CORAMTHE HONOURABLE MR v. Sri Krishna Agencies

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 17-4-2007CORAMTHE HONOURABLE MR.JUSTICE K. VENKATARAMANC.M.A.No.234 of 20011. Tmt.Velu Ammal2. Minor Petchiammal3. Minor Nandakumar4. Minor Mohana [Minor Appellants 2 to 4 are rep. by their mother & guardian the first appellant] .. Appellantsvs.1. Sri Krishna Agencies, No.4/905, G.N.T. Road, Padiyanallur, Chennai-52.2. United India Insurance Co.Ltd., Motor Third Party Claim Cell, No.38, Anna Salai, Chennai-2. .. RespondentsCivil Miscellaneous Appeal filed under Section 30 of theWorkmen's Compensation Act against the order dated 18.5.1999 made inW.C.No.125 of 1997 on the file of the Commissioner for Workmen'sCompensation-II, Chennai-6. For Appellants : Mr.U.M.RavichandranFor Respondent-2 : Mr.P.D.Audikesavalu R-1 : No appearanceJUDGMENTThe applicants in W.C.No.125 of 1997 before the Commissionerof Workmen's Compensation No.II, Chennai-6 are the appellants beforethis Court. 2. The case put forth by them before the said Authority wasthat one Anbazhagan, husband of the first appellant and father of theother appellants, died in an accident arising out of and in the course https://hcservices.ecourts.gov.in/hcservices/ of his employment with the first respondent on 18.8.1993. Their furthercase before the said Authority was that the deceased Anbazhagan wasreceiving a sum of Rs.80/- as daily wages and Rs.10/- as daily batta.On 18.8.1993, when he was working as Lorry Driver in the lorry bearingregistration No.AP-26-T-4656 owned by the first respondent herein dieddue to electrocution during the course of employment at the firstrespondent's shed. The second respondent being the insurer of the saidvehicle has been added in the said proceedings. The said proceedingshas been initiated by them for payment of compensation for the death ofthe said Anbazhagan in the said accident arising out of and in thecourse of his employment. 3. The first respondent filed a counter stating that if any ordersare passed for payment of compensation, that amount should be paid bythe second respondent-Insurance Company. The second respondent hasfiled the counter stating that it does not admit the manner of accidentand the employment of the deceased with the first respondent herein, asdriver. It has also been averred in the said counter that theappellants have to establish that the deceased died in the course ofemployment as driver under the first respondent.4. After considering the evidence adduced on the side of theappellants as well as the respondents herein, the Authority referred toabove held that the deceased died due to electrocution during the courseof his employment with the first respondent herein. Further, theAuthority has ordered compensation of a sum of Rs.78,824/- and the saidamount has been directed to be deposited by the second respondent hereinwithin one month from date of receipt of the order failing whichinterest at the rate of 6% shall be recovered from date of filing of theclaim application. The applicants/appellants preferred the presentappeal only on the ground that the Authority ought to have awardedinterest at the rate of 12% from the date of the accident withoutimposing any condition which will give loop holes to the respondents toevade payment of interest for the amount awarded. In fact, when theappeal was entertained, the following substantial question of law hasbeen framed:-"Whether the Commissioner for Workmen's Compensation oughtnot to have awarded interest at the rate of 12% per annumfrom the date of accident when the award was passed onmerit?5. The learned counsel appearing for the appellants contendedthat the Authority while awarding interest should have awarded interestat the rate of 12% from the date of accident and should not havedirected the second respondent to deposit a sum of Rs.78,824/- withinone month from the date of receipt of the order failing which it has topay interest at the rate of 6% which will be recovered from the date offiling of the petition. In fact, the learned counsel appearing for theappellants contended that the appellants are entitled to the said awardamount with interest at 12% from the date of the accident and theAuthority should not have awarded interest only at 6% per annum if the https://hcservices.ecourts.gov.in/hcservices/ amount awarded is not deposited within one month from the date ofreceipt