Tmt.Sumathi vs M.Rathnavelu
2021 Latest Caselaw 1907 Mad

                                                                         C.M.A.No.1581 of 2018

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED : 29.01.2021

                                                      CORAM

                                   THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM

                                              C.M.A.No.1581 of 2018

                     1.Tmt.Sumathi

                     2.Minor Dinesh Barathi

                     3.Minor Vijaya Barathi

                     4.Tmt.Errammal

                     5.Murugan
                                                                           ... Appellants
                                                         Vs.

                     1.M.Rathnavelu

                     2.Reliance General Insurance Company Limited,
                       Sri Lakshmi Complex, 1st Floor, Barathi Street,
                       Omalur Main Road, Swarnapuri, Salem – 4.
                                                                           ..Respondents

                     Prayer : Civil Miscellaneous Appeal filed under Section 30 of the
                     Employees Compensation Act, 1923, to set aside the order made in
                     W.C.No.426 of 2009 on the file of the workmen's compensation
                     Commissioner cum Deputy Commissioner of Labour, Salem dated
                     30.09.2013 in respect of the rate of interest.


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https://www.mhc.tn.gov.in/judis/
                                                                                 C.M.A.No.1581 of 2018

                                   For Appellants     : Mr.C.Kulanthaivel

                                   For Respondents    : M/s.M.B.Gopalan Associates
                                                     JUDGMENT

This Civil Miscellaneous Appeal is filed raising the substantial

question of law regarding the payment of interest to be granted under the

Workmen Compensation Act.

2. The learned counsel for the appellants mainly contended that

the interest of 12% is not granted from the date of accident. Contrarily,

the interest was granted with effect from the expiry of period of 30 days

from the date of passing of the award. Therefore, there is a huge loss in

the matter of calculating the interest to the appellants.

3. This Court is of the considered opinion that Section 4-A(3)(a)

of Employees Compensation Act, direct that the employer shall, in

addition to the amount of arrears, pay simple interest thereon at the rate

of 12% 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. Thus, the

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1581 of 2018

claimants are entitled for 12% interest as per the above provisions of the

Employees Compensation Act.

4. The question arose whether 12% per annum interest is to be

calculated from the date of accident or the expiry of 30 days from the

date of passing of the Award.

5. In most of the cases, the Deputy Commissioners of Labour are

passing the Award stating that the Award amount is to be deposited by

the opposite party, within 30 days, failing which the interest at the rate

of 12% is to be paid from the date of expiry of 30 days. Such a

conditional payment of interest to the claimants is not contemplated

under the Statute.

6. The conditional grant of interest cannot be acceptable in view

of the fact that the Statute provides interest at the rate of 12% per

annum. Thus, 12% per annum interest is to be calculated from the date

of cause of action that is the date of accident and not from the date on

which the period of 30 days expiry from the passing of the Award.

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1581 of 2018

7. The conditional grant of interest is not contemplated under the

Act. When the Act says 12% per annum is to be paid for compensation,

then the interest is to be calculated from the date on which the cause

arose for grant of compensation.

8. In every case, the cause arises on the date of accident and soon

after the accident occurred, the victim is entitled for compensation.

Thus, the interest is to be calculated from the date of accident and not

from the date of Award or the expiry of 30 days from passing of the

Award. Such conditional grant of interest is unacceptable and in all

cases, the opposite party, who is liable to pay compensation, shall pay

interest from the date of accident, which would be the spirit of the Act.

9. The Employees Compensation Act is a Welfare Legislation.

Thus, constructive interpretation is just and necessary. Once an

employee met with an accident and sustained injury or died, the Award

of compensation, the interest is to be paid from the date of accident

because the period of litigation is unknown to the parties. Some

litigations are disposed at the early stage and some at later stage. If

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1581 of 2018

interest is denied, it will create inconsistency or anomaly amongst the

workmen, which is certainly not justifiable. Therefore, uniformity is to

be followed for grant of interest in all cases of compensation under the

Employees Compensation Act.

10. In order to maintain uniformity and by interpreting the

provisions constructively, this Court is of the opinion that interest is to

be paid as per Section 4-A(3)(a) from the date of accident and not from

the date of passing the Award or from the date of 30 days expiry from

the date of Award. Both the cases are erroneous and cannot be accepted

at all.

11. In view of the above facts, the award dated 30.09.2013, passed

in W.C.No.426 of 2019 is modified only with reference to the date of

interest paid to the appellants. Accordingly, the appellants are entitled

for the payment of 12% interest with effect from the date of expiry of 30

days from the date of accident. In other words, they are entitled for 12%

interest with effect from 31st day from the date of accident.

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1581 of 2018

12. Accordingly, the second respondent Insurance Company is

directed to deposit the difference interest amount within a period of 12

weeks from the date of receipt of a copy of this order. on such deposit,

the major appellants alone are permitted to withdraw their respective

portion of the award by filing an appropriate application and payments

are to be made through RTGS. As far as the minor appellants are

concerned, the said amount shall be deposited in an interest bearing

scheme in any one of the Nationalised Bank till they attain majority.

13. Thus, the award dated 30.09.2013 in W.C.No.426 of 2009

stands modified. C.M.A.No.1581 of 2018 stands allowed in part. No

costs.

29.01.2021 Index: Yes/No Internet:Yes/No Speaking order/Non-Speaking Order gsk

To The workmen's compensation Commissioner cum Deputy Commissioner of Labour, Salem.

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1581 of 2018

S.M.SUBRAMANIAM, J.

gsk

C.M.A.No.1581 of 2018

29.01.2021

https://www.mhc.tn.gov.in/judis/