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North East Karnataka Road Transport Corporation (S) v. Sujatha (S).
Factual and Procedural Background
Mallikarjuna, a driver employed by the appellant State Road Transport Corporation of Karnataka, died on 6-4-1999 while on duty after experiencing chest pain and suffering a heart attack. His wife (the respondent) filed a claim under the Workmen's Compensation Act, 1923 before the Commissioner for Workmen's Compensation (Labour Court), Bellary.
By order dated 23-4-2002, the Commissioner allowed the claim and awarded Rs 3,79,120, directing the appellant to deposit the amount within 45 days, failing which the amount would carry interest at 12% per annum. The employer appealed to the High Court of Karnataka (MFA No. 4170 of 2002). On 29-11-2006, the High Court dismissed the appeal and confirmed the Commissioner’s order.
The employer then filed a special leave appeal. In this Court, none appeared for either party; the Court perused the record and proceeded to decide the matter.
Legal Issues Presented
- Whether the High Court was justified in dismissing the employer’s appeal under Section 30 of the Workmen’s Compensation Act, 1923, thereby affirming the Commissioner’s order (i.e., whether the appeal involved any substantial question of law).
- Whether the Commissioner correctly directed the grant of interest on the awarded amount, and from which date interest should be payable under Section 4-A of the Act.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289; AIR 1976 SC 222 | An employer’s liability to pay compensation arises as soon as the personal injury is caused in an accident arising out of and in the course of employment; the material date is the date of the accident. | Followed to hold that compensation “becomes due” on the date of the accident, and interest under Section 4-A is payable from that date; thus the Commissioner’s direction granting interest only after 45 days from the order was contrary to law. |
| Kerala SEB v. Valsala K., (1999) 8 SCC 254; AIR 1999 SC 3502 | The relevant date for determining compensation and rate of interest is the date of the accident, not the date of adjudication. | Followed to reinforce that the date of accident governs the entitlement and the commencement of interest. |
| National Insurance Co. Ltd. v. Mubasir Ahmed, (2007) 2 SCC 349 | Held that compensation falls due only after the Commissioner’s order or with reference to the date of the claim application. | Not followed. Treated as not laying down the correct law because it did not notice the larger Bench decisions in Pratap Narain and Valsala. |
| Oriental Insurance Co. Ltd. v. Mohd. Nasir, (2009) 6 SCC 280 | Similar view as Mubasir Ahmed on when compensation falls due. | Not followed. Treated as not laying down the correct law for the same reason as above. |
| Oriental Insurance Co. Ltd. v. Siby George, (2012) 12 SCC 540 | Noted the conflict; explained that the larger Bench rulings in Pratap Narain and Valsala govern; the later contrary two-Judge decisions are per incuriam. | Followed to resolve the conflict and apply the larger Bench position that interest runs from the date of accident. |
Court's Reasoning and Analysis
- The Court first outlined the nature of issues typically arising in compensation claims under the Act (e.g., occurrence of accident, its nexus to employment, age and wages, dependency, disability, insurance coverage). These are questions of fact to be proved by evidence, and the Commissioner’s findings thereon are findings of fact.
- Appeals to the High Court under Section 30 of the Act lie only against specified orders and must involve substantial questions of law. Additionally, except for appeals under clause (b), an employer must deposit the entire awarded amount as a precondition to filing the appeal. The High Court’s role is confined to substantial questions of law; it is not a first appeal on facts.
- On examining the record, the Court found that the employer’s appeal before the High Court raised no substantial question of law. The Commissioner had properly decided the material factual issues based on evidence and correctly determined compensation. The High Court rightly affirmed those findings. These concurrent factual findings were binding and disclosed no perversity, arbitrariness, or legal error.
- Regarding interest, the Commissioner had directed interest at 12% per annum only if the employer failed to deposit the award within 45 days, and then from the date of the order. The Court held this to be contrary to Section 4-A and the settled law.
