JUDGMENT : DEEPAK GUPTA, J. 1. This appeal has been admitted on the following substantial question of law: “1. Whether the Commissioner under Workmen’s Compensation Act has failed to pass the impugned award as per statutory provisions of the Workmen’s Compensation Act?” 2. It would be pertinent to mention that the aforesaid appeal was earlier dismissed by a short order holding that in the memorandum of appeal no challenge had been made in respect of award of interest or penalty. The appellant filed a Civil Appeal No. 4809 of 2005 before the Apex Court which was allowed and the matter was remanded to this Court for decision afresh in accordance with law. 3. The undisputed facts are that the applicant was a Workman and filed a claim petition for compensation on account of personal injury sustained in an accident while discharging his duties as a driver. The learned Commissioner awarded compensation of Rs. 2,21,004/-. It further directed that the amount be deposited within sixty days from the date of order, failing which, the Insurance Company would be liable to pay interest at the rate of 12% per annum. The workman challenged this award only on the ground that the Commissioner has failed to award statutory interest at the rate of 12% per annum from the date the amount fell due and also prayed that the Commissioner has failed to exercise jurisdiction vested in him by law in not awarding penalty and interest in terms of Section 4-A of the Workmen’s Compensation Act. 4. Section 4-A of the Workmen’s Compensation Act reads as follows: “4-A. Compensation to be paid when due and penalty for default: (1) Compensation under section 4 shall be paid as soon as it falls due. (2) In case 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 payment 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 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. (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.” 5. A bare perusal of this Section shows that an employer in terms of Section 4-A is expected to deposit the amount of compensation payable to an employee within one month. If he does not pay the compensation within one month, he is liable to pay interest and penalty. The main question which arises for consideration in this case is when does the compensation “fall due.” Section 3 of the Workmen’s Compensation Act makes an employer liable to pay compensation in respect of personal injury or death of an employee in an accident arising out of and in the course of employment. As per the provisions of this Section, the amount falls due when the accident takes place. Section 4 lays down the criteria to calculate the amount of compensation payable. Section 4-A, which has been quoted hereinabove, lays down that the compensation under Section 4 shall be payable as soon as it falls due. Section 4(2) provides that even when 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 without prejudice to the right of the Workman while making any further claim.
From a bare perusal of Section 4-A(1) and 4-A (2), it is apparent that the compensation falls due on the date of accident and the employer is expected to make the payment immediately and even if he does not accept the liability to the extent claimed, he is bound to make provisional payment. 6. It would be pertinent to note that under the provisions of the Workmen’s Compensation Act, it is not necessary that a claim petition must be filed. The employer of his own can also deposit the compensation with the Commissioner. Section 4-A (3) lays down that where the employer is in default in paying the compensation due under the Act within one month from the date it falls due, the Commissioner shall direct the employer to pay interest in addition to compensation at the rate of 12% per annum or at such higher rate not exceeding the maximum the lending rates of scheduled banks. Section 4-A (3) (b) empowers the Commissioner to impose penalty, if he is of the opinion that there is no justification for the delay in depositing the amount. From a perusal of all the aforesaid statutory provisions, it is apparent that the compensation falls due on the date of accident. 7. The liability to pay interest/penalty can be avoided by depositing the amount payable or at least making provisional payment within one month of the accident. The question as to when the amount falls due, came up for consideration before a Constitution Bench of the Supreme Court in Partap Narain Singh Deo vs. Shrinivas Sabata and Another, AIR 1976 SC 222 . The Apex Court was considering the provisions of Sections 3, 4, 4-A and 19 of the Workmen’s Compensation Act. The contention which was raised before the Supreme Court, has been noted by it in Para-6 of the said judgment. In Para-7 and Para-8, the Apex Court dealt with the question as to when the compensation falls due. The relevant portion of the judgment reads as follows: “6. It has next been argued that the Commissioner committed a serious error of law in imposing a penalty on the appellant under Section 4-A (3) of the Act as the compensation had not fallen due until it was ‘settled’ by the Commissioner under Section 19 by his impugned order dated May 6, 1969. There is however no force in this argument.” “7.
