FAO-749-2001 --1-- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-749-2001 (O&M) Date of Decision: 22.07.2026 UNITED INDIA INSURANCE CO. LTD. …Appellant Vs. YUNIS MASIH AND ANOTHER …Respondents CORAM: HON’BLE MR. JUSTICE HARKESH MANUJA Present: Mr. Sanjiv Pabbi, Advocate for the appellant. Ms. Ekakshara Mahajan, Advocate for respondent No.2. ***** HARKESH MANUJA, J. (ORAL) 1. By way of the present appeal, challenge has been laid to the order dated 24.01.2001 passed by the learned Commissioner under the Workmen's Compensation Act, Gurdaspur, whereby compensation amounting to Rs.2,87,781/-, along with conditional interest @ 12% per annum in the event of default in payment, payable from the date of the order till realization, was awarded in favour of the respondents-claimants. SONIKA 2026.07.28 17:00 I attest to the accuracy and authenticity of this document FAO-749-2001 --2-- 2. Briefly stating, the case of the claimants was that the deceased was employed as a workman on Truck No. PB-02K-9595 and, on 24.12.1998, while the said vehicle was returning from Kangra (Himachal Pradesh), it met with an accident within the jurisdiction of Police Station Shahpur, District Kangra, resulting in fatal injuries to the deceased. On the basis of the pleadings and evidence led by the parties, the learned Commissioner accepted the claim petition and assessed the monthly wages of the deceased at Rs.2,700/-, comprising salary of Rs.1,500/- and daily allowance of Rs.1,200/-, and awarded compensation of Rs.2,87,781/-. Aggrieved against the aforesaid award, the appellant-Insurance Company has preferred the present appeal. 3. Learned counsel for the appellant submits that the learned Commissioner committed a patent error while computing compensation by taking the monthly wages of the deceased at Rs.2,700/-, ignoring the statutory ceiling prescribed under Explanation II to Section 4 of the Act. It is contended that, on the date of the accident, where the monthly wages exceeded Rs.2,000/-, the wages for the purpose of computation were statutorily deemed to be Rs.2,000/- only. Consequently, compensation ought to have been calculated by taking 50% of Rs.2,000/-, i.e. Rs.1,000/-, multiplied by the relevant factor of 221.37, which works out to Rs.2,21,370/. Therefore, the impugned award deserves to be modified. 4. I have heard learned counsel for the appellant and perused the paper-book. 5. The only question that arises for consideration in the present appeal is whether the learned Commissioner was justified in computing SONIKA 2026.07.28 17:00 I attest to the accuracy and authenticity of this document FAO-749-2001 --3-- compensation on the basis of monthly wages of Rs.2,700/- despite the statutory wage ceiling contained in Explanation II to Section 4 of the Act. Section 4 of the Act, as applicable at the relevant time, specifically provided that where the monthly wages of a workman exceeded Rs.2,000/-, such wages, for the purpose of calculation of compensation, were required to be deemed as Rs.2,000/- only. The provision is mandatory in nature and leaves no discretion with the Commissioner to compute compensation on actual wages beyond the prescribed statutory limit. 6. A perusal of the impugned award reveals that although the learned Commissioner recorded the monthly earnings of the deceased as Rs.2,700/-, compensation was calculated on the said amount itself, which is contrary to the express mandate of Explanation II to Section 4 of the Act. Once the statutory ceiling was applicable, the monthly wages liable to be taken into consideration could not have exceeded Rs.2,000/-. 7. Accordingly, the compensation is liable to be recomputed by taking the deemed monthly wages of the deceased at Rs.2,000/-, as mandated under Explanation II to Section 4 of the Workmen's Compensation Act, 1923. Since the accident resulted in death, fifty per cent of the deemed monthly wages, i.e. Rs.1,000/-, is required to be multiplied by the relevant factor applicable to the age of the deceased i.e. 221.37. Consequently, the compensation payable to the respondents-claimants works out to Rs.2,21,370/- (Rs.1,000 × 221.37), instead of Rs.2,87,781/- as awarded by the learned Commissioner. The impugned award, therefore, deserves to be modified to the aforesaid extent. SONIKA 2026.07.28 17:00 I attest to the accuracy and authenticity of this document FAO-749-2001 --4-- 8. Before parting, it is considered necessary to deal with the issue of statutory interest and penalty. Though the respondents-claimants have neither preferred any appeal nor filed cross-objections seeking enhancement of the award, this Court cannot lose sight of the mandatory provisions contained in Section 4A of the Workmen's Compensation Act, 1923. The liability to pay interest and penalty under the said provision is statutory in nature and follows upon the employer's failure to deposit the compensation within the prescribed period. In National Insurance Co. Ltd. vs. Alavi , MACA No. 2322 of 2015 , the Kerala High Court, while invoking the plenary powers under Order XLI Rule 33 of the Code of Civil Procedure, held that the appellate Court is competent to grant just compensation as supported by evidence and established legal precedents, even in the absence of a cross-appeal or cross-objections by the claimants, so as to ensure complete justice and to give effect to the mandatory mandate of the statute. Accordingly, in exercise of the powers under Order XLI Rule 33 CPC, and having regard to the statutory scheme of Section 4A of the Act, the respondents-claimants shall also be entitled to interest at the rate of 12% per annum and penalty to the extent of 50% of the compensation amount, in accordance with law, notwithstanding the absence of any independent challenge by them to the impugned award. 9. Consequently, the present appeal is partly allowed. The impugned order dated 24.01.2001 passed by the learned Commissioner under the Workmen's Compensation Act, Gurdaspur, is modified to the extent that the compensation payable to the respondents-claimants shall stand reduced from Rs.2,87,781/- to Rs.2,21,370/-. However, in exercise of SONIKA 2026.07.28 17:00 I attest to the accuracy and authenticity of this document FAO-749-2001 --5-- the powers conferred under Order XLI Rule 33 of the Code of Civil Procedure and in view of the statutory mandate contained in Section 4A of the Workmen's Compensation Act, 1923, the respondents-claimants shall also be entitled to interest @ 12% per annum payable from the expiry of 30 days of the date of accident till the realization of compensation amount and penalty equivalent to 50% of the compensation amount, in accordance with law. The modified amount shall be released after deducting the amount of Rs.2,00,000/-, if already disbursed. 10 Pending application(s), if any, shall also stand disposed of. July 22, 2026 (HARKESH MANUJA) sonika JUDGE Whether speaking/reasoned: Yes Whether reportable: Yes SONIKA 2026.07.28 17:00 I attest to the accuracy and authenticity of this document