of the order. According to the learned counsel, orderinginterest at 6% only if the amount is not deposited within one month istotally erroneous. The learned counsel relied on the decision of theDivision Bench of this Court reported in 2002 (4) C.T.C. 469 (THEORIENTAL INSURANCE CO LTD v. KALIYA PILLAI) wherein it has been held asfollows:-"As stated earlier, the Workmen's Compensation Act,being a beneficial legislation, considering the object andscheme of the Act, particularly after insertion of Section4-A, we hold that interest for the compensation amountwould accrue 30 days after the date of accident and notfrom the date of quantification. To make it clear that weare of the view that the liability to pay interest wouldrun from the date on which the right to receivecompensation accrues in favour of the workman namely thedate of the accident and not on the date of issuance oforders by the Commissioner for Workmen's Compensation."6. The learned counsel further relied on the decision reportedin III (2006) A.C.C. 727 (DB) (MARY v. JOSE MATHEW) wherein a DivisionBench of the Kerala High Court has held that the rate of interestpayable is 12% and not 6%.7. The learned counsel further relied on an unreporteddecision of a Division Bench of this Court made in L.P.A.No.224 of 2001dated 2.4.2004 wherein Their Lordships have held as follows:-"We are also of the opinion that the claimants are entitledto get interest from the date of the accident, on which datethe right to receive compensation accrues, though thequantum is fixed subsequently. Hence, the judgment of thelearned Judge in this regard cannot be sustained and theclaimant is entitled to get interest at 12% from 1.6.1998,i.e., from the date of the accident."8. The learned counsel relied on another unreported decisionof a Division Bench of this Court made in C.M.A.No.1055 of 2001 dated30.10.2002 wherein, Their Lordships have held as follows:-"In the light of what is stated above, while upholding thequantum of compensation arrived, we grant interest at therate of 12% per annum for the said amount, but interest asmentioned above shall be payable after expiry of 30 daysfrom the date of accident till date of payment. To thisextent, the Civil Miscellaneous Appeal is allowed."By citing the above decisions, the learned counsel appearing for theappellants contended the the appellants are entitled to get interestfrom the date of the accident on which date the right to receivecompensation accrues, though the quantum is fixed subsequently. https://hcservices.ecourts.gov.in/hcservices/

9. Per contra, the learned counsel appearing for the secondrespondent contended that the Authority has rightly held that interestat the rate of 6% is payable if the respondent in the said proceedingsdid not deposit the amount awarded within one month from the date of theorder. The learned counsel relied on the decision reported in 2007SCCL.COM 102 (NATIONAL INSURANCE CO. LTD v. MUBASIR AHMED) wherein theApex Court has held as follows:-"Interest is payable under Section 4-A(3) if there isdefault in paying the compensation due under this Act withinone month from the date it fell due. The question ofliability under Section 4-A was dealt with by this Court inMAGHAR SINGH v. JASHWANT SINGH (1998 (9) S.C.C. 134). ByAmending Act, 14 of 1995, Section 4-A of the Act wasamended, inter alia, fixing the minimum rate of interest tobe simple interest @ 12%. In the instant case, the accidenttook place after the amendment and, therefore, the rate of12% as fixed by the High Court cannot be faulted. But theperiod as fixed by it is wrong. The starting point is oncompletion of one month from the date on which it fell due.Obviously it cannot be the date of accident. Since noindication is there as when it becomes due, it has to betaken to be the date of adjudication of the claim. Thisappears to be so because Section 4-A(1) prescribes thecompensation under Section 4 shall be paid as soon as itfalls due. The compensation becomes due on the basis ofadjudication of the claim made. The adjudication underSection 4 in some cases involves the assessment of loss ofearning capacity by a qualified medical practitioner.Unless adjudication is done, question of compensationbecoming due does not arise. The position becomes cleareron a reading of sub-section (2) of Section 4-A. It providesthat provisional payment to the extent of admitted liabilityhas to be made when employer does not accept the liabilityfor compensation to the extent claimed. The crucialexpression is "falls due". Significantly, legislature hasnot used the expression "from the date of accident". Unlessthere is an adjudication, the question of an amount fallingdue does not arise."Thus, according to the learned counsel appearing for the secondrespondent, the payment of interest will arise only if the amountawarded has not been deposited within one month from the date of theaward by the Authority referred to above.10. I have heard Mr.U.M.Ravichandran, the learned counselappearing for the appellants and Mr.P.D.Audikesavalu, the learnedcounsel appearing for the second respondent. https://hcservices.ecourts.gov.in/hcservices/

11. The question that has to be answered in this appeal iswhether the appellants are entitled to compensation from the date ofaccident with interest at the rate 12% per annum or whether thecompensation awarded by the authority directing the second respondent-Insurance company to pay the award amount within one month from the dateof receipt of the order and failure to do so will attract interest at 6%per annum from the date of filing of the claim application is to besustained. The learned counsel appearing for the appellants relying onthe decisions referred to above contended that the claimants will beentitled to get interest from the date of the accident on which date theright to get compensation has accrued, though the quantum has been fixedlater. But, on the other hand, the learned counsel appearing for thesecond respondent contended that interest is payable only if there is adefault in payment of compensation within one month from the date itfell due.12. Section 4-A(1) of the Act reads as follows:-"Compensation under Section 4 shall be paid as soon as itfalls due." Thus, the said provision makes it very clear that compensation becomesdue on the basis of the adjudication of the claim made. Unlessadjudication is done, the question of compensation becoming due does notarise. If the intention of the legislature is that the compensation isto be payable from the date of the accident, Section 4-A(1) would sayfrom the date of the accident. But, Section 4-A(1) says compensationshall be paid as soon as it "falls due". Thus, the said expression"falls due" will clearly show that the compensation becomes due on thebasis of the adjudication of the claim made. Adjudication depends uponassessment of loss of earning capacity to be proved through the evidenceof the Medical practitioner. Till it is quantified, the question ofcompensation becoming due does not arise at all. Such a view has beentaken by the Honourable Apex Court in the judgment reported in 2007SCCL.COM 102 (NATIONAL INSURANCE CO. LTD v. MUBASIR AHMED). Eventhough the Bench of this Court has taken the view that the claimantswill be entitled to interest from the date of the accident, sinceaccording to the Bench of this Court, the right to receive compensationaccrues from the date on which the accident took place, the Apex courthas clearly held that the compensation under Section 4-A shall arise onthe date of adjudication of the claim and not on the date of accident.In view of the said settled position held by the highest Court of theland, I am constrained to hold that payment of compensation will becomedue on the date of adjudication of the claim and not on the date of theaccident. Thus, the Court below has awarded a sum of 78,824/- anddirected the second respondent to deposit the said sum within one monthfrom the date of receipt of the order failing which interest at the rateof 6% will be recovered from the date of claim application. The saidorder does not suffer from any illegality or infirmity. https://hcservices.ecourts.gov.in/hcservices/

13. In the result, the award of the learned Commissioner forWorkmen's Compensation No.II, Chennai-6 made in W.c.No.125 of 1997 dated18.5.1999 is liable to be confirmed and accordingly, the same isconfirmed. The Civil Miscellaneous Appeal stands dismissed. However,there is no order as to costs.Sd/Asst.Registrar/true copy/Sub Asst.RegistrardppTo1. The Commissioner for Workmen's Compensation-II, Chennai-6. 2. The Section Officer, V.R.Section, High Court, Madras.1 cc To Mr.A.Shanmugaraj, Advocate, SR.25389.1 cc To M/S.P.A.Devasigamani Associates, Advocate, SR.25080.C.M.A.No.234 of 2001 VC(CO)RVL 25.04.2007