Partly allowed

Ratu Devi v. Nirmu Devi

Himachal Pradesh HC5 Nov 2009FAO/62/2005

Case brief

AI extract

What is this about?

The High Court allowed the appeal partly, holding that compensation falls due on the accident date. The Commissioner was directed to award 12% per annum interest from one month post-accident as mandated by Section 4-A, overriding the lower order which deferred interest for 60 days.

What did the court decide?

Commissioner's award modified to entitle claimants to 12% per annum interest w.e.f. one month after the accident date; Insurance Company directed to pay interest in registry.

Ratu Devi Vs Nirmu Devi — Pension and Retirement Benefits | Himachal Pradesh HC (2009)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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FAO(WCA) No.62 of 2005 Date of Decision: 5.11.2009

Smt.Ratu Devi

…..Appellant.

VERSUS

Smt.Nirmu Devi & ors. …..Respondents.

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Coram

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The Hon’ble Mr. Justice Deepak Gupta, Judge.

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Whether approved for reporting?No

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For the Appellant: Mr.G.R.Palsra, Advocate. For the Respondents: Mr.B.M.Chauhan, Advocate for respondent No.6.

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Deepak Gupta,Judge (Oral)

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This appeal under Section 30 of the

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Workmen’s Compensation Act, was admitted on the following questions of law:-

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“2. Whether the Ld.Commissioner below has committed serious illegality by not observing the mandatory provisions of Workmen Compensation Act, which has caused miscarriage and failure of justice to the appellant?

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Whether the non awarding of interest from the date of claim petition till the amount is deposited is violative of Workmen Compensation Act?”

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As far as question No.2 is concerned, at the

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time of arguments, no serious illegality in observing mandatory provisions of Workmen’s Compensation

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…2…

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Act was pointed out except that no interest has been awarded to the claimant in terms of Section 4-A of the Workmen’s Compensation Act, 1923 which reads as

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follows:-

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“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.

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(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.

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[(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-

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(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

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(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 percent of such amount by way of penalty:

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Provided that an order for the payment of penalty shall not be passed under clanse (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.

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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).

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[(3A) The interest and the penalty payable under subsection (3) shall be paid to the workman or his dependent, as the case may be.]]”

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It is obvious that compensation under the

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Act must be deposited by the employer as soon as it

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…3…

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falls due. In case the compensation is not deposited within a period of one month then the Commissioner, Workmen’s Compensation is duty bound to award interest @ 12% per annum at least, from the date on which the amount fell due.

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This Court in Sita Ram v. Satvinder Singh & another, latest HLJ Volume 21, 2008(2), 1110 held as

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follows:-

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“The Constitution Bench had already decided the question as to when compensation falls due in terms of the Workmen’s Compensation Act, 1923. Unfortunately, this decision of the Constitution Bench was not brought to the notice of the Apex Court while deciding National Insurance Co. Ltd. Versus Mubasir Ahmedand & another, 2007 ACJ 845. Therefore, I feel that this Court is bound by the judgment rendered by the Constitution Bench of the Apex Court and I accordingly hold that the compensation falls due on the date when the accident takes place and in case the same is not deposited within thirty days, the workman is entitled to claim interest at the rate of 12% per annum without having to show that delay in depositing the compensation was attributable to the employer. While taking this view, I am supported by a Division Bench judgment of the Kerala High Court reported in National Insurance Co. Ltd. Versus Rekha, 2008 ACJ 886.”

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Therefore, it is obvious that compensation

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falls due when the accident takes place. A period of

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…4…

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one month is granted to the employer to deposit the amount. In this case, the Commissioner, Workmen’s Compensation has granted interest only in case the amount of compensation assessed was not deposited within a period of 60 days from the date of award. I am of the considered view that he could not have done so. There was a duty cast upon him to award interest and he could not have held that interest shall not be paid in case the amount is deposited within a period of 60 days. This portion of the order is totally violative of Section 4-A of the Workmen’s Compensation Act. Accordingly the same is set aside.

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It has been urged by Sh.G.R.Palsra, learned counsel for the appellant that the income of the deceased has wrongly been assessed. The question as to what is the income of the deceased is a pure question of fact and not at all a substantial question of law. Even a perusal of the evidence of the owner of the vehicle shows that she herself is not certain as to what was the salary being paid to the deceased. At one stage, she states that Rs.4000/- per month was being paid to the deceased but at another stage she states that only Rs.1500/- was being paid to the

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…5…

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deceased. We also cannot loose sight of the fact that she was in fact not managing the business of the truck. The same was admittedly being managed by her husband who unfortunately died in the accident. No record with regard to the pay of the deceased was produced. Therefore, there is no reason to differ with the finding of the learned Trial Court.

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In view of the above discussion, the appeal is partly allowed and the award of the Commissioner, Workmen’s Compensation is modified to the extent that the claimants are held entitled for interest @ 12% per annum w.e.f. 29^th August, 2002, i.e., one month after the date of accident till payment of the amount. Since the Insurance Company has failed to place on record any material to show that it had not covered the liability to pay interest, it is held liable to pay the same. The Insurance Company is directed to pay the interest as awarded by this Court in the Registry within twelve weeks from today.

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The appeal is disposed of in the aforesaid

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terms. No order as to costs.

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November 5, 2009 ( Deepak Gupta )

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…6…

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(m) Judge.

Ratu Devi v. Nirmu Devi

Case brief

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Ratu Devi v. Nirmu Devi

Case brief

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