Andhra HC (Pre-Telangana)
Midicharla Ramanamma And Ors. vs V. Naga Prathap And Anr. on 2 January, 2003
Equivalent citations: II(2003)ACC493, 2005ACJ397, 2003(1)ALT630, (2003)ILLJ751AP
ORDER P.S. Narayana, J.
1. The appellants had preferred the present Civil Miscellaneous Appeal against the order passed in W.C. No. 89 of 1998 dated 27-3-2002 on the file of the Commissioner for Workmen's Compensation, Kurnool aggrieved by the facts that the interest of 12% per annum was not awarded from the date of accident till the date of realisation even though the amount was deposited in 30 days. The factual aspects need not be gone into elaborately since the facts are not in dispute and the operative portion of the order in W.C. No. 89 of 1998 reads as follows:
"The opposite parries 1 and 2 are directed to deposit the total amount of Rs. 2,13,570/-(Two lakhs thirteen thousand and five hundred and seventy rupees only) by way of demand draft drawn on State Bank of India, Kurnool in favour of the Commissioner for Workmen's Compensation, Kurnool within thirty days from the date of receipt of this order.
If they fail to deposit the awarded amount within 30 days from the date of receipt of this order, they have to pay an interest at the rate 6% P.A. from the date of order to the date of realization, in addition to the penalty that may be imposed under Section 4-A (3) of the Workmen's Compensation Act 1923."
2. The appellants aggrieved of negativing the relief of interest of 12% per annum from the date of accident till the date of realisation had preferred the present appeal.
3. Sri Gopal, the learned Counsel representing the appellants had placed strong reliance on Sasidharan v. State of Kerala, 2001 ACJ 1502, Surendra Prabhu v. Sripadarao Shankararao Patil, 2001 ACJ 1504, Oriental Insurance Co., Ltd. v. Ningachari, 2001 ACJ 366 and also on L.R. Ferro Alloys Ltd. v. Mahavir Mahto, 2001 ACJ 645 and had contended that in view of the said decisions the Insurance Company is liable to pay interest at 12% per annum from the date of accident till the date of realisation.
4. Per contra, Sri Naram Bhaskar Rao, learned Counsel for the 2nd respondent Insurance Company had made elaborate submissions and had drawn my attention to Section 4A of the Workmen's Compensation Act, 1923 (hereinafter referred to as 'the Act') prior to the amendment and subsequent to the amendment and also had pointed out that in the light of the language of Section 4A of the Act, the interest need not be awarded from the date of accident. In view of the fact that some time limit is prescribed for preferring the claim under Section 10 of the Act, the interest can be awarded from the date of presentation of the claim till the date of realization. The learned Counsel further had drawn my attention to the language employed in Section 4A(3)(a) of the Act and had contended that in view of the words "at such higher rate in extending the maximum of the lending rates of any scheduled bank". It was contended that in view of the scheduled bank, interest rate being only 9%, 9% alone is payable and the claim of 12% interest cannot be sustained.
The learned Counsel also had placed strong reliance on General Manager and Ors. v. Sangum Bhagyamma, (FB), in this regard.
5. Heard both the learned Counsels.
6. The only question that had been argued by both the learned Counsel is relating to the payment of interest. The claim is made under the Act and no doubt the claim was allowed but, however, 12% interest from the date of accident till the date of realisation had not been granted. In L.R.Ferro Alloys Ltd.'s case (supra), the Apex Court held that the Insurance Company is liable to pay interest along with the amount of compensation under the Act since the liability to pay interest is part and parcel of legal liability to pay compensation upon default of payment within one month. The decision in Ved Prakash Garg v. Premi Devi, 1998 ACJ 1 (SC), had been relied on. No doubt, the same view was expressed in the Sasidharan's case and Surendra Prabhu's case (supra). In General Manager and other's case (supra) while dealing with the rate of interest under the Motor Vehicles Act, 1988 the Full Bench of this Court had arrived at a conclusion that the rate of interest should not exceed 9% from the date of accident till the date of realisation and the Full Bench had placed reliance on Kaushnuma Begum v. New India Assurance Company Limited, 2001 (1) ALD 95 (SC)., 2001 (1) ALD 95 (SC).
7. Section 4A of the Act reads as 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 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 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 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.
(3-A) The interest payable under Sub-section (3) shall be paid to the workman or his dependent, as the case may be, and the penalty shall be credited to the State Government.
8. The words employed are "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".
9. Strong reliance was placed on the language employed and a contention was advanced that inasmuch as the scheduled bank interest rate is only 9%, 9% alone is payable by the Insurance Company. No doubt the word employed is "or" it is not in serious dispute, the interest rate by the scheduled bank is only 9% and in view of the facts and circumstances and also the view expressed by the Apex Court in Kaushnuma Begum's case (supra) and also the Full Bench decision of this Court in General Manager and others case (supra). Though it is a beneficial piece of legislation enacted for the purpose of workman in view of the binding decisions, I am of the opinion that in view of the language referred to supra even in Workmen's Compensation cases the liability to pay interest is only at 9% per annum. as on today. Yet another contention advanced was whether interest is payable from the date of accident or from the date of the claim. No doubt, elaborate arguments had been advanced and the difference of the language prior to amendment and subsequent to amendment also had been brought to my notice. It is needless to say that this is a welfare legislation to be interpreted and construed in favour of the workman. In Section 4A of the Act, the heading itself specifies compensation to be paid when due and penalty for default and the words "when due" assume lot of importance.
10. In my considered opinion though some time limit is specified under Section 10 of the Act the cause of action to be reckoned accrues as on the date of accident only. Hence the claimants in such case are entitled to claim interest from the date of accident till the date of realisation. Hence in view of what had been discussed above the appellants are entitled to interest of 9% per annum from the date of accident till the date of realisation and order of the Court below is modified accordingly.
11. The Appeal is allowed to the extent indicated above. No order as to costs.