Managing Director, J&K Projects Construction Corporation Ltd. v. Gul Joo

Workmen’s Compensation Act, Kashmir Division, Srinagar (hereinafter referred to as ‘Commissioner’) whereby respondent No.1-Gul Joo was granted interest and penalty in terms of Section 4-A of the Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Act of 1923’).

#02. The petitioner, Project Construction Corporation Ltd., is engaged in the construction of buildings, bridges and other civil infrastructure and is not involved in any manufacturing activity. The Corporation claims that the provisions of the Act of 1923 are not applicable to it. However, the Corporation has framed its own rules governing compensation, interest, and 2 penalties payable to its workers in case of injury or death occurring during the course of employment.

#03. The respondent No. 1 was engaged as a field worker with the petitioner-Corporation. On 21.08.2006, he met with an accident during the course of his employment while he was working at Mujghund Tengpora Bridge site and fall from a Chairlift at 40 feet height resulting in severe injuries. Thereafter he was rushed to Jehlum Valley Hospital Bemina Srinagar by his colleagues. The respondent No. 1 suffered fracture of neck and femur with Burst fracture C3 vertebra. The damage, he suffered, was certified to be 40%.

#04. Respondent No. 1 moved an application seeking grant of compensation under the Workmen’s Compensation Act, 1923. This application was considered and decided by the Commissioner vide judgment dated 30.05.2013 and compensation to the tune of Rs. 1,76,803/- was awarded in his favour. The respondent after receiving the awarded compensation another application before Commissioner wherein he sought interest and penalty on compensation already awarded to him on 30.05.2013. The petitioners resisted the said application by filing objections but respondent No. 2-Commissioner vide judgment dated

19.07.2014 directed the petitioners to deposit an amount of Rs. 1,48,515/- along with interest on delay compensation. 3 The relevant paragraph of the judgment dated 19.07.2014 reads as under:- “Section 4A of Workmen’s Compensation Act, 1923 is crystal clear that if the compensation to an injured workman is not paid within 30 days from the date falls due, the Commissioner Workmen’s Compensation Act is within its statutory jurisdiction to saddle the employer with interest and penalty. In the instant case, the Petitioner was injured during and in the course of his employment with the respondents on

21.08.2006 and compensation of Rs. 1,76,803/was paid to the Petitioner on 08.10.2013 so there is a delay of 07 years and accordingly the respondents are under an obligation to pay interest and penalty. The respondents are saddled with interest @ 12% on principal compensation to Rs.1,76,803/- which after computation amounts to Rs.21,216/per year and Rs.1,48,514.52/for seven years rounded to. Rs.1,48,515/-. The respondents are directed to deposit Rs.1,48,515/as interest on compensation delayed with this court within 30 days failing which the same shall be recovered together with 50% penalty.”

#05. The petitioners are aggrieved of the impugned judgment/order dated 19.07.2014 on the ground that respondent No.2 lacks jurisdiction to entertain and consider the application under Section 4-A of the Act of 1923 as respondent No. 1, being engaged as a field worker, does not fall within the ambit of the said Act. The entire proceedings before the respondents are without jurisdiction and liable to b set aside.

#06. It is submitted that apart from the compensation already paid to respondent No. 1, an amount of Rs. 5,000/- 4 from the Employees’ Welfare Fund in addition to Rs. 10,000/- was released in his favour. It was, therefore, contended that once the claim had been adjudicated, respondent No. 2 had no power to consider this application. Respondent No. 2 has exercised its power arbitrarily, against the mandate of law and rules governing the field. The claim of respondent No. 1 was already time barred in terms of the specific provisions laid down under the Act. The petitioners-corporation does not fall under the Workmen’s Compensation Act, as such, the impugned order granting interest could not be passed.