- Relying on Pratap Narain and Valsala, as reaffirmed in Siby George (and noting that Mubasir Ahmed and Mohd. Nasir took a contrary view without noticing the larger Bench decisions), the Court held that compensation becomes due on the date of the accident and interest is payable from that date.
- Even though the respondent had not appealed the interest direction, the Court, considering it a pure question of law and to do substantial justice, modified the order to align with the settled legal position.
- Consequently, directions were issued to the Commissioner to compute the total amount payable in terms of the modified order; the Registry was directed to dispatch the order to the parties and the Commissioner; and the Commissioner was to notify the parties and calculate the payable amount for deposit within one month for payment to the respondent after due verification.
Holding and Implications
MODIFIED AND DISPOSED OF
- The Commissioner’s order dated 23-4-2002 is modified: the awarded sum of Rs 3,79,120 shall carry interest at 12% per annum from the date of the accident, i.e., 6-4-1999.
- The Commissioner is directed to calculate the total amount payable in terms of this modification, issue notice to the parties, and enable the appellant to deposit the amount within one month for payment to the respondent after verification.
- The Registry shall send a copy of this order to the Commissioner, the appellant, and the respondent within one week.
Implications: The decision results in interest accruing from the accident date, increasing the respondent’s recovery. The ruling applies settled law under Section 4-A and does not establish a new precedent beyond enforcing the existing larger Bench decisions.
Abhay Manohar Sapre, J.— This appeal is directed against the final judgment and order dated 29-11-2006 passed by the High Court of Karnataka at Bangalore in North East Karnataka RTC v. Sujatha MFA No. 4170 of 2002 whereby the High Court dismissed the appellant's appeal and confirmed the order dated 23-4-2002 passed by the Commissioner for Workmen's Compensation (Labour Court), Bellary (hereinafter referred to as “the Commissioner”).
2. The issue involved in this appeal lies in a narrow compass. It is clear from the facts mentioned hereinbelow.
3. One Mallikarjuna was an employee of the appellant a State Road Transport Corporation for the State of Karnataka working as a driver. He died while he was on duty on 6-4-1999 when he felt pain in his chest and suffered heart attack.
4. The respondent is the wife of deceased Mallikarjuna. The respondent filed a claim petition before the Commissioner under the Workmen's Compensation Act, 1923 (for short “the Act”) claiming compensation for the death of her husband Mallikarjuna. The appellant employer contested the claim petition.
5. By order dated 23-4-2002, the Commissioner allowed the claim petition and awarded a sum of Rs 3,79,120 with a direction to the appellant to deposit the awarded sum within 45 days, failing which, the awarded amount would carry interest @ 12% p.a.
6. The employer appellant herein felt aggrieved and filed appeal in the High Court of Karnataka at Bangalore. By the impugned order MFA No. 4170 of 2002, the High Court dismissed the appeal, which has given rise to filing of this special leave to appeal by the employer in this Court.
7. So the question, which arises for consideration in this appeal is whether the High Court was justified in dismissing the employer's appeal and thereby was justified in upholding the order of the Commissioner.
8. None appeared for both the parties. We, therefore, perused the record of the case. On perusal of the record, we are inclined to modify the order of the Commissioner dated 23-4-2002 in favour of the respondent to the extent indicated infra.
9. At the outset, we may take note of the fact, being a settled principle, that the question as to whether the employee met with an accident, whether the accident occurred during the course of employment, whether it arose out of an employment, how and in what manner the accident occurred, who was negligent in causing the accident, whether there existed any relationship of employee and employer, what was the age and monthly salary of the employee, how many are the dependants of the deceased employee, the extent of disability caused to the employee due to injuries suffered in an accident, whether there was any insurance coverage obtained by the employer to cover the incident, etc. are some of the material issues which arise for the just decision of the Commissioner in a claim petition when an employee suffers any bodily injury or dies during the course of his employment and he/his LRs sue(s) his employer to claim compensation under the Act.
