Upper Doab Sugar Mills v. Asstt Labour Commissioner Muzaffarnagar
2019-05-15
J.J.MUNIR
body2019
DigiLaw.ai
JUDGMENT : J.J. Munir, J. This petition has been filed challenging an order dated 6.2.1998, passed by the Workman's Compensation Commissioner in WCA Case No.11 of 1997 Rajveer Singh Vs. Upper Doab Sugar Mills, whereby the Workman's Compensation Commissioner has awarded a sum of Rs.59,864/- along with 12% simple interest from the date of accident till realization, besides 50% penalty in exercise of powers under Section 4A of the Employees Compensation Act, 1923 (for short the 'Act'). 2. Heard Sri Diptiman Singh, learned counsel for the petitioner and Ms. Saima Saher, learned counsel appearing on behalf of respondent No.2, the workman and Sri Ramesh Kumar learned Standing Counsel appearing on behalf of respondent Nos.1, 3 and 4. 3. At the outset Ms. Saima Saher, learned counsel appearing on behalf of respondent no. 2 raised a preliminary objection to the effect that impugned order passed by the Workman's Compensation Commissioner is appealable under Section 30 (1) of the Act to this Court, and therefore, this petition is clearly barred in view of an equally efficacious alternative remedy being available. 4. A perusal of the records of this case shows that this petition was entertained by a detailed order dated 05.10.1998. It appears that the plea of alternative remedy under Section 30 of the Act was over ruled and notice was issued by means of the said order that reads thus: "Heard learned counsel for the petitioner and learned Standing Counsel for the respondent no. 1. I have also perused the provisions contained in Section 4-A and Section 30 of the Workmen Compensation Act as well as the case law reported in Baru Ram v. Labour Officer, Sonipat,1984 LIC 80 and C. Rajan vs. P.M. Subramoniam,1993 66 FLR 257. The question raised at the Bar regarding the scope and ambit of the proviso to Section 4-A is substantial question of law and needs to be settled by this Court. Standing counsel prays for and is granted four weeks' time to file counter affidavit. Pending admission issue notice to second respondent returnable at an early date. Steps for the service of the 2nd respondent may be taken within a week. In the meantime, it is provided, as an interim measure, that recovery of penalty imposed by order dated 06.02.1998 shall remain stayed." 5. In course of time, parties have exchanged affidavits.
Pending admission issue notice to second respondent returnable at an early date. Steps for the service of the 2nd respondent may be taken within a week. In the meantime, it is provided, as an interim measure, that recovery of penalty imposed by order dated 06.02.1998 shall remain stayed." 5. In course of time, parties have exchanged affidavits. A counter affidavit in this case was filed on 24.11.1998 on behalf of respondent no. 2, the respondent-workman, now represented by his heirs and a rejoinder was filed on 11.12.1998. 6. This petition has remained pending before this Court for a period of two decades and more. It is ready for hearing on merits. It is a well settled proposition of law that where a writ petition is entertained in the face of an alternative remedy, more particularly, after the plea is raised and over ruled, the said plea cannot be a ground to dismiss the writ petition at the stage of final hearing. This rule of exception operates with more vigour in cases where a writ petition has remained pending for a long period of time, as in this case, for a period of the upwards of two decades. After all, the rule of alternative remedy is no rule of ouster of this Court's jurisdiction under Article 226 of the Constitution. In the context of a plea of alternative remedy accepted by the High Court in relation to a writ petition that had been pending for thirteen years, their Lordships of the Hon'ble Supreme Court disapproved the acceptance of this plea in Durga Enterprises (P) Ltd. and another vs. Principal Secretary, Govt. of U.P. and others, (2004) 13 SCC 665 In paragraph nos. 2 and 3 of the report in Durga Enterprises (P) Ltd. (supra), it has been held thus: 2. By the impugned order the writ petition, which was pending for a long period of thirteen years, has been summarily dismissed on the ground that there is remedy of civil suit. The dispute between the parties was concerning exercise of the respondents' alleged right of re-entry on the disputed property in accordance with sub-rules (2) and (3) of Rule 5 of the Land Acquisition (Companies) Rules, 1963. The aforesaid Rules contain a mechanism for adjudication of a dispute relating to the alleged breach of terms of the agreement and the manner in which it is to be resolved.
