JUDGMENT : 1. In this appeal, filed under Section 30 of the Workmens’ Compensation Act, 1923 (hereinafter referred to as “the Act of 1923” for short), the appellant/original claimant has challenged the judgment and award dated 16.04.2010 passed by the learned Commissioner under the Workmens’ Compensation Act and Judge, 1st Labour Court, Nagpur, whereby the claim filed by the appellant-claimant under Section 10 of the Act of 1923 for grant of compensation was partly allowed. 2. BACKGROUND FACTS :- The appellant was working as a Cleaner in the Speed Form Department of respondent no.1-textile mill since 1985 on a salary of Rs.1,800/- per month. On 31.03.1995, while discharging his duties, the appellant met with an accident and suffered an injury to his backbone. He was initially treated by Dr. Potdar, who was the honorary Medical Officer of respondent no.1. The appellant was later on referred to Dr. Chandak, an Orthopaedic Surgeon for further examination and treatment. On his medical examination, Dr. Chandak found that the appellant suffered back compression fracture of L1 vertebral. The Doctor declared him unfit to perform his duty as a Cleaner in Speed Form Department of respondent no.1. According to the appellant, on account of back compression fracture of L1 vertebral, he has been incapacitated to work and thereby affected his 100% earning capacity. He, therefore, claimed a total compensation of Rs.2,07,511/-. Respondent no.1 granted him Rs.32,909/- only towards compensation. Before filing the claim, the appellant issued notice to respondent no.1 and demanded compensation. Respondent no.1 did not comply with the said notice. Therefore, the appellant filed claim under Section 10 of the Act of 1923. 3. The respondent no.1 filed written statement and opposed the claim. Respondent no.1 denied its liability to pay compensation. It was contended that the appellant was not its regular employee and therefore, he was not entitled to get compensation. According to respondent no.1, the appellant was engaged as a ‘badli’ (substitute) worker. Respondent no.1 admitted the accident, however, it was contended that proper medical treatment at the cost of respondent no.1 was provided to the appellant. On submitting the disability certificate, respondent no.1 paid Rs.32,909/- towards compensation to the appellant. It was deposited with the office of the Commissioner. The amount of Rs.32,909/-, according to respondent no.1, was proper and adequate compensation as per the provisions of the Act of 1923. The appellant accepted the amount without any protest. On submitting the disability certificate, respondent no.1 paid Rs.32,909/- towards compensation to the appellant. It was deposited with the office of the Commissioner. The amount of Rs.32,909/-, according to respondent no.1, was proper and adequate compensation as per the provisions of the Act of 1923. The appellant accepted the amount without any protest. It was contended that the employees of the respondent-textile mill were insured with the insurance company. 4. On the basis of the contentions raised in the written statement by respondent no.1, respondent no.2-Insurance Company was joined as party-respondent no.2. The Insurance Company contended that the employees of respondent no.1 were not insured with it. The policy was not issued by the company covering the risk of the employees of respondent no.1-textile mill. 5. The appellant examined himself. He also examined the Medical Officer Dr. Potdar as his witness. The respondents have not adduced oral evidence. Learned Commissioner, on appreciation of the evidence recorded a finding that the appellant, being a substitute (badli) worker in the textile mill of respondent no.1, was covered by clause (ii) of Schedule II of the Act of 1923 and as such, his claim was maintainable. Learned Commissioner recorded a finding that the appellant sustained injuries during the course of employment. The learned commissioner, on the basis of the percentage of disability mentioned in the certificate, awarded compensation to the extent of 40%. The appellant being aggrieved by this judgment and award, has come before this Court in appeal. 6. This appeal was admitted on following question of law : “Whether the Commissioner was justified in rejecting the claim for penalty and interest without giving any reasons for denying the same ? 7. I have heard Mr. S.A. Kalbande, learned Advocate for the appellant, Mr. R. B. Puranik, learned advocate for Respondent no.1 and Mrs. Anita Mategaonkar, learned advocate for respondent no.2. Perused the record and proceedings. 