10. The aforementioned questions are essentially the questions of fact and, therefore, they are required to be proved with the aid of evidence. Once they are proved either way, the findings recorded thereon are regarded as the findings of fact.
11. The appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner lies only against the specific orders set out in clauses (a) to (e) of Section 30 of the Act with a further rider contained in the first proviso to the section that the appeal must involve substantial questions of law.
12. In other words, the appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner is not like a regular first appeal akin to Section 96 of the Code of Civil Procedure, 1908 which can be heard both on facts and law. The appellate jurisdiction of the High Court to decide the appeal is confined only to examine the substantial questions of law arising in the case.
13. When an employer files the appeal, he is under a legal obligation to deposit the entire awarded sum in terms of the second proviso to Section 30 of the Act as a precondition to file the appeal in the High Court except where the appeal is filed against the order falling in clause (b).
14. It is only when the employer deposits the entire awarded money along with the memo of appeal duly certified by the Commissioner, his appeal is regarded as being properly filed in conformity with the requirement of Section 30 of the Act.
15. Such appeal is then heard on the question of admission with a view to find out as to whether it involves any substantial question of law or not. Whether the appeal involves a substantial question of law or not depends upon the facts of each case and needs an examination by the High Court. If the substantial question of law arises, the High Court would admit the appeal for final hearing on merit else would dismiss in limine with reasons that it does not involve any substantial question(s) of law.
16. Now coming to the facts of this case, we find that the appeal before the High Court did not involve any substantial question of law on the material questions set out above. In other words, in our view, the Commissioner decided all the material questions arising in the case properly on the basis of evidence adduced by the parties and rightly determined the compensation payable to the respondent. It was, therefore, rightly affirmed by the High Court on facts.
17. In this view of the matter, the findings being concurrent findings of fact of the two courts below are binding on this Court. Even otherwise, we find no good ground to call for any interference on any of the factual findings. None of the factual findings are found to be either perverse or arbitrary or based on no evidence or against any provision of law. We accordingly uphold these findings.
18. This takes us to examine the next question which was wrongly decided by the Commissioner and the High Court also did not notice the error committed by the Commissioner.
19. The question relates to grant of interest on the awarded amount and further, from which date, it is to be awarded to the respondent claimant.
20. The grant of interest on the awarded sum is governed by Section 4-A of the Act. The question as to when does the payment of compensation under the Act “becomes due” and consequently what is the point of time from which interest on such amount is payable as provided under Section 4-A(3) of the Act remains no more res integra and is settled by the two decisions of this Court.
21. As early as in 1975, a four-Judge Bench of this Court in Pratap Narain Singh Deo v. Srinivas Sabata (1976) 1 SCC 289, AIR 1976 SC 222 speaking through Singhal, J. has held that an employer becomes liable to pay compensation as soon as the personal injury is caused to the workman in the accident which arose out of and in the course of employment. It was accordingly held that it is the date of the accident and not the date of adjudication of the claim, which is material.
22. Another question analogous to the main question arose before the three-Judge Bench of this Court in Kerala SEB v. Valsala K. (1999) 8 SCC 254, AIR 1999 SC 3502 as to whether increased amount of compensation and enhanced rate of interest brought on statute by amending Act 30 of 1995 with effect from 15-9-1995 would also apply to cases in which the accident took place before 15-9-1995. Their Lordships, placing reliance on the law laid down in Pratap Narain case (1976) 1 SCC 289, AIR 1976 SC 222 held that since the relevant date for determination of the rate of compensation is the date of accident and not the date of adjudication of the claim by the Commissioner and hence if the accident has taken place prior to 15-9-1995, the rate applicable on the date of accident would govern the subject.
23. After these two decisions, this Court in two cases (both by the two-Judge Bench) viz. National Insurance Co. Ltd. v. Mubasir Ahmed (2007) 2 SCC 349 and Oriental Insurance Co. Ltd. v. Mohd. Nasir (2009) 6 SCC 280 without noticing the law laid down in Pratap Narain (1976) 1 SCC 289, AIR 1976 SC 222 and Valsala (1999) 8 SCC 254, AIR 1999 SC 3502 cases took a contrary view and held that 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.
