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2010 DIGILAW 35 (AP)

K. Madhu v. Brij Kishore Pandiya

2010-01-29

G.V.SEETHAPATHY

body2010
JUDGMENT : 1. This appeal is directed against the order dated 04-07-2005 in W.C.No.237 of 2004, on the file of the Commissioner for Workmen’s Compensation, Hyderabad, wherein the claim of the appellant was allowed-in-part, awarding compensation of Rs.1,61,677/- with a direction to the opposite parties to deposit the said amount within 30 days from the date of receipt of a copy of the order, failing which the appellant would be entitled for interest 9% p.a., from the date of filing of the claim application i.e., 04-12-2004. 2. Heard the learned counsel for the appellant and learned counsel for the respondents. Perused the record. 3. The appellant herein filed claim application before the learned Commissioner seeking compensation of Rs.4 lakhs for the injuries sustained by him in a motor vehicle accident that occurred on 28-06-2004 in the course of his employment as driver of the auto trolley bearing No.AP 13 V 7632, which was involved in the accident. According to the appellant, on that day, he was driving the said vehicle from Goshamahal to Basheerbagh, Hyderabad and when it reached near Nizam College gate, a scooterist dashed against the auto trolley, as a result of which the auto trolley overturned and the appellant sustained injuries, including fracture of right acetabulum with a displacement. 4. The first respondent herein, the owner of the vehicle, has not entered appearance and remained ex parte. The second respondent herein, the insurer, filed a counter opposing the claim and denying their liability to pay the compensation. 5. During enquiry, the appellant was examined as A.W.1 and Dr.V.K.V.Prasad, Assistant Professor of Orthopaedics, Gandhi Hospital was examined as A.W.2 and Exs.A-1 to A-7 were marked on his side. No oral or documentary evidence was adduced by the opposite parties, but Ex.D-1 copy of the insurance policy was marked. 6. On a consideration of the evidence available on record, the learned Commissioner held that the appellant sustained injuries in the accident that occurred in the course of employment as driver of the auto trolley. It was further held that the appellant was entitled for a total compensation of Rs.1,61,677/- by taking into consideration the disability suffered by the appellant at 50%. Aggrieved by the same, the appellant filed the present appeal. 7. It was further held that the appellant was entitled for a total compensation of Rs.1,61,677/- by taking into consideration the disability suffered by the appellant at 50%. Aggrieved by the same, the appellant filed the present appeal. 7. The learned counsel for the appellant would contend that the learned Commissioner ought to have taken the loss of earning capacity of the appellant at 100% instead of restricting the same to 50% in view of the medical evidence on record to the effect that the appellant cannot work as a driver any more. He would further contend that the learned Commissioner erred in taking the minimum wages of the driver into consideration at Rs.3,004/- per month, though the evidence on record shows that the appellant was drawing wages of Rs.3,500/- per month. 8. The finding of the learned Commissioner that the appellant was employed as driver in the auto trolley bearing AP 13 V 7362 and that he suffered injuries in the accident that occurred in the course of the said employment, is not challenged. 9. According to the appellant, he suffered fracture of right acetabulum with a displacement, besides other injuries and he underwent treatment as inpatient in Osmania General Hospital from 29-06-2004 to 08-08-2004. He further contends that the injury had led to permanent disability as a result of which he is unable to stand or walk for a long time or drive any vehicle. Ex.A-2 the discharge memo issued by the Osmania General Hospital and Ex.A-7 the case sheet would disclose the nature of the injuries and the treatment undergone by the appellant. A.W.2. the Assistant Professor of Orthopaedics, Gandhi Hospital, testified that he examined the appellant on 06-04-2005 and also verified the records of Osmania General Hospital relating to the treatment and found that there was central fracture of dislocation of right hip, fracture of iliac wing, fracture extending into superior aspect of acetabulum, stiffness of right hip and discrepancy in the length of right limb. According to him, because of the above, the appellant cannot sit, squat or walk for a long time and cannot drive auto trolley or any vehicle. He assessed the loss of earning capacity at 100% and the physical disability as per Mc.Bride Scale at 40% and issued Ex.A-5 disability certificate. In the cross-examination A.W.2 admitted that the fracture is united. According to him, because of the above, the appellant cannot sit, squat or walk for a long time and cannot drive auto trolley or any vehicle. He assessed the loss of earning capacity at 100% and the physical disability as per Mc.Bride Scale at 40% and issued Ex.A-5 disability certificate. In the cross-examination A.W.2 admitted that the fracture is united. He added that because of the fracture of acetabulum and as the head as gone inside, it would not allow driving normally. The learned Commissioner observed that there is nothing to disbelieve the evidence of A.W.2 and the disability certificate-Ex.A-5. But, however, he was inclined to assess the loss of earning capacity at 50% only. The learned counsel for the appellant would contend that in view of the evidence of A.W.2, coupled with the disability certificate-Ex.A-5, showing that the appellant suffered such permanent disability whereby he cannot drive any vehicle in future, the learned Commissioner ought to have taken the loss of earning capacity at 100%, instead of limiting the same to 50%. 10. Section 4(1)(c)(ii) of the Workmen’s Compensation Act (for short ‘the Act’) states that in the case of an injury not specified in Part II of Schedule I, the compensation shall be such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity, as assessed by the qualified medical practitioner, permanently caused by the injury. Explanation II appended to the above provision states that in assessing the loss of earning capacity for the purposes of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I. Clause (c) to sub-section (i) of Section 4 deals with the amount of compensation in respect of permanent partial disablement resulting from the injury. Sub-clause (i) of clause (c) deals with injury specified in Part II of Schedule I and subclause (ii) deals with the injury not specified in Schedule I. Sub-clause (i) states that in respect of the scheduled injury resulting in partial permanent disablement such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of loss of earning capacity caused by that injury, is payable. However, when it comes to subclause (ii) dealing with injury not specified in Schedule I, it is such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity, as assessed by the qualified medical practitioner, that becomes payable. 