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2008 DIGILAW 241 (GAU)

Oriental Insurance Co. Ltd. v. Umesh Nath

2008-03-27

H.N.SARMA

body2008
JUDGMENT H.N. Sarma, J. 1. The subject-matter of this batch of appeals is the respective award passed by the Commissioner, Workmen's Compensation, Guwahati by which the claim of the respective claimants were allowed and compensation was awarded to the claimants. 2. Heard Mr. A. Ahmed, learned Counsel for the appellant and Mr. D.K. Saikia, learned Counsel for the claimants/respondents. 3. At the outset Mr. Ahmed has pointed out that although the appeals were admitted, the specific substantial question of law has not been framed. 4. Accordingly, upon hearing the learned Counsel and as agreed to by the learned Counsel for both the sides, the following substantial questions of law have been framed for deciding these appeals. 1. Whether the Commissioner, Workmen's Compensation erred in law in including daily allowance while calculating the monthly wages of the workman/victim? 2. Whether the order directing to pay the interest to the claimant on the awarded sum from the date of filing of the petition is sustainable in law? 5. Although there are other points to be agitated in the memo of appeal, Mr. Ahmed has restricted his submission only to the aforesaid substantial questions of law, the aforesaid substantial question of law being common in these appeals, all these appeals are heard analogously as prayed for by the learned Counsel and disposed of by this common judgment. 6. In MFA No. 20/03 the claimant was a driver of the offending vehicle which met with an accident as a result of which he sustained injuries. His monthly wage was Rs. 2,000 and daily allowance was Rs. 70. Accordingly, aiding the said daily allowance of Rs. 70 his total wages is found to be Rs. 4,100 but in view of the monthly salary being fixed under Section 4(2) of the Workmen's Compensation Act, the wages was taken to be Rs. 4,000 per month. 7. In MFA No. 21/03, the claimant was a handyman of the offending vehicle and his salary was Rs. 1,500 with daily allowance Rs. 50 per day and accordingly his monthly wages was calculated to be Rs. 3,000 and award was passed on the basis of his wages so calculated. 8. In MFA No. 62/03 the claimant who was a driver of the offending vehicle was paid the wage of Rs. 1,000 per month and daily allowance was Rs. 1,500 with daily allowance Rs. 50 per day and accordingly his monthly wages was calculated to be Rs. 3,000 and award was passed on the basis of his wages so calculated. 8. In MFA No. 62/03 the claimant who was a driver of the offending vehicle was paid the wage of Rs. 1,000 per month and daily allowance was Rs. 120 per day and calculating and aiding it to the wages, his wages was fixed at Rs. 4,000 per month and. 9. Similarly, in MFA No. 79/03, the claimant was a handyman and was getting wages of Rs. 900 and Rs. 70 as daily allowances. The Commissioner calculated the award aiding the daily allowance with the wages and accepted the wages to be Rs. 3,000 per month. The Commissioner calculated the respective waged aiding daily allowances with the salary of the claimant/victim. 10. The question that falls for consideration is as to whether the daily allowance can be added while calculating the wages of a workman under the provisions of Section 2(m) of the WC Act, 1923. This point is no longer a res-integra inasmuch as the Division Bench of this Court in the case of Oriental Insurance Co. Ltd. v. Lakhimai Das and Anr. 2006 (3) GLT 870has held that the daily allowance is not to be included while calculating the wages. The counsel submits that the aforesaid decision of the Division Bench squarely covers the first substantial question of law so framed in the case. Accordingly, the same is answered in the affirmative. 11. Adverting to the other substantial question of law regarding admission to pay the interest on the awarded amount from the date of 'filing the claim petition, Mr. Ahmed submits that such interest at best can be awarded only after adjudication of the dispute, i.e., after passing of the award. In this connection Mr. Ahmed has relied on a decision of this Court passed in MFA No. 44/04 National Insurance Co. Ltd. v. Dipen Laskar and Ors. (1976) SCC 254 disposed of on 5.9.2006. In the aforesaid case, this Court at paragraph 11 has held as follows: 11. Mr. M. Choudhury, however referring to the decisions of the Apex Court (1997) 8 SCC 1 submits that the liability to pay interest would arise from the date of the accident itself. Ltd. v. Dipen Laskar and Ors. (1976) SCC 254 disposed of on 5.9.2006. In the aforesaid case, this Court at paragraph 11 has held as follows: 11. Mr. M. Choudhury, however referring to the decisions of the Apex Court (1997) 8 SCC 1 submits that the liability to pay interest would arise from the date of the accident itself. The ratio of the decisions of the aforesaid cases, more particularly (1997) 8 SCC shows that in the light of the Sub-section (2) of Section 4 of the Act once the compensation is due under the Act becomes assertive