ORIENTAL INSURANCE CO LTD Vs. MAN BHADUR

JUDGEMENT

(1.) The only ground upon which the appeal of the appellant insurer has to be partly allowed is with respect to multiplication of the relevant factor, as prescribed in Schedule IV to the Workmen's Compensation Act, 1923, with the monthly wage of the deceased workman. The Commissioner has held that the deceased workman was drawing monthly wage of Rs. 300 and he has, in terms of section 4 (1) (a) read with Schedule IV of the Act, multiplied the aforesaid monthly wage of Rs. 300 in its entirety with the relevant factor of 221.37 treating the age of the workman as 22 years and thus calculated the compensation amount at Rs. 66,411. In doing so, the Commissioner ignored the clear stipulation in section 4 (1) (a) of the Act which stipulated (at the relevant time) that the multiplication of the relevant factor has to be with 40 per cent of the monthly wages of the deceased workman and not the monthly wage in its entirety. Section 4 (1) (a) of the Act, as it stood on the relevant date, reads as under: "4. Amount of compensation.(1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely: (a) Where death results from the injury an amount equal to forty per cent of the monthly wages of the deceased workman multiplied by the relevant factor; or an amount of eighty (Sic. twenty) thousand rupees whichever is more;"

(2.) A bare look at the aforesaid provision of law clearly points out that there is an error apparent on the face of the award which is patently contrary to, and in violation of, the explicit provision of law. This error, therefore, requires rectification. The relevant factor of 221.37 had to be multiplied with Rs. 120, being 40 per cent of the monthly wage of Rs. 300 and that being the case, the awarded amount comes to Rs. 26,564.40 instead of Rs. 66,411 as has wrongly been awarded by the Commissioner.

(3.) The Commissioner has awarded interest for 9 years at the rate of 6 per cent per annum. Section 4-A (3) (a) of the Workmen's Compensation Act, 1923 reads thus: "4-A. Compensation to be paid when due and penalty for default. xxx xxx xxx (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and" A perusal of section 4-A (3) (a) of the Act clearly suggests that the interest had to be calculated at the rate of 12 per cent per annum which is statutorily mandatory and not at the rate of 6 per cent per annum, as has wrongly been awarded by the Commissioner. Mr. Ashwani K. Sharma, the learned counsel appearing for appellant submits that the Commissioner awarded 6 per 6ent interest on the compensation amount because the law as it stood on the date of the accident prescribed only 6 per cent interest rate. Mr. Sharma submitted that section 4-A (3) (a) was amended in the year 1995 whereby the interest rate was enhanced from 6 per cent per annum to 12 per cent per annum and that at best, if at all this court is inclined to modify the part of the award about the interest rate, from the date of filing of the claim petition, uptil 15.9.1995 [the date of amendment of section 4-A (3) (a)] the interest should be awarded at the rate of 6 per cent per annum and thereafter it can be 12 per cent per annum. I do not agree with the aforesaid submission of Mr. Sharma and for a very simple reason. The liability to pay interest on the awarded amount has to be reckoned in accordance with law as it stands on the date the award is passed. Since the award in this case was passed on 10.11.1999, section 4-A (3) (a) of the Act at that point of time had prescribed 12 per cent per annum interest on the awarded amount and this was irrespective of whether the claim petition had been filed earlier in point of time, or the mishap had also occurred earlier. In providing 12 per cent per annum interest rate on the awarded amount, the legislature had clearly intended that this stipulation shall be taken into account on the date the award is passed and that if on the date of the accident or on the date of filing of the claim petition there was any lower rate of interest provided in the section, that could not be taken into consideration. That being the legal position, therefore, the award is required to be modified to the extent that the interest on the awarded amount deserves to be enhanced at the rate of 12 per cent per annum from and instead of 6 per cent per annum as had been originally fixed by the Commissioner.