11. A careful reading above two provisions would, therefore, disclose that in respect of an injury resulting in partial permanent disablement, which is not mentioned in the schedule, the loss of earning capacity is required to be assessed by a qualified medical practitioner and the compensation payable is at such percentage of the compensation payable in the case of permanent total disablement which is proportionate to the loss of earning capacity as assessed by the qualified medical practitioner. Explanation II also clarifies that while assessing the loss of earning capacity for the purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentage of loss of earning capacity in relation to different injuries specified in Schedule-I. Thus, keeping in view the percentages of loss of earning capacity mentioned in Schedule-I regarding different injuries specified therein, the qualified medical practitioner shall have to assess the loss of earning capacity arising out of the injury, which had led to partial permanent disablement. It is only on such assessment being made by the qualified medical practitioner, the compensation payable in respect of injury not mentioned in Schedule-I can be estimated in terms of sub-clause (ii). 12. Section 2(1) (g) of the Act defines partial disablement as follows:- “Partial disablement” means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time: Provided that every injury specified (in Part II of Schedule I) shall be deemed to result in permanent partial disablement. The above proviso makes it clear that in the case of injuries specified in Part II of Schedule I permanent partial disablement is inferred. The above proviso makes it clear that in the case of injuries specified in Part II of Schedule I permanent partial disablement is inferred. By necessary implication, it means that no such inference of permanent partial disablement can be drawn in respect of injury not specified in Part II of Schedule I and the same has to be proved as a matter of fact. As per the definition of the expression partial disablement contained in Section 2(1) (g) where the disablement is of a permanent nature, the partial disablement means such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time. The medical evidence on record shows that the disablement suffered by the appellant is permanent in nature and it is also partial. It means that it is such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time. There is absolutely no evidence on record to show that the appellant has become disabled to the extent that it reduced his earning capacity in every employment in which he was capable of undertaking at that time. In other words, the evidence of A.W.2 does not disclose that the appellant is incapable of undertaking any other work, which he was capable of undertaking at the time of accident. Even assuming that the appellant was incapable of driving, going by the evidence of A.W.2, it does not lead to any inference that the appellant was incapable of doing any other work which he was capable of undertaking at the time of accident. In other words, there is no evidence on record to show that the partial permanent disability suffered by the appellant whose percentage is stated to be 40% in terms of physical disability had led to total loss of earning capacity, in the sense that his earning capacity is lost in every employment which he was capable of undertaking at the time of accident. In the absence of any such evidence, the learned Commissioner has taken the loss of earning capacity at 50%. 13. In the absence of any such evidence, the learned Commissioner has taken the loss of earning capacity at 50%. 13. The learned counsel for the appellant invites attention to a decision in CHAIRMAN, EMPLOYEES STATE INSURANCE CORPORATION, HYDERBAD V. SWAMINATH SINGH AND ANOTHER 2007 (5) ALD 166 (DB) wherein a Division Bench of this Court held that as follows: “From the above decisions and principles laid down thereunder, the only conclusion which can be arrived at is to the effect that be it a scheduled injury or non-scheduled injury, the extent of disability as proved or held to be proved by any medical evidence, will not be a final word in regard to the assessment of compensation for the loss of earning capacity. Each case has to be considered from its own facts and vis-à-vis the nature of employment and the duties with which one is concerned about. Therefore, having regard to the nature of injuries irrespective of the extent of disability if one is not able to perform the duties, the same as he was doing earlier or he could do, necessarily, the loss of earning capacity will have to be far more than the extent of disability.” 14. The principle laid down in the above decision is not disputed. The extent of disability as proved by the medical evidence cannot be made co-extensive with loss of earning capacity. There can be cases where the physical disability is partial, whereas the loss of earning capacity is total and vice versa. In a given case where the loss of earning capacity is shown to be far exceeding the extent of physical disability in such case, irrespective of the percentage of physical disability, the loss of earning capacity has to be estimated. In the present case, there is no such evidence on record to show that the loss of earning capacity of the appellant has, in fact, been assessed by the medical practitioner as required under Section 4(1)(c) or that on such assessment it was found that the loss of earning capacity is far more than the extent of physical disability and the appellants earning capacity got reduced in every employment which he was capable of undertaking on account of the disablement. 15. 