8. Mr. Kalbande, learned advocate for the appellant submitted that in the accident the appellant suffered back compression fracture of L1 vertebral. Learned advocate submitted that the appellant was disabled to do his normal work, which he was performing prior to the date of the accident. Learned advocate, in short, submitted that the appellant has sustained 100% functional disability. Learned advocate submitted that the learned Commissioner has not properly appreciated the evidence of the Doctor. Learned advocate submitted that the appellant was disabled to do his normal work, which he was performing prior to the date of the accident. Learned advocate, in short, submitted that the appellant has sustained 100% functional disability. Learned advocate submitted that the learned Commissioner has not properly appreciated the evidence of the Doctor. It is pointed out that the Doctor, has categorically stated that due to the injury, the appellant was not able to work as a Cleaner in Speed Form Department because of the permanent injury suffered by him. Learned advocate relying upon the decisions of the Hon’ble Apex Court in Arjun S/o Ramanna alias Ramu .v. IFFCO Tokio General Insurance Co. Ltd. and another, reported at (2022) 5 SCC 706 ; and Indra Bai .v. Oriental Insurance Co. Ltd. and another, reported at AIR 2023 SC 3478 , submitted that the percentage of disability mentioned has to be considered in juxtaposition with 100% functional disability to discharge his function as a Cleaner, which required lifting heavy machine tools, machine parts etc. and fixing the same, which required lifting, bending, forwarding etc. Learned advocate submitted that the Hon’ble Apex Court has held that if an employee loses his capacity to perform the work, which he was doing at the time of the incident or similar to the said work, on account of an accident, the Court has to consider the functional disability at 100%. 9. Learned advocate for respondent no.1 submitted that the disability certificate obtained by the appellant from the Authorized Board categorically states that the appellant suffered 40% partial disability. Learned advocate submitted that Dr. Potdar, who initially examined the appellant, was not an Orthopaedic Surgeon and therefore, the certificate issued by him cannot be made the basis to decide the claim of the appellant. Learned advocate submitted that therefore, the evidence of the Doctor and the certificate issued by him are required to be discarded. Learned advocate submitted that learned Commissioner has properly appreciated the evidence and on doing so has recorded a finding that the appellant has suffered 40% physical disability. Learned advocate submitted that, therefore, the finding recorded by learned Commissioner does not warrant interference. 10. Undisputedly, the appellant was working in Speed Form Department of respondent no.1 – textile mill, as a Cleaner. He was assisting a Mechanical Engineer for over oiling and maintaining machine parts, which required bending, forwarding and lifting etc. Learned advocate submitted that, therefore, the finding recorded by learned Commissioner does not warrant interference. 10. Undisputedly, the appellant was working in Speed Form Department of respondent no.1 – textile mill, as a Cleaner. He was assisting a Mechanical Engineer for over oiling and maintaining machine parts, which required bending, forwarding and lifting etc. of the heavy machine parts while fixing the same in the machines. There is hardly any dispute about the fact that in the accident, the appellant suffered Compression Fracture to L1 vertebral. The appellant, in his evidence, has categorically stated that due to this injury, he is not able to perform the said work or any work, which involves bending, forwarding and lifting heavy machinery and machine parts. He has stated that he has suffered 100% functional disability. He has further stated that he was treated by Dr. Potdar. He was referred by Dr. Potdar to Dr. Chandak, an Orthopaedic Surgeon and on the basis of his discussion with Dr. Chandak, a permanent disability certificate was issued by Dr. Chandak on 16.02.1997. He has further stated that he went to join the duty but he was not allowed to join on account of the permanent disability suffered by him, as reported by the Doctor, to perform his duties as a Cleaner. The appellant has produced on record two medical certificates, one dated 16.02.1997 (Exh.22) and another certificate dated 15.02.1997 (Exh.23). He has also produced on record a letter (Exh.24) issued by the General Manager of respondent no.1 to the Chairman, Orthopaedically Handicapped Board, Mayo Hospital, Nagpur for examination of the appellant and issuance of disability certificate. The medical certificate, obtained by respondent no.1 from the Chairman of the Orthopaedically