Bharat Carriers Ltd. vs Fayez Sekh and Others

Valmiki J. Mehta, J.—The present appeal filed u/s 30 of the Employee''s Compensation Act, 1923 impugns the order dated 27.11.2012 passed by the Commissioner imposing a penalty of 50% u/s 4A of the Employee''s Compensation Act, 1923. The only argument urged on behalf of the appellant/employer is that the claim of penalty in the main case was in fact made by the dependants of the workman, and who were the applicants before the Commissioner in the main compensation claim, but that claim petition was allowed in terms of the order dated 10.8.2010 without allowing the prayer of penalty, and therefore, it is argued that this prayer of the applicants/dependents which, is now allowed by the impugned order dated 27.11.2012 of awarding penalty amount is illegal because this prayer for awarding the penalty amount is deemed to have been rejected in accordance with the principles akin to Explanation V of Section 11 C.P.C. in the first order dated 10.8.2010 itself and consequently a subsequent application u/s 4A for penalty did not lie.

The argument urged on behalf of appellant appeared in the first blush to have some substance because the impugned order of penalty dated 27.11.2012 has been passed after the main order dated 10.8.2010 awarding compensation was passed and which does not show awarding of any penalty, though such prayer was made, and thus which in a way can be said to have deemed to be rejected. However, on a deeper examination of the case it is found that really the order which has now been passed on 27.11.2012 is pursuant to the proviso to Sub-section 3 of Section 4A of the Employee''s Compensation Act as per which penalty cannot be imposed on the employer unless first a specific show-cause notice is given to the employer for showing cause as to why penalty be not imposed i.e. the employer is entitled to show that he is not responsible for delay in payment of compensation as required by law under 4A(1) and with respect to which aspect there was no show cause notice in the original proceedings in which compensation was claimed and awarded. In law it is only on the failure of the employer to show cause as to why the penalty order should not be passed i.e. the justification which is sought to be given is not accepted, that the penalty order can thereafter be passed. Accordingly, since while disposing of the main compensation case vide the order dated 10.8.2010 there were no proceedings which are shown to have taken place under proviso to Sub-section 3 of Section 4A, therefore it cannot be said that the issue of penalty was in fact decided in the main original compensation proceedings/petition which was decided on 10.8.2010.

It also requires to be noted that proceedings for imposition of penalty are consequent upon a finding first being arrived at that compensation is payable to an employee on account of accident happening during the course of employment. It is only after the finding that compensation is payable is first arrived at, that thereafter justification has to be sought by issuing of a show cause notice as to why there was delay in payment of the compensation. Therefore, it is nothing illegal that consequent upon finalization of proceedings for determination of compensation, that thereafter, proceedings u/s 4A are initiated, and in the facts of the present case it accordingly took place for being held that the same were not decided at the time of passing of the Award of compensation in the main proceedings. In view of the above, I do not find any merit in the appeal, and the same is therefore dismissed, leaving the parties to bear their own costs. The amount of penalty which has been deposited by the appellant before this Court be released by the Registry of this Court alongwith accrued interest thereon if any to the respondent Nos. 1 and 2 within a period of four weeks from today.