Judgment · High Court

despite service of notice neither of the respondents appeared. This court in view of the substantial question involved in this appeal proposed to dispose of the appeal on the admission stage in the absentia of the responden ts. From the grounds contended in the appeal, the sole grievance of the appellant ap pears before this court is in respect of award of interest from the date of acci dent. Sub Section 3(a) of Section 4(A) of the Workmen’s Compensation Act, 1923 p rovides as follows: (cid:28)3(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 ba nk as may be specified by the Central Government, by notification in the Offici al Gazette, on the amount due; and &. (cid:29) In view of the provision above, it was incumbent on the part of the Commissioner to direct payment of simple interest at the rate of 12 % per annum or at such h igher rate not exceeding the maximum on account of default of payment of compens ation and not otherwise.

Learned Commissioner by the impugned judgment and award directed payment of interest at the rate of 9% from the date of accident which is not allowable under Sub Section 3(a) of Section 4A of the Workmen’s Compensat ion Act, 1923. Mr. S. Dutta in support of his contention also relies in the case in between National Insurance Co. Ltd. Vrs. Mubasir Ahmed and Another; reported in (2007( 2 SCC 349, wherein paragraph-9 of the judgment states as under: (cid:28)9. Interest is payable under Section 4A(3) if there is default in paying the c ompensation due under this Act within one month from the date it fell due. The q uestion of liability under Section 4A was dealt with by this Court in Maghar Son gh V. Jashwant Singh. By amending Act 30 of 1995, Section 4A of the Act was amen ded, inter alia, fixing the minimum rate of interest to be simple interest @ 12% . In the instant case, the accident took place after the amendment and , therefo re, the rate of 12% as fixed by the High Court cannot be faulted.

But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it fell due. Obviously it cannot be the date of accident. Sinc e no indication is there as to when it becomes due, it has to be taken to be the date of adjudication of the claim. This appears to be so because Section 4A(1) prescribes that compensation under Section 4 shall be paid as soon as it falls d ue. The compensation becomes due on the basis of adjudication of the claim made. The adjudication under Section 4 in some cases involves the assessment of loss of earning capacity by a qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The position, become s clearer on a reading of sub-section (2) of Section 4A. It provides that provis ional payment to the extent of admitted liability has to be made when employer d oes not accept the liability for compensation to the extent claimed.

The crucial expression is (cid:28)falls due (cid:29). Significantly, legislature has not used the expressi on (cid:28)from the date of accident (cid:29). Unless there is an adjudication, the question of an amount falling due does not arise. (cid:29) In view of the decision of the Apex Court in the case(supra) and the substantive law as well provided in the Workmen’s Compensation Act, 1923, the impugned awar d in the matter of payment of interest is set aside and quashed. Appeal accordingly stands allowed. No cost.