Handicapped Board, has not been placed on record. No plausible explanation has been put forth in that regard. Similarly, the photo copy of medical certificate produced on record has not been proved. In his cross-examination, the appellant has admitted that the management of respondent no.1 spent on his hospitalization, medicine and transportation. It was suggested to him that the management had given him a charge-sheet for not joining duty. He has stated that on 18.03.1997, he had submitted a certificate to the management, which was issued to him by the IGMC, Nagpur. In his cross-examination, the appellant has admitted that the management of respondent no.1 spent on his hospitalization, medicine and transportation. It was suggested to him that the management had given him a charge-sheet for not joining duty. He has stated that on 18.03.1997, he had submitted a certificate to the management, which was issued to him by the IGMC, Nagpur. In his cross-examination, the appellant has reiterated that he is not able to work as a Cleaner because due to the injuries sustained to the spinal cord, he has been 100% incapacitated to lift, bend, forward etc. the machine parts and lift heavy goods. He has admitted that in the certificate issued by Dr. Ptodar, besides his opinion, he has stated that the partial permanent disability sustained by him was 40% for the purpose of getting compensation. The appellant has further stated in his cross- examination that he was constrained to take voluntary retirement on account of the 100% functional disability sustained by him. 11. In this context, it would be appropriate to consider the evidence of Dr. Potdar, who had initially examined the appellant. He has stated that at the relevant time, he was working as an honorary medical officer for respondent no.1. He has stated that he had examined the appellant immediately after the accident. The appellant had sustained major injury to his vertebral columns and therefore, he referred him to Dr. R.M. Chandak, an Orthopaedic Surgeon. He has stated that after examination, Dr. Chandak found that the appellant had sustained compression fracture of L1 vertebral. He has stated that after consultation with Dr. Chandak, he had issued the certificates dated 16.02.1997 and 15.02.1997 (Exhs.22 and 23). Dr. Potdar has categorically deposed that due to the injuries, the appellant is unable to work as a Cleaner in the Speed Form Department of respondent no.1. The injury was a permanent injury. He has stated that he suffered partial physical disability to the extent of 40%. In his cross-examination, Dr. Potdar has admitted that he is not an Orthopaedic Surgeon. He has also admitted that the examination of a patient by an Orthopaedic Surgeon differs from the examination of a person by a General Practitioner. He has stated in his cross-examination that the applicant can perform light work where lifting weight and bending forward is not required. 12. Potdar has admitted that he is not an Orthopaedic Surgeon. He has also admitted that the examination of a patient by an Orthopaedic Surgeon differs from the examination of a person by a General Practitioner. He has stated in his cross-examination that the applicant can perform light work where lifting weight and bending forward is not required. 12. The question is whether the disability suffered by the appellant is 100% functional disability or not. The Doctor has categorically stated that on account of the injuries sustained by him, he is not able to work as a Cleaner in the Speed Form Department, which requires bending and lifting heavy goods. In such a case, for the purpose of deciding the functional disability, the nature of employment by the employee on the date of the accident is required to be taken into consideration. It has come on record that the appellant was required to bend and lift heavy goods and machine parts. The evidence on record goes to show that a particular fitness level of an employee was required for performance of the said work. For the purpose of lifting heavy goods and machine parts, an employee is required to bend forward. In this situation the pressure would always be on the lower back. The injury sustained, namely, compression fracture of L1 vertebral, is a serious injury. In this background, it would be appropriate to consider the law laid down by the Hon’ble Apex Court in Arjun Ramanna alias Ramu .vs. Iffco-Tokiyo General Insurance Co. Ltd. (supra). In this case, the employee was a Driver of a goods carrier. He met with an accident resulting in his right upper limb above the wrist joint being amputated, consequent to which he lost his capacity to drive the vehicle. The Doctor had assessed his disability at 