Report No. 62
3.52. Section 4A-Compensation to be paid promptly.-
It is one of the chief principles of the Act that compensation as provided in the Act shall be paid as soon as it falls due. Theoretically, compensation falls due as soon as liability is incurred under section 3(1); but acceptance of the liability or quantification of the liability may sometimes take time. To provide for such a situation, the Act has a provision requiring the employer, where he does not accept the liability to the extent claimed, to make a provisional payment based on the extent of liability which he accepts. This is the gist of sub-sections (1) and (2) of section 4A.
If the employer is in default in paying the compensation due under the Act for one month from the date of it fell due, the Commissioner may, under sub-section (3) of section 4A, direct that in addition to the amount of the arrears, simple interest at the rate of 6 per cent. per annum on the amount due "together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding 50 per cent. of such amount", shall be recovered from the employer by way of penalty.
3.53. Paucity of case-law and improvements needed in drafting.-
This section (section 4A) was inserted in 1959. No reported cases on this section have come to our notice. But sub-section (3)1 of the section appears to be capable of improvement in some respects. As it is also possible that some of the expressions used in sub-section (3) might create controversies, drafting changes are also desirable.
1. Para. 3.52, supra.