15. In NATIONAL INSURANCE COMPANY LTD., V. RAJESH HELMANDGE AND ANOTHER 2001(3) ALD 177 , a learned Single Judge of this Court has held as follows:- “Further, Section 4 (1) (c) (i) (ii) and the explanation to the said provision clearly indicates that the evidence of qualified medical practitioner shall be relevant and the Commissioner shall have due regard to the percentage of compensation payable as assessed by a qualified medical practitioner. Therefore, non-examination of the doctor who issued medical certificate does not satisfy the requirement of law, because the Tribunal may not be in a position to determine whether the disablement would lead to total loss of earning capacity or whether the workman suffered permanent partial disability, enabling him to discharge normal duties with the employer or any other employer. As already observed above, a workman would be entitled to compensation irrespective of his ability to work if he suffers any scheduled injuries. However, in the case of disablement sustained by him, which falls within the definition of Section 2(1)(g), for the purpose of proper adjudication and determination, the examination of the doctor to assess the loss of earning capacity in case of non-scheduled injury is essential and an unexceptionable requirement of law. Any order of the Commissioner without applying the statutory requirement of Section 4(1) (c) (ii) and explanation (ii) would be contrary to the statute, and cannot be sustained. Therefore, I hold that in case of non-scheduled injury, to assess the loss of earning capacity, it is mandatory to examine qualified medical practitioner.” Of course, in the above case, the doctor who issued the disability certificate was not examined before the learned Commissioner and it was held that mere filing of medical certificate without expert testimony of a medical practitioner as to the assessment of loss of earning capacity in relation to the disability suffered, would not enable the Commissioner to award compensation straightaway. In the present case, though the medical practitioner was examined, his evidence as also the certificate issued by him are silent as to the assessment of the extent of loss of earning capacity on account of the injury sustained. 16. In the present case, though the medical practitioner was examined, his evidence as also the certificate issued by him are silent as to the assessment of the extent of loss of earning capacity on account of the injury sustained. 16. In UNITED INDIA INSURACNE COMPANY LIMITED V. SETHU MADHAVAN 1993 (4) ACJ 1035 (F.B) (KERALA), a Full Bench of the Kerala High Court held as under:- “But when the statute specifically postulated that the compensation to be awarded should be proportionate to the loss of earning capacity, as assessed by the qualified Medical Practitioner, permanently caused by the injury, we cannot obviously overlook the legislatures intention in accepting and recognizing the expert opinion of the Medical Practitioner. It is only the medical practitioner who can, in the circumstances of the case, assess the loss of earning capacity. It would certainly depend on the facts and circumstances of each case. To hold that the Commissioner can disregard it without calling for any other data would be doing violence to the statutory provision. Of course, on the basis of the evidence tendered before the Commissioner, if he finds that the medical certificate issued by the medical practitioner cannot be accepted, he can certainly refer the applicant to the Medical Board for expert opinion and report. Without doing so, coming to a decision of his own based on the interested testimony of the applicant would not be justifiable. As it is always open to the Commissioner to send the applicant before a Medical Board, he can very well adopt that method in a case where he finds that the certificate issued by a qualified medical practitioner is found wanting or suffers from any infirmity. In view of the newly incorporated words “as assessed by the qualified medical practitioner” by virtue of Act 22 of 1984, its importance and significance cannot be overlooked. As the legislature in its wisdom chose to incorporate the aforesaid words into Section 4(1)(c) (ii), we cannot hold that it has been incorporated with no purpose. It is really with a purpose that it has been enacted. In view of the incorporation, it is not a case of ambiguity at all. In such a situation Court is not justified in stultifying the comprehensive language used by the legislature when there is no ambiguity at all. It is really with a purpose that it has been enacted. In view of the incorporation, it is not a case of ambiguity at all. In such a situation Court is not justified in stultifying the comprehensive language used by the legislature when there is no ambiguity at all. It is was further held as under: In this context, we have necessarily to consider how exactly Section 4(1)(c) (ii) stood prior to Act 22 of 1984. Prior to the incorporation, compensation for the injury not specified in Schedule I will have to be decided on the basis of the percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity caused by the injury. In the case in hand, as doctor’s certificate did not specifically mention the percentage of loss of earning capacity, there was no question of the Commissioner being bound by such evidence. But when the Parliament specifically incorporated the words ‘as assessed by the qualified medical practitioner”, its significance cannot be overlooked.” 17. In S.S.PATIL V. ERAPPA BASAPPA BHAVIHAL (2004) 104, FJR (KAR.) (F.B), a Full Bench of Karnataka High Court laid down the following proposition: “A reading of the aforesaid provisions makes it clear that an employer is under an obligation to pay compensation to the injured workman in accordance with the provisions of chapter II of the Act. His liability to pay compensation is not dependent on the claim to be made by the injured person. Therefore, the moment an accident takes place in his establishment and a workman is injured, if the injury which is suffered by the said workman is specified in Schedule I, the employer is bound to pay the compensation as mentioned in Schedule I read with Schedule IV. In the event the employer does not accept the liability for compensation to the accident claimed by the workman he is bound to make a provisional payment based on the extent of liability, which he accepts and such payment shall be deposited with the commissioner. In the event of his committing any default he will be liable to pay the interest and penalty for delayed payment. In the event of his committing any default he will be liable to pay the interest and penalty for delayed payment. The problem arises in respect of an injury not specified in Schedule I because the act does not provide any guidance to the employer about the loss of earning capacity which is the basis for making payment of compensation. It is in this background, an amendment was effected to the act by Act 22/1984, which came into force from July 1, 1984. By virtue of the amendment, it is made clear in the case of an assessment made by the qualified medical practitioner regarding the disability and loss of earning capacity. It is because of the lacuna in the legislation prior to 1984 coupled with a statutory obligation imposed on the employer to pay