Judgment · High Court · 2012

K. Bhatta, learned counsel appearing for the appellant.

#02. Identical substantial questions of law have been projected in bo th the appeals. Apart that, these appeals have emerged from the same accident wh ich occurred on 22.08.2004. As such, the appeals are taken up together for dispo sal by a common judgment. 03. These appeals filed under Section 30 of the Workmen’s Compensati on Act, 1923 against the judgment and award dated 30.08.2004 passed by the Commi ssioner, Workmen’s Compensation, Tinsukia in W. C. Case No.96 of 2004 and W. C. Case No.95 of 2004. 04. At the time of admission no substantial question of law was form ulated as required under Section 30(1) of the Workmen’s Compensation Act, 1923. However, from the memorandum of appeal, it appears that the following substantia l questions of law are involved in these appeals: Whether the wages of the workmen would include the daily allowance and 1. 2. Whether the interest shall accrue from the date of the judgment and awar d @ 12% per annum or from the date when it fell due as per Section 3 of the Work men’s Compensation Act, 1923 or whether there can be higher rate of interest bey ond 12% per annum on the award. It is clear from herein above that a sum of amount paid to a workman to Mr. Sharma, learned senior counsel submitted that by the impugne 05. d judgment and award, the Commissioner, Workmen’s Compensation has included the daily allowance in the monthly wages and thereafter assessed the compensation. M r. Sharma, learned senior counsel to buttress his argument further submitted tha t Section 2(m) of the W. C. Act, 1923 had fallen for interpretation before this Court in Oriental Insurance Co. Ltd. -Vs- Lakhimai Das and Anr. as reported in 2 006(3) GLT 870 where this Court has held as under: (cid:28)12. cover any special expenses entailed on him by the nature of his employment is no t included in his (cid:28)wages (cid:29) for the purpose of the Act. From the nature of the emp loyment of the deceased, we have no hesitation to hold that the daily allowances by the claimant in her deposition would not form a part of the wages as defined under the Act. On a moderate estimate, we may take that a daily allowance of Rs .20/- was paid to the deceased. Resultants an amount of Rs.600/- can be safely d educted from the amo8unt quoted by the claimant to be the income of the deceased per month. According to us, therefore, the wages for the purpose of computing t he compensation for the death of the deceased has to be taken as Rs.3000/- per m onth. We are, therefore, of the view that the learned commissioners had erred in law and on facts in proceeding on the basis that the monthly wages of the decea sed at the relevant time was Rs.3,500/-. (cid:29) 06. Mr. Sharma, learned senior counsel also submitted that as per Se ction 4(A)(3)(a) of the Workmen’s Compensation Act, 1923 the Commissioner can on ly 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 hig her 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 Ga zette, on the amount due. Therefore, unless such notification is published, no h igher rate of interest can be given by the Commissioner, Workmen’s Compensation. Apart that, the interest @ 12% can only be given on the amount due meaning ther eby from when the compensation is determined by the Commissioner, Workmen’s Comp ensation, not from a date anterior thereto. 07. This Court has given an anxious consideration to the submission of Mr. Sharma, learned senior counsel and has also critically examined the decis ion of Lakhimai Das (supra). In Lakhimai Das (supra) this High Court did not lay down any principle but has interpreted the provisions of law in the attendant c ircumstances of that particular case and held that a sum of amount paid to a wor kman to cover any special expenses entailed on him by the nature of his employme nt is not included in his (cid:28)wages (cid:29) for the purpose of the Act. The said interpret ation does not contravene in any manner the definition of the (cid:28)wages (cid:29) as provide d in Section 2 of the Workmen’s Compensation Act, 1923 which stipulates as under : (cid:28)wages (cid:29) includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concess ion or a contribution paid by the employer of a workman towards any pension or p rovident fund or a sum paid to a workman to cover any special expenses entailed on him by the nature of his employment (cid:29) In that case, the tribunal found that the said daily allowance w 08. as a sum paid to the workman to cover the special expenses but it did not projec t that the daily allowance of all nature would be excluded from the wages. The w ages includes any privilege or benefit which is capable of being estimated in mo ney. In this regard a decision of the apex Court in Mohd. Ameeruddin and another Vrs. United India Insurance Co. Ltd. and another as reported in (2011) 1 SCC 30 3 is required to be referred to. The apex Court in Mohd. Ameeruddin (supra) held that: We are unable to appreciate the view taken by the High Court on both cou (cid:28)7. nts. First, there was no evidence that the daily allowance of Rs.50/- was not pa id to the deceased every day or even that he was not on work on every day of the month. On the contrary, there is evidence on record that apart from the monthly salary of Rs.2500/- he was getting Rs.50/- as daily allowance. We, therefore, h old that the tribunal was right in assessing the monthly income of the deceased at Rs.4000/-. (cid:29)

