Supreme Court of India
AJAYA KUMAR DAS & ANR versus DIVISIONAL MANAGER & ANR on 24 January 2022
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SUPREME COURT REPORTS
[2022] 1 S.C.R.
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AJAYA KUMAR DAS & ANR
v.
DIVISIONAL MANAGER & ANR
(Civil Appeal No. 447 of 2022)
BJANUARY 24, 2022
[DR. DHANANJAYA Y CHANDRACHUD ANDDINESH MAHESHWARI, JJ.]
Workmen’s Compensation Act, 1923: s. 4A – Award of intereston compensation to labourer who sufferred permanent disabilityCupto 85% – Appeal thereagainst by insurer – High Court havingdismissed the appeal on the ground of limitation directed that theclaimant are not entitled to any interest on the compensation awardedexcept the accrued interest – On appeal, held: Judgment of theHigh Court is inexplicable – Having dismissed the appeal of theDinsurer on the ground of limitation, there was no occasion for theHigh Court to interfere on merits with the award of interest oncompensation – Error on the part of the High Court has led alabourer and his spouse to travel all the way to this Court – Thus,in addition to the compensation and interest which have beenawarded, the appellants entitled to costs quantified at Rs 50,000/-E– Costs.
Allowing the appeal, the Court
HELD: 1.1 The judgment of the High Court is inexplicable.Having dismissed the appeal of the insurer on the ground ofFlimitation, there was no occasion for the High Court to interfereon merits with the award of interest on compensation under theWorkmen’s Compensation Act 1923. The error on the part ofthe High Court has led a labourer and his spouse to travel all theway to this Court. Though the accident took place in 2000, thecourse of litigation would now end only with the present judgment.GThe High Court has erred on merits as well. Section 4A of the1923 Act stipulates that the Commissioner shall direct theemployer to pay interest of 12% or at a higher rate, not exceedingthe lending rates of any scheduled banks specified, if the employer H
does not pay the compensation within one month from the date itfell due. Interest shall be paid on the compensation awarded fromthe date of the accident. Thus, there was no legal basis for theHigh Court to delete the order of payment of interest, and thesaid direction is set aside. The order for the payment of interestby the Commissioner together with the award of compensationis restored. [Paras 5, 6][470-G-H; 471-A-B, D-F]
1.2 Though the first respondent has not appeared in theseproceedings, despite service of notice, an award of costs isnecessary since the appellants have been compelled to movethis Court against a palpably erroneous order of the High Courtpassed in an appeal filed beyond limitation by the respondent.The insurer took the contest to the High Court in an appeal barredby limitation. A well-resourced insurance company has used itsposition of dominance to evade the cause of justice. Suchstrategies must be eschewed. In addition to the compensationand interest which have been awarded, the appellants would beentitled to costs quantified at Rs 50,000. [Para 7][471-F-G;472-A]
Saberabibi Yakubhai Shaikh v. National Insurance Co.Ltd. (2014) 2 SCC 298 : [2014] (1) SCR 303; OrientalInsurance Co. Ltd. v. Siby George (2012) 12 SCC 540: [2012] (6) SCR 1079; P. Meenaraj v. P. Adigurusamy& Anr. Civil Appeal No 209 of 2022, decided on 6January 2022 – referred to.
Case Law Reference
[2014] (1) SCR 303referred toPara 5[2012] (6) SCR 1079referred toPara 5CIVIL APPELLATE JURISDICTION: Civil Appeal No. 447 of2022.
From the Judgment and Order dated 08.02.2019 of the High Courtof Orissa at Cuttack in Review Petition No.84 of 2018.
Chitta Ranjan Mishra, Neeraj Srivastava, Ronak Baid, Ms. NeetuRathore, Ms. Shalu Sharma, Advs. for the Appellants.
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470SUPREME COURT REPORTS
AThe Judgment of the Court was delivered byDR. DHANANJAYA Y CHANDRACHUD, J.
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1. Leave granted.
2. This appeal arises from a judgment of a Single Judge of theBHigh Court of Orissa dated 11 April 2018 in FAO No 358 of 2018.