compensation immediately after the accident to an injury person, as the act did not provide what is the amount of compensation in respect of the injury not specified in Schedule I this amendment became necessary. Therefore, the assessment by a qualified medical practitioner would aid in assessing the compensation payable to an injured. As the medical practitioner though well versed regarding the disablement arising on account of the injury sustained, is not duly qualified to assess the loss of earning capacity, an Explanation II was added by amendment making it clear that in assessing the loss of earning capacity for the purpose of sub-clause (2), the qualified medical practitioner shall have due regard to the percentage of loss of earning capacity in relation to different injuries specified in Schedule I. Therefore, the law took care to see that the medical practitioner assesses the loss of earning capacity also in addition to the assessment regarding disablement and in so assessing he shall have due regard to what is contained in schedule I of the Act. Though the commissioner could have assessed the loss of earning capacity on the basis of the medical report to be submitted by the medical practitioner, the legislature in its wisdom thought it fit that if a commissioner, could assess the loss of earning capacity on the basis of Schedule I a duly qualified doctor could also do the same. Though the commissioner could have assessed the loss of earning capacity on the basis of the medical report to be submitted by the medical practitioner, the legislature in its wisdom thought it fit that if a commissioner, could assess the loss of earning capacity on the basis of Schedule I a duly qualified doctor could also do the same. Therefore, as the employer has to pay compensation even in respect of injuries sustained which are not mentioned in Schedule I immediately after the accident the legislature thought it fit to confer on the medical practitioner the power to assess the loss of earning capacity also as that would serve the purpose of the assessment made by the qualified medical practitioner in respect of the loss of earning capacity and pays the compensation the matter ends there. Such assessment is valid and legal and payment made on the basis of such assessment is also legal and valid and the object with which the act was passed is fully achieved.” 18. In NATIONAL INSURANCE CO. LTD., V. MUBASIR AHMED AND ANR 2007 ACJ 845 , the Apex Court held as under:- “Loss of earning capacity is, therefore, not a substitute for percentage of the physical disablement. It is one of the factors taken into account. In the instant case the doctor who examined the claimant also noted about the functional disablement. In other words, the doctor had taken note of the relevant factors relating to loss of earning capacity. Without indicating any reason or basis the High Court held that there was 100% loss of earning capacity. Since no basis was indicated in support of the conclusion, same cannot be maintained. Therefore, we set aside that part of the High Court’s order and restore that of the Commissioner, in view of the facts situation. 19. In RAMPRASAD BALMIKI V. ANIL KUMAR JAIN (2008) 9 SCC 492 , the Apex court held as follows:- “Be that as it may, the High Court, in our opinion, correctly proceeded on the assumption that the extent of permanent disability suffered by the appellant is only 40% and not 100%. “ 20. In ORIENTAL INSURANCE CO. 19. In RAMPRASAD BALMIKI V. ANIL KUMAR JAIN (2008) 9 SCC 492 , the Apex court held as follows:- “Be that as it may, the High Court, in our opinion, correctly proceeded on the assumption that the extent of permanent disability suffered by the appellant is only 40% and not 100%. “ 20. In ORIENTAL INSURANCE CO. LTD., V. MOHD.NASIR AND ANOTHER 2009(6) SCJ 153 , the Apex Court held as under:- “The learned Tribunal had held that there has been a 15% disability but then there was nothing to show that he suffered 100% loss of earning capacity. The Commissioner has applied the 197-06 as the relevant factor, his age being 35. He, therefore, proceeded on the basis that it was a case of permanent total disablement. However, his income was taken to be at Rs.1,920/- per month. There is nothing on record to show that the qualified medical practitioner opined that there was a permanent and complete loss of use of his permanent and complete loss of use of his right leg or that he became totally unfit to work as a driver. In that situation, the High Court, in our opinion, was not correct in determining the loss of income at 100%.” In CA @ SLP (C) No.21012 of 2006 referred to in the above decision, the physical disability was assessed at 40% and the loss of earning capacity at 80%. The Apex Court observed that the doctor having found the disability to the extent of 40% would not have taken the loss of earning capacity at 80%. The judgment and order of the High Court as well as the Commissioner was accordingly set aside. In CA @ SLP (C) No.74 of 2007 also referred to in the above decision, the doctor assessed the physical disability at 40% and the loss of earning capacity at 80%. The learned Commissioner assessed the physical disability at 80% and the loss of earning capacity at 100%. The High Court confirmed the award, but no reasons were assigned therefor. The Apex Court observed that the impugned judgment and order of the High Court and the award passed by the learned Commissioner cannot be sustained and they were accordingly set aside. 21. The High Court confirmed the award, but no reasons were assigned therefor. The Apex Court observed that the impugned judgment and order of the High Court and the award passed by the learned Commissioner cannot be sustained and they were accordingly set aside. 21. A Division Bench of this Court in NEW INDIA ASSURANCE COMPANY LTD., SECUNDERABAD V. ABDUL KHADER JILANI @ JILANI AND ANOTHER 2007(4) 607 (D.B) after referring to the above Full Bench decisions of Kerala and Karnataka High Courts, upheld the view taken in Rajesh Helmandge’s case (2 supra) and held that “the quantum of compensation to be awarded to the workman will always depend on the assessment made by the qualified medical practitioner on the issue of loss of earning capacity of the workman”. 22. In the facts and circumstances of the present case and in the light of the principles laid down in the above decisions though the qualified medical practitioner A.W.2 deposed that the appellant cannot drive any vehicle in future on account of the disability, still it cannot be considered that the appellant is totally incapacitated to the extent that he cannot do any work or earn any income by pursuing any other vocation or calling. It is to be noted that the physical disability assessed by the same medical practitioner A.W.2 is only 40%. Even in the case of amputation, which is a scheduled injury, the percentage of disability is only 90%, depending upon the extent of amputation. In the case of fracture or dislocation of a joint, it cannot stand on a higher footing than that of the amputation. 