Sri. Venkat Reddy S/O Laxmi Reddy vs Sri. Bheemreddy S/O Laxmireddy ...
2022 Latest Caselaw 5237 Kant

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          IN THE HIGH COURT OF KARNATAKA
                   KALABURAGI BENCH

     DATED THIS THE 23RD DAY OF MARCH, 2022

                          BEFORE

     THE HON'BLE MR.JUSTICE ASHOK S. KINAGI

               MFA No.32774/2013 (WC)
Between:
Sri. Venkat Reddy S/o Laxmi Reddy,
Age: 33 years, Occ: Ex. Driver,
R/o Maddipet, Near City Talkies,
Raichur-584 101.
                                                ... Appellant
(By Sri.Basavaraj R.Math, Advocate)
And:
1.     Sri. Bheemreddy S/o Laxmireddy,
       Owner of Maruti Car No.KA-34/M-4042,
       R/o H.No.9-7-15, Maddipete, Raichur-584 101.

2.     The Manager,
       M/s Reliance General Insurance Company Ltd.,
       Raichur-584 101.
                                         ... Respondents

(V/o dated 15.09.2014 notice to R1 is dispensed
with;
By Sri.Rahul R.Asture, Advocate for R2)

       This Miscellaneous First Appeal is filed under Section
30(1) of W.C.Act praying to (a) call for records and modify the
impugned Award dated 06.08.2013 passed by the Labour Officer
and W.C. Commissioner, Raichur partly allowing the claim
petition and seeking enhancement of compensation.
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      This appeal coming on for hearing, this day, the
Court delivered the following:-


                      JUDGMENT

This appeal is filed by the appellant challenging

the judgment and award dated 06.08.2013 passed by

the Labour Officer & Commissioner for Workmen's

Compensation, Raichur in Case No.KAR/KNP/CR-

159/2010 under Section 30(1) of Workmen's

Compensation Act, 1923 (for short 'the Act').

2. Parties will be referred to as per their

ranking before the Commissioner for Workmen's

Compensation.

3. Brief facts giving rise to filing of this appeal

is that the claimant sustained injuries during the

course of employment on 21.01.2010, after getting

proper treatment petitioner could not recover fully,

due to the injuries sustained by him. Hence, the

claimant filed claim petition seeking for compensation

on the account of injury sustained during the course of

employment.

4. The respondents appeared before the

Tribunal through their counsels and filed written

statement denying the averments made in the petition

and respondent No.2 denied the said fact. Hence,

prayed to dismiss the claim petition.

5. The Commissioner for Workman's

Compensation, on the basis of the pleadings, has

framed the issues and allowed the claim petition in

part and awarded compensation of Rs.2,15,904/- with

interest at the rate of 12% per annum and directed

the respondent No.2 - Insurance Company to deposit

the compensation amount. Being aggrieved by the

judgment and award passed by the Commissioner for

Workmen's Compensation, filed this appeal on the

ground that, the Commissioner has committed an

error in awarding interest from the date of passing the

order.

6. Heard the learned counsel for the claimant

and also learned counsel for respondent No.2 -

Insurance Company.

7. Learned counsel for the claimant submits

that the claimant is entitled for interest from the date

of accident, and not from the date of order passed by

the Commissioner. Hence, on this ground alone has

filed this appeal.

8. Per contra, learned counsel for the

respondent No.2 - Insurance Company supports the

impugned judgment and award passed by the

Commissioner.

9. This Court admitted the appeal on the

following substantial question of law.

           Whether     the   Labour   Officer  &
           Commissioner       for      Workmen's

Compensation is justified in awarding interest from the date of passing the award?

10. Perused the records and considered the

submission of the learned counsel for the parties.

11. It is not in dispute that the claimant has

sustained injuries during the course of employment

and in order to prove that, the claimant had suffered

injuries during the course of employment, claimant

himself examined as PW-1 and also examined the

doctor as PW-2, in order to prove the disability.

12. The Commissioner, after recording the

evidence and considering the material on record,

awarded a compensation of Rs.2,15,904/-.

13. Insofar as awarding interest as per Section

4A(3)(a) of the Act, 1923, which deals with award of

interest when the employer is in default. Section 4A

reads as under:

"Section 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.

(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.

(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 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 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."

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).

(3A) The interest and the penalty payable under sub-section (3) shall be paid to the employee or his dependant, as the case may be."

14. As per Section 4A of the Act, 1923

compensation under Section 4 shall be paid as soon as

it falls due. It can be seen that the liability to pay the

interest on the amount of compensation due and

payable would be under Section 4A(3)(a) and the

penalty would be leviable under Section 4A(3)(b). As

per Section 4A(3)(a), the employer shall pay, in

addition to the amount of the arrears, simple interest

thereon @ 12% p.a. or at such higher rate not

exceeding the maximum of the lending rates of any

scheduled bank as may be specified on the amount

due. As per Section 4A(1) compensation under section

4 shall be paid as soon as it falls due.

     Therefore,      on      the     death    of      the

employee/deceased      immediately,    the   amount    of

compensation can be said to be falling due. Therefore,

the liability to pay the compensation would arise

immediately on the death of the deceased. Even as

per Section 4A(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 employee, as the

case may be, without prejudice to the right of the

employee to make any further claim.

Therefore, the liability to pay the compensation

would arise from the date on which the deceased died

or injured for which he is entitled to the compensation

and therefore, the liability to pay the interest on the

amount of arrears/compensation shall be from the

date of accident and not from the date of the order

passed by the Commissioner. The said view has been

reiterated by the Hon'ble Apex Court in the Case of

SHOBHA & ORS -vs- THE CHAIRMAN, VITHALRAO

SHINDE SAHAKARI SAKHAR KARKHANA LTD. &

ORS. in Civil Appeal No.1860/2022 disposed of on

11.03.2022.

15. In view of the law laid down by the Hon'ble

Apex Court, the petitioner is entitled for interest on

the compensation as awarded by the Commissioner

from the date of the incident.

16. In view of the above discussion, the appeal

is allowed in part. The judgment and award passed

by the Commissioner for Workmen's Compensation,

Raichur in Case No.KAR/KNP/CR-159/2010 is

modified. Claimant would be entitled for interest on

the compensation as awarded by the Commissioner

from the date of the incident.

SD/-

JUDGE

GRD