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Civil · Reportable judgment

Shobha & Ors. vs The Chairman, Vithalrao Shinde Sahakari Sakhar Karkhana Ltd. & Ors.

Court
Supreme Court of India
Date
11 March 2022
Case No.
Civil Appeal No. 1860 of 2022
Result
Allowed
Bench
M.R. Shah, B.V. Nagarathna
Citation
[2022] 1 S.C.R. 761 : 2022 INSC 298
Supreme Court Reports [2022] 1 S.C.R. 761 : 2022 INSC 298
Headnote

Employee’s Compensation Act, 1923: ss. 4, 4A – Award of compensation under – Entitlement to interest, from the date of the order passed by the Commissioner or from the date of accident – Held: Liability to pay the compensation would arise from the date on which the deceased died for which he is entitled to the compensation, thus, the liability to pay the interest on the amount of arrears/compensation would be from the date of accident and not from the date of the order passed by the Commissioner – On facts, order passed by the High Court directing the employer to pay the interest @ 12% p.a. on the amount of compensation as leviable u/s. 4A(3)(a) from the date of the order passed by the Commissioner is unsustainable and is set aside.

Allowing the appeal, the Court

Read the full headnote (1 more paragraph)

HELD: 1.1 As per Section 4A(1) of the Employee’s Compensation Act, 1923 compensation under section 4 shall be paid as soon as it falls due. Therefore, on the death of the employee/deceased immediately, the amount of compensation can be said to be falling due. Therefore, the liability to pay the compensation would arise from the date on which the deceased died for which he is entitled to the compensation and therefore, the liability to pay the interest on the amount of arrears/compensation shall be from the date of accident and not from the date of the order passed by the Commissioner. As per Section 4A(3)(b), if the Commissioner is satisfied that there is no justification for the delay, it can direct the employer, in addition to the amount of the arrears and interest thereon, to pay a further sum not exceeding 50% of such amount by way of penalty. Thus, provision for interest and provision for penalty are different. The provision for levy of interest would be under Section 4A(3)(a) and the provision for levy of penalty would be under Section 4A(3)(b). While directing the employer to pay the interest from the date of the order passed by the Commissioner, the High Court has not at all considered Section 4A(3)(a) and has considered Section 4A(3)(b) only, which is the penalty provision. The impugned judgment and order passed by the High Court directing the employer to pay the interest @ 12% p.a. on the amount of compensation as leviable under Section 4A(3)(a) from the date of the order passed by the Commissioner, is unsustainable, andis quashed and set aside. The appellants-original claimants would be entitled to the interest @ 12% p.a. on the amount of compensation as awarded by the Commissioner from the date of the incident. [Paras 4.1, 5, 6][765-B-H; 766-B]

As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

The Judgment of the Court was delivered by M. R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court of Judicature at Bombay, Bench at Aurangabad in First Appeal No. 3008 of 2017 by which the High Court has partly allowed the said appeal preferred by the respondents herein and has ordered that the respondents shall be liable to pay interest @ 12 per cent p.a. as leviable under Section4A(3) of the Employee’s Compensation Act, 1923 (hereinafter referred to as the “Act, 1923”) from the date after expiry of period of one month from 25.01.20
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