23. In the circumstances, it is considered that the ends in the present case would be met by estimating the loss of earning capacity at 75% in view of the medical evidence available on record regarding the nature of the injuries and extent of physical disability suffered by the appellant. The appellant would, therefore, be entitled for a compensation of Rs.3004 x 60% x 75% x 178.49 = Rs.2,41,283/-. 24. The question which then arises for consideration is - as to from what date the interest is payable and at what rate and by whom. 25. The appellant would, therefore, be entitled for a compensation of Rs.3004 x 60% x 75% x 178.49 = Rs.2,41,283/-. 24. The question which then arises for consideration is - as to from what date the interest is payable and at what rate and by whom. 25. The learned counsel appearing for the applicant-workman would contend that the interest is payable at a minimum rate of 12% p.a., as provided under Section 4-A (3) of the Act and from the date of the accident, which according to him is the date on which the compensation payable fell due and the interest is payable along with the principal amount of compensation by the insured employer and the insurance company jointly and severally. 26. The learned counsel appearing for the insurer would contend that the rate of interest prescribed under Section 4-A (3) of the Act is payable only in the event of default in payment of the compensation amount within the period of 30 days from the date of adjudication and in such event of default, the interest is payable at the minimum prescribed rate of 12% from the due date i.e., the date on which the period of 30 days expired. He would further contend that the insurer is not liable for payment of interest for any period prior to the date of adjudication. 27. Both the learned counsel have relied on certain decisions of the Apex Court and other High Courts and this Court as well in support of their respective contentions which are referred to herein below. 28. It would be useful to extract Section 4-A of the Act which deals with “compensation to be paid when due and penalty for default” which states as follows:- “(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 accept, 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, 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; 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;’’ A plain reading of the above provision would disclose that under sub-section (1), the amount of compensation which is determined in accordance with Section 4 shall be paid as soon as it falls due. Sub-section (2) stipulates that in case where the employer does not accept the liability for the compensation, as claimed, he would make provisional payment of such amount as admitted by him and deposit the same with the Commissioner or make the payment to the workman without prejudice to the right of the workman to make any further claim. Sub-section (3) states that where the employer is in default in paying the compensation due under the Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of twelve per cent per annum on the amount due shall be recovered from the employer. Sub-section (3) also empowers the Commissioner to direct that a further sum not exceeding fifty per cent of such amount shall be recovered from the employer by way of penalty, if in the opinion of the Commissioner there is no justification for the delay. It is, however, not disputed and is established by a catena of decisions that the liability to pay any such penalty imposed in a given case is that of the employer alone and such liability for payment of penalty cannot be fastened on the insurer. 29. The words “falls due” occurring in sub-section (1) and the expression “fell due” occurring in sub-section (3) are significant. 30. 29. The words “falls due” occurring in sub-section (1) and the expression “fell due” occurring in sub-section (3) are significant. 30. The learned counsel for the applicant-workman would contend that the said expression signifies the date of accident itself because the amount is payable by the employer the moment the workman suffers personal injuries arising out of the accident in the course of employment. 31. The learned counsel for the insurer, on the other hand, would contend that in the event of the employer not admitting his liability, for any reason, the amount of compensation has to be necessarily ascertained only upon adjudication and it is only on such adjudication and in the event of default in payment of such amount within the period of 30 days from the date of adjudication that interest becomes payable from the date of adjudication and not before. 32. In PRATAP NARAIN SINGH DEO V. SRINIVAS SABATA AND ANOTHER (1976) 1 SCC 289 , a four Judge Bench of the Apex Court held as follows: “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”. In the facts and circumstances of the above case, the Apex Court upheld the order passed by the Commissioner awarding penalty to the extent of fifty per cent and interest at six per cent. 33. In the facts and circumstances of the above case, the Apex Court upheld the order passed by the Commissioner awarding penalty to the extent of fifty per cent and interest at six per cent. 33. In MAGHAR SINGH V. JASHWANT SINGH 1997 ACJ 517, a three Judge Bench of the Apex Court awarded interest at 9 % per annum from the date of accident i.e., 26-07-1984 till the date of recovery or actual payment under the provisions of the Act. 34. In P.J.NARAYAN V. UNION OF INDIA AND OTHERS 2004 ACJ 452, the Apex Court held that “insurance is a matter of contract between insurance company and the insured. It is always open to the insurance company to refuse to insure. Similarly, they are entitled to provide by contract that they will not take on liability for interest. In the absence of any statute to that effect, insurance company cannot be forced by courts to take on liabilities which they do not want to take on.” In the above case, a direction was sought to the insurance company to delete the clause in the policy, which provides that in case of compensation under the Workmen’s Compensation Act, 1923, the insurance company will not be liable to pay interest. The Apex Court held that there was no substance in the writ petition and there was no statutory liability on the insurance company and the statutory liability under the Workmen’s Act was on the employer and the writ petition was dismissed. 