3. The first appellant was working as a labourer in a truck bearingregistration No OAX 2764 and was engaged by the second respondentfor the loading and unloading of sand. On 5 June 2000, the truck metwith an accident as a result of which the first appellant suffered multipleCinjuries in his abdomen and kidney. He underwent a surgery and wasdischarged from the hospital on 22 June 2000. A claim for compensationwas lodged before the Workmen compensation-cum-Assistant LabourCommissioner, Odisha. The claim was allowed by an order dated 24May 2016. It was held that the first appellant in spite of all the possibletreatment became permanently disabled upto 85% which would reduceDhis earning capacity upto 100%. Since he was receiving Rs 2100 as amonthly income, the total compensation payable was arrived at Rs2,78,926 (60% of 2100 (monthly income) x 221.37 (age factor as he was22 years old) x 100 (loss of earning)). The Labour Commissioner directedthat the compensation must be paid together with interest at the rate ofE12 per cent per annum on the principal sum awarded from the date ofaccident till the deposit.
4. The first respondent, who is the insurer, filed an appeal beforethe High Court, being FAO No 358 of 2018, with a delay of 619 days.The High Court, by its order dated 11 April 2018, dismissed the applicationFfor condonation on the ground that there was an unexplained delay of619 days. Nonetheless, the High Court directed that the appellants arenot entitled to any interest on the compensation awarded except theaccrued interest. The order of the High Court was sought to be reviewed,but the petition for review was also dismissed on 8 February 2019 on theground that the first appellant has already withdrawn the entire awardedGamount along with the accrued interest.
5. The judgment of the High Court is inexplicable. Havingdismissed the appeal of the insurer on the ground of limitation, there wasno occasion for the High Court to interfere on merits with the award ofinterest on compensation under the Workmen’s Compensation Act 1923.HWhen the appeal was dismissed on the ground of limitation, the High Court could not have entertained it on merits. The error on the part ofthe High Court has led a labourer and his spouse to travel all the way tothis Court. Though the accident took place in 2000, the course of litigationwould 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’sCompensation Act 1923 stipulates that the Commissioner shall directthe employer to pay interest of 12% or at a higher rate, not exceedingthe lending rates of any scheduled banks specified, if the employer doesnot pay the compensation within one month from the date it fell due. InSaberabibi Yakubhai Shaikh v. National Insurance Co. Ltd.[1], thisCourt held that interest shall be paid on the compensation awarded fromthe date of the accident and not the date of adjudication of the claim inview of the decision of this Court in Oriental Insurance Co. Ltd. v.Siby George[2] where it was held that compensation would fall due fromthe date of the accident. Further, in the recent decision in P. Meenarajv. P. Adigurusamy & Anr.[3], this Court reiterated that the applicant isentitled to interest from the date of accident while rejecting the submissionthat the award of interest should be after the expiry of 30 days from thedate of accident. Thus, there was no legal basis for the High Court todelete the order of payment of interest.
6. For the above reasons, we set aside the direction contained inthe order of the High Court dated 11 April 2018 by which the order forthe payment of interest was deleted. The order for the payment of interestwhich was issued by the Additional Labour Commissioner-cum-Commissioner, Workmen Compensation shall together with the awardof compensation stand restored.
7. Though the first respondent has not appeared in theseproceedings, despite service of notice, we are of the view that an awardof costs is necessary since the appellants have been compelled to movethis Court against a palpably erroneous order of the High Court passedin an appeal filed beyond limitation by the respondent. The insurer tookthe contest to the High Court in an appeal barred by limitation. A well-resourced insurance company has used its position of dominance to evadethe cause of justice. Such strategies must be eschewed. In addition tothe compensation and interest which have been awarded, the appellants 1 (2014) 2 SCC 298
3 Civil Appeal No 209 of 2022, decided on 6 January 2022
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Ashall be entitled to costs quantified at Rs 50,000 which shall be paid overwithin a period of four weeks, together with the component of the awardinclusive of interest that remains to be paid.
8. The appeal is allowed in the above terms.
9. Pending application, if any, stands disposed of.B
Nidhi Jain
Appeal allowed.
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