SHOBHA & ORS. versus THE CHAIRMAN, VITHALRAO SHINDE SAHAKARI SAKHAR KARKHANA LTD. & ORS.

Citation: [2022] 1 S.C.R. 761 · Decided: 11-03-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2022] 1 S.C.R. 761
761
SHOBHA & ORS.
v.
THE CHAIRMAN, VITHALRAO SHINDE SAHAKARI
SAKHAR KARKHANA LTD. & ORS.
(Civil Appeal No. 1860 of 2022)
MARCH 11, 2022
[M. R. SHAH AND B.V. NAGARATHNA, JJ.]
Employee’s Compensation Act, 1923: ss. 4, 4A – Award of
compensation under – Entitlement to interest, from the date of the
order passed by the Commissioner or from the date of accident –
Held: Liability to pay the compensation would arise from the date
on which the deceased died for which he is entitled to the
compensation, thus, the liability to pay the interest on the amount of
arrears/compensation would be from the date of accident and not
from the date of the order passed by the Commissioner – On facts,
order passed by the High Court directing the employer to pay the
interest @ 12% p.a. on the amount of compensation as leviable
u/s. 4A(3)(a) from the date of the order passed by the Commissioner
is unsustainable and is set aside.
Allowing the appeal, the Court
HELD: 1.1 As per Section 4A(1) of the Employee’s
Compensation Act, 1923 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 from the date on which the deceased
died for which he is entitled to the compensation and therefore,
the liability to pay the interest on the amount of arrears/
compensation shall be from the date of accident and not from the
date of the order passed by the Commissioner. As per Section
4A(3)(b), if the Commissioner is satisfied that there is no
justification for the delay, it can direct the employer, in addition
to the amount of the arrears and interest thereon, to pay a further
sum not exceeding 50% of such amount by way of penalty. Thus,
provision for interest and provision for penalty are different. The
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SUPREME COURT REPORTS
[2022] 1 S.C.R.
provision for levy of interest would be under Section 4A(3)(a)
and the provision for levy of penalty would be under Section
4A(3)(b). While directing the employer to pay the interest from
the date of the order passed by the Commissioner, the High Court
has not at all considered Section 4A(3)(a) and has considered
Section 4A(3)(b) only, which is the penalty provision. The
impugned judgment and order passed by the High Court directing
the employer to pay the interest @ 12% p.a. on the amount of
compensation as leviable under Section 4A(3)(a) from the date
of the order passed by the Commissioner, is unsustainable, andis
quashed and set aside. The appellants-original claimants would
be entitled to the interest @ 12% p.a. on the amount of
compensation as awarded by the Commissioner from the date of
the incident. [Paras 4.1, 5, 6][765-B-H; 766-B]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1860
of 2022.
From the Judgment and Order dated 12.12.2019 of the High Court
of Judicature at Bombay, Bench at Aurangabad in F.A. No.3008 of 2017.
Ms. Qurratulain, Shivaji M. Jadhav, Brij Kishor Sah, Aditya Jadhav,
Advs. for the Appellants.
Samrat Krishnarao Shinde, Sarang Aaradhya, Advs. for the
Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned
judgmentand order passed by the High Court of Judicature at Bombay,
Bench at Aurangabad in First Appeal No. 3008 of 2017 by which the
High Court has partly allowed the said appeal preferred by the respondents
herein and has ordered that the respondents shall be liable to pay interest
@ 12 per cent p.a. as leviable under Section4A(3) of the Employee’s
Compensation Act, 1923 (hereinafter referred to as the “Act, 1923”)
from the date after expiry of period of one month from 25.01.2017 (the
date of the order passed by the Commissioner), the heirs of the deceased
–labourer working on sugarcane field have preferred the present appeal.
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2. That the deceased was a sugarcane cutting labourer. He was
engaged as a labourer by the Labour Contractor for cutting the sugarcane,
which was to be supplied to the sugar factory. While cutting the
sugarcane, he died of a snake bite. Neither the sugar factory nor the
contractor paid the compensation due and payable under the Act, 1923
and therefore the appellants herein – heirs of the deceased filed a claim
petition before the Commissioner Workmen’s Compensation, Beed being
W.M.C. No. 39 of 2011 and claimed Rs. 5 lakhs. By the o

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