[Case Brief] The Oriental Insurance Company Ltd. v/s Siby George & Others – Supreme Court of India

Case Name The Oriental Insurance Company Ltd. v/s Siby George & Others
Case Number Civil Appeal No 5669 of 2012
Court Supreme Court of India
Bench Justice Aftab Alam and Justice Ranjan Desai
Author of the judgment Justice Aftab Alam
Decided On 31 July 2012
Relevant Act/Sections Workmen’s Compensation Act, 1923 – Section 3, Section 4, Section 19
Author of the case brief Aditya Gor

 

In this case, the Commissioner for Workmen’s Compensation, Ernakulam, by his order directed for payment of simple interest at the rate of 12% per annum from the date of the accident on July 12, 2006. The Appellant’s appeal against the order of the Commissioner was dismissed by the Kerala High Court as barred by limitation. Challenging the order of the High Court, this special leave petition has been filed in the Supreme Court in which notice was issued “limited to the interest”.

The issue to be answered in this appeal is, when does the payment of compensation under the Workmen’s Compensation Act, 1923 become due and consequently what is the point in time from which interest would be payable on the amount of compensation as provided under Section 4A(3) of the Act.

The appellant has argued that the learned Commissioner was wrong in directing for payment of interest from the date of the accident and any interest on the amount of compensation would be payable only from the date of the order of the Commissioner.

It was the observation of the Court that Sub-section (1) of section 4A provides that the employer shall be liable to pay compensation if “personal injury is caused to a workman by accident arising out of and in the course of his employment.” What the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner.

The Appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the Appellant, and there is no justification for the argument to the contrary.

Thus the appellant was liable to pay compensation at the rate provided by Section 4 as soon as the personal injury was caused to the Respondent. But he did not pay so and further he did not even make a provisional payment under Sub-section (2) of Section 4 for, as has been stated, he went to the extent of taking the false pleas that the Respondent was a casual contractor and that the accident occurred solely because of his negligence.

Moreover, he paid no heed to the Respondent’s personal approach for obtaining the compensation. Thus the Respondent was driven to the necessity of making an application to the Commissioner for settling the claim, and even there the Appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the Respondent to file a memorandum of agreement settling the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner.

In the past, the precedents of the Courts have held that the payment of compensation fell due on the date of the accident. Various High Courts in the country, while dealing with the claim for compensation under the Workmen’s Compensation Act have uniformly taken the view that the relevant date for determining the rights and liabilities of the parties is the date of the accident.

The Honourable Supreme Court has also in the case of Pratap Narain Singh Deo v. Srinivas Sabata, (1976) has held that an employer becomes liable to pay compensation as soon as the personal injury is caused to the workmen by the accident which arose out of and in the course of employment.

Thus it cannot be said that the 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. And thus the appeal was dismissed with cost.

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