Bombay High Court
Manganese Ore (India) Ltd. Through Mine ... vs Commissioner For Workmen ... on 3 April, 2008
Equivalent citations: 2008(3)BOMCR269, 2008(3)MHLJ693
Author: C.L. Pangarkar
Bench: C.L. Pangarkar
JUDGMENT C.L. Pangarkar, J.
1. This is an appeal by non applicant in a Workmen's Compensation case. Respondent No. 2 who is the applicant in the original application was working as a truck driver w.e.f. 01.07.1979. He was working in the Mine run by the appellant. While the respondent was on duty from 6 a.m. to 2 p.m. he met with an accident. It is alleged that heap of stones collapsed and hit him injuring his both legs. The respondent was admitted in the Medical College Hospital from 18.04.1986 to 19.06.1986. He was operated twice. He was unable to walk without the aid of crutches. He was unable therefore to do the job of a driver. The salary of the respondent was Rs. 935/-P.M. It is alleged that appellant did not pay any amount to the respondent.
2. Appellant resisted the application by filing Written Statement. It does not dispute that the respondent met with an accident. He suffered injuries. It is also not disputed that he was admitted in the Medical College Hospital. Medical College had issued a fitness certificate. Respondent was unable to drive the vehicle and therefore at the request of the respondent and the Union he was provided a job as Compressor Driver. It is alleged that his basic salary was only Rs. 561/-. Further it is contended that the respondent was paid fortnightly compensation of Rs. 3197.60 Ps. It is contended that since the alternative job has been provided the appellant is not liable to pay anything.
3. The learned Workmen's Compensation Commissioner found that the respondent had suffered disability to the extent of 35%. He found that appellant had paid Rs. 3197.05 as compensation and respondent was further entitled to a compensation of Rs. 33,526/-. The learned Commissioner further awarded interest and penalty at 10%.
4. I have heard the learned Counsel for the appellant and the respondents.
5. The grounds upon which the award is challenged are award of penalty and interest. The learned Counsel for the appellant contended that the trial Court had erred in awarding penalty as well as interest. According to him the appellant is not liable to pay either the penalty or interest as there is no default committed by it as contemplated by Section 4-A of the Workmen's Compensation Act.
6. Compensation amount becomes payable as soon as the employee meets with an accident and either dies or is injured. Such compensation becomes payable under Section 4 of the Act. Section 4A of the Act makes provision for payment of interest and penalty on the amount of compensation. It is necessary to understand under what circumstances such penalty and interest becomes payable. Section 4-A of the Act reads thus:
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.
It is apparent that not in every case or routinely an order of payment of interest or penalty could be passed or becomes payable. Sub-section 2 says that when the employer does not accept the liability to the extent claimed he is bound to make a provisional payment based on the liability he accepts. In short the employer is bound to pay that much compensation which according to his calculations is due. The question is if he makes payment according to his own calculations within one month and the Commissioner subsequently determines a higher compensation, would the employer be bound to pay interest and penalty on that amount of award? The answer has to be No. The Legislature specifically empowers the employer himself to calculate the amount and pay it as provisional compensation. Final determination is always made by the Commissioner upon consideration of the evidence tendered before him. There could be cases where the Commissioner may determine lessor amount of compensation than determined by the employer provisionally. The question of default would arise, (before determination by the Court) when the employer who refuses to even pay the provisional compensation. Thus what becomes due immediately upon the accident is the provisional compensation determined by the employer. If he commits default in paying provisional amount also he could be said to have committed a default as contemplated by Sub-section 3. Similar would be the case in respect of penalty. The liability to pay penalty would arise in case the employer refuses to pay provisional compensation, or if pays there is a deliberate delay in such payment. In ordinary course the Commissioner can neither award penalty nor interest. There has to be a delay or refusal in payment of provisional compensation and if there is no justification for the delay and non payment, employer would incur penalty as well as interest. Reference may be made to a decision of the Supreme Court in Ved Prakash Garg v. Premi Devi and Ors. .
7. The Legislature has made this provision to ensure timely payment of compensation. Therefore provision would apply to those who totally neglect or refuse to pay any amount though that falls due immediately after the accident. If compensation though it falls due was not paid within the time stipulated under Section 4-A the Court would be justified in awarding the interest and if it is found further that there was a deliberate delay in payment of the provisional compensation a penalty could be imposed.
8. It can be said that the compensation as determined by the Court would fall due on passing of the award, if that award is not satisfied within one month, the Court could direct the interest to be paid after lapse of one month. In the instant case the appellants had paid Rs. 3197.50 Ps. within one month as fortnightly compensation. Thus the appellant had paid the amount which according to appellant was due. Therefore, the learned Judge of the Lower Court could not have directed the appellant to pay penalty at 10% and also the interest. The order, therefore, suffers from illegality to that extent. The appeal is therefore allowed. The order directing payment of interest and penalty is set aside. No order as to costs.