40%. The Hon’ble Apex Court has observed that if a person is incapacitated from doing the work he was capable of doing before the accident then it would be a 100% disability of permanent nature. In other words, the Hon'ble Apex Court has held that while considering 100% functional disability, the Court has to consider whether an employee, on account of the injury, has been incapacitated to do the work which he was doing or capable of doing. In Indra Bai .v. Oriental Insurance Co. Ltd. (supra), the employee was working as loading and unloading labour. In Indra Bai .v. Oriental Insurance Co. Ltd. (supra), the employee was working as loading and unloading labour. The Board had certified the employee as unfit for labour, as there was complete loss of grip in her left hand. In this case, the disability was assessed at 40%. In this case, the Hon’ble Apex Court has held that if disablement incurred in an accident incapacitates a workman for all work which he was capable of performing at the time of accident resulting in such disablement, the disablement would be taken as total for the purpose of award of compensation under section 4(1)(b) regardless of injury sustained being not one as specified in Part I of Schedule I of the Act. It is held that the decision of the Commissioner in awarding the compensation by treating the disability as total due to functional disability, where the employee is rendered unfit for labour could not be said to be perverse. 13. In my view, the judgment relied upon by learned advocate for the appellant is the fitting answer to the objection/submission advanced by the learned advocate for respondent no.1. Undisputedly, the appellant on account of the accident suffered compression fracture of L1 vertebral, which is a serious injury. The nature of injuries sustained has to be considered viz-a-viz the nature of work the workman was doing on the date of the accident. If the injury is of such a nature which incapacitates the workman from doing the same work, then it has to be taken as 100% functional disability. In this case, admittedly, on account of his disability to perform the duties as a Cleaner, he was not allowed to join his duty by the management of respondent no.1. He was constrained to take voluntary retirement. The Doctor, who is honorary medical officer of respondent no.1, has stated that the appellant was unable to work as a Cleaner in the Speed Form department on account of permanent injury suffered by him. Keeping in mind the nature of work performed by him at the time of the accident and his incapacity to perform the said work on account of the injury sustained by him, the disability has to be taken at 100% functional disability. The learned Commissioner has failed to properly appreciate the evidence. Keeping in mind the nature of work performed by him at the time of the accident and his incapacity to perform the said work on account of the injury sustained by him, the disability has to be taken at 100% functional disability. The learned Commissioner has failed to properly appreciate the evidence. I do not see any reason to discard and disbelieve the oral evidence of the Doctor as well as the certificates issued by the Doctor. The oral evidence of the Doctor and the certificates are sufficient to conclude that the appellant has sustained 100% functional disability on account of the injury i.e. compression fracture of L1 vertebral in the accident. In my view, therefore, the learned Commissioner was required to grant compensation by keeping in mind 100% functional disability. Therefore, the order granting 40% claim is required to be modified. 14. The next important issue is whether the appellant would be entitled to get interest from the date of the accident or from the date of the order, as has been granted by the learned Commissioner. Learned Commissioner has awarded interest @ 12% per annum from the expiry of one month from the order passed by him till its realization. Learned advocate for respondent no.1, in order to buttress his submission that the interest has to be awarded from the date of the accident and not from the date of the award, has placed reliance on the following decisions : 1] Oriental Insurance Co. Ltd. .vs. Siby George and others [2012 III CLR 6 : (2012) 12 SCC 540 ] 2] The Coordinate bench judgment of this Court in Subhash S/o Gajananrao Tiwade and another .vs. National Insurance Co. Ltd. and another. [2014(3) All MR 204] 15. Learned advocate for respondent no.1, relying upon these judgments submitted that as far as entitlement of interest is concerned, it has to be awarded from expiry of one month from the date of the accident. Learned advocate for respondent no. 1 submitted that the amount of compensation was immediately paid, and therefore, the appellant was not entitled to get interest from the date of the accident. In order to support his submission, learned advocate has relied upon another decision of the coordinate bench of this Court in Udhav Rangnathrao Pawar .vs. Sheshrao Ramji Jogdand and another, reported at 2009 III CLR 697. 