The aforesaid Rules contain a mechanism for adjudication of a dispute relating to the alleged breach of terms of the agreement and the manner in which it is to be resolved. 3.The High Court, having entertained the writ petition, in which pleadings were also complete, ought to have decided the case on merits instead of relegating the parties to a civil suit. 7. Thus, the plea raised on behalf of respondent nos. 2/1 to 2/5 is, therefore, rejected. 8. The respondent-workman was admittedly employed with the petitioner as a Blacksmith. He suffered an accident, while on duty on 18.04.1996 that led to a partial loss of vision. He filed a claim under the Act, which came up before the Workman's Compensation Commissioner/Assistant Labour Commissioner, Muzaffar Nagar on 6.4.1998. The claim was duly contested by the petitioner-employer on the merits of it but the Workman's Compensation Commissioner found the factum of accident established, while the workman was on duty. He also found that the workman had sustained partial loss of vision leading to a 30% loss of his working capability, and on that basis, he worked out the compensation by multiplying the monthly wages with a factor of 166.29 that was admissible, going by his age that was held to be 46 years in accordance with Schedule-IV to the Act, framed under Section 4. The figure arrived at was further multiplied by a multiplier of 30 relying upon the loss of working capability. The product was divided by 100 in order to work out a percentage of it to arrive at the compensation figure of Rs.59,864/- as the substantive compensation payable to the petitioner, under-section 4 of the Act. In addition, 12% interest was awarded on the aforesaid substantive compensation, as indicated hereinabove. Penalty in the sum of 50% was also awarded under Section 4A of the Act. About this penalty, Sri Diptiman Singh submits that the award is manifestly illegal, inasmuch as the proviso to Section 4-A(3)(b), stipulates that before an order for payment of penalty can be made under Section 4-A(3)(b), reasonable opportunity to the employer to show-cause has to be afforded by the Workman's Compensation Commissioner. Sri Diptiman Singh, submits that no such opportunity was afforded to the petitioner before passing the order levying 50% by way of penalty, on the substantive compensation determined. 9.
Sri Diptiman Singh, submits that no such opportunity was afforded to the petitioner before passing the order levying 50% by way of penalty, on the substantive compensation determined. 9. Section 4-A of the Act is quoted for ready reference:- "Section 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 4[employee], as the case may be, without prejudice to the right of the 4[employee] to make any further claim. (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). (3A) The interest and the penalty payable under sub-section (3) shall be paid to the 4[employee] or his dependant, as the case may be." 10.
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). (3A) The interest and the penalty payable under sub-section (3) shall be paid to the 4[employee] or his dependant, as the case may be." 10. A reading of the aforesaid provision, with reference to the proviso appended to sub Section (3) of Section 4A, clearly indicates that the employer has to be afforded a reasonable opportunity to show-cause, specifically in relation to the penalty proposed to be imposed, before that order can be made. A perusal of the impugned order shows that penalty has been imposed in this case, mechanically and as a matter of routine on the substantive compensation, without specifically putting the employer to notice on the question of penalty. 11. The issue whether penalty under Section 4-A(3)(b) of the Act can be imposed without opportunity of hearing fell for consideration of the Supreme Court in The Oriental Insurance Company Ltd. vs. Siby George and others, (2012) 12 SCC 540 where in paragraph no. 8 of the report, it has been held thus: 8. 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. 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.
