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N.A.K. Pathan Vs. Julekhabi Pathan - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKarnataka High Court
Decided On
Case NumberM.F.A. No. 472 of 1984
Judge
Reported inILR1986KAR2413
ActsWorkmen's Compensation Act, 1923 - Sections 4A(1) and 4A(3)
AppellantN.A.K. Pathan
RespondentJulekhabi Pathan
Appellant AdvocateS.S. Joshi and ;W.K. Joshi, Advs.
Respondent AdvocateP.H. Gotkhindi, Adv. for R-1 and ;C. K. Kambayenda, Adv. for R-2
DispositionAppeal dismissed
Excerpt:
.....within a month it fell due -- renditions: objective -- provision compensatory, not penal -- levy of penalty, in the absence of justification for delay in payment -- conditions at least partially subjective, to be decided after consideration of the explanation and case of employer -- procedural sophistications in other contexts and embellishments of procedure impeding speedy settlement not to be imported.;contended that levy of interest and penalty under the section should be after finding - in the course of adjudication upon claim for compensation - the existence of a case for initiation of proceedings for such levy, followed by show cause notice, hearing the employer and considering cause shown ; failing which levy is infirm in law.;(i) the condition on the happening of which..........was also part of the specific case he was called upon to meet in the main proceedings. a specific issue, issue no. 4, was framed by the commissioner. the parties went to trial, conscious of the various aspects involved in the adjudication. even the rule that evidence let in on an issue on which the parties actually went to trial should not be made the foundation for the decision of another and different issue, which was not present to the minds of the parties and on which they had no opportunity of adducing evidence, has no application to a case where parties go to trial with knowledge that a particular question in issue, though no specific issue has been framed thereon, and adduce evidence relating thereto. that being so, in the present case where specific issue was raised on the.....
Judgment:

Venkatachaliah, J.

1. This appeal by the employer is directed against the judgment and decree dated 23-9-1983, made by the Commissioner for Workmen's Compensation, Hubli, in WCA/ SR. 44/1982, on his file, awarding a compensation of Rs. 18,000/- to the mother of the deceased-workman under the Workmen's Compensation Act, 1923 (shortly called the 'Act'), The Commissioner also granted, under Section 4A(3) of the Act interest at 6 per cent per annum and a penalty of 10% of the amount awarded.

In this appeal appellant does not question the quantification of the compensation. What is, however, assailed is the award of interest and penalty. Claimant-1st respondent has preferred cross-objections seeking enhancement of the penalty. There having been some delay in filing the cross-objections the claimant has filed I.A.I for condonation of that delay. In the circumstances stated, we allow I.A.I. and condone the delay in the filing of the cross-objections.

2. The proceedings arose in the context of the death of a certain Firojkhan Khadarkhan Pathan, who was employed by the appellant as a driver of the vehicle MEW 4252. On 2-9-1979 while he was so working, in an accident arising out of and in the course of employment, he was seriously injured. He succumbed to the injuries on the following day i.e., 3-9-1979 at the K.M.C. Hospital, Hubli. Appellant did not deposit the compensation in terms of the provisions of the Act. After service of notice of the proceedings to the insurer, the latter deposited the amount before the Commissioner only on 14-3-1983. The insurer had been notified of the proceedings as long back as the year 1980.

3. The contention of Sri S.K. Joshi is that Section 4A(3) being in the nature of a penal-provision, the Commissioner had, first to adjudicate upon the claim for compensation and if, in the course of that adjudication, he found that there, was in his opinion, a case for initiation of proceedings for levy of interest and of penalty under Section 4A, he should then issue a show-cause notice and arrive at a decision in the matter after hearing the employer and after considering the cause shown against the levy. Sri Joshi contends that this procedure not having been followed in the present-case the award of interest and penalty are rendered infirm in law. This, according to the learned Counsel, is the substantial question of law arising in the appeal.

4. Section 4A(3) is in two parts. The first part which contemplates the levy of interest provides that where any employer is in default in paying the compensation due under the Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent per annum shall be recovered.

The condition on the happening of which liability for| interest gets attracted is merely that the employer is in default in paying the compensation within one month of the date it fell due. The considerations relevant to the levy of interest do not include any circumstances subjective to the employer. The conditions are purely objective. The provision is compensatory and not strictly penal. Under the 'Act' the employer becomes liable to pay the compensation as soon as the injury to or death of the workman, as the case may be, is caused. Section 19 only provides for settlement by the Commissioner of any question regarding liability of any person to pay compensation or the amount of compensation. The Section does not have the effect of suspending the liability of an employer to pay compensation till after the settlement contemplated under Section 19. It is the duty of employer to pay compensation under Section 4A(1) as soon as the death is caused. Where the employer fails to do so, the employer is liable to pay interest. The facts of this case, are, admittedly, that the accident took place on 2-9-1979. The amount was deposited by the insurer only on 14-3-1983. The Commissioner has awarded interest from 2-10-1979 to 14-3-1983. There is no substance in the contention urged against the award of interest.

5. Second Part of Section 4A(3) deals with levy of penalty, which becomes imposable if in the opinion of the Commissioner there is no justification for the delay, in paying the amount. The question of justification for the delay or the absence of it depend, at least partially, on factors subjective to the employer and will have to be decided after considering his case and his explanation.

An order imposing penalty for failure to carry out a statutory obligation, it is true, is in the nature of a quasi criminal proceeding, and penalty may not be imposed unless the party obliged has either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. It is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances.

However, in a proceeding under a law of this kind and having regard to the objects of the law and the mischief sought to be suppressed and remedy to be advanced by the law it is not proper to import into them a dichotomy in the stages of the adjudication - one in respect of the settlement of the dispute arising out of the claim and thereafter in respect of the imposition of the penalty. That is not the scheme of the Act. The 'Act' provides for an expeditious settlement of the claim arising out of employment injuries and death, It is, of course, necessary that the employer is enabled to know the case he has to meet and should have the right, and be afforded a reasonable opportunity to, present his case and be heard. The procedural sophistications attending levy of penalty in other contexts should not be imported to a proceeding under the present 'Act' which is law providing for speedy and expeditious settlement of claims arising out of employment injury or death. Having regard to the social purposes of the statute, any embellishments of the procedure which might impede a speedy settlement should not be imported. All that is necessary is that the employer should know the case he is required to meet and has - - and is afforded - - a reasonable opportunity of meeting the case.

6. In the present case, the appellant-employer was fully aware that the question whether a penalty should be levied against him and if so in what sum, was very much involved in the proceedings and was also part of the specific case he was called upon to meet in the main proceedings. A specific issue, Issue No. 4, was framed by the Commissioner. The parties went to trial, conscious of the various aspects involved in the adjudication. Even the rule that evidence let in on an issue on which the parties actually went to trial should not be made the foundation for the decision of another and different issue, which was not present to the minds of the parties and on which they had no opportunity of adducing evidence, has no application to a case where parties go to trial with knowledge that a particular question in issue, though no specific issue has been framed thereon, and adduce evidence relating thereto. That being so, in the present case where specific issue was raised on the question of penalty it cannot be said that the procedure adopted by the Commissioner was bad in law. There is thus no merit in this contention either.

7. Now to the cross-objections. The ground is that the penalty should have been awarded at 50 per cent. The Commissioner has given his reasons for determining the quantum of the penalty. There is no justification in this case for this Court to substitute any assessment of its own as to quantum of the penalty.

8. Both the appeal and the cross-objections are therefore, rejected.


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