A married daughter is not a statutory dependant and cannot continue a pending compensation claim.

Late Padum Bahadur Soni was allegedly employed by M/s Suraj Pulses Industries.

On 26.04.2015, a factory boundary wall collapsed on him during the course of employment, causing injuries that resulted in his death the same day.

His widow, Suraji Bai Soni, instituted a claim under Section 22 of the Employees’ Compensation Act, 1923.

The employer denied the employment relationship.

During the pendency of the proceedings, Suraji Bai died on 10.05.2021, and her married daughter, Smt. Nanda Soni, was substituted as claimant by order dated 06.05.2022, despite the employer’s objection that she was not a statutory dependant.

The Commissioner awarded Rs. 6,12,360 with interest at 10% per annum from the date of the claim application.

The claimant appealed for enhancement, interest from the date of accident, and penalty, while the employer appealed against the award itself.

Whether compensation could legally be awarded in favour of the claimant, who was a married daughter and not a “dependant” of the deceased employee under Section 2(1)(d) of the Employees’ Compensation Act, 1923.

Whether the Commissioner was justified in awarding interest at 10% per annum from the date of the claim application, subject to a condition, instead of statutory interest at 12% per annum from the date of the accident.

Whether the Commissioner was justified in declining to impose a statutory penalty on the employer under Section 4A(3)(b) of the Act.

Section 2(1)(d) of the Employees’ Compensation Act, 1923 restricts entitlement to compensation to specified “dependants,” including a widow, minor son, unmarried daughter, widowed mother, and certain other relatives satisfying the statutory conditions; an ordinary married daughter is not included.

Under Section 4A(3)(a), where compensation is not paid within one month from the date it falls due, interest at 12% per annum, or a higher notified rate within the statutory limit, is payable.

Section 4A(3)(b) permits a penalty of up to 50% where the delay is unjustified, subject to an opportunity to show cause.

In Amarsai Amar Singh Netam v. M/s N.C. Nehar, 2011 SCC OnLine Chh 183, the Chhattisgarh High Court held that the right to claim compensation is personal to a statutory dependant and does not survive in favour of a non-dependant legal heir while the claim remains pending; however, a legal heir may succeed to an award already passed because the awarded amount forms part of the deceased claimant’s estate.

Relying on Shobha v. The Chairman, Vitthal Rao Shinde, Civil Appeal No. 1860 of 2022, and Ajay Kumar Das v. Divisional Manager, 2022 SCC OnLine SC 93, the Court held that compensation falls due from the date of the accident/death and statutory interest runs from that date, not from the date of adjudication.

The Court found that Nanda Soni was undisputedly a married daughter and did not fall within any applicable category of “dependant” under Section 2(1)(d), particularly because there was no case or evidence that she was a minor married daughter or a widowed minor daughter covered by the statutory provision.

Her substitution after the death of her mother could not create a substantive right to compensation.

Since Suraji Bai died before any award was passed, the cause of action remained a pending statutory claim and had not merged into a decree or become part of her estate.

Accordingly, the principle in Amarsai Amar Singh Netam applied, and the order permitting substitution and the subsequent award in favour of Nanda Soni were held legally unsustainable.

Although the Commissioner’s award of interest at 10% from the date of the application was contrary to Section 4A(3)(a), the Court declined to grant enhanced interest because the claimant herself was not legally entitled to maintain the compensation claim.

The questions concerning interest and penalty therefore became academic.

MAC No. 1494 of 2022, filed by the employer, was allowed, and the Commissioner’s judgment and award dated 13.09.2022 were quashed and set aside.

MAC No. 1311 of 2022, filed by Nanda Soni for enhancement of compensation and interest, was dismissed.

Any compensation amount and accrued interest deposited before the Commissioner was directed to be returned to the employer after due verification.

No order as to costs was made.