[Cites 8, Cited by 0]
Delhi High Court
Divisional Railway Manager vs Kanchan Tiwari on 5 December, 2025
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 01.12.2025
Judgment pronounced on:05.12.2025
+ FAO 118/2020, CM APPL. 9386/2020, CM APPL. 9387/2020, CM
APPL. 28629/2020 & CM APPL. 9022/2021
DIVISIONAL RAILWAY MANAGER .....Appellant
Through: Mr. Vikrant N. Goyal, Mr. Harsh
Kumar Singh, Mr. Piyush Wadhwa
and Mr. Yash, Advocates.
versus
KANCHAN TIWARI .....Respondent
Through: Mr. Akhil Sachar, Ms. Babita Rawat,
Ms. G. Arora, Advocates.
CORAM:
HON'BLE MS. JUSTICE CHANDRASEKHARAN SUDHA
JUDGMENT
CHANDRASEKHARAN SUDHA, J.
1. This Appeal under Section 30 of the Employees' Compensation
Act, 1923 (the EC Act) has been filed by the respondent in an
Application under Section 4A(3)(b) of the EC Act, aggrieved by
the order dated 23.05.2019 passed by the Commissioner,
Employees' Compensation, Labour Department, whereby the
respondent has been directed to pay interest of ₹ 2,39,138/-
along with penalty @ 30% amounting to ₹1,28,142/- for the
delay in depositing the compensation amount payable to the
deceased's family member, i.e., his widow and son.
2. In this appeal, unless otherwise specified, the parties will be
specified to as described in the original proceedings.
3. The facts of the present case originate from the demise of Shri
Himanshu Tripathi, on 20.09.2009 who was employed with the
respondent, Northern Railway, Indian Railways, as Signal
Khalasi. He passed away due to an accident resulting in severe
head injury while he was travelling from Talhari Bujurg to
Rohana Kala Station during the course of his official duty. The
joint inspection report dated 29.12.2013, prepared and signed by
the authorised officials of the respondent confirmed that the
deceased fell from a running train resulting in his death.
4. On 14.01.2016, the respondent deposited a sum of ₹4,27,140/-
through cheque bearing No. 647704 dated 17.12.2015 towards
death compensation. The said amount was deposited without
any interest for the delay in the payment of compensation. Upon
such deposit, the Commissioner disbursed the aforesaid amount
to the family of the deceased vide disbursement order dated
02.02.2016.
5. Pursuant to the aforesaid events, the wife of the deceased filed a
claim application on 24.10.2017 before the Commissioner,
seeking, inter alia, a direction to the respondent for payment of
arrears of simple interest at the rate of 12% for the delay in
depositing the compensation, penalty not exceeding 50%,
funeral expenses, and further interest till the final deposit.
6. Upon receipt of the application, the learned Commissioner
issued a show cause notice dated 19.12.2017 to the respondent,
directing them to explain why maximum penalty @ 50% should
not be imposed upon them.
7. The respondent, inter alia, contended that the widow of the
deceased had been provided compassionate appointment and
that the compensation amount had been duly deposited with the
Commissioner and that it was subsequently released to the
family of the deceased by the Labour Department. It was also
contended that apart from the statutory compensation, an
additional sum of ₹10,00,000/- was also paid as ex-gratia. The
delay in releasing the compensation amount from 12.02.2014 to
14.01.2016 was attributed to procedural reasons, asserting also
that the deceased was not covered under the EC Act.
8. Upon consideration of the submissions of both sides and the
documents placed on record, the learned Commissioner found
that the claimants were entitled to compensation and that there
was clear delay on the part of the respondent in depositing the
compensation amount. Accordingly, the Commissioner
concluded that the respondent was liable to pay interest @ 12 %
on the principal amount. With respect to the date from which
interest is to be computed, it was held that the interest be
calculated with effect from December 2013.The interest was
directed to be computed up to 30.08.2018, being the date on
which the proceedings were concluded, in other words, from
December, 2013 to 30.08.2018.Accordingly, the total interest
liability was assessed at ₹2,39,198/-
9. Regarding the penalty, the learned Commissioner adopted a
lenient approach, acknowledging the procedural delays inherent
in the government sector and considering the fact that the
respondent had already disbursed an ex-gratia payment of ₹10
Lakhs. Consequently, a penalty of 30% on the principal amount,
calculated at ₹1,28,142/-, was imposed and the respondent was
directed to deposit a total sum of ₹3,67,340/- (comprising both
interest and penalty) within 30 days of the said order.
10. The respondent filed a review application under Section
32(2) of the EC Act, challenging the impugned order dated
23.05.2019. However, the review application was dismissed
vide order dated 07.11.2019.
11. Aggrieved by the directions contained in the impugned order
dated 23.05.2019, the respondent has preferred the present
appeal, wherein it is, inter alia, alleged that the computation of
interest liability for the period from December 2013 till
30.08.2018 is wholly erroneous, since the respondent had
already deposited the compensation amount on 14.01.2016.
