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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • T.P Naik, J.
Acts
  • section 30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as the Act)
  • Amending Act of 1959,
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • T.P Naik, J.
Acts
  • section 30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as the Act)
  • Amending Act of 1959,
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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This appeal arises under section 30 of the Workmen's Compensation Act, 1923. The appellant employer (Messrs Rewa Coalfields Ltd.) challenged a determination by the Commissioner, Workmen's Compensation, Jabalpur.

Relevant facts (as stated in the opinion):

  • Respondent Chainoo was a workman with estimated monthly wages of Rs. 95.07, employed in the Burhar and Amlai collieries owned by the appellant.
  • An accident arising out of and in the course of employment occurred on 16 May 1962, causing injury to the dorso‑lumbar vertebrae of the respondent.
  • Between 4 June 1962 and 16 November 1962 the respondent was paid approximately Rs. 299.99 in half‑monthly instalments; subsequently, on 19 January 1963 the employer paid Rs. 750.01 in full settlement of the respondent's claim under the Act.
  • On 8 January 1963 the employer sent the memorandum of agreement to the Commissioner for registration under section 28; the Commissioner, by order dated 6 July 1965, refused to register the agreement as inadequate and held the respondent entitled to Rs. 4,200 as compensation, less Rs. 1,050 already received, leaving Rs. 3,150 due with interest at 6% per annum from the date of the accident to the date of payment.
  • The respondent had not given notice under section 10 of the Act but resisted registration on the ground that the compromise sum was inadequate.
  • The narrow issue on appeal was whether the respondent was entitled to interest at 6% per annum from the date of the accident under section 4‑A of the Act; the award of compensation itself was not contested on appeal.

Legal Issues Presented

  1. Whether, for the purposes of section 4‑A of the Workmen's Compensation Act, compensation "falls due" on the date of the accident or on some other date (for example, the date when a competent Court or Commissioner determines the amount).
  2. Whether the Commissioner was correct in awarding interest at 6% per annum from the date of the accident to the date of payment in the circumstances of this case, particularly where a medical report indicating 25% permanent partial disablement was available to the employer on 1 November 1962.

Arguments of the Parties

Appellant's Arguments

  • The appellant employer contended that compensation "falls due" only on the date on which it is determined by a competent Court (or authority), i.e., that the obligation to pay and hence the commencement of liability for interest should be fixed at the date of judicial/commissioner determination.
  • The employer contended that, having entered into negotiations and paid Rs. 1,050 on settlement (an amount calculated on 25% loss), this course of conduct explained the absence of a provisional payment within one month of the medical report and should be relevant to the interest claim.

Respondent's Arguments

  • The respondent's counsel argued that compensation under section 4 of the Act falls due on the date on which the accident occurs, implying entitlement to interest from that date under section 4‑A.
  • The respondent resisted registration of the compromise on the ground that the sum was inadequate and sought full compensation and interest as awarded by the Commissioner.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court undertook a textual and purposive interpretation of section 4‑A and related provisions of the Act. The analysis proceeded as follows:

  1. Interpretation of "falls due": The court observed that the Act does not define "falls due" and declined to adopt a rigid single meaning (i.e., either the date of accident or the date of adjudication). Instead, the phrase must be given a flexible meaning and be determined on the facts of each case.
  2. Legislative intent and context: Section 4‑A was introduced by the Amending Act of 1959. The objects and reasons for that amendment indicated a legislative purpose to ensure that a workman could get whatever amount the employer was prepared to pay immediately, pending a final decision on the compensation due. This supports a flexible and fact‑sensitive approach to when compensation "falls due".
  3. Statutory scheme and practical considerations: The court examined sections 3, 4, 5, 8, 9, 10 and 11 to illustrate why compensation cannot be said to fall due mechanically on the date of the accident in every case. Key points:
    • Section 3 creates liability but does not fix timing.
    • Section 4 prescribes amounts payable depending on the type and extent of injury (death, permanent total disablement, permanent partial disablement, etc.), which often requires medical assessment and determination of loss of earning capacity.
    • There can be factual contexts (late manifestation of disablement, delayed medical opinion, delay in notice under section 10, etc.) where immediate determination of the compensation amount is not feasible.
    The court therefore concluded it would be wrong to treat "falls due" as always coinciding with the accident or always with judicial determination.
  4. Role of provisional payment under section 4‑A(2): Where the employer does not accept the full liability claimed, he is obligated to make a provisional payment based on the extent he accepts; such provisional payment, if made, will protect the employer from the penal consequences under subsection (3) (which provides for interest and possibly a further penalty up to 50%).
  5. Application to the present facts:
    • It was undisputed that the respondent was a workman and that the injury arose out of employment; however, the precise extent of disablement and the consequent loss of earning capacity were not ascertainable immediately on the date of the accident.
    • A medical report from the Chief Medical Officer of the employer dated 1 November 1962 opined a 25% permanent partial disablement. The employer did not explain why it failed to make the provisional payment within one month of that report as required by section 4‑A(2).
    • The fact that parties soon entered into negotiations and that Rs. 1,050 (calculated on the 25% figure) was paid on settlement did not excuse the employer's failure to make the statutory provisional payment in the required time frame.
    On this basis, the court held that the Commissioner was correct in applying interest under section 4‑A(3) to the balance due.

