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2020 DIGILAW 163 (KER)

M. G. Gineesh v. K. C. Ninan

2020-02-07

DEVAN RAMACHANDRAN

body2020
JUDGMENT : These appeals proffers for resolution an apparently hitherto unasked question -whether an employee/claimant is entitled to interest on the amounts of medical expenses suffered by him, consequent to the suffering of personal injury on account of an accident in the course of employment, under the provisions of the Employee's Compensation Act, 1923. 2. Since it is the same issue impelled in these appeals, I have thought it apposite to hear them together and to dispose them of through this judgment. 3. Both these appeals have been filed by the claimants before the Court of the Commissioner for Employee's Compensation (Industrial Tribunal), Alappuzha, who assert that they had suffered accidents, while being engaged by their employer, namely, the first respondent (who will hereinafter be referred to as the employer). The appellants say that consequent to the accidents, since their compensation and reimbursement claims were not acceded to by the employer, they were constrained to file claim petitions before the Employees Compensation Commissioner, which were numbered as ECC No.169/2014 (in the case of the appellant in MFA NO.168/2019) and as ECC No.204/2014 (in the case of the appellant in MFA No.171/2019). 4. The appellants submit that though the Compensation Commissioner has granted them eligible compensation and interest on various heads, they are aggrieved because the said Court has refused them interest on the reimbursement of medical bills and they contend that the impugned orders, to this extent, is in error and contrary to the provisions of the Employees Compensation Act, 1923 (hereinafter referred to as 'the Act' for short). 5. The appellants thus pray that the impugned orders of the Compensation Commissioner be set aside to the afore extent and that interest be awarded to them, under the provisions of Section 4-A of the Act, on the amounts ordered to be reimbursed as being the medical expenses. 6. In response to the afore submissions made on behalf of the appellants by Sri. Rajesh. S. Subrahmanian, the learned counsel appearing for the respondents, Sri. A.A.Ziyad Rahman, began his submissions by saying that the reimbursement towards medical expenses stand on a different footing than the other amounts claimed as compensation, as far as the Act is concerned. 6. In response to the afore submissions made on behalf of the appellants by Sri. Rajesh. S. Subrahmanian, the learned counsel appearing for the respondents, Sri. A.A.Ziyad Rahman, began his submissions by saying that the reimbursement towards medical expenses stand on a different footing than the other amounts claimed as compensation, as far as the Act is concerned. He submits that, as is manifest from Section 4-A of the Act, compensation is to be paid by the employer "as soon as it falls due" and that where he defaults in paying the same within one month after it fell due, the Compensation Commissioner becomes authorized to award interest on it. He then submits that in the case of "compensation", as defined under Section 4 of the Act, this would present no difficulty because the date on which it falls due is certainly the date of the accident and the employer will, therefore, be in a position to compute the same based on the germane criteria, namely, the wages being drawn by the claimant, his age of the claimant at the time of the accident and the percentage of disability suffered by the him and thus pay the same, even without the claimant having to seek it through legal redress. He says that, however, in the case of reimbursement of medical expenses, the date on which the claimant pays such amounts to the hospital or medical practitioner being not known to the employer, the provisions of Section 4-A cannot be automatically applied, since it is more than likely to be much after the date on which the accident had occurred. He says, therefore, that the Compensation Commissioner was without error in not having granted interest on the amounts comprised of the reimbursement of medical expenses and thus prays that these appeals be dismissed. 7. When I assess the afore submissions and test them closely with reference to the applicable provisions of law, it becomes without any doubt that the amounts towards reimbursement of actual medical expenditure incurred by a claimant, is certainly a component of "compensation" as defined under Section 4 of the Act. This is incontestable because, the liability of an employer to reimburse the actual medical expenditure is mandated under Sub-section 2-A of Section 4 of the Act, which guides the quantification of the amounts of all eligible compensation. This is incontestable because, the liability of an employer to reimburse the actual medical expenditure is mandated under Sub-section 2-A of Section 4 of the Act, which guides the quantification of the amounts of all eligible compensation. In fact, Section 4 of the Act begins with the heading “Amount of compensation” and enumerates the various heads under which it can be claimed, as also the method of its computation; and obviously, therefore, when reimbursement of actual medical expenditure is included as one of the components listed under it, through Sub-section 2-A thereof, there can be little doubt that it is a vital component of "compensation" as defined under the Act. 8. The above said, the fact remains that question whether reimbursement of medical expenses is a part of "compensation" is not under great contest in these appeals, though the Sri.A. A. Ziyad Rahman attempted to draw a difference between the two concepts, vehemently contending that they have to be construed differently with respect to the legal implications as far as the payment of interest on it is concerned, for the reasons already stated by him, which have been recored above. 9. Even when I hear the submissions of Sri. A. A. Ziyad Rahman as above, it is perspicuous that payment of interest on the amounts claimed by a claimant under the head of "reimbursement of actual medical expenses" certainly is also to be governed by the provisions of Section 4-A of the Act which deals generally with interest payable on the "compensation" amounts; and has already been seen above, this section makes it mandatory that compensation under Section 4 shall be paid as soon "as it falls due", which is generally the date of the accident. 