JUDGMENT This first appeal from order under Section 30 of the Workmen’s Compensation Act has been filed by the appellant/employer – Sri Pradeep Joshi against the order dated 20.12.2002 passed by Workmen Compensation Commissioner, Haldwani, District Nainital in Suit No. 65 of 2001, Smt. Murti Devi Vs. Sri Pradeep Joshi & another. 2. Brief facts of the case are that the opposite party No. 2 – Smt. Murti Devi filed a suit for compensation against the employer/appellant on the ground that the deceased was the driver of Truck No. UTU 9812, owned by appellant- Sri Pradeep Joshi and during discharge of his duty on 2.5.1992 he met with an accident, due to which he succumbed to injuries on 4.5.1992. At the time of death, the deceased was 45 years of age and was earning an amount of Rs. 2,000/- per month. The claimant has thus claimed for a compensation of Rs. 5,00,000/- along with interest @ 18% per annum. 3. The appellant/defendant no. 1 – Sri Pradeep Joshi (owner of the vehicle) filed his written statement denying the pleadings of the claimant. He also admitted the fact of death of deceased – Narendra Kumar Gupta during employment and the salary of the deceased as Rs. 1800/- per month. But he alleged that on the date of alleged accident the vehicle in question was insured with New India Assurance Company to liable to pay compensation to the claimant. 4. The New India Assurance Company has also filed its written statement denying all the allegations given in the petition. It has also been alleged by Insurance Company that claimant is not entitled to get any compensation from the Insurance Company, but it has not been disputed that the vehicle was not insured. 5. The Workmen Compensation Commissioner after having perused the entire material on record and hearing the parties directed the appellant-Sri Pradeep Joshi to pay a sum of Rs. 65,228/- as compensation – and interest of Rs. 41,093/- @ 6% in addition to this, the Workmen Compensation Commissioner also imposed penalty upon the appellant to the tune of Rs. 32,614/-, the 50% of the compensation amount of Rs. 65,228/- and he was directed to pay the amount of penalty within a period of one month from the date of judgment, failing which recovery proceedings shall be initiated against him. 6. 32,614/-, the 50% of the compensation amount of Rs. 65,228/- and he was directed to pay the amount of penalty within a period of one month from the date of judgment, failing which recovery proceedings shall be initiated against him. 6. Feeling aggrieved by the aforesaid order, the appellant preferred the appeal challenging the order to the extent of imposing the penalty upon the appellant to the tune of Rs. 32,614/-. 7. Heard Sri Sandeep Kothari, holding brief of Sri Rajendra Kotiyal, learned counsel for the appellant, Sri Anil Joshi, learned counsel for respondent no. 8 and perused the record. 8. Learned counsel for the petitioner has submitted that the Workmen Compensation Commissioner has not afforded opportunity of being heard to the appellant/employer while imposing the penalty, which is against the provisions of proviso inserted to sub-section (3) of Section 4A of Workmen Compensation Act. 9. In order to decide the controversy involves in the matter, it would be relevant to peruse the provision of Section 4A of the Workmen’s Compensation Act, 1923 (hereinafter referred as ‘Act’) which reads as follows :- “4A. Compensation to be paid when due and penalty for default : 1. Compensation under Section 4 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 Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim. 3. 3. Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall – a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, 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 by way of penalty; Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. Explanation — For the purposes of this sub-section, “scheduled bank” means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934). (3-A) The interest payable under sub-section (3) shall be paid to the workman or his dependant, as the case may be, and the penalty shall be credited to the State Government.” 10. From perusal of proviso inserted to sub-section (3) of Section 4A of the aforesaid Act, it is clear that the order of payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should no be passed. 11. The impugned order passed by the Workmen Compensation Commissioner nowhere indicates that the employer was provided any opportunity to show cause as to why the order for the payment of penalty should not be passed. 12. The proviso of Sub Section 3 of Section 4A of the Act itself indicates that the same is mandatory in nature. The Workmen Compensation Commissioner should have issued a show cause notice and decide the matter after hearing the employer and after considering the show cause. 12. The proviso of Sub Section 3 of Section 4A of the Act itself indicates that the same is mandatory in nature. The Workmen Compensation Commissioner should have issued a show cause notice and decide the matter after hearing the employer and after considering the show cause. It is necessary that the employer is enabled to know the case he has to meet and should have the right to present his case therefore, it is also necessary to afford a reasonable opportunity to the employer in order to present his case and be heard. 13. The Workmen Compensation Commissioner in the impugned order has not followed the provision order has not followed the provision of Section 4A Sub Section 3 proviso and has passed the order for payment of penalty without affording a reasonable opportunity to the employer. 14. For the reasons stated above, I come to the conclusion that the impugned order dated 20.12.2002 passed by Workmen Compensation Commissioner and Assistant Labour Commissioner, Haldwani, District Nainital, in Suit No. 65 of 2001, Smt. Murti Devi Vs. Sri Pradeep Joshi & another, to the extent imposing the penalty upon the employer/appellant to the tune to Rs. 32,614/- is liable to be set aside. 15. Accordingly, the appeal is allowed. The impugned order to the extent imposing penalty upon the appellant is hereby set aside. No order as to costs.