NATIONAL INSURANCE CO LTD Vs. REKHA

JUDGEMENT

(1.) Appeal is filed by the insurance company against the award of compensation by the Commissioner for Workmen's Compensation. Contentions raised are three in number. First contention is that Rs. 4,000 was taken as the monthly income without any basis. He was a professional driver. The amount of Rs. 4,000 assessed by the Commissioner needs no interference as commercial heavy vehicle driver will get more than Rs. 4,000 a month. In any event, it is a finding of fact and no substantial question of law arises. Second contention is with regard to assessment of loss of earning capacity. Commissioner has assessed the same on the basis of medical certificate. Index factor was fixed considering the undisputed age of the claimant. It is submitted that the Commissioner has awarded penalty to be paid by insurance company, if the amount is not paid within the time prescribed. It is well settled law that penalty is not payable by the insurance company but by the employer as held by the Apex Court in Ved Prakash Garg v. Premi Devi, 1998 ACJ 1 (SC). But in this case, the amount was paid in time and no penalty is payable.

(2.) Final question is what is the rate of interest to be paid. It is argued by learned counsel for appellant insurance company that Commissioner has awarded interest from the date of accident. Based on the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. v. Mubasir Ahmed, 2007 ACJ 845 (SC), it was argued that interest can be awarded only from the date of award and not from the date of accident. In motor accident claims, usually, interest is awarded from the date of application except in special circumstances. Even though there is no special provision in the Motor Vehicles Act regarding grant of interest on the compensation awarded, interest is awarded on the discretion of the Motor Accidents Claims Tribunal depending upon the rate of percentage of interest and other circumstances to set off erosion in money value, etc. But, award of interest is statutory in workmen's compensation case. Section 4-A (3) reads as follows:

(3.) When compensation 'fell due' is the main dispute. Section 3 mandates payment of compensation by employer immediately when injury occurs to a workman in the course of employment arising out of employment. Section 4-A (1) also casts liability to pay compensation 'as soon as it falls due' and section 4-A (3) casts liability to pay interest if it is not paid within one month from the date compensation amount 'fell due'. It is clear from the statutory provisions that amount of compensation fell due on the date of accident itself. Interest liability can be avoided by making deposit/payment or at least provisional payment/ deposit within a month of the accident. If compensation 'falls due' only on the date of award, compensation has to be calculated on the provisions of the Act existing on the date of award. Now, it is settled law that compensation has to be calculated with reference to the provisions of the Act as on the date of accident as compensation 'fell due' on that date itself. In Kerala State Electricity Board v. Valsala K., 2000 ACJ 5 (SC), a three-Judge Bench of the Apex Court held that relevant date for determination of the rights and liabilities of the parties concerned is the date of accident and not the date of adjudication of the claim. It is true that if there is dispute regarding liability, the matter can be referred to the Commissioner. But, Constitution Bench of the Hon'ble Apex Court in Pratap Narain Singh Deo v. Shrinivas Sabata, 1976 ACJ 141 (SC), held that even a reference under section 19 of the Act does not have the effect of suspending the liability of an employer to pay compensation under section 3 till after adjudication or settlement. It is the duty of the employer to pay/deposit compensation as soon as personal injury is caused to the workman in an accident during the course of employment. If the employer fails to do so within one month of the accident and also makes no provisional payment, he is liable to pay interest from the date of accident. Apex Court held as follows: