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Kerala HC: Employee Entitled to Interest on Medical Reimbursement From Date of Claim

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Published on: October 21, 2023 at 16:20 IST

The Kerala High Court has ruled that an employee is entitled to claim interest on medical reimbursement under Section 4A of the Employees Compensation Act, 1923, starting from the date of filing the claim before the Compensation Commissioner, rather than the date of the accident.

Justice Basant Balaji emphasized that the Commissioner failed to award interest in accordance with Section 4A of the Act. Given that the accident occurred in 2011, and the claim was made only in 2016, the court held that the employee is entitled to interest from the respondents only from the date of filing the claim with the Employees Compensation Commissioner.

The delay in not filing the claim from 2011 to 2016 is attributed to the applicant, so the responsibility for interest payment during that period cannot be imposed on the respondent.

The court found that the delay in filing the medical reimbursement claim was the applicant’s responsibility, not the employer’s. Consequently, interest for medical expenses due to the delay in filing the claim can only be ordered from the date of the claim petition before the Compensation Commissioner.

The case in question involved an applicant who sought compensation for functional disability resulting from an accident at work in September 2011. However, the claim for Rs 3,00,000 in compensation was only made in 2016.

The Compensation Commissioner awarded Rs. 50,084 as medical reimbursement. The appeal was filed with the High Court due to the non-disbursement of interest for medical reimbursement.

Section 4A of the Employees Compensation Act deals with interest on compensation in cases of non-payment by the employer. The court determined that the interest on the non-disbursement of medical reimbursement falls under the purview of Section 4A of the Act.

In this particular case, although the Commissioner found no occupational disability or loss of earnings for the applicant, medical reimbursement was granted, falling under the scope of Section 4A.

The court noted the accident occurred in 2011, the claim was filed in 2016, and the Commissioner’s order was issued in 2020.

The Commissioner failed to award interest on non-disbursement of medical reimbursement from the date the employee filed the claim with the Employees Compensation Commissioner, even though the delay in filing the claim was the applicant’s responsibility.

Consequently, the court allowed the appeal in part and ordered the payment of interest on medical reimbursement at a rate of 12 percent from the date of the petition until realization.

Case title: Venugopalan v The Managing Partner