24. This conflict of view in the decisions on the question was noticed by this Court (two-Judge Bench) in Oriental Insurance Co. Ltd. v. Siby George (2012) 12 SCC 540. Aftab Alam, J. speaking for the Bench referred to the aforementioned decisions and explaining the ratio of each decision held that since the two later decisions rendered in Mubasir (2007) 2 SCC 349 and Mohd. Nasir (2009) 6 SCC 280 which took contrary view without noticing the earlier two decisions of this Court rendered in Pratap Narain (1976) 1 SCC 289, AIR 1976 SC 222 and Valsala (1999) 8 SCC 254, AIR 1999 SC 3502 cases by the larger Benches (combination of four and three Judges respectively) and hence later decisions rendered in Mubasir (2007) 2 SCC 349 and Mohd. Nasir (2009) 6 SCC 280 cases cannot be held to have laid down the correct principles of law on the question and nor can, therefore, be treated as binding precedent on the question.
25. In other words, the law laid down in Pratap Narain (1976) 1 SCC 289, AIR 1976 SC 222 and Valsala (1999) 8 SCC 254, AIR 1999 SC 3502 cases was held to hold the field throughout as laying down the correct principle of law on the subject. The two-Judge Bench in Oriental Insurance Co. Ltd. v. Siby George (2012) 12 SCC 540 accordingly followed the principle of law laid down in Pratap Narain (1976) 1 SCC 289, AIR 1976 SC 222 and Valsala (1999) 8 SCC 254, AIR 1999 SC 3502 cases and decided the case instead of following the law laid down in Mubasir (2007) 2 SCC 349 and Mohd. Nasir (2009) 6 SCC 280 cases which was held per incuriam.
26. Now coming to the facts of this case, we find that the Commissioner awarded the interest to the respondents @ 12% p.a. on the awarded sum but it was awarded from the expiry of 45 days from the date of order and that too, if the appellant failed to deposit the awarded sum within 45 days.
27. In other words, if the appellant had deposited the awarded sum within 45 days from the date of the order then the respondent was not entitled to claim any interest on the awarded sum, but if the appellant had failed to deposit the awarded amount within 45 days, then the respondent was entitled to claim interest @ 12% p.a. from the date of the order.
28. In our opinion, the aforementioned direction of the Commissioner in awarding the interest on the awarded sum is contrary to law laid down by this Court in Pratap Narain case (1976) 1 SCC 289, AIR 1976 SC 222 and hence not legally sustainable.
29. In the light of the foregoing discussion, even though the respondent did not challenge this direction by filing any appeal in the High Court nor challenged it by filing any appeal in this Court too, yet the question being a pure question of law, this Court with a view to do substantial justice to the respondent considers it just and proper to modify the order of the Commissioner in the respondent's favour so as to make the same in conformity with the law laid down by this Court in the abovereferred two decisions (supra).
30. Accordingly and in view of the foregoing discussion, the order of the Commissioner dated 23-4-2002 is modified in favour of the respondent to the extent that the awarded sum of Rs 3,79,120 shall carry interest @ 12% p.a. from the date of accident i.e. 6-4-1999.
31. The Commissioner is accordingly directed to work out the total amount payable by the appellant to the respondent in terms of the order passed by this Court.
32. Since no one appeared for the appellant as well as the respondent in this case, the Registry shall send a copy of this order to the Commissioner, the appellant and the respondent respectively within one week.
33. The Commissioner, on receipt of the order, will issue notice to the parties and calculate the total amount to enable the appellant to deposit the same within one month for being paid to the respondent after due verification.
34. The appeal stands accordingly disposed of with the aforementioned directions and modifications in the order of the Commissioner dated 23-4-2002 passed in Case No. KAB/KNP/7/985 of 99.
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