provisionally under Sub-section 2 of Section 4 the Workmen's Compensation Act for final adjudication by the Commissioner and if the employer does not pay the sum from one month on which it falls due the employer shall pay under Sub-section 2 of Section 4A at the rate of 12% per annum provided therein the penalty as contemplated under Section 4A(b) thereafter amended as Section 4A(3) of the Act. Thus interest payable on the principal amount if not paid when it falls due after one month of its falling due. In the record of the instant case disclose that there is provision for determination of the compensation under Section 4A(2) and the final determination of the liability was made on G. 1.2004 by the impugned order. On such consideration the order of compensation to pay interest at the rate of 12% per annum w.e.f. 28.2.2002 is not sustainable and such liability to pay interest arose only from 6.2.2004, i.e., one month after the fixation of such liability. 12. Mr. Ahmed submits that subsequent to the aforesaid decision the Apex Court also has interpreted the provision of Section 4A(b) of the Act in the case of National Insurance Co. Ltd. v. Mubasir Ahmed and Anr. (2007) 2 SCC 349 has held that the interest can be awarded only after adjudication of the claim. At paragraphs of the Mubasir Ahmed (supra) the Apex Court has held as follows: Interest is payable under Section 4A(3) if there is default in paying the compensation due under this Act within one month from the date it fell due. The question of liability under Section 4A was dealt with by this Court in Maghar Singh v. Jashwant Singh. At paragraphs of the Mubasir Ahmed (supra) the Apex Court has held as follows: Interest is payable under Section 4A(3) if there is default in paying the compensation due under this Act within one month from the date it fell due. The question of liability under Section 4A was dealt with by this Court in Maghar Singh v. Jashwant Singh. By amending Act 30 of 1995, Section 4A of the Act was amended, inter alia, fixing the minimum rate of interest to be simple interest @ 12%. In the instant case, the accident took place after the amendment and, therefore, the rate of 12% as fixed by the High Court cannot be faulted. But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it fell due. Obviously it cannot be the date of accident. Since no indication is there as to when it becomes due, it has to be taken to be the date of adjudication of the claim. This appears to be so because Section 4A(1) prescribes that compensation under Section 4 shall be paid as soon as it falls due. The compensation becomes due ton the basis of adjudication of the claim made. The adjudication under Section 4 in some cases involves the assessment of loss of earning capacity of a qualified medical practitioner. Unless adjudication is done question of compensation becoming due does not arise. The position becomes clearer on a reading of Sub-section (2) of Section 4A. It provides that provisions payment to the extent of admitted liability has to be made when employer does not accept the liability for compensation to the extent claimed. The crucial expression is "falls due". Significantly, Legislature has not used the expression "from the date of accident". Unless there is an adjudication, the question of an amount falling due does not arise. 13. In view of the aforesaid legal position, Mr. Saikia finds it extremely difficult to sustain the part of the judgment and direction passed by the Commissioner in disposing the claim cases. In view of the above discussion and legal position, the second substantial question of law is also answered in affirmative. 14. In the result, these appeals are allowed to the extent that the fixation of the wages of the claimants/respondents as made by the Commissioner, Workmen's Compensation stands set aside and quashed. In view of the above discussion and legal position, the second substantial question of law is also answered in affirmative. 14. In the result, these appeals are allowed to the extent that the fixation of the wages of the claimants/respondents as made by the Commissioner, Workmen's Compensation stands set aside and quashed. The Commissioner is directed to calculate the award only on the basis of the monthly salary excluding daily wages. It is further ordered that the direction to pay the interest from the date of filing of the claim petition also stands set aside and quashed and such interest is to be calculated only after expiry of one month from the date of final adjudication of the claim. It is further made clear that if after re-calculation of the wages of the workman, the appellant/insurer does not dispose of the same within a period of one month, the interest would be calculated from the next month. 15. All these matters are remanded back to the Commissioner, Workmen's Compensation, Guwahati for doing the aforesaid exercise. Both the parties are directed to appear on 28.4.2008 before the Commissioner and the Commissioner shall calculate the wages and pass appropriate award within a period of three weeks thereafter. Appeal allowed.