FA/483/2007 1/7 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 483 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= NATIONAL INSURANCE CO. LTD - Appellant(s) Versus K. JANKIRAO DALAYAA & 2 - Defendant(s) ========================================================= Appearance : MR MAULIK J SHELAT for Appellant(s) : 1, MR KETAN D SHAH for Defendant(s) : 1, RULE SERVED for Defendant(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 09/05/2008 CAV JUDGMENT 1. Present appeal is preferred by the appellant - the Oriental Insurance Company Limited under Section 30 of the Workmen's FA/483/2007 2/7 JUDGMENT Compensation Act, challenging the judgment and award passed by the learned Commissioner under the Workmen's Compensation Act, Labour Court, Gandhidham-Kutch dated 6.9.2005 passed in Workmen's Compensation (Non-Fatal) Case No.174/91 in so far as directing the appellant – Insurance Company to pay Rs.12,000/- penalty as provided under Section 4-A(3)(b) of the Workmen's Compensation Act and also directing the appellant – Insurance Company to pay interest as provided under Section 4-A(3)(a) of the Act at the rate of 12% per annum from the date of accident till realisation. 2. As the controversy raised in present First Appeal is two folds and in a narrow compass, this Court is not further narrating the facts as the dispute raised in the present appeal are pure questions of law and does not depend upon the facts, as the facts are admitted. 3. Shri Maulik Shelat, learned advocate appearing on behalf of the appellant – Insurance Company has submitted that the learned Commissioner has materially erred in awarding interest at the rate of 12% per annum from the date of the accident. It is submitted FA/483/2007 3/7 JUDGMENT that, as held by the Hon'ble Supreme Court in the case of National Insurance Company Vs. Mubasir Ahmed reported in (2007) 2 SCC 349, interest payable under Section 4-A(3)(a) of the Act would be from the date of adjudication and not from the date of accident. 3.1 He has also further submitted that the learned Commissioner has materially erred in directing the appellant-Insurance Company to pay 50% penalty under Section 4-A(3)(b) of the Act. He has relied upon the decision of the Hon'ble Supreme Court in the case of Ved Prakash Garg Vs. Prerna Devi reported in (1997) 8 SCC 1. No other submissions have been made. 3.2 By making above submissions, it is requested to allow the present appeal and modify the judgment and award passed by the learned Commissioner under the Workmen's Compensation Act accordingly. 4. Shri Ketan D.Shah, learned advocate appearing on behalf of the workmen-claimants has submitted that, the decision of the Hon'ble Supreme Court in the case of Mubasir Ahmed (supra) is by the two Judge Bench and the larger Bench of the Hon'ble Supreme FA/483/2007 4/7 JUDGMENT Court in the case of Pratap Narain Singh Deo Vs. Srinivas Sabata reported in AIR 1976 SC 222 has taken a contrary view, and it is held that the liability to pay interest under the Act would be after one month of the accident and not from the date of adjudication. It is submitted that, in the case of Mubasir Ahmed (supra), the Hon'ble Supreme Court has not considered the decision of larger bench of the Hon'ble Supreme Court in the case of Pratap Narain Singh Deo (supra). Therefore, it is requested to follow the decision of larger bench as the same would be the binding precedent. Under the circumstances, it is requested to dismiss the present appeal. 5. Heard the learned advocates appearing for the respective parties. 6. So far as the dispute raised in the present appeal with respect to the order passed by the learned Commissioner directing the appellant – Insurance Company to pay penalty under Section 4- A(3)(b) of the Act is concerned, the said controversy is not now res integra. As held by the Hon'ble Supreme Court in the case of Ved Prakash Garg (supra), the employer cannot be saddled with the FA/483/2007 5/7 JUDGMENT liability to pay penalty under Section 4-A(3)(b) of the Act. No other contrary decision of the Hon'ble Supreme Court and/or any other decision of the Hon'ble Supreme Court taking a different view has been pointed by the learned advocate appearing on behalf of the claimants/workmen. Under the circumstances, the impugned judgment and award passed by the learned Commissioner directing the appellant – Insurance Company to pay Rs.12,000/- penalty under Section 4-A(3)(b) of the Act deserves to be quashed and set aside. So far as challenge to the judgment and award passed by the learned Commissioner directing the appellant – Insurance Company to pay interest at the rate of 12% per annum from the date of accident is concerned, identical question came to be considered by this Court recently in First Appeal No.4717 of 2006 and other cognate appeals and this Court has considered both the decisions of the Hon'ble Supreme Court i.e. the decision in the case of Mubasir Ahmed (supra) and in the case of Pratap Narain Singh (supra) and considering the fact that the decision in the case of Pratap Narain Singh (supra) is of a larger bench judgment and the same is binding upon this Court, this Court has followed the FA/483/2007 6/7 JUDGMENT decision of Hon'ble Supreme Court in the case of Pratap Narain Singh (supra) and has held by the judgment and order dated 6.5.2008 that liability to pay interest would arise after one month from the date of accident and not from the date of adjudication by the learned Commissioner. Under the circumstances and considering the decision of the Hon'ble Supreme Court in the case of Pratap Narain Singh (supra) and the decision of this Court dated 6.5.2008 passed in First Appeal No.4717 of 2006 and other cognate appeals, the contention on behalf of the appellant – Insurance Company that the liability to pay interest under Section 4-A(3)(a) of the Act would arise from the date of adjudication by the learned Commissioner cannot be accepted and the same deserves to be negatived. 7. For the reasons stated above, the appeal succeeds in part. The impugned judgment and award passed by the learned Commissioner under the Workmen's Compensation Act, Labour Court, Gandhidham-Kutch dated 6.9.2005 passed in Workmen's Compensation (Non-Fatal) Case No.174/91 is hereby quashed and set aside to the extent by which the learned Commissioner has FA/483/2007 7/7 JUDGMENT directed the appellant – Insurance Company to pay Rs.12,000/- penalty under Section 4-A(3)(b) of the Workmen's Compensation Act. Rest of the judgment and award is hereby confirmed. Consequently, the appellant-Insurance Company would be entitled to get back/recover the differential amount of penalty already deposited. If any excess amount is deposited by the appellant before the Commissioner, in view of the final order passed in this appeal, the said amount be refunded by the Commissioner to the appellant on making a request. In the facts and circumstances of the case, there shall be no order as to costs. ( M.R. SHAH, J. ) syed/