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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Sri S.G Bhat, Advocate for Appellant
  • Sri C.S Kothavale, High Court Government Pleader for Respondent.
Judges
  • Jagannatha Shetty
  • Kulkarni, JJ.
Acts
  • Section 30 of the Workmen's Compensation Act, 1923
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Sri S.G Bhat, Advocate for Appellant
  • Sri C.S Kothavale, High Court Government Pleader for Respondent.
Judges
  • Jagannatha Shetty
  • Kulkarni, JJ.
Acts
  • Section 30 of the Workmen's Compensation Act, 1923
See more information ...
Smart Summary

Summary of the Judicial Opinion (Jagannatha Shetty, J.)

Factual and Procedural Background

This appeal under Section 30 of the Workmen's Compensation Act, 1923 was preferred against an order made in W.C.C No. 6/73-74 by the Commissioner for Workmen's Compensation, Madhugiri.

Relevant facts: Krishnappa, husband of the appellant, was a cleaner in a lorry owned by the Public Works Department, Madhugiri Division. He died in an accident on September 13, 1967. The department did not pay or deposit compensation under Section 4 of the Act. The appellant submitted a claim on September 24, 1969. The application was forwarded through various offices: to the Assistant Commissioner, Bangalore Sub‑Division (October 15, 1969), then to the Deputy Commissioner, Tumkur District (October 28, 1969), and then to the Assistant Commissioner, Madhugiri (November 3, 1969). The Assistant Commissioner, Madhugiri considered he had no jurisdiction and forwarded it to the Tumkur Sub‑Division Assistant Commissioner, who on March 6, 1971 issued a notice under Section 12(1) calling upon the respondent to deposit compensation.

The respondent contested liability and asked the commissioner not to proceed. A government notification on October 8, 1971 reconstituted the Assistant‑Commissioner for Madhugiri (and other taluks), and the application returned to Madhugiri. The respondent ultimately deposited Rs. 7,000 on October 5, 1977. The Commissioner held the deposit adequate and refused to award interest or penalty under Section 4A(3), finding justification for the delay. The appellant appealed.

Legal Issues Presented

  1. When does the compensation "fall due" under the Workmen's Compensation Act in the case of death — upon the workman's death or only upon determination by the Commissioner?
  2. Whether interest at 6% per annum and a penalty (up to 50% under Section 4A(3)) can be awarded where there has been delay in depositing compensation, and who bears the burden of justification for such delay.
  3. Whether the rate of compensation should be the rate prevailing on the date of deposit (date of actual payment) or the rate prevailing on the date of death of the workman.

Arguments of the Parties

Appellant's Arguments

  • The compensation falls due immediately upon the death of the workman and must be deposited within one month from that date.
  • The appellant was entitled to interest at 6% per annum and a further sum by way of penalty under Section 4A(3) because of the delay in depositing compensation.
  • The compensation should be calculated at the rate prevailing on the date of deposit (which would be more favourable to the appellant), not the date of the workman's death.

Respondent's / Government's Arguments

  • The government/respondent contended that the amount of compensation falls due only when it is determined by the Commissioner and not upon the death of the workman.
  • During proceedings the respondent contended there was no liability to deposit compensation and requested the Commissioner not to proceed. (As recorded, the respondent later deposited Rs. 7,000 on October 5, 1977.)

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court analysed the statutory scheme of the Workmen's Compensation Act, focusing on Sections 4 and 4A and related provisions (Section 8 and the Rules under the Act), to determine when compensation becomes due and the consequences of delay.

  1. Interpretation of when compensation falls due:
    • The court read Section 4 (compensation for injuries) together with Section 4A(1), noting the phrase "as soon as it falls due" to conclude that in the case of death the compensation falls due upon the death of the workman and not only when the Commissioner determines it.
    • Section 4A(2) was relied upon to show that even where the employer disputes the extent of liability, he must make provisional payment based on the extent of liability he accepts and cannot wait until the Commissioner determines the amount.
    • Section 8 and the Rules (Rules 6 and 7 referred to) were used to emphasize that, in the case of death, payment cannot be made directly to dependents but must be by deposit with the Commissioner, reinforcing the view that the obligation to determine and deposit arises on death.
  2. On Section 4A(3) (interest and penalty for delay):
    • The court set out the two-part mechanism in Section 4A(3): (a) authority to recover simple interest at 6% per annum on arrears not deposited within one month from when they fell due; and (b) authority to recover, as penalty, up to 50% more where in the Commissioner's opinion there is no justification for delay.
    • The court explained the allocation of burden: where there is delay beyond one month, it is for the employer to show sufficient cause to the Commissioner's satisfaction. If no sufficient cause is shown, the Commissioner must direct payment of interest and penalty.
    • The court found the Commissioner's expressed view that there was justification for delay was unsupported by the record: the Commissioner stated there was justification but did not refer to any cause shown by the respondent and the record contained no material supporting that finding; thus the Commissioner's subjective satisfaction could not be sustained.
  3. Temporal scope of justification and the appropriate award:
    • The court acknowledged there was a reasonable explanation for delay prior to March 6, 1971 because the appellant's application had been transferred among authorities and the forum was unclear. Thus the respondent had sufficient cause for not depositing until March 6, 1971 (the date when the Assistant Commissioner, Tumkur Sub‑Division issued a notice).
    • From March 6, 1971 to October 5, 1977 (the date of deposit), the respondent did not satisfactorily explain the delay. That unexplained period justified awarding interest and penalty under Section 4A(3).
  4. On the dispute over the applicable rate of compensation:
    • The court reiterated that the cause of action for depositing compensation is the date of death (not the date of deposit). Therefore the Commissioner was justified in determining compensation at the rate prevailing on the date of death rather than at rates prevailing on the date of deposit.

Holding and Implications

APPEAL ALLOWED IN PART; ORDER MODIFIED

Holding (core rulings):

  • The compensation in the case of death falls due upon the death of the workman, not only upon determination by the Commissioner.
  • The Commissioner may award simple interest at 6% per annum and, if there is no justification for delay, a penalty up to 50% under Section 4A(3); where delay beyond one month is unexplained, interest and penalty are appropriate.
  • The compensation is to be determined at the rate prevailing on the date of death of the workman, not at the rate prevailing on the date of deposit.

Direct consequences ordered by the court:

  • The respondent was directed to pay interest at 6% per annum from March 6, 1971 up to October 5, 1977 (the date on which the respondent deposited Rs. 7,000).
  • The respondent was directed to pay a lump sum penalty of Rs. 1,000 in addition to the interest specified.
  • The appellant was not entitled to have the compensation recomputed at the rate prevailing on the date of deposit; the Commissioner was correct to compute it at the rate prevailing on the date of death.
  • The appeal was allowed in part and the order under appeal was modified accordingly; the respondent was ordered to deposit the additional amount (as determined) within four weeks from receipt of the order.
  • No order as to costs was made.

Broader implications: The opinion explains statutory interpretation and application of Sections 4, 4A and related provisions in the Act as applied to delay and provisional deposits, but the judgment itself frames relief specific to the facts; the opinion does not state that it is establishing any broader binding precedent beyond its reasoning in this case.

Show full summary ...

    Jayamma v. The Executive Engineer, P.W.D .

    Jagannatha Shetty, J.:— This appeal under Section 30 of the Workmen's Compensation Act, 1923 (called shortly as ‘the Act’) is preferred against the order made in W.C.C No. 6/73-74 by the Commissioner for Workmen's Compensation, Madhugiri.

    2. The facts leading to the appeal are these:

    Krishnappa, the husband of the appellant, was a cleaner in the lorry belonging to the Public Works Department of Madhugiri Division. On September 13, 1967, he unfortunately met with a fatal accident. The department did not pay or deposit the compensation due to the appellant under Section 4 of the Act. On September 24, 1969 the appellant, therefore, moved the concerned authority at Bangalore claiming the compensation payable to her. On October 15, 1969, the said application was forwarded to the Assistant Commissioner, Bangalore Sub-Division for consideration, who on October 28, 1969 sent the same to the Deputy Commissioner, Tumkur District for disposal. On November 3, 1969 the Deputy Commissioner in turn transmitted the application to the Assistant Commissioner, Madhugiri.

    3. That is not the end of it. The Assistant Commissioner, Madhugiri, was of the opinion that he had no jurisdiction to deal with the matter. So, he forwarded that application to his counter-part at Tumkur Sub-Division. The latter took it on file and issued a notice dated March 6, 1971 under Section 12(1) of the Act, calling upon the respondent to deposit the compensation due to the appellant. The respondent instead of complying with the demand contended that there was no liability under the Act for him to deposit the compensation and the accordingly requested the commissioner not to proceed with the case.

    4. During the pendency of the application before the Assistant Commissioner, Tumkur Sub-Division, the Government issued a notification dated October 8, 1971, constituting the Assistant-Commissioner under the Act for Madhugiri, Pavagada, Sira and Koratagere Taluks. Consequently, the said application stood transferred back to the Assistant Commissioner, Madhugiri, before whom the respondent deposited Rs. 7,000 on October 5, 1977 as the compensation payable to the appellant.

    5. The said Commissioner upon an enquiry and after considering the material produced before him held that the amount deposited by the respondent was adequate to meet the requirements under the Act, although the appellant contended that she was entitled to interest at 6 per cent per annum in addition to a further sum by way of penalty under Section 4A(3) of the Act since there was delay in depositing the compensation. The Commissioner, however, observed that there was justification for the respondent for not depositing the amount earlier and he accordingly declined to award the interest and penalty.

    6. In this appeal there is a two fold contention urged for the appellant. It relates to the refusal by the Commissioner to award interest and penalty provided under Section 4A(3) of the Act. Incidentally, it was also urged that the appellant was entitled to get the compensation at the rate prescribed and prevailing on the date of the deposit and not at the rate prevalent on the date of death of the workman.

    7. We may now take up the primary question for consideration. The answer to this question depends upon the date on which the compensation falls due under the Act. Section 4-A operates when there is a default in paying the amount of compensation within one month from the date it fell due. It was urged by counsel for the appellant that the compensation falls due immediately, upon the death of a workman and it shall be deposited within one month from that date. But, on the other hand, it was urged by the Government Advocate that the amount of compensation falls due only when it is determined by the Commissioner and not until then.

    8. It seems to us that the contention urged for the respondent appears to be untenable. Section 4(1) of the Act provides for compensation payable to workmen who have suffered different injuries. Section 4A(1) provides that the compensation prescribed under Section 4 of the Act shall be paid as soon as it falls due. The last words “as soon as it falls due” under Section 4A(1) evidently indicate that in the case of death of a workman it falls due upon his death and not on the date on which the Commissioner determines it in case of any dispute. This becomes further clear if we move on to Section 4A(2) of the Act which provides:

    “In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the worman, as the case may be, without prejudice to the right of the workman to make any further claim”.

    It is clear from the above sub-section that even when there is a dispute as to the amount payable, the employer shall make a provisional deposit calculated on the extent of liability which he accepts and he cannot keep quiet till the Commissioner determines the correct amount payable to the workman.

    9. In the case of death resulting from the injury, this question has been made further clear from Section 8 of the Act r/w Rules 6 and 7 of the Rules framed under the Act. Section 8 prohibits payment of compensation in respect of a workman whose death result from the injury in any manner otherwise than by deposit with the Commissioner. Rule 6 provides procedure for depositing such compensation. Rule 8 provides a remedy to the dependents where the employer has failed to deposit the compensation. It states that the dependent of the deceased workman may apply to the Commissioner for the issue of an order directing the employer to deposit the amount.

