[Employees Compensation Act] Employee Entitled To Interest On Medical Reimbursement From Date Of Claim U/S 4A: Kerala High Court

Justice Basant Balaji observed thus:

“Therefore, I am of the considered opinion that the Commissioner has failed to award interest as stipulated in Section 4A of the Act. Since the accident happened on 18.09.2011, and the claim was made only in 2016, the appellant is entitled to claim interest from the respondents only from the date he made the claim before the Employees Compensation Commissioner. The delay in not filing the claim from 2011 to 2016 is on the applicant himself. Therefore, the payment of interest for the said period cannot be mulcted on the respondent.”

The Court held that the delay occurred for filing medical reimbursement claim was upon the employee and not upon the employer. Thus, payment of interest for medical bills due to the delay caused in making the claim cannot be mulcted on the employer and interest can be ordered only from the date of filing claim petition before the Compensation Commissioner.

The appellant was applicant before Employees Compensation Commissioner (Industrial Tribunal), Thrissur for compensation towards functional disability sustained by him in an accident during the course of his employment. The accident happened on September 09, 2011 and he claimed Rs 3,00,000 from the respondents as compensation in 2016. The Commission awarded Rs. 50,084 as medical reimbursement. Thus, appeal was preferred before the High Court for non-disbursement of interest for the medical reimbursement.

Section 4 of the Act deals with the amount of compensation. Section 4 (2A) provides for reimbursement of actual medical expenditure for the treatment of injuries. Section 4A deals with the interest on such compensation on non-disbursement of payment by the employer. Section 4A (3) (a) states that interest has to be paid at the rate of 12 per cent per annum or such other higher rate not exceeding the maximum of the lending rates of any scheduled bank as specified in the Official Gazette.

The Court found that the Compensation Commission has found that the applicant has not sustained any occupational disability and has not obtained any loss of earnings. It noted that the Commissioner has awarded Rs. 50,084 as reimbursement for medical bills under Section 4 of the Act. Thus, the interest on non-disbursement of medical reimbursement would fall under the ambit of Section 4A of the Act.

“In this case, though, the Commissioner has found that the applicant has not sustained any occupational disability and has not obtained any loss of earnings; only reimbursement of the medical expenditure was awarded. The reimbursement of the medical expenditure would definitely come within the scope of Section 4A. Therefore, if there is a default on the part of respondents in not paying the amount as and when it became due, definitely Section 4A of the Act comes into play.”

The court found that the accident occurred in 2011, and the claim petition was filed only in 2016. The Court noted that the Compensation Commission passed its order in 2020. It noted that the Commission failed to award interest on non-disbursement of medical reimbursement from the date the employee made claim before the Employees Compensation Commissioner. It noted that the delay occurred from the side of the applicant in not filing the claim in 2011 and interest cannot be imposed upon the employer for default of employee.

Thus, the Court allowed the appeal in part and ordered for payment of interest on medical reimbursement at the rate of 12 per cent from the date of petition till realization.

Counsel for the appellant: Advocates Prabhu K.N. and Manumon A.

Counsel for the respondents: Advocate P.K. Manojkumar

Citation: 2023 LiveLaw (Ker) 586

Case title: Venugopalan v The Managing Partner

Case number: MFA (ECC) No. 72 of 2021

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