35. The Apex Court held that there was no substance in the writ petition and there was no statutory liability on the insurance company and the statutory liability under the Workmen’s Act was on the employer and the writ petition was dismissed. 35. In VED PRAKASH GARG V. PREMI DEVI AND OTHERS AIR 1997 SC 3854 , the question which arose before the Apex Court was as follows: “Where an employee receives a personal injury in a motor vehicle accident arising out of and in the course of his employment while working on the motor vehicle of the employer, whether the insurance company, which has insured the employer-owner of the vehicle against third party accident claims under Motor Vehicles Act, 1988 (hereinafter referred to as “the Motor Vehicles Act’) and against claims for compensation arising out of proceedings under the Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Compensation Act’) in connection with such motor accidents, is liable to meet the awards of Workmen’s Commissioner imposing penalty and interest against the insured employer under Section 4A(3) of the Compensation Act.” After reviewing the case law on the subject, the Apex Court held as under:- “As a result of the aforesaid discussion it must be held that the question posed for our consideration must be answered partly in the affirmative and partly in the negative. In other words the insurance company will be liable to meet the claim for compensation along with interest as imposed on the insured-employer by the Workmen’s Commissioner under the Compensation Act on the conjoint operation of Section 3 and Section 4A sub-section (3)(a) of the Compensation Act. In other words the insurance company will be liable to meet the claim for compensation along with interest as imposed on the insured-employer by the Workmen’s Commissioner under the Compensation Act on the conjoint operation of Section 3 and Section 4A sub-section (3)(a) of the Compensation Act. So far as additional amount of compensation by way of penalty imposed on the insured employer by the Workmen’s Commissioner under Section 4A(3)(b) is concerned, however, the insurance company would not remain liable to reimburse the said claim and it would be the liability of the insured employer alone.” In the above case, the Apex Court set aside the impugned judgments to the extent to which they exonerated the insurance companies from payment of interest awarded on the principal compensation amounts by the Workmen’s Commissioner on account of default of the insured in paying up the compensation amount within the period prescribed under Section 4-A(3) and accordingly held that the insurance company would be liable to pay interest at 6% per annum from the date of accident till the date of payment. 36. In KAMALA CHATURVEDI V. NATIONAL INSURANCE CO. LTD. AND OTHERS 2009 (1) ACJ 115, the insurance company sought to avoid its liability to pay interest on the ground that there was no contract by the insured for payment of interest. However, there was no exception stipulated in the policy regarding payment of interest by the insurance company. It was, therefore, held following Ved Prakash Garg’s case (12 supra) that the insurance company was liable to pay interest along with compensation. 37. In L.R.FERROR ALLOYS LTD. V. MAHAVIR MAHTO AND ANOTHER 2001 ACJ 645, the Apex Court, following the decision in Ved Prakash Garg’s case (12 supra), held that payment of interest and penalty are two distinct liabilities arising under the Act, while liability to pay interest is part and parcel of legal liability to pay compensation upon default of payment of that amount within one month. Therefore, claim for compensation along with interest will have to be made good jointly by the insurance company with the insured employer. But, so far as the penalty imposed on the insured employer is on account of his personal fault, insurance company cannot be made liable to reimburse penalty imposed on the employer. Hence, the compensation with interest is payable by the insurance company but not penalty. 38. But, so far as the penalty imposed on the insured employer is on account of his personal fault, insurance company cannot be made liable to reimburse penalty imposed on the employer. Hence, the compensation with interest is payable by the insurance company but not penalty. 38. In KERALA STATE ELECTRICITY BOARD AND ANOTHER VV. VALSALA K. AND ANOTHER AIR 1999 SC 3502 , while upholding the view taken by a Full Bench of the Kerala High Court in UNITED INDIA INSURANCE COMPANY LTD. V. ALAVI (1998(1) KERALA LAW TIMES 951), the Apex Court held as follows: “Our attention has also been drawn to a judgment of the Full Bench of the Kerala High Court in United India Insurance Co. Ltd. V. Alavi (1998(1) Ker LT 951) wherein the Full Bench precisely considered the same question and examined both the above noted judgments. It took the view that the injured workman becomes entitled to get compensation the moment he suffers personal injuries of the types contemplated by the provisions of the Workmen’s Compensation Act and it is the amount of compensation payable on the date of the accident and not the amount of compensation payable on account of the amendment made in 1995, which is relevant. The decision of the Full Bench of the Kerala High Court, to the extent it is in accord with the judgment of the larger bench of this Court in Pratap Singh Narain Singh Deo v. Srinivas Sabata ( AIR 1976 SC 222 : 1976 Lab IC 222) (supra) lays down the correct law and we approve it.” The question which arose for consideration in the above decision was whether the amendment of Sections 4 and 4-A of the Act made by Act 30/95 w.e.f. 15-09-1995 enhancing the amount of compensation and rate of interest would be attracted to cases where the claims arose from the accidents that occurred prior to 15-09-1995. It was observed by the Apex Court that various High Courts in the country have uniformly taken the view that the relevant date for determining the rights and liabilities of the parties is the date of the accident. It was observed by the Apex Court that various High Courts in the country have uniformly taken the view that the relevant date for determining the rights and liabilities of the parties is the date of the accident. The above decision referred to the four Judge Bench decision of the Apex Court in Pratap Narain Singh Deo’s case (9 supra) where it was held that the relevant date for determination of the rate of compensation is the date of accident and not the date of adjudication of the claim. Reference was made to a two Judge Bench decision of the Apex Court in THE NEW INDIA ASSURANCE COMPANY LIMITED V. V.K.NEELAKANDAN in Civil Appeal Nos.16904 to 16906 of 1996, decided on 06-11-1996, wherein a contrary view was taken to the effect that the Act being a special legislation for the benefit of the workmen, the benefit as available on the date of adjudication should be extended to the workmen and not the compensation which was payable on the date of the accident. It was observed that the two Judge Bench in Neelakandan’s case (referred above) did not take notice of the larger Bench decision in Pratap Narain Singh Deo’s case (9 supra) as it presumably was not brought to the notice of the Court and in view of the categorical law laid down by the larger Bench in Pratap Narain Singh Deo’s case (9 supra), the view expressed by the two Judge Bench in Neelakandan’s case is not correct. 