There is however no force in this argument.” “7. Section 3 of the Act deals with the employer’s liability for compensation sub-section (1) of that section provides that the employer shall be liable to pay compensation if “personal injury is caused to a workman by accident arising out of and in the course of his employment.” It was not the case of the employer that the right to compensation was taken away under sub-section (5) of Section 3 because of the institution of a suit in a civil court for damages, in respect of the injury, against the employer or any other person. The employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is therefore futile to contend that the compensation did not fall due until after the Commissioner’s order dated May 6, 1969 under Section 19. What the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner. There is therefore nothing to justify the argument that the employer’s liability to pay compensation under Section 3, in respect of the injury, was suspended until after the settlement contemplated by Section 19. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is no justification for the argument to the contrary.” “8. It was the duty of the appellant, under Section 4-A (1) of the Act, to pay the compensation at the rate provided by Section 4 as soon as the personal injury was caused to the respondent. He failed to do so. What is worse, he did not even make a provisional payment under sub-section (2) of Section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence.” (Emphasis supplied) 8.
He failed to do so. What is worse, he did not even make a provisional payment under sub-section (2) of Section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence.” (Emphasis supplied) 8. It would also be pertinent to mention that a three Judge Bench of the Apex Court in Kerala State Electricity Board vs. Valsala K. 2000 ACJ 5 , held that the relevant date for determining the rate of compensation and liability of the parties concerned, is the date of the accident and not the date of adjudication of the claim. No doubt, in that case, the question raised, was as to whether compensation should be assessed in accordance with the provisions of Section 4 of the Workmen’s Compensation Act, as existing on the date of adjudication or as per the law which was in force on the date of accident. The Apex Court clearly held that the rights of the parties will be governed by the law as it exists on the date of accident. The view of the Apex Court in Partap Narain Singh Deo’s case, was being followed by all the Courts as well as this Court for the last more than three decades. 9. This Court in Ram Dulari Kalia vs. H.P. State Electricity Board and Another, ILR 1986 H.P. 842, following the aforesaid judgment held as follows: “8. Against the background aforesaid, it is manifest that in the present case duty to pay the compensation at the rate provided in section 4 arose under sub-section (1) of section 4-A of the Act as soon as the accident resulting in the injury to the deceased workman and in his consequential death occurred and that the respondents being in default in paying the compensation due under the Act within one month from the said day, the discretion conferred on the Commissioner under sub-section (3) of section 4-A to award interest on the compensation amount in accordance with law was required to be exercised reasonably and in a judicial manner after taking into consideration all the relevant factors and that if, in her considered opinion, there was no justification for the delay, the penalty was also required to be ordered to be recovered.
The Commissioner has held, as earlier pointed out, that since the respondents had admitted the liability to pay the compensation “whatever is to be awarded” and that they had also deposited the amount of compensation in the Court, the claim with regard to the payment of interest was not justified. The question of imposition of penalty does not appear to have been considered at all presumably on the same ground. The question for determination is whether the award suffers from any error of law based, inter-alia, upon the misconstruction of the relevant statutory provision.” 10. It would be pertinent to mention here that in a large number of cases, the Apex Court as well as this Court were granting interest from one month after the date of the accident or from the date of filing of the application. However, the respondent-Insurance Company has placed reliance upon the judgment of the Apex Court in National Insurance Co. Ltd. vs. Mubasir Ahmed and Another, 2007 ACJ 845 in this case the Apex Court held as follows: “9. Interest is payable under section 4-A (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 4-A was dealt with by this court in Maghar Singh vs. Jaswant Singh, 1997 ACJ 517 (SC). By amending Act 30 of 1995, section 4-A of the Act was amended, inter-alia fixing the minimum rate of interest to be simple interest at the rate of 12 per cent. In the instant case, the accident took place after the amendment and, therefore, the rate of 12 per cent 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 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 4-A (1) prescribes that compensation under section 4 shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim made.
