Shri Shiva Lakhaji Sakhare vs President Indorama Synthetic (I) ...
2017 Latest Caselaw 7598 Bom

fa.126.08.jud                            1


  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
            NAGPUR BENCH, NAGPUR

                       FIRST APPEAL NO.126 OF 2008

Shri Shiva s/o lakhaji Sakhare,
Aged 21 years, Occ - Nil,
R/o C/o Dharamdas Kawale,
Takalghat, Tah. Hingna, Distt. Nagpur
At present Limba, Tal. Salekasa, Dist. Nagpur.                      .... Appellant

       -- Versus -

01]    The President,
       Indo Rama Synthetice (I) Ltd.,
       M.I.D.C. Area, Butibori, Nagpur.

02]    The Oriental Insurance Co. Ltd.
       Asha Complex, First Floor,
       Mount Road Extension, Sadar, Nagpur.                   .... Respondents


Shri S.A. Kalbande, Advocate for the Appellant.
Shri M.R. Puranik, Advocate for Respondent No.1.

                CORAM           : KUM. INDIRA JAIN, J.

                DATE            : SEPTEMBER 27, 2017.


ORAL JUDGMENT :-

This appeal takes an exception to the judgment and

award dated 09/12/2004 passed by the Commissioner under the

Workmen's Compensation Act, First Labour Court, Nagpur in

W.C.A. Case No.104/1997 thereby allowing an application filed by

appellant under Section 22 of the Workmen's Compensation Act,

1923 (for short 'the Act') claiming compensation of Rs.2,67,252/-

from the employer and the insurer. The learned Commissioner

directed respondents to jointly and severally deposit

compensation within one month from the date of order passed

by the Commissioner. Being dissatisfied with the award of

interest from the date of order, appellant has preferred this

appeal.

02] For the sake of convenience, appellant and

respondents are referred in their original status as applicant and

non-applicants as they were referred before the Labour Court.

03] The facts giving rise to the appeal may be stated in

nutshell as under :

i. Appellant was working since about three years before

filing the application on the establishment of non-

applicant no.1. He was paid Rs.72.20 per day wages.

Non-applicant no.1 was manufacturing synthetic yarn

and more than 4000 workers were working on it's

establishment.

ii. According to applicant, he was working on permanent

basis, but his name was not maintained on muster

roll. Non-applicant no.1 on paper had shown that

applicant was working through a contractor viz. M/s.

Loknath Security Services. It was submitted that

applicant is an employee of non-applicant no.1 and

not of the so called contractor.

iii. On 04/08/1997, applicant was working in Coal

Handling Plant of Boiler House as usual at the Coal

Conveyor Belt in second shift. He met with an

accident. He received crush injuries to his right hand

as it came in the Coal Conveyor Belt. His right hand

was required to be cut off from elbow portion. He was

admitted to the Medical College and Hospital, Nagpur.

His right hand was amputated by the machine at the

time of occurrence of accident. He became

permanently disable and was not able to perform his

duties due to accident.

iv. At the time of accident, applicant was 21 years old.

He served notice through his Counsel to non-applicant

no.1 on 22/09/1997. Non-applicant no.1 replied the

notice and raised a contention that risk of the

applicant being covered under the insurance policy,

he would receive compensation accordingly. After

receipt of notice, non-applicant no.1 paid Rs.50,000/-

towards ex gratia payment to applicant.

v. Applicant then filed an application under the Act

claiming compensation of Rs.2,67,252/-. During

pendency of W.C.A. No.104/1997, non-applicant no.2

deposited an amount of Rs.78,839/-. Applicant also

claimed interest at the rate of 12% per annum and

the penalty on the amount of compensation.

vi. Non-applicant no.1 resisted the application by filing

reply. It was the defence of non-applicant no.1 that

applicant was never the employee of non-applicant-

establishment. It was submitted that applicant was in

the employment of a contractor and was not a

workman within the meaning of Section 2(1)(n) of the

Act. According to non-applicant no.1, as per the

certificate of Civil Surgeon, 50% permanent disability

came to be assessed and compensation to the extent

of 50% disability was already paid to applicant. The

submission was that application is not maintainable

and if at all is maintainable, applicant was not entitled

to receive compensation as claimed by him.

vii. Non-applicant no.2 filed reply at Exh.22 and

submitted that non-applicant no.1 is exclusively liable

to pay compensation.

viii. Upon rival pleadings of the parties, Commissioner

framed issues at Exh.13. Applicant examined himself.

