Case Note & Summary
The petitioner, Shrikrishna Saw Mill, through its proprietor Rasiklal Walji Patel, filed a writ petition challenging an order dated 09-02-2010 passed by the Commissioner for Workmen's Compensation, Labour Court, Jalgaon in Misc. W.C.A. No. 7 of 2005. The impugned order rejected the petitioner's applications (Exhibits U-16 and U-20) seeking to set aside the award of interest under Section 4A(3) of the Workmen's Compensation Act, 1923. The respondent No.2, Sadashiv Shankar Suryawanshi, an employee, had suffered an injury during employment and claimed compensation. The Commissioner had earlier awarded compensation of Rs.1,04,400/- with interest at 12% per annum from the date of accident till deposit. The petitioner deposited the principal amount within one month of the accident, but the interest component was disputed. The petitioner argued that the delay in payment of compensation was not attributable to them but to the court proceedings, and that they had deposited the amount within the prescribed period under Section 4A(1) of the Act. The respondent No.2 contended that the employer was liable to pay interest as per Section 4A(3) for delayed payment. The court analyzed Section 4A of the Act, which requires the employer to pay compensation within one month of the accident falling due, and if delayed, the Commissioner may direct payment of interest and penalty after giving the employer an opportunity of being heard. The court found that the employer had deposited the principal amount within one month of the accident, and the delay in payment of the interest component was due to the pendency of the proceedings before the Commissioner. The court held that the Commissioner had not given any opportunity to the employer to show cause before imposing interest, and the delay was not attributable to the employer. Therefore, the order imposing interest was set aside, and the petition was allowed. The rule was made absolute with no order as to costs.
Headnote
A) Workmen's Compensation - Interest under Section 4A(3) - Employer's Liability - The Commissioner awarded interest on compensation amount from the date of accident till deposit, but the employer had deposited the amount within one month of the accident and the delay in payment was due to court proceedings - Held that interest cannot be imposed when the employer was not at fault and the delay was attributable to the judicial process (Paras 2-5).
Issue of Consideration
Whether the Commissioner for Workmen's Compensation was justified in awarding interest under Section 4A(3) of the Workmen's Compensation Act, 1923 on the compensation amount when the employer had deposited the amount within the prescribed period and the delay was occasioned due to court proceedings?
Final Decision
The writ petition is allowed. The impugned order dated 09-02-2010 passed by the Commissioner for Workmen's Compensation, Labour Court, Jalgaon below Exhibits U-16 and U-20 in Misc. W.C.A. No. 7 of 2005 is set aside. The award of interest under Section 4A(3) of the Workmen's Compensation Act, 1923 is quashed. Rule made absolute with no order as to costs.
Law Points
- Interest under Section 4A(3) of Workmen's Compensation Act
- 1923 is not automatic
- employer must be given opportunity to show cause before imposing penalty or interest
- delay due to court proceedings is not attributable to employer
