{"id":263654,"date":"2022-03-14T15:00:08","date_gmt":"2022-03-14T09:30:08","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=263654"},"modified":"2022-03-17T09:00:20","modified_gmt":"2022-03-17T03:30:20","slug":"explained-compensation-under-section-4-of-employees-compensation-act-1923-to-be-awarded-from-the-date-of-accident-or-the-date-of-commissioners-order","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/03\/14\/explained-compensation-under-section-4-of-employees-compensation-act-1923-to-be-awarded-from-the-date-of-accident-or-the-date-of-commissioners-order\/","title":{"rendered":"Explained| Compensation under Section 4 of Employee\u2019s Compensation Act, 1923 to be awarded from the date of accident or the date of Commissioner&#8217;s order?\u00a0"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: The bench of <strong>MR Shah*<\/strong> and BV Nagarathna, JJ has held that as per Section 4A of the Employee\u2019s Compensation Act, 1923, the liability to pay the compensation would arise from the date on which the deceased died for which he is entitled to the compensation and therefore, the liability to pay the interest on the amount of arrears\/compensation shall be from the date of accident and not from the date of the order passed by the Commissioner.<\/p>\n<p style=\"text-align: justify;\">The Court was deciding the case where a sugarcane cutting labourer, engaged by the Labour Contractor who provided sugarcane to a sugar factory, died of a snake bite while cutting sugarcane. Neither the sugar factory nor the contractor paid the compensation due and payable under the Act, 1923. Therefore the heirs of the deceased filed a claim petition before the Workmen\u2019s Compensation Commissioner, who allowed the application and directed the respondents herein jointly and severally to pay the compensation amount of Rs.3,06,180\/- alongwith simple interest @ 12% p.a. from the date of accident, i.e., 29.11.2009 till its full realization. The Commissioner also imposed the penalty of 50% on the compensation amount, i.e., Rs. 1,53,090\/-.<\/p>\n<p style=\"text-align: justify;\">The Bombay High Court has though dismissed the appeal insofar as the amount of compensation awarded by the Commissioner, it, however, set aside the penalty and modified the interest awarded @ 12% p.a. from the date of incident and directed that the interest be paid from the period after expiry of one month from the date of Commissioner\u2019s order dated 25.01.2017.<\/p>\n<p style=\"text-align: justify;\">However, going by the scheme of the 1963 Act, the Supreme Court observed that compensation under Section 4 shall be paid as soon as it falls due. It can be seen that the liability to pay the interest on the amount of compensation due and payable would be under Section 4A(3)(a) and the penalty would be leviable under Section 4A(3)(b). As per Section 4A(3)(a), the employer shall pay, in addition to the amount of the arrears, simple interest thereon @ 12% p.a. or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified on the amount due.<\/p>\n<p style=\"text-align: justify;\">As per Section 4A(1) compensation under section 4 shall be paid as soon as it falls due. Therefore, on the death of the employee\/deceased immediately, the amount of compensation can be said to be falling due. Therefore, the liability to pay the compensation would arise immediately on the death of the deceased. Even as per Section 4A(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 employee, as the case may be, without prejudice to the right of the employee to make any further claim. Therefore, the liability to pay the compensation would arise from the date on which the deceased died for which he is entitled to the compensation and therefore, the liability to pay the interest on the amount of arrears\/compensation shall be from the date of accident and not from the date of the order passed by the Commissioner.<\/p>\n<p style=\"text-align: justify;\">As per Section 4A(3)(b), if the Commissioner is satisfied that there is no justification for the delay, it can direct the employer, in addition to the amount of the arrears and interest thereon, to pay a further sum not exceeding 50% of such amount by way of penalty. Thus, provision for interest and provision for penalty are different.<\/p>\n<p style=\"text-align: justify;\">The Court noticed that the provision for levy of interest would be under Section 4A(3)(a) and the provision for levy of penalty would be under Section 4A(3)(b). The Court observed that while directing the employer to pay the interest from the date of the order passed by the Commissioner, the High Court has not at all considered Section 4A(3)(a) and has considered Section 4A(3)(b) only, which is the penalty provision. Hence, the impugned judgment and order passed by the High Court directing the employee to pay the interest on the amount of compensation as leviable under Section 4A(3)(a) from the date of the order passed by the Commissioner, i.e., 25.01.2017was held to be unsustainable.<\/p>\n<p style=\"text-align: justify;\">[Shobha v. Chairman, Vithalrao Shinde Sahakari Sakhar Karkhana Ltd, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/0i335W3J\"><b>2022 SCC OnLine SC 308<\/b><\/a>, decided on 11.03.2022]<\/p>\n<hr \/>\n<h4 style=\"text-align: justify;\">*Judgment by: Justice MR Shah<\/h4>\n<hr \/>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: The bench of MR Shah* and BV Nagarathna, JJ has held that as per Section 4A of the Employee\u2019s Compensation <\/p>\n","protected":false},"author":121,"featured_media":263657,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[32585,2728,37961,48857],"class_list":["post-263654","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-commissioner","tag-compensation","tag-employees-compensation-act-1923","tag-workmens-compensation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Explained| Compensation under Section 4 of Employee\u2019s Compensation Act, 1923 to be awarded from the date of accident or the date of Commissioner&#039;s order?