The Supreme Court has fastened the liability to pay a penalty on an employer for a delay in depositing the compensation amount under the Employees' Compensation Act, 1923, saying the law is a "social welfare statute" for redressing employees' grievances.
A Bench of Justices Aravind Kumar and P.B. Varale said in a catena of judgments, the apex court has stressed the "liberal and purposive interpretation" of the Act in favour of the employees being a social-welfare legislation.
The Bench delivered its verdict on an appeal filed by an insurance firm, challenging a May 2025 order of the Delhi High Court.
The High Court had fastened the liability of paying the penalty imposed under section 4A(3)(b) of the Act on the insurance firm.
"The perusal of the statement of objects of the said legislation makes it crystal clear that the said legislation is a social welfare statute brought in by Parliament to redress the grievances of the employees in case of accidents that may occur in or during the course of employment by payment of adequate compensation expeditiously...," the top court said in its February 23 verdict.