#09. In the case in hand also though there is no evidence that the da ily allowance as was being given to the workman was not being given on everyday of the month or he had not worked on everyday of the month. Therefore, a conjoin t reading of Section 2(m) with Mohd. Ameeruddin (supra), it would be crystal cle ar that wages would include the daily allowance unless it is demonstrated that t he said allowance is a part of the sum paid to a workman to cover any special ex penses entailed on him by the nature of his employment. 10. The appellants in these appeals did not make any endeavour to pr ove that the daily allowances as paid to the workmen was a sum paid to the workm en to cover any special expenses entailed on him by the nature of his employment . Moreover, the allowances which are capable of being estimated in money would i nclude within the benefit as defined in Section 2(m) of the Workmen’s Compensati on Act, 1923. It is held that the daily wages of the nature as the workmen were being paid would include in the wages for purpose of calculating the compensatio n for death and bodily injury of the workmen. 11. The rate of interest on the award made under Section 4 of the Wo rkmen’s Compensation Act, 1923 is still on the hot-bed of debate. However, the a pex Court in National Insurance Co. Ltd. Vs. Mubasir Ahmed and another as report ed in (2007) 2 SCC 349 held as under: (cid:28)9. Interest is payable under Section 4-A(3) <javascript:fnOpenGlobalPopUp(’/ba/ disp.asp’,’26430’,’1’);> if there is default in paying the compensation due unde r this Act within one month from the date it fell due. The question of liability under Section 4A <javascript:fnOpenGlobalPopUp(’/ba/disp.asp’,’26430’,’1’);>wa s dealt with by this Court in Maghar Singh v. Jashwant Singh <javascript:fnOpenG lobalPopUp(’/citation/crosscitations.asp’,’MANU/SC/1402/1998’,’1’);> (1998) 9 SC C 134. By Amending Act 30 of 1995, Section 4A <javascript:fnOpenGlobalPopUp(’/b a/disp.asp’,’26430’,’1’);>of the Act was amended, 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, therefore, the rate of 12% as fixed by the High Court cannot be faulted. But the period as fixed by it is wrong. The starti ng point is on completion of one month from the date on which it fell due. Obvio usly it cannot be the date of accident. Since 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 4-A(1) <javascript:fnOpenGlobalPopUp(’/ba /disp.asp’,’26430’,’1’);>prescribes that compensation under Section 4 <javascri pt:fnOpenGlobalPopUp(’/ba/disp.asp’,’26429’,’1’);>shall be paid as soon as it fa lls due. The compensation becomes due on the basis of adjudication of the claim made. The adjudication under Section <javascript:fnOpenGlobalPopUp(’/ba/disp.asp ’,’26429’,’1’);> in some cases involves the assessment of loss of earning capaci ty by a qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The position becomes clearer on a rea ding of Sub-section (2) of Section 4-A <javascript:fnOpenGlobalPopUp(’/ba/disp.a sp’,’26430’,’1’);>. It provides that provisional payment to the extent of admitt ed liability has to be made when employer does not accept the liability for comp ensation to the extent claimed. The crucial expression is \falls due\. Significa ntly, legislature has not used the expression \from the date of accident\. Unles s there is an adjudication, the question of an amount falling due does not arise . Section 4-A(3) <javascript:fnOpenGlobalPopUp(’/ba/disp.asp’,’26430’,’1’) The apex Court further enunciated the law drifting moderately aw 12. ay from Mubasir Ahmed(supra) in Oriental Insurance Co. Ltd. Vs. Mohd. Nasir and another as reported in (2009) 6 SCC 280 where it has been held that: (cid:28)47. The second question which arises for consideration is with regard to the pa yment of interest. There cannot be any doubt whatsoever that interest would be f rom the date of default and not from the date of award of compensation. 48. ;> of the 1923 Act reads as under: (cid:28)4-A. Compensation to be paid when due and penalty for default.- (1) - (2) (3) Where any employer is in default in paying the compensation due under this A ct 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, pa y simple interest thereon at the rate of twelve per cent per annum or at such hi gher rate not exceeding the maximum of the lending rates of any scheduled bank a s may be specified by the Central Government, by notification in the Official Ga zette, 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 Clau se (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 ban k for the time being included in the Second Schedule to the Reserve Bank of Indi a Act, 1934 (2 of 1934). 49. Section 4-A(3), as it appears from a plain reading, is penal in nature. It, however, does not take into consideration the chargeability of interest on vario us other grounds including the amount which the claimant would have earned if th e amount of compensation would have been determined as on the date of filing of the claim petition. The Workmen’s Compensation Act does not prohibit grant of in terest at a reasonable rate from the date of filing of the claim petition till a n order is passed. Only when Sub-section (3) of Section 4-A <javascript:fnOpenGl obalPopUp(’/ba/disp.asp’,’26430’,’1’);> would be attracted, a higher rate of int erest would be payable wherefor a finding of fact as envisaged therein has to be arrived at. Only because in a given case, penalty may not be held to be leviabl e, by itself may not be a ground not to award reasonable interest. 50. Reliance has been placed on Mubasir Ahmed, wherein it was held: (SCC pp.354- 55, para 9) (cid:28)9. Interest is payable under Section 4-A(3) <javascript:fnOpenGlobalPopUp(’/ba/ disp.asp’,’26430’,’1’);> if there is default in paying the compensation due unde r this Act within one month from the date it fell due. The question of liability under Section 4-A <javascript:fnOpenGlobalPopUp(’/ba/disp.asp’,’26430’,’1’);> w as dealt with by this Court in Maghar Singh v. Jashwant Singh <javascript:fnOpe nGlobalPopUp(’/citation/crosscitations.asp’,’MANU/SC/1402/1998’,’1’);>(1998)9SCC

