Employees Compensation Act | Insurer Of Vehicle Involved In Accident Cannot Escape Liability: Jharkhand High Court

In a case involving an appeal under Section 30 of the Employee's Compensation Act, 1923, which contested a Labor Court's award that did not include interest as mandated by Section 4(A) of the Act, the Jharkhand High Court observed that compensation should be calculated from the date of the accident, and interest calculations should commence from that very date. Additionally, the court emphasized that insurers of motor vehicles involved in accidents resulting in the death or injury of employees cannot absolve themselves of the obligation to pay interest on the principal award.Justice Pradeep Kumar Srivastava held, “Award of compensation fells due on the date of occurrence/ accident and computation of compensation and interest begins from the date, it fell due i.e. the date of accident and not the date of award till its realization. In case of accident out of use motor vehicle causing death or injuries to employee, the insurer of vehicle can’t escape liability to pay the interest on principal award.”The Labour Court had awarded amount of compensation without any interest which is mandatory under Section 4(A) of Workmen’s (Employee’s) Compensation Act, 1923.The case involved the death of an employee, Lakhan Ray, who worked as a tractor driver. Following the accident, a case was filed, and a charge sheet was submitted after investigation. However, the employer failed to provide compensation to the deceased's legal heirs and dependents within the legally required timeframe. Consequently, legal action was initiated under the Workmen's Compensation Act, 1923. The trial court determined compensation based on the minimum wage rate without interest, which led to the current appeal.The substantial question of law before the Court was whether the Commissioner, Employee’s Compensation has committed perversity by not awarding any interest to the claimant on the amount of compensation awarded under of Employee’s Compensation Act (Workmen Compensation Act)?The Court in its verdict, referred to Section 4A(3) of the Employee's Compensation Act, highlighting the provision for interest and penalties. The Court observed that in case of an accident out of use motor vehicle causing death or injuries to an employee, the insurer of the vehicle can’t escape liability to pay the interest on principal award. The Court added, “After analyzing the law, I must revert back to the findings recorded by Ld. Presiding Officer-cum-Commissioner under Employee’s Compensation Act, which categorically show that no amount of interest component has been awarded inspite of statutory mandate of Section 4A(3)(a) and no reason has been attributed for not granting the interest component in the award which is quite illegal and suffers from perversity”The appeal was allowed, and the order was modified to include simple interest at 12% per annum from the date of the employee's death until the actual payment on the original award. Counsel For The Appellant/S: For the Appellant : Mr. Arvind Kr. Lall, AdvocateCounsel For The Respondent No. 2: Mr. Manish Kumar, Adv Ll Citation: 2023 Livelaw (Jha) 44Case Title: Jugal Kishor Ray vs Ashok Prasad Yadav and Another Case No.: M.A. No.227 of 2020Click Here To Read Judgment

Employees Compensation Act | Insurer Of Vehicle Involved In Accident Cannot Escape Liability: Jharkhand High Court

Bhavya Singh

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