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2011 DIGILAW 2558 (MAD)

E. Mannammal v. General Manager, Southern Railway

2011-06-06

ARUNA JAGADEESAN

body2011
JUDGMENT :- 1. This Civil Miscellaneous Appeal is filed by the appellants/claimants against the order made in W.C.No.27 of 2001 dated 04.03.2003 passed by the Commissioner for Workmen's Compensation-I, Chennai-6. 2. The Commissioner for Workmen's Compensation awarded a sum of Rs.1,97,060/- as compensation with a direction upon the first respondent to pay the said amount within 30 days from the date of receipt of the copy of the award with a further stipulation that in default of such payment within the said period, the awarded sum would carry a simple interest at the rate of 12 per cent p.a. from the date of receipt of a copy of the order till the date of realisation. 3. Being dissatisfied with the award of interest in default, the claimants have come up with the present appeal. 4. The only point taken by Mr.A.Shanmugaraj, the learned counsel appearing on behalf of the appellants in this appeal is that in view of the provision contained in Sec.4-A(3) of the Workmen's Compensation Act, it was the duty of the Commissioner to award interest at the rate of 12 per cent p.a. from the expiry of one month from the date of accident till the actual deposit of amount irrespective of the fact whether there was default on the part of the respondents in making payment of the awarded sum within the time stipulated in the award. 5. The question that arise for determination in this appeal is what should be the starting point of computation of the amount of interest in a proceeding for compensation under the Workmen's Compensation Act, 1923. 6. 5. The question that arise for determination in this appeal is what should be the starting point of computation of the amount of interest in a proceeding for compensation under the Workmen's Compensation Act, 1923. 6. In order to appreciate the aforesaid question, it will be appropriate to refer to the provision contained in Sec.4-A (3) of the Act which is quoted below:- "(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 12 per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and (b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears, and interest thereon pay a further sum not exceeding fifty per cent of such amount by way of penalty. Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. Explanation: For the purpose of the sub-section, 'scheduled bank' means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934)." 7. A plain reading of the aforesaid provision makes it abundantly clear that if the employer is in default in paying compensation due under the Act within one month from the date it fell due, the Commissioner should pass order of payment of interest in addition to the amount of arrears at the rate of interest at 12 per cent p.a. or at such higher rate not exceeding the maximum of the lending rate of any schedule bank as may be specified by the Central Government by notification in the Official Gazette on the amount due. 8. At this stage, it will not be out of place to refer to Sec.3 of the Act which deals with the employer's liability to the Workmen's Compensation. 8. At this stage, it will not be out of place to refer to Sec.3 of the Act which deals with the employer's liability to the Workmen's Compensation. Sub Sec.(1) of that Section provides the employer should be liable to pay compensation if personal injury is caused to the workman by an accident arising out of or in course of his employment. The employer, therefore, becomes liable to pay compensation as soon as the aforesaid personal injury is caused to the workman in the above said accident. Therefore, the liability to pay compensation arises not from the date of order of assessment but from the date of accident itself. As provided in Sec.4-A(3) of the Act, the interest will be charged from the expiry of one month after it had fallen due, meaning thereby, that the same will be payable after the expiry of one month from the date of accident. 9. The learned counsel for the appellant drew the attention of this Court to the decision of the Division Bench of this Court reported in N.Ganesan Vs.Thilagavathi and another, 2010 (2) TN MAC 80 (DB) wherein, it is held placing reliance on the decision of the Hon'ble Supreme Court that the work "falls due" occurring under Sec.4-A of the Workmen's Compensation would mean that interest for compensation amount would accrue 30 days after the date of accident and not from the date of quantification of the amount passed by the Commissioner. At this juncture, it may be profitable to refer to the following observations of four-Judges Bench of the Hon'ble Supreme Court in the case of Pratap Narain Singh Deo Vs. Shrinivas Sabata, 1976 ACJ 141 (SC) where the aforesaid question is answered by the said Bench in the following manner:- "(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 06.05.1969. 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 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'. 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 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 compensation did not fall due until after the Commissioner's order dated 06.05.1969 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." 10. The aforesaid question again came up for consideration before a three-Judges Bench of the Hon'ble Supreme Court in the case of Kerala State Electricity Board Vs. Valsla K [2000 ACJ 5 (SC)] where the said Bench made the following observations in paras 2 and 3 of the said judgment. "(2) Various High Courts in the country, while dealing with the claim for compensation under Workmen's Compensation Act have uniformly taken the view that the relevant date for determining the rights and liabilities of the parties is the date of accident. (3) A four-Judge Bench of this Court in Pratap Narain Singh Deo Vs. "(2) Various High Courts in the country, while dealing with the claim for compensation under Workmen's Compensation Act have uniformly taken the view that the relevant date for determining the rights and liabilities of the parties is the date of accident. (3) A four-Judge Bench of this Court in Pratap Narain Singh Deo Vs. Shrinivas Sabata, 1976 ACJ 141 (SC), speaking through Shinghal, J. has held that an employer becomes liable to pay compensation as soon as the personal injury is caused to the workman by the accident which arose out of and in the course of employment. Thus, the relevant date for determination of the rate of compensation is the date of the accident and not the date of adjudication of the claim." 11. In the light of the decision of the Hon'ble Supreme Court and this Court and in view of what have been stated above, I am of the opinion that in the facts of the present case, it was the duty of the Commissioner to award interest on the awarded sum from the expiry of one month from the date of accident till actual deposit of the amount by the respondents. 12. The learned counsel for the appellant brought to the notice of this Court that the first respondent inspite of the order passed by the Commissioner dated 04.03.2003 has not deposited the amount till date which has necessitated the claimants to file a petition in C.M.P.No.6 of 2011 to direct the first respondent to deposit the awarded amount with interest at the rate of 12 per cent p.a. from the date of accident and to pay further sum not exceeding 50 per cent of such amount by way of penalty before the Commissioner. In the present case, the respondents miserably failed in complying with the provisions of the statute. The respondents were enjoyed with the duty to pay the compensation to the employee under the Act. The Act being benevolent legislation, it was incumbent upon the owner to have directly paid the amount so as to enable the dependents of the employee to tide over the financial crisis arisen due to the accident which took place during the course of his employment. Therefore, in my view, the owner is liable to pay interest as also the maximum penalty of 50 per cent. Therefore, in my view, the owner is liable to pay interest as also the maximum penalty of 50 per cent. Accordingly, I modify the award impugned by directing the first respondent to pay interest at the rate of 12 per cent per annum from the expiry of one month from the date of accident till deposit of the awarded amount and also penalty at the rate of 50 per cent on the amount of compensation. The impugned award is modified accordingly and the appeal is allowed. There shall be no orders as to costs.