Holding and Implications

Holding: The appeal is dismissed. The court upheld the Commissioner's award that the respondent was entitled to the balance of compensation (Rs. 3,150 as found by the Commissioner) with simple interest at the rate of 6% per annum from the date of the accident to the date of payment under section 4‑A(3). The appeal fails and is dismissed with costs.

Implications:

  • The decision affirms that the phrase "falls due" in section 4‑A must be interpreted flexibly and determined on the facts of each case; it is not confined to a single fixed point such as the date of accident or the date of adjudication.
  • An employer who, having sufficient information (for example, a medical opinion indicating permanent disablement), fails to make a provisional payment within the statutory month may be liable for interest under section 4‑A(3) on the unpaid amount.
  • The court did not purport to lay down a rigid rule for all cases; rather it emphasized fact‑sensitive adjudication. The opinion does not announce or rely upon any newly cited precedents and does not state broader doctrinal changes beyond its interpretation and application of section 4‑A in the circumstances before it.

This summary is prepared exclusively from the text of the provided opinion and does not add facts or outside authorities not present in that opinion.

Show full summary ...

    Rewa Coalfields Ltd., Shahdole v. Chainoo .

    1. This is an appeal by an employer under section 30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as ‘the Act’) on a short point that it raises, viz., whether the respondent workman Chainoo was entitled to interest at the rate of 6% per annum from the date of accident till the date of payment under section 4-A of the Act. Facts necessary for our purpose may shortly be stated as follows:

    2. The respondent Chainoo was a workman, whose monthly wages were estimated at Rs. 95.07 p., working in the Burhar and Amlai collieries owned by the appellant Messrs Rewa Coalfields Ltd. On 16th May 1962, injuries were caused to the respondent workman by accident arising out and in the course of his employment while he was working in the aforesaid collieries. There was an injury to the dorso lumbar vertebrae.

    3. Between the period 4-6-1962 to 16-11-1962 the respondent workman was paid about Rs. 299.99 p as compensation in half-monthly instalments. Thereafter, there were negotiations for a settlement whereunder on 19-1-1963 the appellant employer paid Rs. 750.01 p in full settlement of all and every claim of the respondent workman under the Act in respect of the accident in question.

    4. On 8-1-1963 the appellant employer sent a memorandum of the agreement to the Commissioner, Workmen's Compensation (appointed under section 20 of the Act), Jabalpur, for registration of the agreement under section 28 of the Act.

    5. The Commissioner by an order dated 6-7-1965 held that the sum settled by the agreement was inadequate and that consequently the agreement could not be registered. He further held that the workman-respondent Chainoo was entitled to Rs. 4,200 as compensation and deducting therefrom Rs. 1,050, which the workman-respondent had already received, he was further entitled to Rs. 3,150 with interest at 6% from the date of accident to the dete of payment.

    6. It may here be stated that the workman Chainoo had not given any notice of his claim under section 10 of the Act but had resisted the prayer of the employer for registration of the agreement on the ground that the sum settled by compromise was inadequate.

    7. In this appeal the award of compensation is not resisted. The only question that has been canvassed before me is that under the circumstances of the case the learned Commissioner was in error in awarding interest to the workman under section 4-A of the Act.

    8. Under section 4-A of the Act,—

    “(1) Compensation under section 4 shall be paid as soon as it falls due.

    (2) 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 workman, as the case may be, without prejudice to the right of the workman to make any further claim.

    (3) 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.”

    9. The expression ‘falls due’ has not been defined in the Act. According to the learned counsel for the appellant employer, it falls due on the date on which it is determined by a competent Court. On the other hand, the learned counsel for the respondent workman says that compensation under section 4 of the Act falls due on the date on which the accident occurs.

    10. It would be observed that the Legislature had advisedly not said that compensation under section 4 of the Act shall be paid as soon as an accident occurs, nor had it said that it shall be paid as soon as it is determined by a Court of competent jurisdiction. On the other hand, it had used a phraseology which is quite flexible so that it shall be for the Court to determine in each case when compensation under section 4 of the Act falls due. Section 4-A of the Act was for the first time introduced by the Amending Act of 1959, and the objects and reasons of the amendment stated that the provision was being made in order to ensure that the workman was able to get whatever amount the employer was prepared to pay immediately pending a decision as to the amount of compensation actually due.