\u00a0 | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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Patil, JJ. while allowing the appeal set aside the award of the Commissioner as he committed an error of law in applying the provisions of the Act, which was already repealed. In the instant case, the appeal under Section\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":268480,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/06\/16\/bom-hc-%e2%94%82whether-the-compensation-granted-under-chapter-x-of-motor-vehicle-act-forfeits-the-right-of-the-employee-to-claim-the-compensation-under-s-3-of-the-employees-compensation-act\/","url_meta":{"origin":263654,"position":1},"title":"Bom  HC \u2502Whether the compensation granted under chapter X of Motor Vehicle Act forfeits the right of the employee to claim compensation under S. 3 of the Employees Compensation Act?","author":"Prachi Bhardwaj","date":"June 16, 2022","format":false,"excerpt":"Bombay High Court: S.G. Mehare, J. allowed an appeal against the order passed by the Commissioner for Workmen\u2019s Compensation and Judge Labour Court dated July 30, 2001.\u00a0 Appellant was a driver with respondent 1 who owned a truck which was insured with respondent 2. He met with a vehicular accident\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Bombay High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":220523,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/10\/05\/hp-hc-%e2%94%82-employees-compensation-act-service-of-show-cause-notice-to-the-employer-before-imposition-of-penalty-is-mandatory\/","url_meta":{"origin":263654,"position":2},"title":"HP HC | Employees Compensation Act: Service of show-cause notice to the employer before imposition of penalty is mandatory","author":"Bhumika Indulia","date":"October 5, 2019","format":false,"excerpt":"Himachal Pradesh High Court: Tarlok Singh Chauhan, J. partly allowed the appeal of filed by an employer challenging the compensation granted to a deceased employee\u2019s wife under the Employees Compensation Act, 1923 on the ground that before passing a penalty order against the employer, a reasonable opportunity must have been\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":197305,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/06\/21\/an-employee-covered-under-mgnrega-is-not-entitled-to-claim-compensation-under-employees-compensation-act-1923\/","url_meta":{"origin":263654,"position":3},"title":"An \u2018employee\u2019 covered under \u2018MGNREGA\u2019 is not entitled to claim compensation under Employee\u2019s Compensation Act, 1923","author":"Bhumika Indulia","date":"June 21, 2018","format":false,"excerpt":"Tripura High Court: A Single Judge Bench of\u00a0 S. Talapatra J., addressed a petition seeking claim under the Employee\u2019s Compensation Act, 1923 by stressing upon the categories of employees constituted under the definition of \u2018employee\u2019 under Section 2(dd) of the said Act. The deceased for whom the compensation was being\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":220958,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/10\/17\/all-hc-employees-compensation-act-is-a-social-welfare-legislation-principles-of-liberal-construction-to-be-applied-while-interpretation-thereof\/","url_meta":{"origin":263654,"position":4},"title":"All HC | Employee&#8217;s Compensation Act is a social welfare legislation, principles of liberal construction to be applied while interpretation thereof","author":"Bhumika Indulia","date":"October 17, 2019","format":false,"excerpt":"Allahabad High Court: Dr Yogendra Kumar Srivastava, J. dismissed a writ petition challenging the order passed by the Employees Compensation Commissioner\/Assistant Labour Commissioner, U.P. Gorakhpur, and the Bench highlighted a very significant point that, \u201cEmployees Compensation Act, 1923 is a piece of social security and welfare legislation with its dominant\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":298788,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/08\/07\/rajasthan-hc-vehicle-driven-by-the-deceased-will-be-compensated-under-wc-act-1923-legal-news\/","url_meta":{"origin":263654,"position":5},"title":"Rajasthan High Court| Vehicle driven by deceased in course of employment to be compensated by Insurance company only under Workmen Compensation Act, 1923","author":"Editor","date":"August 7, 2023","format":false,"excerpt":"\u201cThe liability of the Insurance Company will be restricted to that arising under the Workmen Compensation Act, 1923 and the owner will be liable to satisfy the remaining part of the award.\u201d","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"rajasthan high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/rajasthan-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/rajasthan-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/rajasthan-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/rajasthan-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/263654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/121"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=263654"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/263654\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/263657"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=263654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=263654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=263654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}