Madras High Court
S.Muthuramalingam vs General Manager on 2 June, 2025
2025:MHC:1297
C.M.A.(NPD).No.251 of 2002
and C.M.P.No.3601 of 2003
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 28.04.2025
PRONOUNCED ON :02.06.2025
CORAM
THE HONOURABLE MR.JUSTICE S.SOUNTHAR
C.M.A.(NPD).No.251 of 2002
and C.M.P.No.3601 of 2003
S.Muthuramalingam ... Appellant
vs.
General Manager,
Southern Railway Head Quarters,
Part Town,
Chennai 600 003 ... Respondent
PRAYER: Civil Miscellaneous Appeal is filed under Section 30 of the
Workmen's Compensation Act, to set aside the order dated 13.03.2001 in
W.C.No.12/2000 on the file of the Commissioner for Workmen's
Compensation – I, Chennai – 600 006 and pass an award for a sum of
Rs.91,498/- against the Respondent with interest at the rate of 12% p.a.
from the date of accident.
1/15
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C.M.A.(NPD).No.251 of 2002
and C.M.P.No.3601 of 2003
For Appellant : Mr.A.Shanmugaraj
For Respondent : Mr.A.R.Sakthivel
JUDGMENT
This Civil Miscellaneous Appeal has been filed by the Workman
challenging the order passed by the Commissioner for Workmen's
Compensation - I, Chennai-6, in W.C.No.12 of 2000, dated 13.03.2001.
2. It is the case of the appellant that he was working as Chief
Commercial Inspector under the respondent. According to him, his nature of
work was to meet the Officers of different companies for collecting the
documents and informations and also to trace the consignments, lockers,
parcel and wagons. On 26.02.1998, the respondent deputed the appellant to
attend official work in connection with court cases. The appellant travelled
in Bangalore Mail by utilising duty pass. As per the rules, the appellant had
to stay at Railway Subordinates Guest House. On 27.02.1998, when the
appellant was taking bath in the Guest House, he got slipped and fell down.
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Due to the said accident, the appellant sustained fracture and dislocation in
the neck of right femur and right hip. He had been treated as inpatient at
Railway Hospital, Bangalore from 27.02.1998 to 28.02.1998 and thereafter,
he continued his treatment as inpatient at Railway Hospital, Perambur,
Chennai from 28.02.1998 to 21.03.1998. Thereafter, he was treated as
outpatient till 03.08.1998. Due to the injuries suffered by him, the
appellant's movement got restricted and he suffered permanent disability.
The appellant sent a Legal Notice on 04.10.1999 to the respondent
demanding payment of compensation and the same was not properly
responded. Hence, the appellant filed a claim petition before the
Commissioner for Workmen's Compensation.
3. The claim made by the appellant was resisted by the respondent on
the ground that the appellant got slipped in bathroom due to his negligence
and hence, the respondent was not liable to pay compensation. The claim
petition was also resisted on the ground that the accident did not occur
during the course of employment with the respondent. It was also claimed
that the injuries suffered by him did not result in loss of earning capacity
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and therefore, respondent sought for dismissal of the claim petition.
4. Before the Labour Commissioner, the claimant was examined as
PW.1 and a Doctor was examined as PW.2. 10 documents were marked on
the side of the claimant as Exs.P1 to P10. On the side of the respondent, one
witness was examined as RW.1 and 4 documents were marked as Exs.R1 to
R4.
5. The Labour Commissioner on consideration of evidence available
on record came to the conclusion that the accident had occurred during the
course of employment and fixed the disability at 45%. The Labour
Commissioner directed the respondent to pay a sum of Rs.91,498/- as
compensation to the appellant within 30 days from the date of the order and
in default, the respondent was directed to pay interest at the rate of 12%
from the date of claim petition to the date of actual deposit.
6. Aggrieved by the direction issued by the Labour Commissioner to
pay interest only from the date of petition, that too only on default of
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payment as directed, the appellant/claimant has filed this appeal.
7. At the time of admission, this Court formulated the following
substantial question of law by order dated 28.03.2025:-
“Whether the Commissioner for Workmen's
Compensation - I had committed an error in not awarding
interest at the rate of 12% per annum from the date of accident
as per Section 4A (3) of the Workmen's Compensation Act?”
8. Heard the learned counsel appearing for the appellant and the
learned counsel appearing for the respondent on the question of law
formulated at the time of admission.
9. The learned counsel appearing for the appellant would submit that
as per the provisions of Workmen's Compensation Act (as it was known at
the time of accident), the employer is liable to pay compensation from the
date of accident. In support of his contention, he relied on the judgment of
the Apex Court in Pratap Narain Singh Deo vs. Shrinivas Sabata and
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another reported in 1976 A.C.J 141 (SC).
10. Per contra, the learned counsel appearing for the respondent
would submit that as per Section 4-A(3) of the Workmen's Compensation
Act, 1923 (now known as Employee's Compensation Act, 1923), the
employer is liable to pay interest if he commits default in paying the
compensation due under the Act within one month from the date it fell due.
According to him, the compensation amount becomes payable only on the
adjudication of the dispute by the Labour Commissioner and therefore, the
liability of the employer to pay compensation starts only after expiry of 30
days from the date of adjudication by the Competent Authority/Labour
Commissioner. In support of his contention, he relied on the judgments of
the Apex Court in National Insurance Co. Ltd. vs. Mubasir Ahmed and
another reported in CDJ 2007 SC 165 : (2007) 2 SCC 349 and Kamla
Chaturvedi vs. National Insurance Co. and others reported in CDJ 2008
SC 1941 : (2009) 1 SCC 487.
11. Section 4-A of the Employee's Compensation Act, 1923 reads as
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follows:-
“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 *[employee],
as the case may be, without prejudice to the right of
the*[employee] 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 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
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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. ”
12. A perusal of the same would indicate that Section 4-A(1) of the
Act declares compensation amount becomes payable as soon as it falls due.
The consequence of failure to pay compensation as soon as it falls due is
declared by Section 4-A(3). It says that if the employer committed default
in payment of compensation due under the Act within one month from the
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date it fell due, the Commissioner shall direct the employer to pay interest
on the compensation amount at the rate of 12% per annum. It also talks
about further consequence in case of absence of justification for the delay.
Therefore, the crucial question in this case is when the compensation
payable under the Act became due. The said question was examined by the
Three Member Bench of the Apex Court in Pratap Narain Singh Deo case
cited supra and it was categorically held by the Apex Court in that case that
the employer was liable to pay compensation as soon as the accident occurs.
The relevant observation of the Apex Court reads as follows:-
“6. It has next been argued that the Commissioner
committed a serious error of law in imposing a penalty on the
appellant under section 4A(3) of the Act as the compensation
had not fallen due until it was 'settled' by the Commissioner
under section 19 by his impugned order dated May 6, 1969.
There is however no force in this argument.
7. Section 3 of the Act deals with the employer's liability
for compensation. Sub-section (1) of that section provides that
the employer shall be liable to pay compensation if "personal
injury is caused to a workman by accident arising out of and in
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the course of his employment." It was not the case of the
employer that the right to compensation was taken away under
sub-section (5) of section 3 because of the institution of a suit
in a civil court for damages, in respect of the injury, against
the employer or any other person. The employer therefore
became liable to pay the compensation as soon as the
aforesaid personal injury was caused to the workman by the
accident which admittedly arose out of and in the course of the
employment. It is therefore futile to contend that the
compensation did not fall due until after the Commissioner's
order dated May 6, 1969 under section 19. What the section
provides is that if any question arises in any proceeding under
the Act as to the liability of any person to pay compensation or
as to the amount or duration of the compensation it shall, in
default of agreement, be settled by the Commissioner. There is
therefore nothing to justify the argument that the employer's
liability to pay compensation under section 3, in respect of the
injury, was suspended until after the settlement contemplated
by section 19. The appellant was thus liable to pay
compensation as soon as the aforesaid personal injury was
caused to the appellant, and there is no justification for the
argument to the contrary.” (emphasis supplied)
13. The learned counsel appearing for the respondent relied on two
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judgments of the Apex Court wherein it was stated that the amount payable
under the Act becomes due only on adjudication of the claim by the
Competent Authority. Both the cases relied on by the learned counsel
appearing for the respondent namely Mubasir Ahmed case and Kamla
Chaturvedi case, were decided by Two Member Bench of the Apex Court.
