Current Trends In Law: Accident compensation By Adv. R.S. Agrawal

The question answered by the Supreme Court in the judgment of the case – North East Karnataka Road Transport Corporation v. Smt. Sujatha , delivered on November 2, 2018, by Justice Abhay Manohar Sapre and Justice Indu Malhotra relate to grant of interest on the awarded  amount of compensation and the date from which the interest will be computed.

The Supreme Court noted that the appeal before the Karnataka High Court did not involve any substantial question of law on the material questions. The Commissioner had decided all the material questions arising in the case properly on the basis of evidence adduced by the parties and rightly determined the compensation payable to the respondent. It was, therefore, rightly affirmed by the HC on facts.

The findings being concurrent findings of fact of the two courts below were binding on the Court. Even otherwise, the Court found no ground for interfere with any of the factual findings. None of the factual findings are either perverse or arbitrary or based on no evidence or against any provision of law. Accordingly, The Supreme Court upheld these findings. After this, the Apex-Court proceeded to examine the next question which was wrongly decided by the Commissioner and the error by him was also not noticed by the HC. The question related to grant of interest on the awarded amount and further, from which date, it is to be awarded to the respondent-claimant.

The grant of interest on the awarded sum is governed by section 4-A of the Workmen’s Compensation Act, 1923.The question as to when does the payment of compensation under the Act “becomes due” and consequently what is the point of time from which interest on such amount is payable as provided under section 4-A(3) of the Act remains no more res integra and stands settled by two SC decisions.

As early as in 1975, a 4-judge bench of the Supreme Court ,in the case – Pratap Narain Singh Deo v. Srinivas Sabata & Another- (1976) 1 SCC 289,speaking through Singhal J. has held that an employer becomes liable to pay compensation as soon as the personal injury is caused to the workman in the accident which arose out of and in the course of employment. It was accordingly held that it is the date of the accident and not the date of the adjudication of the claim, which is material.

Another question analogues to the main question arose before the 3-judge bench of the Supreme Court in the case of Kerala State Electricity Board & Another v. Valsala K. & Another (1999) 8 SCC 254 as to whether increased amount of compensation and enhanced rate of interest brought on statute by amending Act 30/1995 with effect from September 15, 1995 would also apply to cases in which the accident took place before September 15, 1995.

The Court, placing reliance on the law laid down in Pratap Narain’s case held that since the relevant date for determination of the rate of compensation is the date of accident and not the date of adjudication of the claim by the Commissioner and if the accident had taken place prior to September 15, 1995,the rate applicable on the date of accident would govern the subject.

After these two decisions, the Apex-Court in two cases (both by the two-judge bench) – National Insurance Co. Ltd. V. Mubasir Ahmed & Another (2007) 2 SCC 349 and Oriental Insurance Co. Ltd. Vs Mohd. Nasir  & Another (2009) 6 SCC 280 without noticing the law laid down in Pratap Nartain and Valsala cases took a contrary view and held that payment of compensation would fall due only after the Commissioner’s order or with reference to the date   on which the claim application is made.

This conflict of view in the decisions on the question was noticed by the Court (2-judge bench) in Oriental Insurance Co. Ltd. v. Siby George and Others – (2012)12 SCC 540. Justice Aftab Alam speaking for the bench referred to these decisions and explaining the ratio of each decision held that since the two later decisions rendered in the cases of Mubasir and Mohd. Nasir which took contrary view without noticing the earlier two decisions of the Court in Pratap Narain and Valsala cases by the larger benches, consisting of four and three judges respectively, hence later decisions rendered in Mubasir and Mohd. Nasir cannot be held to have laid down the correct principles of law on the question and nor can, therefore, be treated as binding precedent on the question.

In other words, the law laid down in Pratap Narain and Valsala cases was held to hold the field throughout as laying down the correct principle of law on the subject. Accordingly, in the Oriental Insurance Company Ltd. decision followed the decision in the Pratap Narain and Valsala cases and decided the case, instead of following the Mubasir and Mohd. Nasir decisions, which were held per incuriam. Now in the present case, the Court noted that the Commissioner awarded interest to the respondents at the rate of 12 pc per annum on the awarded sum from the expiry of 45 days from the date of order and that too, if the appellant failed to deposit the awarded sum within 45 days.

In the Supreme Court’s opinion, this order by the Commissioner in awarding the interest on the awarded sum is contrary to the law laid down by this Court in Pratap Narain’s case and hence not legally sustainable.

In the light of this legal position, this being a pure question of law, the Apex-Court with a view to do substantial justice to the respondent considered it just and proper to modify the order of the Commissioner in respondent’s favour so as to make the same in conformity with the law laid down by the Court in the two decisions holding the field.

The Supreme Court has modified the order passed by the Commissioner on April 23, 2002 in favour of the respondent to the extent that the awarded sum of Rs.3,79,120 /-shall carry interest at the rate of 12 pc per annum from the date of the accident, that is April 6, 1999.The Court has directed the Commissioner to work out the total amount payable by the appellant to the respondent in terms of the order passed by the Court.

After the total amount is calculated  by the Commissioner, he will issue notice to the appellant to enable the appellant to deposit the amount in one month for making payment to the respondent after due verification.

The Supreme Court disposed of the appeal in these terms.

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