This appears to be so because section 4-A (1) prescribes that compensation under section 4 shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim made. The adjudication under section 4 in some cases involves the assessment of loss of earning capacity by 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 4-A. It provides that provisional 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.” 11. The Apex Court held that the compensation falls due only after the adjudication is done and consequently interest can be awarded only from the date of adjudication. With due respect, it appears that the earlier judgment of the Apex Court in Partap Narain Singh Deo vs. Shrinivas Sabata and Another, rendered by a Bench of four Judges was not brought to the notice of the Apex Court while deciding the aforesaid case. Even the judgment rendered in the Kerala State Electricity Board vs. Valsala K. was not brought to the notice of the Apex Court. It is apparent that the judgment in National Insurance Co. Ltd. vs. Mubasir Ahmed and Another is in direct conflict with the view taken by a larger Bench in Partap Narain Singh Deo vs. Shrinivas Sabata and Another case. Reliance is also placed by the Insurance Company on a judgment of a learned Single Judge of this Court in Executive Engineer and Another vs. Ambika Sharma, 2008 ACJ 664 , wherein also the Single Judge relying upon the judgment of the Apex Court rendered in National Insurance Co. Ltd. versus Mubasir Ahmed and another held that interest could only be granted from the date of award. This judgment also does not take into consideration the Constitution Bench judgment in Partap Narain Singh Deo vs. Shrinivas Sabata and Another. Therefore, the said judgment is per incuriam. 12.
Ltd. versus Mubasir Ahmed and another held that interest could only be granted from the date of award. This judgment also does not take into consideration the Constitution Bench judgment in Partap Narain Singh Deo vs. Shrinivas Sabata and Another. Therefore, the said judgment is per incuriam. 12. When there are two conflicting judgments of the Apex Court, the only option before the High Court is to follow the judgment rendered by the Larger Bench of the Apex Court. In this behalf, reference may be made to Mattulal vs. Radhe Lal, AIR 1974 SC 1596 . A reference may also be made to the judgment of the Apex Court rendered in N.S. Giri vs. Corporation of City of Mangalor and Others, (1999) 4 SCC 697 , wherein the Court held as follows: “12. The abovesaid decision does support the proposition canvassed by the learned counsel for the appellant that an industrial settlement would operate even by overriding a statutory provision to the contrary. However, suffice it to observe that the Constitution Bench decision in New Maneck Chowk Spg. and Wvg. Co. Ltd. and also the decision of this Court in Hindustan Times Ltd. which is a four-Judge Bench decision, were not placed before the learned Judges deciding LIC of India case. A decision by the Constitution Bench and a decision by a Bench of more strength cannot be overlooked to treat a later decision by a Bench of lesser strength as of a binding authority; more so, when the attention of the Judges deciding the latter case was not invited to the earlier decisions available.” 13. The Constitution Bench had already decided the question as to when compensation falls due in terms of the Workmen’s Compensation Act, 1923. Unfortunately, this decision of the Constitution Bench was not brought to the notice of the Apex Court while deciding National Insurance Co. Ltd. vs. Mubasir Ahmed and Another, 2007 ACJ 845 . Therefore, I feel that this Court is bound by the judgment rendered by the Constitution Bench of the Apex Court and I accordingly hold that the compensation falls due on the date when the accident takes place and in case the same is not deposited within thirty days, the workman is entitled to claim interest at the rate of 12% per annum without having to show that delay in depositing the compensation was attributable to the employer.
While taking this view, I am supported by a Division Bench judgment of the Kerala High Court reported in National Insurance Co. Ltd. vs. Rekha, 2008 ACJ 886 . 14. Before this Court no argument has been raised by the Insurance Company that it is not liable to pay interest in terms of the policy. So far as the penalty is concerned, there is nothing on record to show that any notice was issued to the employer and therefore, I do not feel that it is a fit case where penalty should be awarded. 15. In view of the above discussion, the appeal is partly allowed and the order of learned Commissioner, Workmen’s Compensation (SDM), Nalagarh is modified and the respondents are held liable to pay the compensation assessed at Rs. 2,21,004/- with interest at the rate of 12% per annum with effect from 11.9.1998, i.e. one month after the date of accident till deposit of the amount. 16. The appeal is disposed of in the aforesaid terms. No order as to costs.