39. In GOTTUMUKKALA APPALA NARASIMHA RAJU AND OTHERS V. NATIONAL INSURANCE CO. LTD. 2007(6) ALD 36 (SC), the Apex Court held as follows: “The ingredients for maintaining a proceeding under 1988 Act and 1923 Act are different. The purpose for which a contract of insurance is entered into may be different, whereas 1988 Act, it will bear repetition to state, a contract of insurance would be mandatory; for the purpose of applicability of the 1923 Act, it will be optional and as indicated hereinbefore in Harshadbhai Amrutbhai Modhiya’s case (2006 AIR SCW 2352), even contracting out is permissible, as under the 1923 Act, the liability of the insurer is limited to the claim of the workman. The liability under Section 147(2)(b) of the 1988 Act, on the other hand, extends to third party.” 40. In NEW INDIA ASSURANCE CO. LTD. The liability under Section 147(2)(b) of the 1988 Act, on the other hand, extends to third party.” 40. In NEW INDIA ASSURANCE CO. LTD. V. HARSHADBHAI AMRUTBHAI MODHIYA AND ANOTHER 2006 AIR SCW 2352, it was held as follows:- “It is, therefore, clear from the above decisions that it is open to the insurance company to contract out insofar their liability for payment of interest by making necessary stipulation in the terms of the agreement i.e., policy of insurance. It is, however, not a case of the insurer in the present case that there was any such stipulation made in the contract of insurance entered into with the employer, whereby their liability for payment of interest is excluded.” 41. In NATIONAL INSURANCE CO. LTD. V. MUBASIR AHMED AND ANOTHER 2007 ACJ 845 , the Apex Court held as follows:- “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 v. Jashwant 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 if 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. 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 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.” The above decision was reiterated by the Apex Court in Kamala Chaturvedi’s case (13 supra). 42. The learned counsel for the insurance company would seek to rely upon the above decision and contend that as the amount of compensation fell due only upon adjudication, the interest under Section 4-A (3) of the Act is payable only in the event of default in payment of the amount within 30 days from the date of adjudication and the interest becomes payable at 12% per annum only on expiry of said period of 30 days and not before. 43. The learned counsel for the applicant-workman would, on the other hand, seek to rely on the four Judge Bench decision of the Apex Court in Pratap Narain Singh Deo’s case (9 supra) and would contend that the crucial date is the date of the accident as the amount becomes payable the moment the workman suffers personal injuries in the accident that arises out of and in the course of employment. He would further contend that the decision in Pratap Narain Singh Deo’s case (9 supra) having been rendered by a bench of larger strength of four judges, the same takes precedence over the decision in Mubasir Ahmed’s case (18 supra) which was rendered by a bench of two judges. In that connection, he relied on a decision of High Court of Gujarat in UNITED INDIA INSURANCE CO. LTD. In that connection, he relied on a decision of High Court of Gujarat in UNITED INDIA INSURANCE CO. LTD. V. SHAKURA ISHAQ BHAYA AND ANOTHER 2008 ACJ 2711 wherein a learned Single after referring to the above two decisions of the Apex Court and reviewing the case law as to what constitutes a binding precedent, held as follows:- “In view of the aforesaid discussion, this Court is of considered view that when there is conflict between the judgments of the Hon’ble Apex Court in Pratap Narain Singh Deo’s case, 1976 ACJ 141 (SC), (decided by four-Judge Bench) and Mubasir Ahmed’s case (supra) (decided by two-Judge Bench) and, therefore, this court is bound to follow the decision of larger Bench judgment of the Hon’ble Supreme Court i.e., Pratap Narain Singh Deo’s case”. Accordingly, the learned Single Judge directed both the defendants i.e., insurance company and the owner to pay compensation and also 6% interest from the date of application. 44. It is to be noted that in Mubasir Ahmed’s case (18 supra), the Court was dealing with the question of liability to pay interest in terms of Section 4-A(3) of the Act and it was held that the interest at the statutorily prescribed minimum rate of 12% per annum under Section 4-A(3) becomes payable if there is default in paying the compensation within one month from the date it fell due and the starting point is on completion of one month from the date on which it fell due and obviously it cannot be the date of accident. What was held in Pratap Narain Singh Deo’s case (9 supra) was that the employer became liable to pay the compensation as soon as the personal injury was caused to the workman from the accident which arose out of and in the course of employment and it was futile to contend that the compensation did not fall due until after the order was passed by the Commissioner. It cannot be disputed that the liability to pay compensation arises the moment the workman suffers injury in the accident that occurs in the course of employment. The Act contemplates payment of compensation by the employer even without a formal adjudication. It is only when the employer disputes the liability on any ground that a need for adjudication arises under Section 19. The Act contemplates payment of compensation by the employer even without a formal adjudication. It is only when the employer disputes the liability on any ground that a need for adjudication arises under Section 19. The Act also contemplates payment of the amount to the extent of admitted liability by the employer within one month from the date it falls due. In the event there is no dispute regarding the accident or the nature and extent of liability, the amount of compensation as claimed by the workman becomes payable instantly