Neelam Kumari & Ors. v. National Insurance Company Ltd & Ors.

Through: Mr. D. S. Chauhan, Advocate & Ms. Sheeba Sethi, Advocate for No. 1 Coram: HON’BLE MR. JUSTICE RAJNESH OSWAL, JUDGE JUDGMENT

1. This appeal has been preferred by the appellants-claimants against the judgment and award dated 11.05.2006 passed by learned Commissioner, Workmen’s Compensation Act, Jammu, tilted, Neelam Kumari vs National Insurance Company and others, for enhancement of the compensation.

2. The present appeal has been filed on twin grounds. Firstly, that the Commissioner unilaterally and arbitrarily fixed wages of the deceased- Thoru Ram as Rs. 3,000/- contrary to the evidence on record despite the fact that the SRO No. 20 dated 15.01.2002 relied upon by the Commissioner only provided for the minimum wages of a skilled worker and also the interest was required to be awarded at the rate of 12% per annum from the date of accident till the amount is paid.

3. Mr. Vishnu Gupta, learned counsel for the appellant has vehemently argued that as per Explanation 2 appended to section 4 to the Workmen 2 MA No. 105/2007 Compensation Act, 1923, the monthly wages of the deceased was required to be taken as Rs. 4,000/- only in view of the evidence on record with regard to the monthly wages of the deceased as Rs. 5,000/ and further that SRO 20(supra) was not at all applicable as there was no bar for payment of enhanced wages. He further argued that interest was required to be paid from the date of accident along with interest @ 12% per annum till it was paid.

4. Per contra, Mr. D. S. Chauhan, learned counsel for respondent No. 1 has vehemently submitted that the wages cannot be taken as Rs. 5,000/- per

6. month. Heard and perused the record. This Court vide order dated 21.04.2008 framed the following substantial questions of law: “i) Whether designated authority could fix the reckonable wages of petitioner on his assessment independent of the evidence on file and award interest at a rate lesser than the one prescribed under the statute. ii) Whether the authority below could rely on SRO 20/2002 to absolve the Insurance Co. concerned of its liability in the matter.”

7. A perusal of award reveals that the learned Commissioner has directed the respondent Insurance Company to satisfy the award of Rs. 2,54,160/ within the period of 30 days from the date of award, failing which respondent Insurance Company has been directed to pay interest @ 6% per annum from the date of award.

8. In fact, both these issues are interrelated as the learned Commissioner while fixing the earning of the deceased as Rs. 3,000/-, has relied upon 3 MA No. 105/2007 SRO 20(supra) in which the wages of the skilled worker has been fixed as Rs. 100/ per day.

9. The first issue is whether the learned Commissioner could have taken monthly wages of the deceased as Rs. 3,000/- per month in view of the evidence on record with regard to the earning of the deceased as Rs. 5,000/-. There is abundant evidence in the form of statements of appellant, PW Tilak Raj and PW Dharam Paul that the deceased was getting Rs. 5,000/- to 6,000/- per month. The learned Commissioner has relied upon SRO 20(supra) for fixing the wages of the deceased as Rs. 3,000/- per month despite the fact that it did not place any embargo upon the Commissioner to fix wages at the rate higher than fixed by the SRO, as there was no bar for payment of the higher wages in the SRO. The Explanation 2 of Section 4 of the Workmen Compensation Act, 1923 is reproduced as under: “4. Amount of compensation: Explanation II- Where the monthly wages of a workman exceed [four thousand rupees], his monthly wages for the purposes of Cls. (a) and (b) shall be deemed to be [four thousand rupees] only. (c) where permanent partial disablement results from the injury (i) in the case of any injury specified in Part II of Sch. I such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury, and (ii) in the case of any injury not specified in Sch. I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity [as assessed by the qualified medical practitioner] permanent caused by injury.” 4 MA No. 105/2007

10. As it was proved by the appellant that the deceased was getting salary of Rs. 5,000/- per month but as per the Explanation 2 (supra), the wages of the deceased are required to be considered as Rs. 4,000/- only per month. The deceased was 45 years of age, as such, taking into consideration his wages as Rs. 4,000/- per month, the appellants are found to be entitled compensation of Rs. 3,38,880/-(2000x169.44).

11. The other issue is with regard to the interest payable upon the compensation. Further sub section (3)(a) of Section 4-A of the Workmen’s Compensation Act, 1923, provides that the employer shall in addition to amount of the arrears, pay simple interest @ 12% per annum or such higher rate not exceeding the maximum of the lending rates of any scheduled bank. As such the appellants are entitled to interest @ 12% per annum from the date of death in the instant case.

12. Reliance is placed upon the decision of the Apex Court in Ajaya Kumar Dass others v Divisional Manager others MANU/SC/0096/2022 , has held: “5. The judgment of the High Court is inexplicable. 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 compensation under the Workmen's Compensation 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 the 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 5 MA No. 105/2007 in Oriental pay the compensation within one month from the date it fell due. In Saberabibi Yakubhai Shaikh v. National Insurance Co. Ltd. MANU/SC/0013/2014 : (2014) 2 SCC 298, 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 Insurance Co. Ltd. v. Siby George MANU/SC/0608/2012 : (2012) 12 SCC 540 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 and Anr. 1, 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.”

13. In view of the above, the present appeal is allowed and the award passed by the learned Commissioner is modified to the extent mentioned above. The respondent No. 1-Insurance Company is directed to satisfy the award as modified above along with interest at the rate of 12% from the date of accident i.e 04.11.2001 till it is paid. The amount, if any deposited by the appellant be released in favour of the appellants and if the amount is not deposited by the respondent No. 1-Insurance Company in the Registry, the respondent No.1 is directed to pay the compensation along with up-to- date interest in terms of the modified award in favour of the appellants within a period of thirty days from the date of this order.

14. Disposed of. (Rajnesh Oswal) Judge JAMMU 25.02.2022 Rakesh Whether the order is speaking: Whether the order is reportable: Yes/No Yes/No