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Allahabad High Court · body

2013 DIGILAW 870 (ALL)

BHURI DEVI v. STATE OF U. P.

2013-03-18

TARUN AGARWALA

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Tarun Agarwala, J. Heard Sri Arun Kumar Singh-I, the learned counsel for the petitioner and Sri Jagdev Singh, the learned counsel for the employer. No one appears for the Insurance Company. The deceased Jai Prakash was a driver of the respondent No.3 and, in the course of his employment, met with a road accident and died on the spot on 22.1.2007. The heirs, namely, the petitioners, filed a claim application under the provisions of the Workman's Compensation Act. 1923. An exparte award dated 15.12.2007 was passed awarding compensation along with interest and penalty. Pursuant to the said award, the Insurance Company deposited the principal amount on 3.1.2008, but, did not deposit the interest or the penalty. On 15.5.2008 the employer filed an application for the recall of the exparte award. After due consideration and after hearing all the parties concerned, the Commissioner Workmen Compensation allowed the application and recalled the exparte award. Subsequently, the employer moved an application praying that he is willing to pay the amount awarded by the Commissioner towards compensation provided the penalty and interest was waived. This application was opposed by the petitioners. The Commissioner, after considering the matter, allowed the application and waived the interest and penalty. The petitioner, being aggrieved, has filed the present writ petition. The learned counsel for the petitioner contended that where compensation becomes due and payable, it is mandatory upon the Commissioner to award interest and penalty and no discretion is given to the Commissioner to waive such interest or penalty. On the other hand, the learned counsel for the employer submitted that sufficient help was granted by the employer to the members of the deceased, in the form that, he took the family members of the deceased on the spot where the accident had occurred and got the post-mortem done and, in that way, granted relief and help to the members of the deceased employee. The learned counsel consequently submitted that in the light of the help extended by the employer, there was no default in payment of the compensation, which was due under the Act, and consequently interest and penalty could not be awarded. The learned counsel submitted that the Commissioner Workmen Compensation had rightly allowed his application and waived the interest and penalty. Section 4-A( 3) of the Workmen Compensation Act is relevant for considering as to whether interest and penalty is payable or not. The learned counsel submitted that the Commissioner Workmen Compensation had rightly allowed his application and waived the interest and penalty. Section 4-A( 3) of the Workmen Compensation Act is relevant for considering as to whether interest and penalty is payable or not. For facility, the relevant provisions is extracted hereunder: "4-A. Compensation to be paid, when due and penalty for default. - ( 1) ....... ( 2) ....... ( 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. In Oriental Insurance Co. Ltd. vs. Siby George and others, 2012 AIR SC 4384, the aforesaid provision was analysed and the Supreme Court held as under: " It is, thus, to be seen that sub-section ( 3) of section 4-A is in two parts, separately dealing with interest and penalty in clauses ( a) and ( b) respectively. Clause ( a) makes the levy of interest, with no option, in case of default in payment of compensation, without going into the question regarding the reasons for the default. Clause ( b) provides for imposition of penalty in case, in the opinion of the Commissioner, there was no justification for the delay. Before imposing penalty, however, the Commissioner is required to give the employer a reasonable opportunity to show cause. Clause ( b) provides for imposition of penalty in case, in the opinion of the Commissioner, there was no justification for the delay. Before imposing penalty, however, the Commissioner is required to give the employer a reasonable opportunity to show cause. On a plain reading of the provisions of sub-section ( 3) it becomes clear that payment of interest is a consequence of default in payment without going into the reasons for the delay and it is only in case where the delay is without justification, the employer might also be held liable to penalty after giving him a show cause. Therefore, a finding to the effect that the delay in payment of the amount due was unjustified is required to be recorded only in case of imposition of penalty and no such finding is required in case of interest which is to be levied on default per se." A perusal of the aforesaid indicates that the compensation becomes payable within one month from the date it falls due and that interest also becomes payable from that date. In Pratap Narain Singh Deo vs. Sri Nivas Sabata and another, AIR 1976 SC 222 , the Supreme Court while considering Sections 3 and 4-A of the Act, held as under: "Section 3 of the Act deals with the employer's liability for compensation. Sub-section ( 1) of that section provides that the employer shall be liable to pay compensation