AI Structured Summary
Not yet generated for this judgment
Judgment
Prateek Jalan, J
This appeal under Section 30 of the Employee's Compensation Act, 1923 (hereinafter as referred to as ""the Act"") is directed against an order dated
24.09.2015, whereby the application filed by the appellant under Order IX Rule 13 of the Code of Civil Procedure, 1908 (hereinafter referred to as
the CPC"") for setting aside the ex-parte order dated 31.12.2013 passed by the Commissioner, Employee's Compensation, was dismissed. By the said
order, the Commissioner ex-parte allowed an application filed by the respondents no. 1 to 3 herein (“the claimantsâ€) under Section 4A of the Act,
and imposed a penalty of Rs. 2,85,360/- on the appellant.
The claimants are the wife and children of one Mahindra Singh who was employed as a driver with the appellant. He met with a fatal road accident
on 16.07.2012 which led to an application for compensation under the Act being filed on 13.08.2012. The respondents in the application were the
appellant/employer and the respondent no.4, which is the insurance company with which the vehicle was insured.
The claim was decided on 21.02.2013 by the Commissioner, Employee's Compensation and the insurance company was directed to pay the sum of
Rs. 5,70,720/- to the claimants. The operative portion of the Commissioner's order reads as follows-
“7. In view of the above made discussion and calculation, petitioners are entitled to get Rs.5,70, 720/-as death compensation from Respondent No-
Since the vehicle in question was insured with Respondent No -3 as such Respondent No -3 is liable to indemnify to petitioners. I do not find any
sufficient ground to impose penalty upon the respondents, as such, same prayer of petitioners are dismissed.
As respondent no-3 despite having the notice of accident, not discharged his responsibilities as per section 4A of the Act, as such he is liable to pay
interest @ 12% from the date of accident till the date of realization.
In view of above made discussion and calculation, I direct Respondent No-3 i.e. M/s The Oriental Insurance Co. Ltd., Regd. Office-Oriental
House, A-25/27, Asaf Ali Road, New Delhi-110002 to deposit Rs.5, 70, 720/-(Rupees Five Lacs Seventy Thousand Seven Hundred Twenty only)
within 30 days from this order in favour of Commissioner, Workmen Compensation along with interest @ 12 % p.a. from the date of accident till the
date of realization failing which same shall be recovered by way of land revenue.â€
After the passing of this order on 02.04.2013, the claimants made a further application under Section 4A of the Act, seeking imposition of penalty
upon the appellant. On that application, the Commissioner passed an order dated 31.12.2013 wherein it was recorded that the appellant did not appear
despite service of summons and was, therefore, proceeded ex parte. Upon the finding that the appellant did not deposit the compensation amount as
required under Section 4 of the Act, the Commissioner imposed a penalty of 50% thereof upon the appellant.
The appellant filed an application under Order IX Rule 13 of the CPC for setting aside the ex-parte order of the Commissioner on the ground that it
had not received the summons and had received notice of the order dated 31.12.2013, only upon being served with it from the office of the Sub-
Divisional Magistrate, Saraswati Vihar. It is stated in the application that an employee of the appellant had received the summons and did not inform
the appellant. The application was resisted by the claimants stating that the service had been refused by the appellant, and was disposed of by the
impugned order dated 24.09.2015, finding that the notices/summons were duly served on the appellant and sufficient opportunities were afforded to
them. The Commissioner has also noted that the appellant did not file any documentary evidence in support of its contentions.
During the course of proceedings before this Court, the penalty amount has been deposited in the Registry of this Court by the appellant and the
order awarding penalty has been stayed. The claimants (respondent nos. 1 to 3 herein) filed CM Appl. No. 6752/2018 for release of the amount
deposited. In the course of the hearing of that application, learned counsel for the parties agreed that the appeal itself be heard finally.
I have heard the parties on the following substantial questions of law arise in these proceedings:-
A. Whether the Commissioner under the Act is empowered to proceed ex parte in the absence of any record regarding the service of summons on
the party concerned?
B. Whether a separate application under Section 4A of the Act is maintainable, when the provisions of Section 4A have been considered in the
original compensation order?
C. Whether the liability for penalty under Section 4A of the Act is fastened upon the employer or the insurance company?
Mr. Jitendra Mehta, learned counsel for the appellant referred to the records of the Commissioner to submit that in fact no notice of the application
under Section 4A had been served upon the appellant. He pointed out that, in the order dated 31.12.2013, it has been stated that summons were issued
to the appellant on 21.02.2013 and 02.09.2013. However, the first of these dates is prior to the application having been filed and on the second date,
the record reveals that the Commissioner did not in fact hold a hearing. In these circumstances, Mr. Mehta submitted that the appellant's application
under Order IX Rule 13 ought to have been allowed. Mr. Mehta also submitted that the principal order of the Commissioner dated 21.02.2013 itself
contained direction under Section 4A and the order dated 31.12.2013 in effect revisits issues which had already been decided and closed. His third
contention is that the vehicle having been properly insured, it is the insurance company which ought to have been made liable for the penalty, if any.
Mr. Hari Kishan, learned counsel for the claimants drew my attention to the observations contained in the order dated 31.12.2013, and 24.09.2015
to the effect that summons had in fact been served on the appellant. However, he conceded that the amount should have been paid by the insurance
company rather than the appellant. Mr.Tyagi, learned counsel for the respondent no.4/insurance company, disputed the last submission and relied upon
the judgment of the Supreme Court in Ved Prakash Garg. vs. Premi Devi (1997) 8 SCC 1 to contend that the penalty amount is payable only by the
employer. He has also referred to two judgments of this Court on the same point.