    11. Sub-section (1) of section 3 of the Act says that ‘if personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter’. The sub-section thus merely creates a liability without specifying when the compensation becomes due. Sub-section (2) of section 3 of the Act provides for compensation for certain occupational diseases suffered by a workman in the course of his employment. Section 4 relates to the amount of compensation, and it prescribes various amounts for different kinds of injuries. Where the injury results in death, compensation is determined as per the second column of Schedule IV according to the monthly wages of the workman injured. Where the injury results in permanent partial disablement, compensation is determined as per the third column of Schedule IV according to the monthly wages of the workman injured. Where the injury results in permanent partial disablement, compensation is determined, in the case of an injury specified in Part II of Schedule I, at such percentage of the compensation which would have been payable in the case of permanent total disablement us is specified therein as being the percentage of the loss of earning capacity caused by that injury, and, in the case of an injury not specified in Schedule I, at such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity permanently caused by the injury. Section 4-A enacts that compensation shall be paid ‘as soon as it falls due’ and provides penalty for defalut. Section 5 deals with methods of calculating damages. Section 8 and 9 deal with the distribution of compensation and that it cannot be assigned, attached or charged, respectively. Section 10 provides for notice of claim by the claimant. Section 11 deals with the medical examination of the workman who has given notice of an accident. The Act nowhere specifically says when compensation falls due for payment to the injured workman or to his dependents in case of his death, because in arriving at a sum payable as compensation to a workman, the employer has to take note of various factors, such as, whether the person injured is a workman, whether the accident arose out of and in the course of his employment, and whether the personal injury suffered by the workman has resulted in his death, or in permanent total disablement, or in permanent partial disablement and in the case of the last the percentage of the loss of earning capacity caused by the injury. Then again, the employer may have no notice of the claim till the workman gives him notice under section 10, he is medically examined, and the doctor has given his opinion on the extent of the injury suffered by him. There may be cases where the disablement may become apparent only sometime after the accident or where death may be caused some days, weeks or months after the accident. It cannot, therefore, be said that compensation ‘falls due’ immediately after the accident occurs. Nor can it be postponed till after the determination of compensation by the Commissioner. Because, in conceivable cases, where there is no dispute as to the claimant being a workman and of the fact that the accident arose out of and in the course of his employment, the employer shall be in a position to provisionally assess the amount of compensation payable to the workman as soon as the medical opinion has disclosed the extent of the workman's disablement. Thus, though it may not be possible to assess the exact damages immediately on the date on which the accident occurs, its consideration cannot be necessarily postponed to the date when the Commissioner determines it. It will be a fact to be Decided on the evidence adduced in each case. In my opinion, the expression ‘falls due’ occuring in section 4-A of the Act cannot be given any rigid meaning and shall have to be understood in accordance with the facts disclosed in each case.

    12. Now, adverting once again to the language used in section 4-A of the Act, we find that though sub-section (1) of the section generally directs payment of compensation ‘as soon as it falls due’, sub-section (2) provides for cases where the employer does not accept liability to the extent claimed. In such cases, the employer has to make a provisional payment, based on the extent of liability which he accepts. Such a provisional payment, when permissible, would absolve him from the penal consequences of sub-section (3) of the section.

    13. In the instant case, we know that the accident occurred on 16-5-1962 and that thereafter the workman was hospitalized. During the period of his hospitalization, he was paid half monthly wages as compensation amounts from time to time. We also know that it had never been disputed that the respondent was a workman, nor that he had been injured in an accident arising out of and in the course of his employment. But, even so, it was not clear on the date the accident occurred what the extent of his injury was, nor what the loss in his earning capacity was; and until and unless these were known with some precision, it was not possible to reasonably assess even the provisional amount of compensation payable to the workman.

    14. It is, however, pointed out that we have on record a report of the medical examination of the injured workman dated 1-11-1962. The report is by the Chief Medical Officer of the appellant Company and it says that, in the opinion of the doctor, the iujured was unfit for duty and that the extent of his permanent partial disablement was 25%. It is, therefore, contended that on the basis of the aforesaid report, the employer was from the stage the report was received aware of the probable extent of the disablement suffered by the workman and could, on that basis, calculate the provisional compensation payable to the workman under section 4-A(2) of the Act.

    15. The appellant employer has not explained how and why, under the circumstances of the case, it did not make the provisional payment within a month of 1-11-1962 as required by section 4-A(2) of the Act. It is contended that immediately thereafter the parties entered into negotiations for the settlement of the dispute and the amount of Rs. 1,050 calculated on the basis of 25% loss in the earning capacity of the workman due to the permanent partial disablement was paid to him on the day the matter was settled. This, however, is no answer to the provisions of section 4-A(2) of the Act, which required a provisional payment pending even the settlement.

    16. The interest was, therefore, rightly allowed on the balance of the amount claimed under section 4-A(3) of the Act at 6% per annum. The appeal fails and is dismissed with costs.

    17. Appeal dismissed.

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    Comments

    Rewa Coalfields Ltd., Shahdole v. Chainoo .
    (Jul 23, 1968)