Sakunjay Vyas
Published on: March 12, 2022 at 08:45 IST
The Two Judge Bench of Justice M. R. Shah and Justice B. V. Nagarathna of Supreme Court overturned the High Court of Judicature at Bombay, Bench at Aurangabad order that has directed the employee to pay the interest on the amount of compensation as leviable under Section 4A(3)(a) from the date of the order passed by the Commissioner.
The Supreme Court recently ruled that according to Employee’s Compensation Act, 1923, the liability to pay the compensation would arise immediately on the deceased’s death.
The Two Judge Bench of M. R. Shah and Justice B. V. Nagarathna was hearing an appeal against the High Court of Judicature at Bombay, Bench at Aurangabad, where the High Court order that modified the time from which the employer has to pay the interest awarded @ 12% p.a., It changed it from the date of the incident to become payable from the period after expiry of one month from 25.01.2017.
The Apex court found High Court’s judgment to be incomplete; it stated that the High Court has only given the order by taking into consideration only Section 4A(3)(b), which deals with the imposition of penalty and taken into consideration the section Section 4A(3)(a) of the Employee’s Compensation Act, 1923, which deals with the award of interest when the employer is in default.
“…the High Court has considered Section 4A(3)(b) only which deals with imposition of penalty. However, the High Court has not noted and/or considered Section 4A(3)(a) of the Act, 1923, which deals with award of interest when the employer is in default. ”
the Court said.
The apex court further stated that according to section 4(A)1, the compensation to be paid should be paid from the date of the incident, therefore in the case in hand, from the date of death of the employee, the amount of compensation can be said to be falling due; consequently, the liability arises immediately.
“As per Section 4A(1) 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 immediately on the death of the deceased.”
the Court said.
As a result, the Apex Court has quashed and set aside the order of High Court of Judicature at Bombay, Bench at Aurangabad by stating that the order of the High Court of awarding the compensation after the period of expiry of one month has been quashed and set aside and that the appellants are entitled to interest on the compensation awarded by the Commissioner from the date of the incident.