Chennai

Defaulting relief would attract interest from date of accident: HC

Answering a substantial question of law, the Madras High Court held that in the event of default in the payment of compensation under the Employees Compensation Act (ECA), the interest accrued should be calculated from the date of accident.

migrator

Updated:3rd Feb, 2021 at 1:23 AM

Chennai

Pointing out that compensation under Section 4 of the Act should be paid as soon as it falls due, Justice SM Subramaniam said: “Because of the delay in disposing of the claim petitions, the claimant should not suffer interest as contemplated under Section 4-A of the Employees Compensation Act.”

As per the Act, compensation should be paid as soon as it falls due and the due was from the date of accident. Thus, the compensation is to be calculated from the date of accident.

If the employer fails to pay the compensation within one month from the date it fell due, then she/he is liable to pay simple interest at the rate of 12 per annum, the judge held.

Justice Subramaniam’s direction came in a plea for a claim in an accident that happened in 2014.

The plea noted that the minimum wage was fixed as Rs 7,600 though the Centre’s 2010 notification had enhanced minimum wage from Rs 4,000 to Rs 8,000, and also sought interest from the date of accident.

Enhancing the monthly income and accepting the contention on interest from the date of accident, Justice Subramaniam enhanced the compensation to Rs 8.5 lakh.

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Defaulting relief would attract interest from date of accident: HC

Answering a substantial question of law, the Madras High Court held that in the event of default in the payment of compensation under the Employees Compensation Act (ECA), the interest accrued should be calculated from the date of accident.

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