Research › Search › Judgment

Allahabad High Court · body

2020 DIGILAW 1481 (ALL)

Shiv Lal v. Vivek Shankar Gupta

2020-12-10

K.J.THAKER

body2020
JUDGMENT : 1. Heard Sri Shreesh Srivastava, learned counsel for the appellant and Sri Radhey Shyam, learned counsel for respondent-Insurance Company. Owner's presence is not required, hence, no notice is issued. 2. This appeal, at the behest of the claimants, challenges the judgment and order dated 29.10.2020 passed by Commissioner, Workmen's Compensation Act, 1923/Additional Labour Commissioner, (hereinafter referred to as 'Commissioner') in E.C. Case No.42 of 2018 awarding a sum of Rs.8,28,852/- as compensation with interest at the rate of 9%. 3. Fact that the deceased was an employee is not in dispute; death caused due to vehicular accident which can be said to be arising out of his employment is not in dispute and; the Insurance Company having insured the vehicle with the workmen is not in dispute, hence, no facts are mentioned except that the accident occurred on 24.10.2017 and the compensation would fall due on 24.11.2017 and no technical pleas are raised. Compensation awarded is not in challenge. 4. The sole question of law which arises for consideration is whether Assistant Labour Commissioner can award interest less than what the statute has legislated, namely, 12% under provisions 4-A of the Workmen's Compensation Act, 1923(hereinafter referred to as 'the Act')? A similar issue had arisen before this Court where this Court has deprecated the practice of grant of interest less than what is specified under the statute. The reason being the word used by the legislation is 'shall' and not 'may'. 5. I am pained to pen down that the Workmen's Commissioner in Uttar Pradesh are time and again have to be conveyed that they are supposed to follow the statute under which they are functioning. Section 4A of the Act legislates as follows: "4A. 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 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. 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. Explanation.—For the purposes of this 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)." 6. I am supported in my view by the judgments rendered by Supreme Court in the case of Oriental Insurance Company Vs. Siby George and others, 2012(4) T.A.C. 4 (SC); Civil Appeal No. 7470 of 2009 North East Karnataka Road Transport Corporation Vs. Smt. Sujatha decided on 2.11.2018. Reliance is being placed by learned counsel for the appellant also on judgment in Civil Appeal No. 10018 of 2017, Smt. Surekha and others Vs. the Branch Manager, National Insurance Company Ltd. decided on 3.8.2017, which holds that Insurance Company has to be made liable and further the relevant date from when the interest would be payable is decided therein, namely, one month of the date, when the compensation accrues. Learned counsel for the appellant has also relied on the decision of this Court in First Appeal From Order No.1538 of 2020 (Miskina and others vs. M/s H.D.F.C. Egro General Insurance Ltd. and another) decided on 26.11.2020 and First Appeal From Order No. 1553 of 2020 (Sanju Kushwaha Vs. Vimal Kumar Verma) decided on 3.12.2020. 7. Learned counsel Sri Radhey Shyam tried to point out that the judgment and order impugned is just and proper. 8. Vimal Kumar Verma) decided on 3.12.2020. 7. Learned counsel Sri Radhey Shyam tried to point out that the judgment and order impugned is just and proper. 8. In view of the judgments cited hereinabove, judgment and award impugned herein is modified to the extent that the amount would carry 12% rate of interest from one month from the date of accident, i.e., 24.11.2017. If the Insurance Company has not yet deposited the amount, it shall deposit the amount with interest at the rate of 12% from one month from the date of accident till the amount is deposited. 9. It goes without saying that once the amount is deposited, the Tribunal shall disburse the same and the Insurance company shall not deduct TDS. I am supported in my view by the ratio laid down by Hon'ble Gujarat High Court, in the case of Smt. Hansagori P. Ladhani v/s The Oriental Insurance Company Ltd., reported in 2007(2) GLH 291 , total amount of interest, accrued on the principal amount of compensation is to be apportioned on financial year to financial year basis and if the interest payable to claimant for any financial year exceeds Rs.50,000/-, insurance company/owner is/are entitled to deduct appropriate amount under the head of 'Tax Deducted at Source' as provided u/s 194A (3) (ix) of the Income Tax Act, 1961 and if the amount of interest does not exceeds Rs.50,000/-in any financial year, registry of this Tribunal is directed to allow the claimant to withdraw the amount without producing the certificate from the concerned Income-Tax Authority. The aforesaid view has been reiterated by this High Court in Review Application No.1 of 2020 in First Appeal From Order No.23 of 2001 (Smt. Sudesna and others Vs. Hari Singh and another) while disbursing the amount. 10. The appeal is allowed. Question of law is answered in favour of the appellant and against the Insurance Company. 11. This Court is thankful to both the learned Advocates for ably assisting the Court. 12. Despite the orders of the Apex Court and this Court, the Workmen Commissioners are not following the mandate of the legislation in awarding the rate of interest and effective date from when interest would accrue. Hence, the Registrar General shall send this order through the Head of the Department of concerned Commissioners for the knowledge of Workmen Commissioners.