AJAYA KUMAR DAS & Anr VS DIVISIONAL MANAGER & Anr (2022)

FACTS OF THE CASE

• The legal proceedings commenced in the High Court of Odisha. 
• The initial petitioner was employed as a labourer for the respondent, tasked with the responsibility of loading and unloading sand from trucks. 
• On June 5th, 2000, the petitioner encountered an accident during his employment with the respondent, resulting in multiple injuries. 
• The accident caused severe damage to his abdomen and kidney. 
• Subsequently, the petitioner underwent surgery, during which 85% of his body was deemed disabled. 
• He was discharged from the hospital on June 22nd, 2000. 
• Seeking compensation, the petitioner filed a claim with the Workmen Compensation-cum-Assistant Labour Commissioner, Odisha. 
• The determination was made that, despite exhaustive treatment, the petitioner’s recovery was unlikely, leading to a 100% loss of income due to his 85% disability. 
• On May 24th, 2016, the Labour Commissioner awarded compensation amounting to Rs 2,78,926. This sum comprised 60% of Rs 2100 (his monthly income) multiplied by 221.370 (age factor, given his age of 22 years) and further multiplied by 100 (percentage of loss of earning). 
• Additionally, the Labour Commissioner directed the inclusion of 12% interest on the compensation amount to be paid to the petitioner.

ISSUES

• Who is liable to pay compensation under the Employees Compensation Act, 1923?
• What is the Penalty for Non-Payment of Compensation?
• What should be the rate of interest on the late payment of the compensation?

ARGUMENT

• Appellant:
  • The appellant challenged the order of the High Court of Odisha dated 11 April 2018, which had dismissed the application of condonation by the first respondent, but the High Court directed that except only for the accrued interest, the appellants are not entitled to any interest on the compensation awarded.

• Respondent:
  • The Appellant were not entitled to receive any sort of interest on the Compensation except the accrued interest.
  • Put up an application for condonation of an unexplainable delay of 619 days to file an appeal before the High Court.
  • Interest should be waived from the payment of compensation to the employee.

JUDGEMENT

• The Supreme Court of India took the reference of three cases, namely,
  1. Saberabibi Yakubhai Shaikh v. National Insurance Co. Ltd in which the 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.
  2. Oriental Insurance Co. Ltd. v. Siby George in which the court held that compensation would fall due from the date of the accident.
  3. P. Meenaraj v. P. Adigurusamy & Anr. In this case the 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 the accident.
• The Supreme Court said that the judgement of the High Court is inexplicable.
• It was observed by the Court that when the appeal of the insurer was dismissed based on limitations, the High Court could not have entertained it based on the merits for awarding the compensation under the Workmen’s Compensation Act 1923.
• Referring to the three above mentioned cases, the Supreme Court said that the High Court did not have any legal basis to delete the order of payment of the interest on the delay of the payment of compensation. 
• The Supreme Court set aside the direction contained in the order of the High Court dated 11 April 2018.
• The order for the payment of interest which was issued by the Additional Labour Commissioner-cum-Commissioner under Section 4A of the Workmen’s Compensation Act 1923, Workmen Compensation and the award of compensation was restored by the Supreme Court.
• The Supreme Court said that despite issuing several notices, the first respondent did not visit the Court. The insurance company was well-resourced and had used its position of dominance to evade the cause of justice. Whereas the first appellant, despite having 85% disability, had to visit the Court along with his wife for the hearings and had to face unnecessary hardships. Hence, the appellant is additionally entitled to costs quantified at Rs 50,000.

CONCLUSION

The appellants were demanding compensation since the first appellant met with an accident causing damage to him that led to 85% disability as a result of which his income became nil. Despite this the respondents were not willing to pay the compensation and had appealed for the same in the High Court of Odisha. In the order dated 11 April 2018, the High Court said that the compensation needs to be paid but the respondent (the appellant in Supreme Court) is not entitled to receive any interest on the compensation except the accrued interest. Later, the Division Bench of the Supreme Court consisting of Justices DY Chandrachud and Dinesh Maheshwari opined that when an appeal was dismissed on the ground of limitation, the High Court could not have entertained it on merits and restored the order for payment of the compensation along with the interest. Additionally, the Court had made the appellants entitled to receive Rs 50,000.

REFERENCES

https://www.livelaw.in/pdf_upload/ajaya-kumar-das-vs-divisional-manager-2022-livelaw-sc-102-1-408595.pdf (The original judgement); and

https://www.latestlaws.com/case-analysis/sc-expounds-when-the-appeal-was-dismissed-on-the-ground-of-limitation-hc-could-not-have-entertained-it-on-merits-read-judgment-182810

This Article is written by Ayushi Sinha of Lloyd School of Law, Intern at Legal Vidhiya

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