New India Assurance Co. Ltd. vs Kanta & Anr.
2014 Latest Caselaw 1347 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         FAO No. 14/2012
%                                                     12th March, 2014

NEW INDIA ASSURANCE CO. LTD.                ......Appellant
                 Through: Mr. D.D.Singh, Adv and Mr.
                           Navdeep Singh, Adv.


                          VERSUS

KANTA & ANR.                                          ...... Respondents
                          Through:

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.    This first appeal is filed under Section 30 of the Employee's

Compensation Act, 1923 impugning the order of the Commissioner dated

19.10.2011 which has directed payment of interest under Section 4A of the

Act by the appellant-insurance company on the compensation amount

awarded.


2.    It is the undisputed position in law and now settled by various

Supreme Court judgments that proceedings under Section 4-A are

consequential proceedings on first the compensation amount being

FAO 14/2012                                                            Page 1 of 3
 determined under Section 4 of the Act. After determination of compensation

under Section 4 of the Act, then, the show cause notice is issued to the

employer and the insurance company if there is any justification for delayed

payment. If the Commissioner is satisfied by the justification then the

Commissioner may not award interest and penalty.


3.            Before the Commissioner, the appellant-insurance company

gave a reply relying upon the case of the National Insurance Co. Ltd. Vs.

Mubasir Ahmed and Anr. (2007) 2 SCC 349 that the interest is liable to be

paid after passing of the Award by the Commissioner and not after 30 days

of date of the accident.


4.            The Supreme Court by a Division Bench judgment of four

judges way back in the case of Pratap Narain Singh Deo Vs. Srinivas

Sabata & Anr. (1976) 1 SCC 289 has held that interest is payable not after

30 days of passing of the order by the Commissioner but after 30 days of

date of the accident and failing which interest will have to be paid. The

judgment in the case of Mubasir Ahmed(supra) was rendered in ignorance

of the judgment in the case of Pratap Narain Singh Deo (supra) and

therefore, this has been so clarified by the Supreme Court in the case of

Oriental Insurance Co. Ltd. Vs. Siby George & Ors. (2012) 12 SCC 540

FAO 14/2012                                                              Page 2 of 3
 which holds that since Mubasir Ahmed's case (supra) takes contrary view

to a Larger Bench judgment in the case of Pratap Narain Singh Deo

(supra), the same is per incuriam decision and not binding.

5.            In view of the above, the appellant-insurance company is liable

to pay interest not from 30 days of passing of the order by the Commissioner

but after 30 days of date of the accident in view of the ratio of Pratap

Narain Singh Deo (supra)

6.            In view of the above, there is no merit in the appeal and the

same is therefore dismissed, leaving the parties to bear their own costs. All

pending applications stand disposed of accordingly.




MARCH 12, 2014                               VALMIKI J. MEHTA, J.

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