#07. Heard learned counsel for the parties. The claim petition filed by respondent No. 1 for grant of compensation injury suffered by him during the course of his employment, was considered by the Commissioner and vide judgment dated 30.05.2013, after considering the evidence, respondent No. 1 was held covered under the provisions of the Workmen’s Compensation Act, who was injured during the course of his employment with the petition and was, accordingly, held entitled to compensation of Rs. 1,76,803/-. This judgment was accepted by the petitioners. The Commissioner after considering the pleadings of the parties had framed five issues i.e., (i) Whether this Court has jurisdiction to try the case? (OPP/OPD) 5 (ii) Whether the petitioner was injured during and in the course of his employment with respondents, if so to what extent? (OPP/OPD) (iii) Whether the petitioner comes under definition of Workman’s Compensation Act, 1923 ? (OPP/OPD) (iv) If reply to issue No. 2 is in affirmative, to what extent the petitioner is entitled to compensation? (v) Whether the application filed by the petitioner is hit by limitation ? (OPP/OPD)

#08. The respondent No. 1 thereafter moved an application under Section 4-A of the Act before the Commissioner seeking interest and penalty on the plea that the petitioners had failed to pay the compensation within one month from the date it became due. This was objected to by respondent No. 1 on the ground that he is a field worker and as such, is not covered under the Workmen’s Compensation Act. The Commissioner having considered the fact that respondent No. 1 fell within the definition of Workmen’s Compensation Act, who was injured during the course of his employment and was entitled to compensation vide judgment dated 30.05.2013 and the same having been accepted by the petitioners, this issue cannot be raised at this stage in this petition.

#09. The only issue which arises for consideration is whether respondent No. 1 is entitled to interest and penalty on already awarded compensation and if he was entitled to the same, he can move an application for the same. The Hon’ble Apex Court in Ajaya Kumar Das & anr. Vs. 6 Divisional Manager & anr. (Civil Appeal No. 447/2022 decided on 24.01.2022) reported as 2022 (1) SCR 468 has already considered the said issue under the Workmen’s Compensation Act, 1923. Relevant Paragraph Nos. 5 & 6 are reproduced as under:- The judgment of the High Court is inexplicable. 5. Having dismissed the appeal of the insurer on the ground of limitation, there was no occasion for the High Court to interfere on merits with the award of interest on the Workmen’s Compensation compensation under Act 1923. When the appeal was dismissed on the ground of limitation, the High Court could not have entertained it on merits. The error on the part of the High Court has led a labourer and his spouse to travel all the way to this Court. Though the accident took place in 2000, the course of litigation would now end only with the present judgment. To set the record straight, the High Court has erred on merits as well. Section 4A of Workmen’s Compensation Act 1923 stipulates that the Commissioner shall direct the employer to pay interest of 12% or at a higher rate, not exceeding the lending rates of any scheduled banks specified, if the employer does not pay the compensation within one month from the date it fell due. In Saberabibi Yakubhai Shaikh v. National Insurance Co. Ltd.1, this Court held that interest shall be paid on the compensation awarded from the date of the accident and not the date of adjudication of the claim in view of the decision of this Court in Oriental Insurance Co. Ltd. v. Siby George2 where it was held that compensation would fall due from the date of the accident. Further, in the recent decision in P. Meenaraj v. P. Adigurusamy & Anr.3, this Court reiterated that the applicant is entitled to interest from the date of accident while rejecting the submission that the award of interest should be after the expiry of 30 days from the date of accident. Thus, there was no legal basis for the High Court to delete the order of payment of interest.

#6. For the above reasons, we set aside the direction contained in the order of the High Court dated 11 April 2018 by which the order for the payment of interest was deleted. The order for the payment of interest which was issued by the Additional Labour Commissioner-cum- Commissioner, Workmen Compensation shall together with the award of compensation stand restored.”

#10. It is, thus, well settled that once the compensation become due under the Act, the Commissioner can award 7 interest under Section 4-A of the Act from the date of accident. The workman is also entitled to interest in delayed payment and penalty. The relevant date of delay is the date when the compensation became due that the date on which accident had taken place. That otherwise also, interest is between the Court and the party. Since the respondent No. 1 was held entitled to compensation, he was also held entitled to seek interest and penalty, the same would be sought by moving an application.

#11. Thus, respondent No. 1 having already been held entitled to compensation under the Workmen’s Compensation Act, 1923, was also legally entitled to claim interest and penalty in terms thereof. The application filed by him for grant of the interest and penalty on the ground that the amount of compensation was payable within one month’s time from the date it fell due and as such, respondent No. 1 was rightly held entitled to the same was valid.

#12. In view of the aforesaid facts and circumstances of the case, there is no infirmity in the impugned judgment dated 19.07.2024 passed by the commissioner. This petition is without any merit and is, accordingly, dismissed. SRINAGAR 28.08.2025 Vishal Khajuria (SINDHU SHARMA) Judge