i.e., immediately after the accident. In case where the liability is not wholly admitted and is partly disputed, still the amount of compensation to the extent of admitted liability becomes payable instantly i.e., immediately upon the occurrence. It is only when the liability is disputed in whole or in part requiring ascertainment of the amount payable, the adjudication by the Commissioner becomes necessary and the amount so ascertained falls due upon such adjudication. In the event of default in payment of the said amount so ascertained after adjudication within one month that interest at the prescribed minimum rate of 12% becomes payable from the date on which the said period of one month expires. The compensation becoming payable immediately after the accident is contemplated under the Act and it was so held in Pratap Narain Singh Deo’s case (9 supra). The same does not have any conflict with the proposition that interest in terms of Section 4-A(3) of the Act at the prescribed minimum rate of 12% becomes payable in the event of default from the date of expiry of the period of one month stipulated under Section 4-A(3). The two propositions are distinct and different. Insofar the interest for the post-adjudication period is concerned, the same is duly taken care of by the provisions of Section 4-A (3). However, there is no specific provision providing for payment of interest for pre-adjudication period in the Workmen’s Compensation Act. 45. The question which then arises for consideration is - whether interest can be awarded for the pre-adjudication period. However, there is no specific provision providing for payment of interest for pre-adjudication period in the Workmen’s Compensation Act. 45. The question which then arises for consideration is - whether interest can be awarded for the pre-adjudication period. It cannot be disputed that the Act is a beneficial piece of legislation and intended to promote the welfare of the workman who becomes the unfortunate victim of accident that occurred in the course of employment or the kith and kin of deceased-workman in the event of death taking place as a result of such accident. When the injured-workman or the kith and kin of the deceased-workman make a claim for compensation and the employer does not settle their claim immediately and it becomes necessary to go in for adjudication for the purpose of ascertainment of the amount payable, it is neither just nor fair nor equitable to deprive the applicant of the benefit of interest on the amount so ascertained upon adjudication, especially when recourse to such adjudicatory process is contemplated by the Act itself. By seeking adjudication of the dispute, the parties are only availing the statutory right and seeking statutory remedy. 46. In a recent decision in ORIENTAL INSURANCE CO. LTD. V. MOHD. NASIR AND ANOTHER 2009(6) SCJ 153 , the Apex Court held as under: “The second question which arises for consideration is with regard to the payment of interest. There cannot be any doubt whatsoever that interest would be from the date of default and not from the date of award of compensation.” After extracting Section 4-A, the Apex Court further held as follows: “The said provision, as it appears from a plain reading, is penal in nature. It, however, does not take into consideration the chargeability of interest on various other grounds including the amount which the claimant would have earned if the amount of compensation would have been determined as on the date of filing of the claim petition. Workmen Compensation Act does not prohibit grant of interest at a reasonable rate from the date of filing of the claim petition till an order is passed. Only when sub-section (3) of Section 4A would be attracted, a higher rate of interest would be payable wherefor a finding of fact as envisaged therein has to be arrived at. Workmen Compensation Act does not prohibit grant of interest at a reasonable rate from the date of filing of the claim petition till an order is passed. Only when sub-section (3) of Section 4A would be attracted, a higher rate of interest would be payable wherefor a finding of fact as envisaged therein has to be arrived at. Only because in a given case, penalty may not be held to be leviable, by itself may not be a ground not to award reasonable interest”. Reference was made to the decision in Mubasir Ahmed’s case (18 supra) in the above decision and it was observed “as therein this aspect of the matter has not been considered, we are of opinion that interest will also be payable at the rate of 7½% per annum from the date of filing of application till the date of award. The rate of interest thereafter shall be payable in terms of the order passed by the Commissioner”. 47. In view of the above decision of the Apex Court upholding payment of interest for the pre-adjudication period as well, the contention of the learned counsel for the insurer that interest is payable only from the date of expiry of one month from the date of order in terms of Section 4-A (3) and not for any earlier period, is untenable. Interest is certainly payable at the statutory minimum rate of 12% per annum in terms of Section 4-A(3) of the Act from the date of expiry of one month period in the event of default in making deposit within the said time. The same has, however, nothing to do with payment of interest for the pre-adjudication period at a reasonable rate, especially when there is no prohibition in the Act against awarding such interest and there being no valid or justifiable reason for depriving the applicant-workman or the kith and kin of the deceased-workman, the benefit of such interest while implementing the provisions of a beneficial legislation brought out as a social welfare measure. 48. Following the above decision of the Apex Court in ‘ORIETNAL INSURANCE COMPANY LTD., VS. MOHD. 48. Following the above decision of the Apex Court in ‘ORIETNAL INSURANCE COMPANY LTD., VS. MOHD. NASIR & ANOTHER’ (20 supra), the appellant is, therefore, held entitled to claim interest at 7½% per annum from the date of filing of the claim application till the date of award and in the event of default in making the payment within the prescribed time limit, interest is payable in terms of Section 4-A (3) of the Act on the compensation amount from the date of expiry of the period of one month from the date of order passed by the Commissioner. The employer and the insurer are both held jointly and severally liable for payment of the principal amount of compensation and the interest thereon as stated above. 49. In the result, the civil miscellaneous appeal is allowed-in-part granting compensation of Rs.2,41,283/- with interest as stated above. There shall be no order as to costs.