Non-applicant no.1 examined Prabhakar Yashwant

Koltewar. Non-applicant no.2 did not adduce any oral

evidence. Considering the oral and documentary

evidence, Commissioner came to the conclusion that

at the time of occurrence of accident on 04/08/1997,

applicant was in the employment of non-applicant

no.1, accident occurred in the course of employment,

applicant suffered 100% permanent disability and was

entitled to get compensation as claimed in the

application. Accordingly, application came to be

allowed and interest at the rate of 12% was awarded

from the date of order of the Commissioner.

04] This Court vide order dated 27/03/2008 admitted the

appeal and framed the following substantial question of law :

"Whether the interest has to be calculated after one

month of date of accident, if amount is not deposited

within one month, or it has to be calculated or paid

from the date the compensation determined by the

Commissioner ?"

05] Learned Counsel for appellant referred to the

provisions of Section 4-A(3)(a) of the Act and submitted that

compensation was not paid within a month from the date of

accident and so employer was required to pay simple interest at

the rate of 12% per annum from the date of accident and not

from the date of order of Commissioner. In support of

submission, learned Counsel relied upon the following

judgments:

i. Saberabibi Yakubbhai Shaikh and others vs. National Insurance Company Ltd. and others - [2014(3) Mh.L.J. 252 - SC].

ii. Shivaji Krishna Gaikwad and others vs. Telecom District Engineer, Sangli - [1996(2) Mh.l.J. 874].

iii. Nanda wd/o pandhari Gatade and others vs. Bhikaji Ghanshyam Shingane - [2009(1) Mh.L.J. 422]

iv. Dattatraya Layappa Koli (Since deceased by his heirs and dependents) Smt. Meena Dattatraya Koli and others vs. Maharashtra State Electirity Distribution Company, Sangli - [2010(2) Mh.L.J. 129]

v. Judgment of this Court in National Insurance Co.

Ltd. vs. Shakilabi wd/o Mohd. Shakil Khan and others in First Appeal No.757/2012.

In addition, reliance is also placed on the judgments

of Allahabad High Court in M/s. Dil Pasand Biri Company,

Farrukhabad and others vs. State of U.P. and others -

[2003 (99) FLR 19] and of Kerala High Court in Workmen of

Modern Tile and Clay Works, Feroke vs. Industrial

Tribunal, Kozhikode and another.

06] Per contra, learned Counsel for non-applicant no.1

submitted that immediately on receipt of notice, an amount of

Rs.50,000/- was paid to applicant towards ex gratia and on

receipt of permanent disability certificate, amount was deposited

by the insurance company. Learned Counsel submits that

payment of ex gratia was just within two months from the date

of accident and this would be the special benefit on the part of

employer to pay compensation to applicant. Learned Counsel

submits that considering the immediate conduct on the part of

non-applicant no.1, it cannot be said that non-applicant no.1

committed default and question of payment of interest would not

arise. Referring to the landmark judgment of the Hon'ble

Supreme Court in Pratap Narain Singh Deo vs. Srinivas

Sabata and another - [(1976) 1 SCC 289] confirmed as

correct view in Oriental Insurance Company Limited vs.