#134. By Amending Act 30 of 1995, Section 4-A <javascript:fnOpenGlobalPopUp(’/ba/ disp.asp’,’26430’,’1’);> of the Act was amended, 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, therefore, the rate of 12% as fixed by the H igh Court cannot be faulted. But the period as fixed by it is wrong. The startin g point is on completion of one month from the date on which it fell due. Obviou sly it cannot be the date of accident. Since no indication is there as to when i t becomes due, it has to be taken to be the date of adjudication of the claim. T his appears to be so because Section 4-A(1) <javascript:fnOpenGlobalPopUp(’/ba/d isp.asp’,’26430’,’1’);> prescribes that compensation under Section <javascript:f nOpenGlobalPopUp(’/ba/disp.asp’,’26429’,’1’);> shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim mad e. The adjudication under Section <javascript:fnOpenGlobalPopUp(’/ba/disp.asp’,’ 26429’,’1’);> in some cases involves the assessment of loss of earning capacity by a qualified medical practitioner. Unless adjudication is done, question of co mpensation becoming due does not arise. The position becomes clearer on a readin g of sub-section (2) of Section 4-A <javascript:fnOpenGlobalPopUp(’/ba/disp.asp’ ,’26430’,’1’);>. It provides that provisional payment to the extent of admitted liability has to be made when employer does not accept the liability for compens ation to the extent claimed. The crucial expression is \falls due\. Significantl y, legislature has not used the expression \from the date of accident\. Unless t here is an adjudication, the question of an amount falling due does not arise. As threin this aspect of the matter has not been considered, we are of the opini on that interest will also be payable at the rate of 7‰% per annum from the date of filing of the application till the date of award. The rate of interest there after shall be payable in terms of the order passed by the Commissioner.

#13. Therefore, law as of now, is that the interest shall be paid @ 7 ‰% per annum from the date of filing the application till the date of award. The rate of interest thereafter shall be payable in terms of the order passed by th e Commissioner i.e. at the minimum rate of 12% per annum or at the higher rate a fter appropriate modification is available saying that the higher rate of intere st 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.

#14. In view of the law as laid down by the apex Court, the appellant s are directed to pay the interest @ 7‰% per annum from the date of filing of th e application till the date of adjudication and thereafter to pay the interest @ 12% per annum till the payment is made.

#15. For the reasons as aforesaid, both the appeals are allowed parti ally to the extent as indicated above. However, there shall not be any order as to costs. The appellants are directed to pay the awarded sum, if not already pai d, before the Commissioner, Workmen’s Compensation, Tinsukia within a period of one month from the date of the judgment and order with interest as aforesaid. Th e Commissioner thereafter would make payment to the claimant-respondents. Send down the LCRs forthwith.