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. (Emphasis by Court) 12. It would be thus evident that imposition of penalty is not a matter of course under clause (b) of sub-Section (3) of Section 4-A, unlike interest which follows as a matter of course on the basis of a claim to compensation arising from an accident. 13. Learned counsel for the respondents, though disputes the aforesaid position, but from a reading of the provision, no other conclusion is possible. As such, the order imposing penalty on the substantive compensation awarded is clearly flawed and liable to be quashed. As regards the substantive compensation awarded, Sri Diptiman Singh, submits that the wages on which the compensation has been worked out is not in dispute. He particularly does not dispute the factum of accident and he also does not dispute the factor of 166.29 applied. But, the submission of Sri Singh is to the effect that the multiplier of 30 applied to the product of the salary is manifestly illegal, inasmuch as for a fact the employee, even after accident was never employed on reduced wages but continued to be paid the same wages that he was being paid before he suffered the accident. He submits that so far as the law in regard to application of the appropriate multiplier is concerned, Part II of Schedule 1 appended to the Act framed under Sections 2(1)and 4 of the Act clearly provides in this behalf. 14. A perusal of the said Schedule shows that Serial No.26-A, which was inserted by Act No.30 of 1995 w.e.f. 15.9.1995, loss of partial vision in one eye, has a prescribed percentage of loss of earning capacity, stipulated at a figure of 10.
14. A perusal of the said Schedule shows that Serial No.26-A, which was inserted by Act No.30 of 1995 w.e.f. 15.9.1995, loss of partial vision in one eye, has a prescribed percentage of loss of earning capacity, stipulated at a figure of 10. According to him, therefore, the respondent-workman's case being one of loss of partial vision in one eye, the percentage of loss of working capacity would be 10. Therefore, the Workman's Compensation Commissioner was in error while pegging it at a figure of 30. This Court finds that the accident in question took place on 18.04.1996, and it is decidedly after enforcement of Act No.30 of 1995, w.e.f. 15.9.1995. The result is that the amended Schedule-I to the Act would apply, where Item No.26-A would be attracted to the facts of this case, it being a case of loss of partial vision. The percentage loss of earning capacity would be 10 and not 30. As such, in working out the substantive compensation determined, the Workman's Compensation Commissioner in the clear opinion of this Court, has manifestly erred in applying by way of loss of earning capacity a multiplier of 30 instead of 10. The substantive compensation is, therefore, liable to be reduced by substituting the multiplier of 30, on account of loss of earning capacity, by a multiplier of 10, as prescribed by Schedule-I to the Act. Applying the aforesaid multiplier of 10 regarding loss of earning capacity, for the substantive compensation of Rs. 59,864/- determined, the substantive compensation would be one third of that amount, and would work out to a figure of 19,955/-. Reckoning interest at the rate of 12% for the period from the date of accident that is 18.04.1996 till date, the amount of interest would work out to a figure of Rs.55,565/-. Adding the aforesaid interest to the substantive compensation of Rs.19,995/-, the total compensation payable would be a sum of Rs.75,520/-. 15. Learned counsel appearing for the respondent, apart from reserving her other pleas, does not dispute that interest may be awarded till date of this order (as against reckoning till actual payment) and, accordingly, it is held that the petitioner is entitled to a total compensation of Rs.75,520/-. 16. In the result, this writ petition succeeds and is allowed in part.
Learned counsel appearing for the respondent, apart from reserving her other pleas, does not dispute that interest may be awarded till date of this order (as against reckoning till actual payment) and, accordingly, it is held that the petitioner is entitled to a total compensation of Rs.75,520/-. 16. In the result, this writ petition succeeds and is allowed in part. The impugned order dated 6.2.1998 is quashed to the extent that it awards penalty under Section 4-A of the Act, and further to the extent that it applies a multiplier of 30 for the loss of working capacity. It is modified in the terms indicated above, and, it is ordered that the petitioner is liable to pay a sum of Rs.75,520/-, including interest to the respondent-workman, which the petitioner shall deposit with the Workman's Compensation Commissioner within a period of four weeks, who will disburse it to the heirs of the respondent-workman, within one week thereafter by remitting it in their bank account. In case of default, the same shall be recovered in accordance with law. Costs easy.