Court Orders Compensation, Interest, and Penalty for Delayed Payment to Deceased Worker’s Widow

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Case Name

Maya Devi Darjee v. Executive Engineer, Central Water Commission (High Court of Sikkim)

W.P.(C) No. 09 of 2019

Date: 12th July 2019

Key Takeaways

• Compensation must be paid promptly: The court reinforced that compensation under the Employee’s Compensation Act, 1923, is due as soon as the accident occurs.
• Interest and penalty for delay: If the employer delays payment, they must pay 12% interest per annum and a penalty up to 50% of the compensation amount, as per Section 4A(3)(a) and (b) of the Act.
• No waiver by seeking closure: The widow’s request to close the execution petition (due to frustration with delays) did not mean she waived her right to interest and penalty.
• Employer’s failure to appeal: The employer did not challenge the original compensation order, so they could not contest liability in this writ petition.
• Court’s proactive stance: The court stepped in to grant relief directly, rather than sending the matter back to the Commissioner, to avoid further delay.

Issue

Was the widow entitled to interest at 12% per annum and a penalty of 50% of the compensation amount due to the employer’s delay in paying compensation for her husband’s work-related death?

Facts

• Who: Maya Devi Darjee, widow of Late Pirthi Ram Sewa, a casual labourer with the Central Water Commission.
• What happened: Pirthi Ram Sewa died in a road accident on 26.04.2013 while traveling to join a new posting after being offered regularization as a skilled worker.
• Initial compensation: The Commissioner for Workman’s Compensation ordered the employer to pay Rs. 7,02,160 as compensation on 02.06.2016.
• Delay: The employer did not pay within the required time, leading Maya Devi to file for execution of the order. Payment was eventually made on 19.01.2018, well after the deadline.
• Further claim: Maya Devi then sought interest at 12% per annum from the date of death and a penalty of 50% of the compensation, as per Section 4A(3) of the Employee’s Compensation Act, 1923.
• Employer’s response: The employer argued that further payment required court order or higher authority approval, and did not pay the interest or penalty.

Arguments

Petitioner (Maya Devi Darjee)

• Sought interest at 12% per annum from the date of her husband’s death until final payment.
• Requested a penalty of 50% of the principal compensation amount, as per Section 4A(3)(a) and (b) of the Employee’s Compensation Act, 1923.
• Argued that the employer’s delay was unjustified and caused hardship.

Respondent (Central Water Commission)

• Did not dispute the facts or file a counter affidavit.
• Raised two oral objections:

1. Claimed the deceased was not employed at the Bhopal office at the time of death (already rejected by the Commissioner and not appealed).
2. Argued that the widow’s request to close the execution petition amounted to waiving her right to further claims (court disagreed).

Key Legal Precedents

• Section 4A(3)(a) and (b) of the Employee’s Compensation Act, 1923:
• Requires employers to pay compensation as soon as it falls due (i.e., from the date of the accident).
• If payment is delayed beyond one month, the employer must pay 12% interest per annum and, if there is no justification for the delay, a penalty up to 50% of the compensation amount.
• Pratap Narain Singh Deo v. Srinivas Sabata & Anr. (1976) 1 SCC 289:
• Supreme Court held that compensation is due from the date of the accident.
• Saberabibi Yakubbhai Shaikh v. National Insurance Company (2014) 2 SCC 298:
• Reaffirmed that compensation must be paid from the date of the accident.

Judgement

• Decision: The High Court allowed the writ petition.
• Orders:
• The employer (Central Water Commission) must pay:
• Simple interest at 12% per annum on the compensation amount from the date of the accident (26.04.2013) until the date of final payment.
• A penalty of 50% of the compensation amount.
• Payment must be made within three months from the date of the judgment (12.07.2019).
• Reasoning: The court found the employer’s delay unjustified and held that the law clearly mandates both interest and penalty in such cases. The court also noted the employer had not contested the facts or the legal basis for the claim.

FAQs

Q1: Why did the court order interest and a penalty?

A: Because the employer delayed payment of compensation beyond one month from when it was due (the date of the accident), Section 4A(3) of the Employee’s Compensation Act, 1923, requires payment of 12% interest and a penalty up to 50% of the compensation amount.

Q2: Did the widow waive her right to interest and penalty by closing the execution petition?

A: No. The court held that her request to close the petition was due to frustration with delays and did not amount to waiving her legal rights.

Q3: What if the employer had appealed the original compensation order?

A: The employer did not appeal, so the compensation order became final. They could not contest liability in this writ petition.

Q4: What legal precedents did the court rely on?

A: The court cited “Pratap Narain Singh Deo v. Srinivas Sabata & Anr.” and “Saberabibi Yakubbhai Shaikh v. National Insurance Company,” both of which confirm that compensation is due from the date of the accident.

Q5: What does this case mean for other employees or their families?

A: It reinforces that employers must pay compensation promptly after a work-related accident, and if they delay, they are liable for both interest and penalty as per the law.