Allowed

Ram Singh v. Yogendra Singh

Rajasthan HC18 Dec 2018CMA/3127/2018

Case brief

AI extract

What is this about?

This appeal challenges the calculation of interest under Section 4A of the Employee's Compensation Act, 1923. The court held that interest must be awarded from the date of the accident, not the date of the Commissioner's order, as the compensation falls due immediately upon liability falling due.

What did the court decide?

Appeal allowed; Employer directed to pay arrears of interest on the awarded sum at 12% per annum from the date of the accident.

Ram Singh Vs Yogendra Singh — Consumer Protection | Rajasthan HC (2018)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

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S.B. Civil Misc. Appeal No. 3127/2018

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Ram Singh, Aged About 63 Years, B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

¶4

Bhanwari Devi W/o Ram Singh, Aged About 61 Years, B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

¶5

Santosh Devi W/o Hem Singh, Aged About 28 Years, B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

¶6

Radha D/o Hem Singh, Aged About 7 Years, Minor Through Mother Santosh. B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

¶7

Narendra Singh S/o Hem Singh, Aged About 5 Years, Minor Through Mother Santosh. B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

¶8

Kishan Singh S/o Hem Singh, Aged About 11 Years, Minor Through Mother Santosh. B/c Rawat, R/o Cheta Asan, Police Station Deogarh, District Rajsamand.

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----Appellants

¶10

Versus

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Yogendra Singh S/o Shankar Singh Kishnawat, R/o Bapu Nagar, Deogarh, Tehsil Deogarh, District Rajsamand.

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New India Insurance Company Ltd., Through Divisional Manager, Division Office, Udaipur.

¶13

----Respondents

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For Appellant(s)	: Mr. Sandeep Saruparia
For Respondent(s)	: Mr. Jagdish Vyas with Mr. Lalit Vyas &
No.2	Mr. R.S. Bhati

¶15

HON'BLE MR. JUSTICE P.K. LOHRA

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Order

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18/12/2018

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Appellant-claimants have laid this appeal under Section 30 of the Employee’s Compensation Act, 1923 (for short, ‘Act’) with the

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(2 of 4)

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[CMA-3127/2018]

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limited grievance that the Employees Compensation Commissioner, Bhilwara (for short, ‘learned Commissioner’) while adjudicating their claim under the Act has though quantified and awarded compensation by applying relevant factor as per Schedule IV, but while awarding interest on the claim amount @12% per annum, the same is reckoned one month after the date of the judgment.

¶22

It is argued by learned counsel for the appellants that precisely, while awarding interest on the claim amount, the learned Commissioner has completely overlooked mandatory provision contained under Section 4A of the Act and it is precisely the substantial question of law involved in the matter.

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For substantiating his arguments, learned counsel for the appellants has placed reliance on not only the relevant provision under Section 4A of the Act but has also invited attention of the Court to a judgment rendered by the Supreme Court in North East Karnataka Road Transport Corporation Versus Smt. Sujatha (Civil Appeal No.7470/2009) decided on 02.11.2018.

¶24

Mr. Jagdish Vyas, learned counsel appearing for the respondent, while acknowledging the legal position submits that the rate of interest determined by the learned Tribunal be reduced considering the present scenario.

¶25

I have considered the submissions made at Bar, perused Section 4A of the Act, which reads as under:

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“4A. Compensation to be paid when due and penalty for default.-

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(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

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(3 of 4)

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[CMA-3127/2018]

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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.

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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 per cent. 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 clause (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 employee or his dependent, as the case may be.”

¶38

Supreme Court while considering Section 4A of the Act has observed that interest on the claim amount is required to be granted from the date of accident and not from the date of adjudication of the quantum of claim. The Court held:

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“23. After these two decisions, this Court in two cases (both by the Two Judge Bench) viz. National Insurance Company Ltd. vs. Mubasir Ahmed & Anr. (2007) 2 SCC 349 and Oriental Insurance Company Ltd. vs. Mohmad Nasir & Anr. (2009) 6 SCC 280 without noticing the law laid down in Pratap Narain and Valsala cases (supra) took a contrary view and held that payment of compensation would fall due only after the Commissioner’s order or with reference to the date on which the claim application is made.

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(4 of 4)

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[CMA-3127/2018]

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In the light of the forgoing discussion, even though the respondent did not challenge this direction by filing any appeal in the High Court nor challenged it by filing any appeal in this Court too, yet the question being a pure question of law, this Court with a view to do substantial justice to the respondent consider it just and proper to modify the order of the Commissioner in respondent’s favour so as to make the same in conformity with the law laid down by this Court in the above referred two decisions (supra).

¶43

Accordingly and in view of the foregoing discussion, the order of the Commissioner dated 23.04.2002 is modified in favour of the respondent to the extent that the awarded sum of Rs.3,79,120/- shall carry interest at the rate of 12% per annum from the date of accident i.e. 06.04.1999.”

¶44

The arguments of learned counsel for the respondent for reducing the rate of interest is not acceptable, and therefore, same is rejected.

¶45

In view of foregoing discussion, the substantial question of law deserves decision in favour of appellants and the same is accordingly decided, and it is hereby declared that appellants are entitled for interest on the claim amount from the date of accident @12% per annum. The respondent-Director is, accordingly, directed to pay the arrears of interest from the date of accident @12% per annum within a period of two months’ from today.

¶46

The appeal is, therefore, allowed as indicated supra.

¶47

(P.K. LOHRA),J

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40-/-

Ram Singh v. Yogendra Singh

Case brief

What is this about?

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Ram Singh v. Yogendra Singh

Case brief

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What did the court decide?

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