if "personal injury is caused to a workman by accident arising out of and in the course of his employment." It was not the case of the employer that the right to compensation was taken away under sub-section ( 5) of section 3 because of the institution of a suit in a civil court for damages, in respect of the injury, against the employer or any other person. The employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is therefore futile to contend that the compensation did not fall due with after the Commissioner's order dated May 6, 1969 under section 19. It is therefore futile to contend that the compensation did not fall due with after the Commissioner's order dated May 6, 1969 under section 19. What the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of a agreement, be settled by the Commissioner. There is therefore nothing to justify the argument that the employer's liability to pay compensation under section 3, in respect of the injury, was suspended until after the settlement contemplated by section 19. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is no justification for the argument to the contrary. It was the duty of the appellant, under section 4A( 1) of the Act, to pay the compensation at the rate provided by section 4 as soon as the personal injury was caused to the respondent. He failed to do so. What is worse, he did not even make a provisional payment under sub-section ( 2) of section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence. Then there is the further fact that he paid no heed to the respondent's personal approach for obtaining the compensation. It will be recalled that the respondent was driven to the necessity of making and application to the Commissioner for settling the claim, and even there the appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the respondent to file a memorandum of agreement setting the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner. In these facts and circumstances, we have no doubt that the Commissioner was fully justified in making an order for the payment of interest and the penalty." The Supreme Court held, that the employer becomes liable to pay compensation as soon as personal injury is caused to the workman arising out in the course of his employment and that it was the duty of the appellant to pay compensation at the rate provided by Section 4 of the Act which he failed to do so. In Oriental Insurance Company Ltd. vs. Smt. Manju and others, 2013( 2)ADJ 644( DB), a Division Bench of this Court after considering the aforesaid decisions held, that interest also becomes payable from the date when the statutory compensation becomes payable, i.e., after 30 days from the date of accident. In the light of the aforesaid, the Court finds that the employer has accepted his liability for payment of compensation, but, did not pay the compensation to the heirs of the deceased immediately. Providing any other kind of help does not mitigate the compensation payable under the Act. The Commissioner Workmen Compensation could not waive this payment of interest as it was not in his discretion to do so. Payment of interest under Section 4-A( 3) is a mandatory provision. The Supreme Court in Siby George ( supra) has held that "Clause ( a) of Section 4-A( 3) makes the levy of interest with no option", meaning thereby that it is mandatory to levy interest. In the light of the aforesaid, the Court is of the opinion that the Commissioner, Workmen Compensation committed an error in waiving levy of interest on compensation that was awarded. In so far as payment of penalty is concerned, the Court finds that the authority has been given a discretion to impose penalty or not in a given circumstance. The Court finds that there was no unreasonable delay. The compensation was deposited by the Insurance Company immediately within one month from the date of the award. The employer has also stated that he helped the members of the family to the best of his ability and that he had become an aged man and had become unwell and that his business income had also suffered. These are sufficient and valid reasons in the given circumstances to exempt levy of penalty. The employer has also stated that he helped the members of the family to the best of his ability and that he had become an aged man and had become unwell and that his business income had also suffered. These are sufficient and valid reasons in the given circumstances to exempt levy of penalty. The Court is of the opinion, that the order of the Commissioner waiving the penalty does not require any interference. In the light of the aforesaid, the impugned order of the Commissioner Workman Compensation, in so far as it waives imposition of penalty, cannot be sustained and therefore to that extent the order of the Commissioner is quashed. The writ petition is partly allowed. The employer shall pay interest to the petitioners, on the compensation awarded, to be calculated @ 12% p.a., after one month from the date of the accident till the date it was actually paid by the Insurance Company. The said amount shall be paid within 8 weeks from today. In the event the vehicle was insured, it would be open to the employer to file an appropriate application or suit for recovery of this money from the Insurance Company.