Insurance Company filed the present appeal in this Court. 2. Notice in this appeal was given to the respondents. I have heard the learned counsel for the parties and have gone through the courts carefully. So far as the quantum of compensation and the liability of the appellant Insurance Company to pay the amount of interest to the claimants-is concerned, in my opinion, there is no merit in this appeal to that effect, inasmuch as, the Commissioner under the Act had assessed the compensation payable to the claimants, after following the procedure laid down under the Act and applying the formula as given there in. Furthermore, there is nothing to show that in the insurance policy the appellant Insurance Company had excluded itself from its liability to pay interest on the amount of compensation. In this view of the matter, in my opinion, the Commissioner under the Act had rightly awarded the compensation amount to the claimants, besides interest and had rightly held the appellant Insurance Company liable to pay the compensation amount and the amount of interest to the claimants and no fault could be found with the same. 3. In this view of the matter, in my opinion, the Commissioner under the Act had rightly awarded the compensation amount to the claimants, besides interest and had rightly held the appellant Insurance Company liable to pay the compensation amount and the amount of interest to the claimants and no fault could be found with the same. 3. The learned counsel appearing for the appellant Insurance Company submitted before me that the Commissioner under the Act had no jurisdiction to grant penal interest at the rate of 18% pa. from the date of award till the date of deposit, in case the compensation amount was not deposited within on month from the date of the order passed by the Commissioner under the Act. 4. There is force in this submission of the learned counsel of the appellant Insurance Company. Under Section 4-A(3)(a) of the Act it has been provided that where there is default in paying the compensation due under the Act, the Commissioner shall also direct that the employer shall in addition to the amount of arrears, pay simple interest at the rate of 12% p.a. on amount due. It has also been provided therein that the Commissioner could also grant simple interest at such a higher rate not exceeding amount of the lending rates of any scheduled bank as may be specified maximum lending rates of any scheduled bank as may have been specified by the Central Government by notification in the Official Gazette is more than 12%. In this view of the matter, the Commissioner under the Act could not have granted the interest more than 12% p.a. on the compensation amount due. Furthermore, there was no occasion for the Commissioner under the Act to have directed the appellant Insurance Company to deposit the compensation amount along the interest within one month from the date of the order failing which the appellant Insurance Company was held liable to pay interest at the rate of 18% p.a. from the date of the order till the date of deposit. This direction given by the Commissioner under the Act is penal in nature and is not supported by any provision of law, which empowers the Commissioner under the Act to pass such an order. 5. This direction given by the Commissioner under the Act is penal in nature and is not supported by any provision of law, which empowers the Commissioner under the Act to pass such an order. 5. In view of the above, the following substantial question of law arises for determination in this appeal: Whether the Commissioner under the Workmens Compensation Act could direct the insurance Company to deposit the amount within one month, failing which the Insurance Company would be liable to pay interest at the rate of 18% p.a. on the said amount from the date of the passing of the order till deposit? 6. In view of the detailed discussion above, the aforesaid substantial question of law has to be decided in favour of the appellant Insurance Company and against the respondents, since there is no provision under which the Commissioner under the Act could pass order regarding payment of penal interest at the rate of 18% p.a. in case there is a default on the part of the Insurance Company to deposit the amount within the specified period. Decided accordingly. 7. In view of the above the present appeal is partly allowed. The order dated 29.11.2004 passed by the Commissioner under the Act is modified and the direction given by the Commissioner under the Act in the last paragraph of the relief clause is set aside and it is directed that the appellant Insurance Company would not be liable to pay interest at the rate of 18% p.a. from the date of award till the date of deposit even if the appellant Insurance Company fails to deposit the compensation amount along with interest, as ordered by the Commissioner under the Act, within one month from the date of the order. There shall however, be no order as to costs in this appeal. CMP No. 1026 OF 2005 8. In view of the disposal of the main appeal, this application has become infructuous and is disposed of accordingly.