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2012 DIGILAW 120 (BOM)

New India Assurance Company Ltd. v. Badrealam Hazarar Mohd. Shaikh

2012-01-18

A.V.NIRGUDE

body2012
Judgment The R. & P. has come. 2. By consent of learned counsels of the parties, I took up the appeal for final hearing. 3. The only question that arose in this appeal is, in case of workman compensation claim, from what date the interest is payable? 4. This is an appeal arising from workman compensation claim. The workman concerned died due to accident that arose during the course of his employment on 15.09.2005. The intimation of accident was immediately given to the employer but, as expected, he did not deposit the compensation amount within one month. He ought to have deposited the compensation payable to the dependents on or before 15.10.2005. 5. In view of this failure, the respondents, who were depending on the deceased workman, lodged their claim before the commissioner for workman compensation, at Mumbai, on 15.07.2006 and the same was allowed on 24.07.2009. Certain amount was awarded as compensation and the commissioner directed the appellant and the employer to pay interest on the compensation amount from the date of application (15.07.2006). 6. The appellant insurance company felt aggrieved by this order and came to this court in this appeal. Their only contention is that the interest is payable only from the date of adjudication. 7. The question therefore is, from what date the compensation is payable. 8. The law on this subject is settled and it depends on interpretation of Sec. 4(A) of the Workman Compensation Act. Sec. 4(A) reads as under. "Sec. 4(A) -Compensation to be paid when due and penalty for default :- (1) Compensation U/Sec. 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 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 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. 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." "3(A) The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be." 9. After going through its provision, it is clear that if an employer fails to deposit compensation within one month from the date of accident, he becomes liable to pay simple interest at the rate of 12%. It means that the liability of the employer to pay interest arises soon after a period of one month expires from the date of accident. 10. In this case, the accident took place on 15.09.2005 and on the very day the workman had died. So, the employer ought to have deposited compensation with the commissioner, within one month. This was not done. The employer has not taken any defence, whatsoever, in the proceeding. He did not deny his liability. It is only the appellant insurance company, who contested the claim by taking up defence such as, there was no relationship between employer and the deceased, and that the deceased was negligent etc. These defences were not proved because the appellant insurance company did not lead any evidence. As said above, the employer did not come forward to state his case. In view of this the claim was allowed. These defences were not proved because the appellant insurance company did not lead any evidence. As said above, the employer did not come forward to state his case. In view of this the claim was allowed. Unfortunately, for the appellant insurance company, the learned Commissioner probably in ignorance of the provision of Sec. 4(A) awarded interest from the date of application and not from 15.10.2005. This would not prejudice the appellant. They are still saving substantial amount on interest. 11. The appeal should therefore fail. 12. The appeal stands dismissed. 13. In view of above order, the civil application does not survive and disposed of.