Case Note & Summary
The appellant, a workman, filed an application under Section 22 of the Workmen's Compensation Act, 1923 claiming compensation of Rs.2,67,252/- for injuries sustained during employment with respondent no.1, Indo Rama Synthetics (I) Ltd., which was insured by respondent no.2, Oriental Insurance Co. Ltd. The Commissioner under the Workmen's Compensation Act, First Labour Court, Nagpur, allowed the application and directed the respondents to jointly and severally deposit compensation within one month. However, the Commissioner awarded interest on the compensation from the date of the order, not from the date of the accident. The appellant, dissatisfied with this aspect, appealed to the High Court. The sole issue was whether interest should be awarded from the date of accident or from the date of the Commissioner's order. The appellant argued that under Section 4A(3) of the Act, interest is payable from the date of accident if compensation is not paid within one month of the accident. The respondents did not contest this point. The High Court, relying on the plain language of Section 4A(3), held that interest must be paid from the date of accident, as the employer failed to pay compensation within the statutory period. The court modified the award to direct that interest at 12% per annum be paid from the date of accident until realization. The appeal was allowed in part, with no order as to costs.
Headnote
A) Workmen's Compensation - Interest - Section 4A(3) of Workmen's Compensation Act, 1923 - Interest on compensation is payable from the date of accident, not from the date of order - The court held that the Commissioner erred in awarding interest from the date of order; interest must be paid from the date of accident as per Section 4A(3) of the Act (Paras 4-5).
Issue of Consideration
Whether the Commissioner under the Workmen's Compensation Act, 1923 was justified in awarding interest on compensation from the date of order instead of from the date of accident.
Final Decision
Appeal allowed in part. The award is modified to direct that interest at 12% per annum on the compensation amount shall be paid from the date of accident until realization. No order as to costs.
Law Points
- Interest on compensation under Workmen's Compensation Act
- 1923 is payable from the date of accident
- not from the date of order
- Section 4A(3) of the Act
- Employer's liability to pay interest when compensation not paid within one month of accident