14. Unfortunately, the decision of the Apex Court in Pratap Narain
Singh Deo case decided by Three Member Bench of the Apex Court was
not brought to the notice of the subsequent Two Member Bench. It is settled
law that when there is a conflict of opinion between Three Member Bench
and Two Member Bench, the view of the Larger Bench will prevail over the
view of the Bench with lesser Coram. Therefore, I am bound by the view
expressed by the Three Member Bench of the Apex Court. Infact, in
Mubasir Ahmed case cited by the learned counsel appearing for the
respondent, the Apex Court referred to earlier judgment in Maghar Singh
vs. Jashwant Singh reported in 1998 (9) SCC 134. The Maghar Singh case
was decided by a Three Member Bench. In the said decision, the Apex
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Court considered the effect of amendment to Section 4-A(3) and
applicability of the amended provision to the accident that occurred prior to
1995. In the said decision, the Apex Court did not consider the question
from which date the compensation payable under the Act became due.
15. Even though, the said question was not specifically considered
after deciding the issue regarding the rate of interest for the accident that
had occurred prior to the amendment, the Hon'ble Apex Court directed the
payment of compensation from the date of accident, not from the date of
adjudication by the Competent Authority. Therefore, even in the Maghar
Singh case referred to by the Two Member Bench of the Apex Court,
interest was directed to be paid from the date of accident, not from the date
of adjudication. The same was also not properly brought to the notice of the
Two Member Bench which decided the Mubasir Ahmed case.
16. In view of the settled position, when there is a conflict of opinion
between Two Benches of the Apex Court, the view expressed by the Bench
with Larger Coram will prevail over the view expressed by the Bench with
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lesser Coram, I prefer to follow the decision of the Three Member Bench of
the Apex Court in Pratap Narain Singh Deo case cited supra and
consequently, I hold that the Labour Commissioner ought to have directed
payment of interest on the compensation amount from 29.03.1998 to the
date of realisation. The liability of the employer to pay interest starts on
expiry of 30 days from the date on which the compensation becomes
payable. In the case on hand, the accident had occurred on 27.02.1998. This
Court already came to the conclusion, the compensation amount becomes
payable on the date of accident. The 30 days period expired on 28.03.1998
(1998, being non leap year, Feb' 1998 had only 28 days). Hence, I direct the
respondent to pay interest from 29.03.1998. Accordingly, the question of
law framed at the time of admission is answered in favour of the appellant
and against the respondent.
17. The Civil Miscellaneous Appeal stands allowed by directing the
respondent to pay compensation amount as fixed by the Commissioner for
Workmen's Compensation - I, Chennai-6, with interest at the rate of 12%
per annum from 29.03.1998 to the date of realisation. No costs.
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Consequently, the connected civil miscellaneous petition is closed.
02.06.2025
Index :Yes / No
Speaking order :Yes / No
Neutral Citation :Yes / No
dm
To
1.The Commissioner for Workmen's Compensation – I,
Chennai – 600 006.
2.The Section Officer,
VR Section,
High Court, Madras.
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S.SOUNTHAR, J.
dm
Pre-delivery Judgment made in
02.06.2025
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