16. Undisputedly, the claim has been partly allowed. In order to support his submission, learned advocate has relied upon another decision of the coordinate bench of this Court in Udhav Rangnathrao Pawar .vs. Sheshrao Ramji Jogdand and another, reported at 2009 III CLR 697. 16. Undisputedly, the claim has been partly allowed. Learned Commissioner was, therefore, required to deal with the issue of grant of interest in accordance with the provisions of law. The Hon’ble Apex Court in the case of Oriental Insurance Co. Ltd. vs. Siby George (supra) has settled the law on this issue. The relevant observations can be found in paragraphs 7 and 12. The same are extracted below : 7. 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. 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. 12. In light of the decisions in Pratap Narain Singh Deo and Valsala, it is not open to contend that the payment of compensation would fall due only after the Commissioner’s order or with reference to the date on which the claim application is made. The decisions in Mubasir Ahmed and Mohd. Nasir insofar as they took a contrary view to the earlier decisions in Pratap Narain Singh Deo and Valsala do not express the correct view and do not make binding precedents. 17. The decisions in Mubasir Ahmed and Mohd. Nasir insofar as they took a contrary view to the earlier decisions in Pratap Narain Singh Deo and Valsala do not express the correct view and do not make binding precedents. 17. The coordinate bench of this Court in Subhash Gajananrao Tiwade .vs. National Insurance Co. Ltd. (supra), while deciding this issue has relied upon the decision in Siby George (supra). Similarly, the coordinate bench has considered the decision in Udhav Rangnathrao Pawar (supra). The coordinate bench while holding that payment of interest is automatic and it becomes a part and parcel of the legal liability, which accrued to the employer on the date of the accident, has held as follows in paragraph 13. Paragraph 13 is extracted below : “13. In absence of section 4-A (1) of the said Act specifying the date on which the compensation under section 4 "falls due", what would be date when the compensation under section 4 would "fall due", is the question to be decided in this case. In this respect, the decision of the Apex Court in the case of Pratap Narain (supra) needs to be considered. It was an appeal preferred by the owner of the vehicle challenging the imposition of penalty as well as the interest on the amount of compensation determined by the Commissioner under section 19 of the said Act. The Apex Court found no force in the argument that the Commissioner committed a serious error of law in imposing the penalty on the appellant, under section 4-A(3) of the said Act for the reason that the compensation had "fallen due", only when it was settled by the Commissioner under section 19 of the said Act. It was held that the employer became liable to pay the compensation, as soon as the personal injury was caused to the workman by the accident, which admittedly arose out of and in the course of an employment. The Apex Court observed that it is, therefore, futile to contend that the compensation did not "fall due" until after Commissioner order. It was further held that there is nothing to justify the argument that the employers liability to pay the compensation under section 3 in respect of the injury sustained arises, only after the settlement as contemplated by section 19 of the said Act.” 18. It was further held that there is nothing to justify the argument that the employers liability to pay the compensation under section 3 in respect of the injury sustained arises, only after the settlement as contemplated by section 19 of the said Act.” 18. On the basis of the above stated legal position, it is crystal clear that the liability to pay compensation arises as on the date of the accident. It is held that payment of interest is a consequence of default in payment of compensation without going into the reasons for delay. The liability to pay interest is automatic and it becomes a part and parcel of the liability of the employer, which accrues to him on the date of the accident. In this case, learned Commissioner has failed to consider this legal position. Respondent no.1 has deposited the amount of Rs.32,909/- only. Considering the nature of the 100% functional disability suffered by the appellant, respondent no.1 was liable to deposit the entire amount of compensation. In view of this, the appellant shall be entitled to the interest from the date of the accident and not from the date of adjudication of the claim. 