12. The Claimant has filed CM Application No. 9022 of 2021
under Order XLI Rule 22 read with Section 151 of the Code of
Civil Procedure, 1908by placing reliance on the judgment in
North East Karnataka State Road Transport Corporation v.
Sujatha, (2019) 11 SCC 514, contending that the interest ought
to have been computed from the date of death of the deceased
employee, i.e., 20.09.2009, rather than from 29.12.2013, being
the date on which the joint inspection report was submitted
declaring the death to be accidental.
12.1. When questioned on the maintainability of seeking such
reliefs by way of an application, instead of filing a cross
appeal against the impugned order dated 23.05.2019, the
respondent sought to justify the course adopted and placed
reliance upon the judgments Delhi Electric Supply
Undertaking v. Basanti Devi, (1999) 8 SCC 229, Sushila
Giri v. Nitish Kaushik, 2018 SCC OnLine Del 7080, M.C.
Luthra v. Ashok Kumar Khanna, 2018 SCC OnLine Del
7462.
13. Both sides were heard.
14. It is submitted by the learned counsel for the respondent that
the sole question that now arises for determination is whether
the interest liability for the deposit of compensation is to be
computed till the conclusion of the proceedings before the
learned Commissioner, i.e., 30.08.2018 or till the date on which
the compensation was actually deposited, i.e., 14.01.2016.
15. Sub-section 3 of Section 4A of the EC act, 1923 reads :
"4-A.Compensation to be paid when due and penalty for default:-
"XXXXXX
(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 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
(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 penaltyshall not be
passed under clause (b) without giving a reasonable opportunity to
the employer to show cause why it should not be passed.
XXXXXX"
(Emphasis supplied)
16. A plain reading of sub section 3 of Section 4A of the EC Act,
unequivocally establishes that any default by the employer in
paying compensation within the statutory period of one month
mandates the Commissioner to impose simple interest at 12
percent per annum and to levy penalty as warranted. It further
stands settled that the employer's liability to pay interest arises
strictly on the compensation that remains due, and the moment
any part of the compensation is paid, the interest liability to that
extent automatically extinguishes from the date of such
payment.In other words, as soon as a payment is made against
the compensation due, the corresponding interest liability cease.
17. In the case on hand, the learned Commissioner, without
giving any reasons, has directed that the interest be computed
up to the conclusion of the proceedings on 30.08.2018, which is
significantly later than the date on which the due compensation
amount had already been deposited by the respondent viz.,
14.01.2016.
18. Such a determination cannot be sustained either in law or on
a proper construction of sub section 3 of Section 4A of the EC
Act. Therefore, the conclusion of the learned Commissioner that
the respondent is liable to pay interest @ 12 % per annum on
the compensation amount from 29.12.2013 till 30.08.2018,
being the date on which the proceedings concluded, is wholly
untenable and is liable to be set aside. The liability to pay
interest could extend only up to the date of deposit of the
compensation, which in the present case was effected on
14.01.2016.
19. In addition to the above, the further question raised by the
claimant for determination is whether the interest liability on the
compensation ought to arise from the date of the accident, i.e.,
20.09.2009, rather than from 29.12.2013, the date on which the
joint inspection report was submitted and through which the
respondent first became aware of the accidental nature of the
death.
20. It is a well settled principle that interest on compensation is
payable from the date of the accident and not from the date of
adjudication, as held in Ajaya Kumar Das v. Divisional
Manager, 2022 SCC OnLine SC 93. But no cross
appeal/objection has been filed by the claimant.
21. The learned counsel for the claimant placed reliance upon the
dictums in Delhi Electric Supply Undertaking v. Basanti
Devi, (1999) 8 SCC 229, Sushila Giri v. Nitish Kaushik, 2018
SCC OnLine Del 7080, and M.C. Luthra v. Ashok Kumar
Khanna, 2018 SCC OnLine Del 7462, to canvass the point that
to do complete justice to the party, Order XLI Rule 33 CPC can
be invoked by this court and interest be awarded from the date
of accident. It is true that no cross appeal/objection has been
filed by the claimants. But the case on hand appears to be a case
in which the discretionary powers of the court under Order XLI
Rule 33 of the CPC can be invoked. Hence, I find that the
claimants are entitled to interest from the date of accident.
22. In light of the afore said reasons, the appeal is allowed only
to the limited extent of correcting the computation of interest
liability, which shall be the period from the date of the accident,
i.e., 20.09.2009 until 14.01.2016, being the date on which the
appellant deposited the compensation amount due. Needless to
say, the direction relating to penalty as awarded by the learned
Commissioner remains unchanged.
23. Applications, if any, pending shall stand closed.
CHANDRASEKHARAN SUDHA
(JUDGE)
DECEMBER 05, 2025/ABP
