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Code on Social Security, 2020 · 7

Section 77: Compensation to be paid when due and damages for default

Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026

Section 77 — Governs compensation to be paid when due and damages for default and the rights, duties, powers or procedure expressly stated in this section. Key operative text: (1) Compensation under section 76 shall be paid as soon as it falls due.

Full official textSource checked: 20 August 20261 direct Central Rule link(s)

Current-law status

The Code was commenced in stages: section 142 had earlier commencement, S.O. 5319(E) brought the specified provisions into force from 21 November 2025, and later commencement instruments must be read with the current India Code footnotes for the remaining clauses.

Primary sources

Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗

Finin2min analysis — what the section actually does

Operative clauses

(1) Compensation under section 76 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the competent authority or made to the employee, as the case may be, without prejudice to the right of the employee to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Chapter within one month from the date it fell due, the competent authority shall,— (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate as may be prescribed by the Central Government, on the amount due; and (b) if in his opinion, there is no justification for the delay, direct that…
Provided that an order for the payment of damages shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should not be passed.
(4) The interest and the damages payable under sub-section (3) shall be paid to the employee or his dependant, as the case may be.

Provisos, explanations & qualifications

Provided that an order for the payment of damages shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should not be passed.

Thresholds and timelines in the text

(3) Where any employer is in default in paying the compensation due under this Chapter within one month from the date it fell due, the competent authority shall,— (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate as may be prescribed by the Central Government, on the amount due; and (b) if in his…

Actors expressly appearing in the text

Employer, Employee / worker, Central Government, Authority / officer

Full statutory text — Section 77

Official English text transcribed from the current India Code consolidation; page headers/line breaks are normalised for web reading. The Gazette/India Code PDF remains authoritative for typography, amendment footnotes and schedules.

77. Compensation to be paid when due and damages for default.—(1) Compensation under
section 76 shall be paid as soon as it falls due.
    (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he
shall be bound to make provisional payment based on the extent of liability which he accepts, and, such
payment shall be deposited with the competent authority or made to the employee, as the case may be,
without prejudice to the right of the employee to make any further claim.
   (3) Where any employer is in default in paying the compensation due under this Chapter within one
month from the date it fell due, the competent authority shall,—
        (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate
    as may be prescribed by the Central Government, on the amount due; and
         (b) if in his opinion, there is no justification for the delay, direct that the employer shall, in addition
    to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent. of such
    amount of arrears by way of damages:
        Provided that an order for the payment of damages shall not be passed under clause (b) without
    giving a reasonable opportunity to the employer to show cause as to why it should not be passed.
   (4) The interest and the damages payable under sub-section (3) shall be paid to the employee or his
dependant, as the case may be.

How to apply this provision

Primary statutory test — (1) Compensation under section 76 shall be paid as soon as it falls due.
Additional operative limb — (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the competent authority or made to the employee, as the case may be, without prejudice to the right of the employee to make any further claim.
Qualification / exception to test — Provided that an order for the payment of damages shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should not be passed.
Numerical or timing control — (3) Where any employer is in default in paying the compensation due under this Chapter within one month from the date it fell due, the competent authority shall,— (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate as may be prescribed by the Central Government, on the amount due; and (b) if in his…
Central Rule mapping — 57. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
Evidence file — retain facts and records proving the role/status of: Employer, Employee / worker, Central Government, Authority / officer.

Why this is section-specific: the operative-clause, exception, threshold and cross-reference panels above are extracted from Section 77 itself rather than a generic “trigger/control/evidence” template.

Rules, forms and cross-references

Direct 2026 Central Rule mapping

Rule 57

Forms mapped

No prescribed form is directly mapped in the current concordance.

Other sections cited in this text

Section 76

Related Labour Hub resources

EPFO Schemes ESIC Gratuity hub

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

For a worker/member seeking a benefit connected with compensation to be paid when due and damages for default, the file should show coverage, service/contribution facts, the rule/scheme and prescribed form, and the calculation/payment. One statutory point to test is: “(3) Where any employer is in default in paying the compensation due under this Chapter within one month from the date it fell due, the competent authority shall,— (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate as may be pre” Also test the express qualification/proviso before concluding the result. Read the mapped Central Rule(s) 57.

Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.

Q&A — Section 77

What does Section 77 of the Social Security Code cover?

What is the main legal requirement or power in Section 77?

The first operative clause identified from the official text is: “(1) Compensation under section 76 shall be paid as soon as it falls due.” Read it with the remaining subsections and any proviso below.

Does Section 77 contain a proviso or explanation?

Yes. A qualification extracted from the official text is: “Provided that an order for the payment of damages shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should not be passed.”

What time limit, percentage or amount appears in Section 77?

The provision contains this numerical/time expression: “(3) Where any employer is in default in paying the compensation due under this Chapter within one month from the date it fell due, the competent authority shall,— (a) direct that the employer shall, in addition to the amount of the arrears, pay interest at such rate as may be prescribed by the Central Government, on the amount due; and (b) if in his…” Apply it only in the clause and context in which it appears.

Which 2026 Central Rules are linked to Section 77?

The current concordance maps Section 77 to Central Rule(s) 57.

Is Section 77 currently operative?

Source & verification trail

Act: Code on Social Security, 2020 — official India Code PDF ↗

Central Rules: Social Security (Central) Rules, 2026 — G.S.R. 344(E), 8 May 2026 ↗

Official library: Ministry of Labour & Employment — Labour Codes ↗

Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.

Reliance note: This page is an educational legal-reference layer. Verify the current official text, the applicable Central/State rules, notifications, schemes and judicial decisions before acting on a live matter.