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Allahabad High Court · body

2020 DIGILAW 1508 (ALL)

Chanda Begum v. Shahnawaz

2020-12-16

KAUSHAL JAYENDRA THAKER

body2020
JUDGMENT : 1. First Appeal From Order No.1244 of 2020 is preferred by claimants and First Appeal From Order Defective No.545 of 2020 is filed by the owner which have been placed before this Court for final disposal. Appeal preferred by Insurance Company namely F.A.F.O No. 1301 of 2020 has already been decided rather dismissed with costs by my brother Judge on 27.8.2020. Papers of the said matter are placed for perusal before this Court. 2. Heard Sri Sanjay Kumar Srivastva, learned counsel for the appellant-claimants, Mohd. Naushad Siddiqui, learned counsel for appellant-owner and Sri Subash Chandra Srivastava, learned counsel for respondent-Insurance Company. 3. Both these appeals arise out of the judgment and award dated 18.2.2020 passed by the Commissioner, Workmen's Compensation Act, 1923 (for short as 'Act') being Additional Labour Commissioner, Kanpur (hereinafter referred to as 'Commissioner') awarding sum of Rs.6,30,062/-with interest at the rate of 9% from the date of accrual of compensation in favour of the claimants. The owner was saddled with liability to pay interest and notice for hearing as to why penalty should not be directed was issued. The Insurance Company was directed to satisfy decretal amount and interest from the date of judgment till deposit of amount. 4. As far as the appeal of the claimants is concerned, the only question of law to be answered is whether in the given facts and circumstances of the case, the Commission has committed manifest error of law holding that if the respondent has failed to deposit the awarded amount within 30 days from the date of judgment then only claimants are entitled for the interest at the rate of 9% from the date of award till the amount is deposited. 5. In support of his submission, learned counsel for the claimants has relied on the decision in First Appeal From Order No.1538 of 2020 titled (Miskina and 5 others Vs. M/s H.D.F.C. Egro General Insurance Co. Ltd. and other) decided on 26.11.2020 and decision rendered in First Appeal From Order No.1673 of 2020 titled (Sri Shiv Lal and another Vs.Sri Vivek Shaker Gupta and Another) decided on 10.12.2020. 6. As far as appeal of the owner is concerned, learned counsel for the owner has submitted that the Commissioner has committed patent error directing the owner to pay interest though the question is no longer res integra. 7. 6. As far as appeal of the owner is concerned, learned counsel for the owner has submitted that the Commissioner has committed patent error directing the owner to pay interest though the question is no longer res integra. 7. In support of his submission, learned counsels both for the claimants and owner have relied on the decisions in Oriental Insurance Company Vs. Siby George and others, 2012(4) T.A.C. 4 (SC); Smt. Surekha and others Vs. The Branch Manager, National Insurance Company Ltd. decided on 3.8.2017, First Appeal From Order No. 1553 of 2020 (Sanju Kushwaha Vs. Vimal Kumar Verma) decided on 3.12.2020 and First Appeal From Order No.1673 of 2020 (Sri Shiv Lal and another Vs.Sri Vivek Shaker Gupta and Another) decided on 10.12.2020. 8. As against this, learned counsel for Insurance Company tried to point out that the judgment and order impugned is just and proper as it was the duty of the owner to notify the insurance company about the accident which was not done and hence the owner was saddled with the payment of interest till date of decision and this is a finding of fact which does not require to be interfered with. 9. While dealing with the above questions of law, it would be appropriate to reproduce Section 4A of the Act which reads as under: "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. 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? 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)." 10. The Supreme Court in the case titled Oriental Insurance Company Vs. Siby George and others, 2012(4) T.A.C. 4 (SC) where in it has been held by the Apex Court that payment of interest is a consequence of default and it has to be directed to be paid without going into the reasons for the delay and only in case where the delay is without justification, the employer might also be held liable to penalty after giving him a show cause notice. Thus, just because the owner had not intimated to the Insurance Company, it cannot be the reason for not directing the Insurance Company to pay the interest. 11. Hence, the findings that the Insurance Company will not be liable for interest is against the spirit of taking the insurance policy and the very object for introducing insurance policy would get frustrated. I am even fortified in my view by the decision in the case titled Guru Govekar vs Miss Filomena F. Lobo & Ors, AIR 1988 SC 1332 . 12. In K. Shivaraman and others Vs. P. Satishkumar and others, 2020 (4) SCC 594 , after considering several decisions, the purpose of Workmen's Compensation Act has been reiterated. I am even fortified in my view by the decision in the case titled Guru Govekar vs Miss Filomena F. Lobo & Ors, AIR 1988 SC 1332 . 12. In K. Shivaraman and others Vs. P. Satishkumar and others, 2020 (4) SCC 594 , after considering several decisions, the purpose of Workmen's Compensation Act has been reiterated. The scope of Section 4 and 4A has been reconsidered. In paragraph 16 of the judgment the word used is 'as soon as it falls due'. Thus the said decision would also help the claimant as well as the owner to the facts in this case. 13. I am even fortified in my view by the decision in Civil Appeal No. 7470 of 2009 North East Karnataka Road Transport Corporation Vs. Smt. Sujatha decided on 2.11.2018, 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. The decision of this Court in First Appeal From Order No.1538 of 2020 (Miskina and 5 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 will also aid both claimants and owner. 14. In view of the above, questions of law framed in both these appeals are answered in the affirmative. 15. These appeals are partly allowed. The judgment and award of the Commissioner shall stand modified to the aforesaid extent namely to the extent that the Insurance Company shall deposit the decretal amount with interest at the rate of 12% from one month after the date of accident till the amount is deposited. 15. The appeal of the Insurance Company has been dismissed with costs quantified at Rs.10,000/-. Learned counsel for the Insurance Company has conveyed that amount of cost be converted to penalty if at all this Court feels that penalty has to be imposed. Normally the penalty will have to be paid if it is found that there was deliberate reason for delay in paying the amount. Learned counsel for the Insurance Company has conveyed that amount of cost be converted to penalty if at all this Court feels that penalty has to be imposed. Normally the penalty will have to be paid if it is found that there was deliberate reason for delay in paying the amount. Here, it is the parents who are demanding from one son for the death of another son and they have claimed from Insurance Company with whom the vehicle was insured to make payment. Hence, the minimal penalty of Rs.10,000/-would suffice which was the cost inflicted by my brother Judge on the Insurance Company. Appellants of these appeals shall deposit a sum of Rs.10,000/-which would be substitution for penalty. The notice for penalty is also now not to be proceeded with further by the authorities in peculiar facts of this case. 16. This Court is thankful to all the learned Advocate for ably assisting the Court and Sri S.D. Ojha, learned Advocate for rendering services as Amicus Curiae.