Interest On Workmen's Compensation Amount To Be Awarded From The Date Of Accident

In North East Karnataka Road Transport Corporation vs Smt. Sujatha, the appeal was filed by the employer against the dismissal of the appeal filed by the employer against the order of the Labour Commissioner.

Interestingly, the Supreme Court found that while there is no error in the impugned orders, the lower courts caused error as far as question of law is concerned by not following the decisions of the Supreme Court in Pratap Narain Singh Deo Vs. Srinivas Sabata & Anr. and Kerala State Electricity Board & Anr. Vs. Valsala K. & Anr. on awarding interest on compensation issue and decided that 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 consider it just and proper to modify the order of the Commissioner in respondent's favour so as to make the same in conformity with the law laid down by this Court in the above referred two decisions (supra).

Referring to the two above judgments, the Supreme Court held that 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 whereas the Commissioner awarded the interest to the respondents at the rate of 12% per annum 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.