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2017 DIGILAW 2029 (BOM)

SHIVA S/o LAKHAJI SAKHARE v. PRESIDENT, INDO RAMA SYNTHETICS (I) LTD. , NAGPUR

2017-09-27

INDIRA K.JAIN

body2017
JUDGMENT : This appeal takes an exception to the judgment and award dated 09-12-2004 passed by the Commissioner under the Workmen’s Compensation Act, First Labour Court, Nagpur in W.C.A. Case No. 104/1997 thereby allowing an application filed by appellant under section 22 of the Workmen’s Compensation Act, 1923 (for short ‘the Act’) claiming compensation of Rs. 2,67,252/- from the employer and the insurer. The learned Commissioner directed respondents to jointly and severally deposit compensation within one month from the date of order passed by the Commissioner. Being dissatisfied with the award of interest from the date of order, appellant has preferred this appeal. 2. For the sake of convenience, appellant and respondents are referred in their original status as applicant and non-applicants as they were referred before the Labour Court. 3. The facts giving rise to the appeal may be stated in nutshell as under : i. Appellant was working since about three years before filing the application on the establishment of non-applicant No.1. He was paid Rs.72.20 per day wages. Non-applicant No. 1 was manufacturing synthetic yarn and more than 4000 workers were working on its establishment. ii. According to applicant, he was working on permanent basis, but his name was not maintained on muster roll. Non-applicant No. 1 on paper had shown that applicant was working through a contractor viz. M/s Loknath Security Services. It was submitted that applicant is an employee of non-applicant No. 1 and not of the so called contractor. iii. On 04-08-1997, applicant was working in Coal Handling Plant of Boiler House as usual at the Coal Conveyor Belt in second shift. He met with an accident. He received crush injuries to his right hand as it came in the Coal Conveyor Belt. His right hand was required to be cut off from elbow portion. He was admitted to the Medical College and Hospital, Nagpur. His right hand was amputated by the machine at the time of occurrence of accident. He became permanently disable and was not able to perform his duties due to accident. iv. At the time of accident, applicant was 21 years old. He served notice through his Counsel to non-applicant No.1 on 22-09-1997. Non-applicant No.1 replied the notice and raised a contention that risk of the applicant being covered under the insurance policy, he would receive compensation accordingly. After receipt of notice, non-applicant No.1 paid Rs. iv. At the time of accident, applicant was 21 years old. He served notice through his Counsel to non-applicant No.1 on 22-09-1997. Non-applicant No.1 replied the notice and raised a contention that risk of the applicant being covered under the insurance policy, he would receive compensation accordingly. After receipt of notice, non-applicant No.1 paid Rs. 50,000/- towards ex gratia payment to applicant. v. Applicant then filed an application under the Act claiming compensation of Rs. 2,67,252/-. During pendency of W.C.A. No. 104/1997, non-applicant No. 2 deposited an amount of Rs. 78,839/-. Applicant also claimed interest at the rate of 12% per annum and the penalty on the amount of compensation. vi. Non-applicant No. 1 resisted the application by filing reply. It was the defence of non-applicant No. 1 that applicant was never the employee of non-applicant-establishment. It was submitted that applicant was in the employment of a contractor and was not a workman within the meaning of section 2(1)(n) of the Act. According to non-applicant No.1, as per the certificate of Civil Surgeon, 50% permanent disability came to be assessed and compensation to the extent of 50% disability was already paid to applicant. The submission was that application is not maintainable and if at all is maintainable, applicant was not entitled to receive compensation as claimed by him. vii. Non-applicant No. 2 filed reply at Exh.22 and submitted that non-applicant No. 1 is exclusively liable to pay compensation. viii. Upon rival pleadings of the parties, Commissioner framed issues at Exh.13. Applicant examined himself. Non-applicant No.1 examined Prabhakar Yashwant Koltewar. Non-applicant No. 2 did not adduce any oral evidence. Considering the oral and documentary evidence, Commissioner came to the conclusion that at the time of occurrence of accident on 04-08-1997, applicant was in the employment of non-applicant No.1, accident occurred in the course of employment, applicant suffered 100% permanent disability and was entitled to get compensation as claimed in the application. Accordingly, application came to be allowed and interest at the rate of 12% was awarded from the date of order of the Commissioner. 4. Accordingly, application came to be allowed and interest at the rate of 12% was awarded from the date of order of the Commissioner. 4. This Court vide order dated 27-03-2008 admitted the appeal and framed the following substantial question of law : “Whether the interest has to be calculated after one month of date of accident, if amount is not deposited within one month, or it has to be calculated or paid from the date the compensation determined by the Commissioner ?” 5. Learned Counsel for appellant referred to the provisions of section 4-A(3)(a) of the Act and submitted that compensation was not paid within a month from the date of accident and so employer was required to pay simple interest at the rate of 12% per annum from the date of accident and not from the date of order of Commissioner. In support of submission, learned Counsel relied upon the following judgments : i. Saberabibi Yakubbhai Shaikh and others vs. National Insurance Company Ltd. and others, 2014 (3) Mh.L.J. (S.C.) 252, ii. Shivaji Krishna Gaikwad and others vs. Telecom District Engineer, Sangli, 1996 (2) Mh.L.J. 874 , iii. Nanda wd/o pandhari Gatade and others vs. Bhikaji Ghanshyam Shingane, 2009 (1) Mh.L.J. 422 , iv. Dattatraya Layappa Koli (Since deceased by his heirs and dependents) Smt. Meena Dattatraya Koli and others vs. Maharashtra State Electricity Distribution Company, Sangli, 2010 (2) Mh.L.J. 129 , v. Judgment of this Court in National Insurance Co. Ltd. vs. Shakilabi wd/o Mohd. Shakil Khan and others in First Appeal No. 757/2012. In addition, reliance is also placed on the judgments of Allahabad High Court in M/s Dil Pasand Biri Company, Farrukhabad and others vs. State of U.P. and others, 2003 (99) FLR 19 and of Kerala High Court in Workmen of Modern Tile and Clay Works, Feroke vs. Industrial Tribunal, Kozhikode and another. 