Ajaya Kumar Das vs Divisional Manager

Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No 447 of 2022 (Arising out of SLP(C) No 12228 of 2019)

Ajaya Kumar Das & Anr .... Appellant(s)

Versus

Divisional Manager & Anr ....Respondent(s)

JUDGMENT

Dr Dhananjaya Y Chandrachud, J

1 Leave granted.

2 This appeal arises from a judgment of a Single Judge of the High Court of Orissa

dated 11 April 2018 in FAO No 358 of 2018.

3 The first appellant was working as a labourer in a truck bearing registration No

OAX 2764 and was engaged by the second respondent for the loading and

unloading of sand. On 5 June 2000, the truck met with an accident as a result of

which the first appellant suffered multiple injuries in his abdomen and kidney. He

underwent a surgery and was discharged from the hospital on 22 June 2000. A

Signature Not Verified claim for compensation was lodged before the Workmen compensation-cum- Digitally signed by Sanjay Kumar Date: 2022.01.28 17:11:36 IST Reason: Assistant Labour Commissioner, Odisha. The claim was allowed by an order

dated 24 May 2016. It was held that the first appellant in spite of all the

possible treatment became permanently disabled upto 85% which would reduce 2

his earning capacity upto 100%. Since he was receiving Rs 2100 as a monthly

income, the total compensation payable was arrived at Rs 2,78,926 (60% of

2100 (monthly income) x 221.37 (age factor as he was 22 years old) x 100 (loss

of earning)). The Labour Commissioner directed that the compensation must be

paid together with interest at the rate of 12 per cent per annum on the principal

sum awarded from the date of accident till the deposit.

4 The first respondent, who is the insurer, filed an appeal before the High Court,

being FAO No 358 of 2018, with a delay of 619 days. The High Court, by its

order dated 11 April 2018, dismissed the application for condonation on the

ground that there was an unexplained delay of 619 days. Nonetheless, the High

Court directed that the appellants are not entitled to any interest on the

compensation awarded except the accrued interest. The order of the High Court

was sought to be reviewed, but the petition for review was also dismissed on 8

February 2019 on the ground that the first appellant has already withdrawn the

entire awarded amount along with the accrued interest.

5 The judgment of the High Court is inexplicable. Having dismissed the appeal of

the insurer on the ground of limitation, there was no occasion for the High Court

to interfere on merits with the award of interest on compensation under the

Workmen’s Compensation Act 1923. When the appeal was dismissed on the

ground of limitation, the High Court could not have entertained it on merits. The

error on the part of the High Court has led a labourer and his spouse to travel all

the way to this Court. Though the accident took place in 2000, the course of

litigation would now end only with the present judgment. To set the record

straight, the High Court has erred on merits as well. Section 4A of the

Workmen’s Compensation Act 1923 stipulates that the Commissioner shall direct

the employer to pay interest of 12% or at a higher rate, not exceeding the

lending rates of any scheduled banks specified, if the employer does not pay the 3

compensation within one month from the date it fell due. In Saberabibi

Yakubhai Shaikh v. National Insurance Co. Ltd.1, this Court held that

interest shall be paid on the compensation awarded from the date of the

accident and not the date of adjudication of the claim in view of the decision of

this Court in Oriental Insurance Co. Ltd. v. Siby George2 where it was held

that compensation would fall due from the date of the accident. Further, in the

recent decision in P. Meenaraj v. P. Adigurusamy & Anr.3, this Court

reiterated that the applicant is entitled to interest from the date of accident

while rejecting the submission that the award of interest should be after the

expiry of 30 days from the date of accident. Thus, there was no legal basis for

the High Court to delete the order of payment of interest.

6 For the above reasons, we set aside the direction contained in the order of the

High Court dated 11 April 2018 by which the order for the payment of interest

was deleted. The order for the payment of interest which was issued by the

Additional Labour Commissioner-cum-Commissioner, Workmen Compensation

shall together with the award of compensation stand restored.

7 Though the first respondent has not appeared in these proceedings, despite

service of notice, we are of the view that an award of costs is necessary since

the appellants have been compelled to move this Court against a palpably

erroneous order of the High Court passed in an appeal filed beyond limitation by

the respondent. The insurer took the contest to the High Court in an appeal

barred by limitation. A well-resourced insurance company has used its position of

dominance to evade the cause of justice. Such strategies must be eschewed. In

addition to the compensation and interest which have been awarded, the

appellants shall be entitled to costs quantified at Rs 50,000 which shall be paid

1 (2014) 2 SCC 298 2 (2012) 12 SCC 540 3 Civil Appeal No 209 of 2022, decided on 6 January 2022 4

over within a period of four weeks, together with the component of the award

inclusive of interest that remains to be paid.

8 The appeal is allowed in the above terms.

9 Pending application, if any, stands disposed of.

…………...…...….......………………........J. [Dr Dhananjaya Y Chandrachud]

…..…..…....…........……………….…........J. [Dinesh Maheshwari]

New Delhi;

January 24, 2022

-S-

5

ITEM NO.19 Court 4 (Video Conferencing) SECTION XI-A

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s).12228/2019

(Arising out of impugned final judgment and order dated 11-04-2018 in FAO No. 358/2018 passed by the High Court of Orissa at Cuttack)

AJAYA KUMAR DAS & ANR. Petitioner(s)

VERSUS

DIVISIONAL MANAGER & ANR. Respondent(s)

Date : 24-01-2022 This petition was called on for hearing today.

CORAM :

HON'BLE DR. JUSTICE D.Y. CHANDRACHUD HON'BLE MR. JUSTICE DINESH MAHESHWARI

For Petitioner(s) Mr. Chitta Ranjan Mishra, Adv.

Mr. Neeraj Srivastava, Adv. Mr. Ronak Baid, Adv.

Ms. Neetu Rathore, Adv.

Ms. Shalu Sharma, AOR

For Respondent(s)

UPON hearing the counsel the Court made the following O R D E R

1 Leave granted.

2 The appeal is allowed in terms of the signed reportable judgment.

3 Pending application, if any, stands disposed of.

(SANJAY KUMAR-I) (SAROJ KUMARI GAUR) AR-CUM-PS COURT MASTER (Signed reportable is placed on the file)