Gujarat High Court
Vagher Amad Hushen vs Secretary, Gujarat Electricity Board ... on 10 February, 1995
Equivalent citations: (1995)2GLR1130
JUDGMENT R. Balia, J.
1. The petition-workman who was employed by the respondent Gujarat Electricity Board received personal injuries in accident on 6th March, 1976 which arose out of and in the course of his employment. The cause of injury was a fall from a height of nearly 40 ft. to 50 ft. while white washing of the wall of the Boiler House of the Power House at Sikka run and owned by the respondent Board. As a result of the injury, the petitioner suffered 75 per cent permanent disability and as no compensation was paid under the Workmen's Compensation Act to the petitioner, registered notice was given on 23rd December, 1976, claiming the compensation but of no avail and, therefore, the petitioner lodged claim before the Workmen's Compensation Commissioner.
The employer Board chose to contest the claim of the workman on all counts as to whether the application is a workman; whether the accident arose out of and during the course of employment; whether the amount of compensation is due. It also contested the liability to pay interest and penalty.
2. The Workmen's Compensation Commissioner found that the applicant is a workman within the meaning of the Act and the accident in question arose out of and in the course of employment of the respondent Board. It further went on to hold that the notice was given by the workman on 23-12-1976 while the accident took place on 6-3-1976 and, therefore, the opponent is not liable to pay penalty and that the opponent has committed any default in making payment of compensation after receipt of the notice, the applicant is entitled to interest from the date of the application. Accordingly, he directed that the claimant is entitled to recover Rs. 20,180/- as compensation with interest thereon at the rate of 6% per annum from the date of the application till the actual payment of the amount. No penalty was awarded.
3. It is against this order that the workman has approached this Court for modifying the award by awarding penalty for delayed payment as well as interest from the date of the accident and not from the date of the application.
4. Now, Section 4A of the Workmen's Compensation Act reads as under :-
"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 further claim.
(3) Where any employer is in default in paying the compensation under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner, there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty."
According to Section 4-A of the Act, compensation should be paid as soon as it becomes due. If the employer does not accept liability to the extent claimed, he has to make provisional payment based to the extent of the liability which he accepts without any prejudice to the right of the workman to make any further claim. Sub-clause (3) which is relevant for the present purpose deals with where any employer is in default in making payment within one month from the date it fell due the Commissioner may direct the payment of interest at the rate of six per cent per annum on the amount of arrears together with further sum not exceeding 50% of the amount by way of penalty when the Commissioner finds that there is no justification for delaying the payment. Therefore, in my opinion, in the matter of deciding whether the workman is entitled to interest as a compensation for delayed payment, simplicitor and penalty for unjustified delay in making payment, the relevant date from which delays has to be considered is the date on which the compensation falls die to be paid.
5. This brings me to consider the question when the compensation under the Act falls due for the purpose of considering the question of interest and penalty to be levied thereon because the payment of compensation becomes liability of employer if personal injury is caused to the workman by accident which arose out of and in the course of employment. Therefore, the date on which the liability of employer to pay compensation arise, is the date on which the accident took place, which has arisen out of and in the course of employment. Section 4 of the Act prescribes scale of compensation. Section 4-A(1) of the Act makes it clear that the compensation is payable as soon as it becomes due. Therefore, in my opinion, the date on which the compensation becomes due is the date on which the accident took place in the course of employment or has arisen out of the employment and the liability to pay compensation does not depend upon raising of claim thereon. In the Scheme of the Act, it is not the right conferred on the workman to claim but liability imposed upon the employer to discharge on the happening of the event in the course of employment offered to him. I am fortified in my aforesaid conclusion by the decision of the Hon'ble Supreme Court in Partap Narain Singh v. Shrinivas Sabata & Anr reported in AIR 1976 SC 222. Repelling the contention of the employer that the compensation had not fallen due until it was settled by the Workmen's Compensation Commissioner, the Court observed as under :-
"Section 3 of the Act deals with the employer's liability for compensation. Sub-section (1) of the section provides that the employer shall be liable to pay compensation if "personal injury is caused to a workmen by accident arising out of and in 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 proceedings 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."
Same is the view taken by this Court in a decision reported in General Manager v. Western Railway, Bombay (1985 ACJ 57).
6. In view of the aforesaid settled legal position, it is apparent that the Workmen's Compensation Commissioner has committed an error apparent on the face of the record when it held that as the workman has issued notice on 23-12-1976 inspite of the accident had taken place on 3-6-1976, the opponent is not liable to pay the penalty and that he is not liable to pay interest before the date of application.
7. The interest is payable when the amount is not paid within one month of the date when it fell due. Obviously applying the aforesaid principle, the compensation fell due to be paid on and from the date of the accident but the same was not paid inspite of the notice served on the Board and, therefore, the employer-Board was automatically liable to pay interest by way of damages for the delayed payment of compensation irrespective of the fact when there was any justification for such delay or not and as there being no justification for delay, in addition to payment of interest, as compensatory measure, penalty to the extent of 50% of the amount of compensation was also liable to be imposed on the erring employer. The Workmen's Compensation Commissioner has not at all adverted to the question as to whether there was any justification in not making the payment even provisionally of the amount claimed even after expiry of one month of the date of the accident.
8. As is apparent from the record, there was undoubtedly delay in payment of compensation when it become due to be paid and no justification whatsoever except delay in serving the notice has been pleaded before the Workmen's Compensation Commissioner. The employer-Board was also liable to penalty under sub-section (3) of Section 4-A of the Act. The ratio laid down in Partap Narain's case (supra) is fully applicable to the facts of the present case.
9. Accordingly the petition succeeds. The order of the Workmen's Compensation Commissioner is modified to the extent that the workman shall be entitled to interest on compensation determined by the Workmen's Compensation Commissioner with effect from 6-4-1976, that is to say, immediately from expiry of 30 days from the date of accident when the employer failed to make payment of compensation has become liable to the payment of interest until final payment was made in pursuance of the award. As there was no justification for delayed payment of compensation, respondents are also held liable to make payment of penalty, which in the circumstances of the present case, taking into consideration lapse of time is quantified at Rs. 10,000/- (Rs. ten thousand only). Rule is made absolute in terms indicated above with no order as to costs as no one appeared for the petitioner.