Siby George and others - [(2012) 12 SCC 540], it is

submitted that conduct of the party plays an important role while

considering default in paying the compensation. Learned

Counsel reiterates that applicant was never in the employment

of non-applicant no.1, but on humanitarian ground, ex gratia was

paid and even learned Commissioner has observed that non-

applicant no.2 accepted the liability and deposited the amount of

compensation due to the applicant. It is submitted that

considering the nature of controversy, provisions of Sections 4-

A(1) & (3) of the Act are to be considered and in the case before

the Hon'ble Supreme Court, the default was inherent, either the

amount of compensation was not at all paid or if paid, was at

much belated stage. According to the learned Counsel, in the

given facts and circumstances of the case, non-applicant no.1 is

in fact not liable to pay interest.

07] The crux of the dispute revolves around a short

question, whether interest on amount of compensation awarded

by the Commissioner would be payable from the date of order

passed by the Commissioner or after one month of the date of

accident. The controversy is squarely covered by the judgment

of the Hon'ble Supreme Court in Oriental Insurance Company

Limited vs. Siby George and others (supra). The question

before the Hon'ble Supreme Court in this case was whether

interest on amount of compensation would be payable from the

date of accident or from the date of order of the Commissioner.

Considering the provisions of Sections 4-A(1) & (3) of the Act and

referring to the earlier decisions in (i) Pratap Narain Singh

Deo vs. Shrinivas Sabata and another - [(1976) 1 SSC

289], (ii) Oriental Insurance Company Limited vs. Mohd.

Nasir and anr. - [(2009) 6 SCC 280] and (iii) National

Insurance Co. Ltd. vs. Mubasir Ahmed and anr. - [(2007) 2

SCC 349, the Hon'ble Supreme Court held that the decisions in

Mubasir Ahmed and Mohd. Nasir insofar as they took a contrary

view to the earlier decisions in Pratap Narain Singh Deo (supra)

did not express the correct view and did not make binding

precedents. The Hon'ble Supreme Court held that interest on

amount of compensation would be payable not from the date of

order of Commissioner, but from the date of accident.

08] In the case on hand, respondent no.1 has not

deposited compensation as per Section 4 of the Act, but the

amount which was deposited there on humanitarian ground,

sought to be treated as compensation. Needless to state that

compensation provided under the Act is towards security against

any accidental events, arising out of and in the course of

employment. Under Section 4-A of the Act, compensation is to

be paid by the employer within one month from the date, it fell

due. If the liability is disputed, sub-section 2 of Section 4-A

requires employer to make the provisional payment based on the

extent of liability. In both the events, there is no escape from

the liability to pay compensation. Let howsoever good

justification on the part of employer may be once compensation

is not paid within the statutory deadline, sub-section 3 gets

attracted and employer in view of default in payment of

compensation would be liable to pay simple interest at the rate

of 12% per annum. Sub-section 3 of Section 4-A of the Act casts

statutory obligation on the Commissioner to award simple

interest at the rate of 12% from the date, it fell due and not from

the date of order of Commissioner.

09] In the light of above, this Court does not find

substance in the submission of learned Counsel for respondent

no.1 that bona fide and immediate conduct on the part of non-

applicant no.1 needs to be considered while saddling with the

liability to pay interest. In view of the well settled propositions of

law laid down by the Hon'ble Supreme Court in case of Pratap

Narain Singh Deo (supra), this Court is of the view that award of

interest from the date of order of Commissioner by the learned

Commissioner was not in accordance with the statutory

requirement, as applicant is entitled to simple interest at the rate

of 12% per annum from the date of accident i.e. 04/08/1997 in

the present case. To that extent, interference is warranted in

this appeal. Hence, the following order :

ORDER

I. Clause (3) of operative part of the impugned judgment and award dated 09/12/2004 is modified.

II. Non-applicant nos. 1 & 2 are directed jointly and severally to pay interest at the rate of 12% per annum from the date of accident.

III. The substantial question of law is answered accordingly.

IV. First Appeal No.126/2008 is disposed of in above terms.

            V.      No order as to costs.


*sdw                                                (Kum. Indira Jain, J)