    When the Act prohibits payment of compensation directly to the dependents and recognizes the only methed of payment i.e, by depositing with the Commissioner, it is incumbent upon the employer to determine the compensation payable under the Act and deposit the same immediately after the death of a workman. In our opinion, in a case like this, the death of a workman alone is the cause of action for payment of the amount of compensation under the Act.

    10. With these prefatory observations, we may now revert to Section 4A(3) of the Act. It provides:

    “Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty.”

    The first part of the sub-section authorises the Commissioner to issue a direction to recover simple interest at the rate of 6 per cent per annum on the amount of arrears of compensation not deposited within one month from the date it fell due. The second part of the sub-section also authorises the Commissioner to recover by way of penalty a further sum not exceeding 50 per cent of such arrears. Both these recoveries are subject to the condition that there is no justification for the delay in depositing the amount. In other words, if there is a delay in depositing the amount for more than one month, it is for the employer to show sufficient cause to the satisfaction of the Commissioner explaining that delay. If the Commissioner feels that the cause shown is not sufficient then, he must direct the employer to pay interest and penalty as aforesaid.

    In the instant case, the Commissioner no doubt has stated in one sentence that there was justification for the delay in depositing the amount. But he has not referred to any cause shown by the respondent. We examined the records to find out whether the respondent had shown any cause. We are sorry to note that there is no material on record to support the observation of the Commissioner. His opinion was evidently on subjective satisfaction, and cannot therefore be sustained.

    11. We can understand the difficulty of the respondent for not depositing the amount till 1971 since the appellant's application was tossed from place to place and no one could locate the forum. We may, therefore, say that he had sufficient cause for not depositing the compensation till March 6, 1971. It was on that day, the Assistant Commissioner, Tumkur Sub-Division, after making preliminary enquiry issued a notice calling upon the respondent to deposit the compensation due to the appellant. The respondent, however, took his own time to comply with the demand. It was only on October 5, 1977, he deposited Rs. 7,000. He has thus failed in the discharge of his obligation to the appellant. The delay from March 1971 to October 1977 remains unexplained and the appellant is therefore entitled to payment of interest and penalty as provided under Section 4-A(3) of the Act.

    12. The Additional payment provided under Section 4-A(3) of the Act was perhaps intended to compensate the claimant against the difficulties or loss he has to suffier as a failure of the respondent in the discharge of his obligations under the Act, that is, in not depositing the compensation amount within the stipulated time. Therefore, if the employer shows no justification by producing acceptable evidence for the delay in depositing the amount, the Commissioner should award interest at the rate of 6 per cent with a proportionate penalty not exceeding 50 per cent.

    13. Having regard to the facts and circumstances of this case, we direct the respondent to pay a lumpsum of Rs. 1,000 by way of penalty in addition to six per cent interest from March 6, 1971. The interest shall be paid upto October 5, 1977 the date on which the respondent deposited the amount of compensation before the Commissioner.

    14. This takes us to the last contention urged for the appellant. It was urged that the compensation ought to have been determined at the rate prevailing on the date of deposit and not at the rate prevailing on the date of death of the workman. If this contention is accepted, the appellant stands to gain since the rate of compensation has been revised to her advantage and she would be entitled to more than Rs. 7000. But, we cannot accept the contention urged in view of the conclusion that we have already reached. We have earlier stated that the cause of action for depositing the amount is the date of death of the workman and not the date on which the employer deposits the amount. The Commissioner, therefore, was justified in determining the compensation on the basis of the rate prevailing on the date of death of the workman.

    15. The appeal is accordingly allowed in part and the order under appeal is modified to the extent indicated above. The respondent shall deposit the additional amount, as determined, within four weeks from the date of receipt of this order.

    In the circumstances of the case, we make no order as to costs.

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    Comments

    Jayamma v. The Executive Engineer, P.W.D .
    (Jun 25, 1981)