6. Per contra, learned Counsel for non-applicant No. 1 submitted that immediately on receipt of notice, an amount of Rs. 50,000/- was paid to applicant towards ex gratia and on receipt of permanent disability certificate, amount was deposited by the insurance company. Learned Counsel submits that payment of ex gratia was just within two months from the date of accident and this would be the special benefit on the part of employer to pay compensation to applicant. 50,000/- was paid to applicant towards ex gratia and on receipt of permanent disability certificate, amount was deposited by the insurance company. Learned Counsel submits that payment of ex gratia was just within two months from the date of accident and this would be the special benefit on the part of employer to pay compensation to applicant. Learned Counsel submits that considering the immediate conduct on the part of non-applicant No. 1, it cannot be said that non-applicant No. 1 committed default and question of payment of interest would not arise. Referring to the landmark judgment of the Hon’ble Supreme Court in Pratap Narain Singh Deo vs. Srinivas Sabata and another, (1976) 1 SCC 289 confirmed as correct view in Oriental Insurance Company Limited vs. Siby George and others, (2012) 12 SCC 540 , it is submitted that conduct of the party plays an important role while considering default in paying the compensation. Learned Counsel reiterates that applicant was never in the employment of non-applicant No. 1, but on humanitarian ground, ex gratia was paid and even learned Commissioner has observed that non-applicant No. 2 accepted the liability and deposited the amount of compensation due to the applicant. It is submitted that considering the nature of controversy, provisions of sections 4-A(1) and (3) of the Act are to be considered and in the case before the Hon’ble Supreme Court, the default was inherent, either the amount of compensation was not at all paid or if paid, was at much belated stage. According to the learned Counsel, in the given facts and circumstances of the case, non-applicant No. 1 is in fact not liable to pay interest. 7. The crux of the dispute revolves around a short question, whether interest on amount of compensation awarded by the Commissioner would be payable from the date of order passed by the Commissioner or after one month of the date of accident. The controversy is squarely covered by the judgment of the Hon’ble Supreme Court in Oriental Insurance Company Limited vs. Siby George and others (supra). The question before the Hon’ble Supreme Court in this case was whether interest on amount of compensation would be payable from the date of accident or from the date of order of the Commissioner. The controversy is squarely covered by the judgment of the Hon’ble Supreme Court in Oriental Insurance Company Limited vs. Siby George and others (supra). The question before the Hon’ble Supreme Court in this case was whether interest on amount of compensation would be payable from the date of accident or from the date of order of the Commissioner. Considering the provisions of sections 4-A(1) and (3) of the Act and referring to the earlier decisions in (i) Pratap Narain Singh Deo vs. Shrinivas Sabata and another, (1976) 1 SCC 289 , (ii) Oriental Insurance Company Limited vs. Mohd. Nasir and anr., (2009) 6 SCC 280 and (iii) National Insurance Co. Ltd. vs. Mubasir Ahmed and anr., (2007) 2 SCC 349 , the Hon’ble Supreme Court held that the decisions in Mubasir Ahmed and Mohd. Nasir insofar as they took a contrary view to the earlier decisions in Pratap Narain Singh Deo (supra) did not express the correct view and did not make binding precedents. The Hon’ble Supreme Court held that interest on amount of compensation would be payable not from the date of order of Commissioner, but from the date of accident. 8. In the case on hand, respondent No. 1 has not deposited compensation as per section 4 of the Act, but the amount which was deposited there on humanitarian ground, sought to be treated as compensation. Needless to state that compensation provided under the Act is towards security against any accidental events, arising out of and in the course of employment. Under section 4-A of the Act, compensation is to be paid by the employer within one month from the date, it fell due. If the liability is disputed, sub-section (2) of section 4-A requires employer to make the provisional payment based on the extent of liability. In both the events, there is no escape from the liability to pay compensation. Let howsoever good justification on the part of employer may be once compensation is not paid within the statutory deadline, sub-section (3) gets attracted and employer in view of default in payment of compensation would be liable to pay simple interest at the rate of 12% per annum. Sub-section (3) of section 4-A of the Act casts statutory obligation on the Commissioner to award simple interest at the rate of 12% from the date, it fell due and not from the date of order of Commissioner. 9. Sub-section (3) of section 4-A of the Act casts statutory obligation on the Commissioner to award simple interest at the rate of 12% from the date, it fell due and not from the date of order of Commissioner. 9. In the light of above, this Court does not find substance in the submission of learned Counsel for respondent No. 1 that bona fide and immediate conduct on the part of non-applicant No. 1 needs to be considered while saddling with the liability to pay interest. In view of the well settled propositions of law laid down by the Hon’ble Supreme Court in case of Pratap Narain Singh Deo (supra), this Court is of the view that award of interest from the date of order of Commissioner by the learned Commissioner was not in accordance with the statutory requirement, as applicant is entitled to simple interest at the rate of 12% per annum from the date of accident i.e. 04-08-1997 in the present case. To that extent, interference is warranted in this appeal. Hence, the following order : ORDER I. Clause (3) of operative part of the impugned judgment and award dated 09-12-2004 is modified. II. Non-applicant Nos. 1 and 2 are directed jointly and severally to pay interest at the rate of 12% per annum from the date of accident. III. The substantial question of law is answered accordingly. IV. First Appeal No. 126/2008 is disposed of in above terms. V. No order as to costs. Order accordingly.