The first point to be decided concerns the service of notice upon the appellant in the claimants’ application under Section 4A of the Act. The
record of the Commissioner was requisitioned by this Court, and I have gone through the order sheets with regard to the said application. It appears
that the application was taken up on six dates, and the orders recorded are reproduced below:
“6-6-13 â€
File taken up today as A/R of claimant moved an application for penality.
A/R of claimant present.
Respondent â€" Absent
As prayed. Next date is fixed for 15-7-13 at 10:00 A.M. for show cause notice to respondent for penality.
Sd
C.W.C
15-7-13 â€
Claimant / AR â€" Present
Respondent â€" Absent
As prayed issue notice to Respondent through
Speed Post for 26-8-13 at 10:00 A.M. for penality.
Sd
C.W.C
26-8-13 â€
Claimant / AR â€" Present
Respondent â€" Absent
As prayed issue dasti notice to Respondent for 02-9-13 at 10:00 A.M. for penality.
C.W.C
2-9-13 â€
Claimant / AR â€" Present
R- 1 â€" Absent
R- 2 â€" Present
Ld. Commissioner has gone to training. As prayed. Next date is fixed for 5-9-13 at 10:00 A.M. as directed by Ld. Commissioner for reply &
arguments on the application.
Reader
5-9-13 â€
Claimant /AR â€" Present
R-1 â€" Absent
R-2 â€" Absent
Despite service of summon R-2 neither appeared
& nor filed reply. dt. notice regarding penality. It appears R-2 does not want to submit defence in this regard. As such matter is proceeded ex parte
Respondents. Reserved for order.
Sd
C.W.C
Order signed. Pl. issue it all the concerned.
Sd/-
31/12/13â€
It appears from the above that, on the first three dates, the Commissioner directed service of notice upon the appellant. However, on the next date,
02.09.2013, the Commissioner was unavailable, and on his directions, the matter was fixed on 05.09.2013 “for reply and arguments on the
applicationâ€. There is no record on that date as to whether service had in fact been effected upon the appellant. Despite this, on 05.09.2013, the
Commissioner proceeded to record that the appellant had neither appeared nor filed a reply, and therefore proceeded ex parte. The matter was
reserved for orders on the same date, and the order signed on 31.12.2013. No separate summons had been issued for 05.09.2013.The record also
shows that although the notice appears to have been sent to the appellant by speed post pursuant to the order of dasti service made on 26.08.2013,
there was neither an acknowledgement of receipt placed on record, nor an affidavit of service. In these circumstances, the Commissioner’s
conclusion that the appellant had not appeared despite service of summons was unjustified.
The order dated 31.12.2013, as pointed out by Mr. Mehta, is also clearly in error in recording that summons were issued and filing of reply was
directed on 21.02.2013 and 02.09.2013, and that the appellant did not appear or file a reply. The question of issuing summons or directing reply to be
filed on 21.02.2013 did not arise as the application was filed only on 02.04.2013 and, according to the record, first taken up on 06.06.2013. Although
notice was issued dasti by order dated 26.08.2013, as stated hereinabove, there was no evidence before the Commissioner that it had been served. On
02.09.2013, the Commissioner was not available and no further directions were given regarding filing of the reply.
In the impugned order dated 24.09.2015, after noting the contentions of the parties, the Commissioner has recorded the following conclusion:
“6. And Whereas, after going through the facts of this case, and examination of documents on record, reply by claimant side, it is established/
found that the notices/ summons have been duly served upon the applicant respondent management. Further, sufficient opportunities have been
afforded to the respondent to defend themselves but it is regretted that the management failed to appear/defend themselves in this matter. It is also
pertinent to mention here that even during the hearing/proceedings in the matter, the respondent management not filed any documentary evident to
prove their contention.
And Whereas, in view of above facts and circumstances and material available on record, the application filed by the respondent management for
setting aside the order dated 31.12.2013 is not sustainable and hence, the same is dismissed accordingly and the stay order dated 06.04.2015 for
recovery stands quashed.â€
The above observations of the Commissioner do not give any details as to the evidence which led to the finding that the appellant had in fact been
served. It is, therefore, not possible to sustain the order as it stands.
The appellant and the respondent no. 4 (insurance company) have raised the further plea that the claimants’ application under Section 4A of
the Act was not maintainable in view of the fact that, in the order dated 21.02.2013, Section 4A was invoked to award interest in favour of the
claimants, and the claim for penalty was expressly rejected. They have also raised contesting contentions regarding whether the liability for penalty, if
any, falls on the employer or the insurance company. Learned counsel for the parties therefore submitted that, in the event the impugned order is set
aside, the matter be remanded to the Commissioner for a fresh inter partes decision on the contentions of the parties. In this view of the matter, I do
not propose to enter upon the merits of these submissions, or deal with the judgments cited by the parties in this connection. The parties will be at
liberty to raise these arguments before the Commissioner.
In the facts and circumstances aforesaid, the appeal is allowed and the impugned order of the Commissioner dated 24.09.2015 is set aside. The
appellant’s application for setting aside the ex parte order dated 31.12.2013 is also allowed; the order is set aside and the matter remanded to the
Commissioner for a fresh decision on the application of the claimants (respondent nos. 1 to 3 herein) under Section 4A of the Act. The parties shall
appear before the Commissioner on 12.07.2019, when the appellant and the respondent no. 4 (insurance company) shall also file their replies to the
application. The Commissioner will fix a date of hearing and pass orders in accordance with law after hearing the parties. Their rights and contentions
are left open. In view of the fact that the application is of the year 2013, the Commissioner is directed to dispose of it expeditiously, and the parties are
directed to cooperate in this regard.
The appeal is allowed in terms of the above, but without order as to costs. Consequently, the Registry is directed to release to the appellant, the
amount deposited by it in this Court, pursuant to the interim order dated 16.11.2015, passed in this appeal.