10. This is inarguable from the tenor of Section 4-A, which is 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 (employee), as the case may be, without prejudice to the right of the (employee) 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 percent. 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)" 11. However, it presents a definite problem with respect to the amounts claimed as reimbursement towards medical expenses, because it is surely plausible and probable that the claimant may incur the medical expenses much after the date of accident; that the employer may not even be aware of this until the bills of such treatment are presented before him. 12. Contextually, therefore, the submissions of Sri. A. A. Ziyad Rahman assumes some significance because, if the amounts of reimbursement of actual medical expenditure are treated at par with the other amounts of compensation payable under Section 4, then the interest on such amounts becomes payable from the date of the accident. However, it is irrefutable that unless the amounts towards medical expenses are actually paid by the claimant, he cannot seek reimbursement of the same; and axiomatically, he would not be entitled to interest on the same from the date of the accident. 13. However, it is irrefutable that unless the amounts towards medical expenses are actually paid by the claimant, he cannot seek reimbursement of the same; and axiomatically, he would not be entitled to interest on the same from the date of the accident. 13. That apart, even when the claimant suffers the bills for treatment, the employer may not become aware of the same until he is specifically notified; and certainly, therefore, the full rigour of Section 4-A of the Act cannot apply as regards reimbursement of medical expenses; and this Court, therefore, becomes enjoined to read down this, to render it in conformity in the philosophy of the Act, particularly since I am told by the learned counsel for the parties that these aspects have not been spoken affirmatively before, at least by this Court. 14. The conspectus of the above inevitably progresses to the certain and unavoidable position that the reimbursement of actual medical expenses cannot obtain interest from the date of the accident but only from the date on which it was actually paid by the claimant. Even then, the employer will become liable to pay interest on the same only after the bills of such expenses are brought to his notice since, otherwise it would be a travesty to mulct him with such liability, even without him being aware of the same. 15. Therefore, it is without doubt that the words "as soon as it falls due", which is used in the 4A of the Act, will have to be construed, in the case of reimbursement of actual expenses, to be the date on which the employer becomes aware or is made aware of the medical expenses suffered by the claimant. Any other interpretation with respect to the reimbursement of actual medical expenses would become inequitable and would cause grave prejudice to the employer, since otherwise, he would be burdened with an obligation to pay interest even on amounts which he was not aware had been spent by the claimant and consequently, being in no position either to accept or reject. 16. 16. This is crucial because, going by Section 4-A of the Act, the employer has the right to refuse payment of compensation amounts or part of it, if he is of the view that he is not liable for the same and this option applies in para materia to the cases of reimbursement of actual medical expenses also. Therefore, unless the employer becomes aware that the claimant has paid or suffered medical expenses, it would not become available to him to either accept or reject it -in the latter case running the risk of having to pay interest if his refusal to honour the said expenses or part of it, as the case may be, is found by the Court to be illegal or improper. 17. Resultantly, I am left without any doubt that, as far as the reimbursement of actual medical expenses is concerned, a combined reading of Sections 4 and 4-A of the Act would render it irrefragable that the obligation to pay interest on it would arise on the employer only from the date on which he becomes aware or is made aware of such expenses by the claimant or through such other sources. 18. Once I have declared the law as afore, the surviving question is whether the compensation Commissioner was right in having denied interest on the amounts claimed by the claimants, being reimbursement of actual medical expenses, in these cases. The Compensation Commissioner appears to have denied interest on this claim of the claimants, presumably being under the wrong impression that no such interest is payable. I am afraid that the impugned orders in this respect are unsustainable in view of my findings above; and certainly thus, the claimants become fully entitled to interest, however, from the date on which they establish that the employer was made aware of the expenses they suffered on account of the medical treatment, consequent to the accident suffered by them. This aspect, not having been considered by the Compensation Commissioner, it becomes incumbent upon him to reconsider it and issue fresh orders. 19. This aspect, not having been considered by the Compensation Commissioner, it becomes incumbent upon him to reconsider it and issue fresh orders. 19. In the afore circumstances, I allow these appeals and set aside the impugned orders, solely to the extent impugned, namely, with respect to the denial of interest on medical expenses suffered by the claimants; with a consequential direction to the Court of the Compensation Commissioner to reconsider this issue, adverting to my observations herein, and deliver orders thereon, after affording necessary opportunity to both sides, as expeditiously as is possible, but not later than six months from the date of receipt/production of a copy of this judgment. 20. In the nature of the factual and forensic circumstances noticed in these appeals, I deem it appropriate not to make any order as to costs and to direct the parties to suffer their respective costs.