19. As far as the total claim amount is concerned, it comes to Rs.2,33,568/- for 100% disability. Out of the said amount, respondent no.1 has already paid Rs.32,909/- immediately after the accident and therefore, on this amount of Rs.32,909/-, the appellant shall not be entitled to get interest. The appellant shall be entitled to get interest @ 12% per annum on the balance amount of Rs. 2,00,659/- (Rupees Two lakhs Six hundred and Fifty Nine only) from the date of the accident till its full realization. 20. The appellant has claimed 50% penalty on account of default on the part of respondent no.1 to pay compensation. Learned advocate for the appellant submitted that learned Commissioner has failed to award 50% penalty as provided under the law despite there being proved default on the part of respondent no.1. The learned advocate for respondent no.1 submitted that award of penalty and award of interest are two distinct aspects. While awarding interest, the justification for delay is not relevant. However, it is submitted that while awarding penalty, justification for delay in awarding compensation is required to be considered. The learned advocate for respondent no.1 submitted that award of penalty and award of interest are two distinct aspects. While awarding interest, the justification for delay is not relevant. However, it is submitted that while awarding penalty, justification for delay in awarding compensation is required to be considered. Learned advocate submitted that therefore, learned Commissioner was duty bound to issue a show cause notice to respondent no.1 and offer an opportunity to respondent no.1 to explain that the delay was on account of some justification. In order to support his submission, he has relied on a decision in the case of Oriental Insurance Co. Ltd. .vs. Siby George and others (supra), the decision of the coordinate bench of this Court in Udhav Ranganathrao Pawar .vs. Sheshrao Ramji Jogdand and another (supra) and a decision of Punjab and Haryana High Court in Smt. Rajni Rani and others .vs. Om Prakash and others, reported at 1992 (65) F.L.R. (P&H) 800. The Hon'ble Apex Court in Siby George’s case (supra), has held that interest on the amount of compensation becomes due when there is a default in payment of compensation. The reasons for default are immaterial. It is held that where there is delay without justification, the employer is also liable to pay penalty after giving him an opportunity to show cause. The same view has been taken by the coordinate bench of this Court in Udhav Rangnathrao Pawar (supra) and Punjab and Haryana High Court in Smt. Rajani Rani (supra). 21. The mandatory procedure prescribed, as stated above, is required to be followed before awarding penalty. Learned Commissioner is duty bound to issue a show cause notice. He is bound to consider the justification for delay. Learned Commissioner can award penalty, if the delay is without justification. In this case, a show cause notice was not issued. Therefore, the appellant will not be entitled to get penalty. In view of the above discussion, the above referred question is answered accordingly i.e., the appellant is entitled to get interest @ 12% per annum from the date of the accident on the balance amount of compensation, however, the appellant will not be entitled to get penalty. 22. The First Appeal is partly allowed. (i) The judgment and award dated 16.04.2010 passed by the learned Commissioner under the Workmens’ Compensation Act and Judge, 1st Labour Court, Nagpur, is modified. 22. The First Appeal is partly allowed. (i) The judgment and award dated 16.04.2010 passed by the learned Commissioner under the Workmens’ Compensation Act and Judge, 1st Labour Court, Nagpur, is modified. (ii) The appellant is entitled to get total compensation of Rs. 2,33,568/- (Rupees Two lakhs Thirty three thousand Five hundred and Sixty Eight only). (iii) Compensation of Rs. 32,909/- has already been paid by respondent no.1. So, after deducting the amount of Rs.32,909/-, the appellant is entitled to get Rs. 2,00,659/- (Rupees Two lakhs Six hundred and Fifty Nine only) with interest @ 12% per annum from the date of the accident till its full realization. (iv) Respondent no.1 shall pay the balance amount of compensation, along with interest, to the appellant within a period of four months from today. (v) The appeal stands disposed of in the aforesaid terms. No order as to the costs.