High Court
Facts
{1} fa3257-18.docdrpIN THE HIGH COURT OF JUDICATURE OF BOMBAYBENCH AT AURANGABADFIRST APPEAL NO.3257 OF 2018The Chairman, APPELLANTSidheshwar Sahakari Sakhar Karkhana Ltd., Uttar Solapur, District - SolapurVERSUS1.Sunita w/o Sakharam Wahule RESPONDENTSAge – 35 years, Occ – HouseholdR/o Khadgaon, At Present Sakhala PlotParbhani, Taluka & District – Parbhani2.Ashroba s/o Sakharam WahuleAge – 18 years, Occ – Education 3.Seema d/o Sakharam WahuleAge – 17 years, Occ – Education4.Balaji s/o Sakharam WahuleAge – 16 years, Occ – Education Respondents No.2 to 4 are the children of respondent No.1 and R/o as above of Respondent No.15.Dinesh s/o Murlidhar Jadhav DELETED6.The Oriental Insurance Company Ltd.,Through its Branch Manager, ParbhaniTaluka & District - Parbhani.......Mr. Aditya N. Sikchi, Advocate for the appellantMr. P. B. Rakhunde h/f Mr. S. B. Bhapkar, Advocate forrespondents No.1 to 4Mr. M. K. Goyanka, Advocate for respondent No.6Respondent No.5 is deleted ....... [CORAM : NITIN B. SURYAWANSHI, J.] {2} fa3257-18.doc DATE : 31 st JULY, 2024 JUDGMENT :1.This first appeal, filed under section 30 of the Employee’sCompensation Act, takes exception to Judgment and Award dated8th January, 2016 passed by learned ex-officio Commissioner forEmployee’s Compensation, Parbhani in W.C.F.A. No. 5 of 2012, tothe extent it directs the appellant to pay penalty amount ofRs.1,84,170/-.2.The only point arises for consideration in this First Appeal isthat, whether the Commissioner for Workmen’s Compensationwas justified in issuing direction to the employer / appellantherein to pay penalty amount to the extent of 50% of the amountof compensation, without issuing notice under section 4-A (3) (b)of the Workmen’s Compensation Act.3.Undisputed facts are that, claim filed by respondents No.1to 4, / original claimants for Compensation on account of deathof Sakharam Munjaji Wahule, was allowed by the Commissioner,thereby directing the appellant and respondent No. 6 herein, tojointly and severally pay compensation of Rs.3,68,340/- alongwith interest @ 12@ p.a. and directed the appellant to pay 50%amount of compensation i.e. Rs.1,84,170/- by way of penalty. 4.Admittedly, though served, appellant remained absent {3} fa3257-18.docbefore the learned Commissioner. 5.Heard learned advocate for appellant, learned advocate forrespondents No.1 to 4 – claimants and learned advocate forrespondent No.6.6.Learned advocate for appellant relied on the followingjudgments :a.“Ved Prakash Garg V/s Premi Devi and Others”(1997) 8 SCC 1b.“Oriental Insurance Company Limited V/s SibyGeorge and Others” (2012) 12 SCC 540c.“Sarjerao Unkar Jadhav V/s Gurindar Singh andOthers” 1990 Mh.L.J. 790d.“Chief Executive Officer and Others V/s SuraiyyaRafik Khalifa and Others” MANU/MH/2890/2023e.Unreported judgment of this Court in First AppealNo. 1592 of 2011 “Kinetic Engineering Ltd V/s K.P.Ramdas Nair”7.The ratio in above judgments is that before imposingpenalty on the employer, the Commissioner has to issue noticeunder section 4-A (3) (b) of the Workmen’s Compensation Act,thereby giving reasonable opportunity to the employer to showcause that there was justifiable reason for the delay on the part
Legal Reasoning
{4} fa3257-18.docof the insured employer to pay the compensation.8.Learned advocate for the appellant is justified in relying onthe above judgments to challenge the penalty imposed on theappellant, on the ground that the learned Commissioner failed toissue notice under section 4-A (3) (b) of the Workmen’sCompensation Act, before imposing penalty on the appellant.9.The Apex Court in “Ved Prakash Garg” (supra), has heldthat-“…… However, if ultimately, the Commissioner after givingreasonable opportunity to the employer to show cause takes the viewthat there is no justification for such delay on the part of the insuredemployer and because of his unjustified delay and due to his ownpersonal fault he is held responsible for the delay then the penaltywould get imposed on him.”10.This Court in “Uddhav Rangnathrao Pawar V/sSheshrao Raji Jogdand and Another” 2009 (6) ALL MR117, has followed the decision in “Ved Prakash” (supra) andheld that:1.“32.This judgment in Ved Prakash’s case has been followed inun-reported judgment of this Court in F. A. No. 1562/2009, NandiShankar Sakhar Karkhan’s case (supra). It has been held that ashow cause notice was required to be issued to the employercalling upon him to furnish the explanation for the delay caused inmaking the payment of arrears. Upon receipt of the explanationfrom the employer, if the Commissioner is not satisfied then the {5} fa3257-18.docpenalty to the extent of maximum 50 per cent of the amount ofcompensation determined is required to be paid by the employer.The order impugned in the present case is a composite orderdetermining the compensation payable by the employer imposingthe interest on the arrears of the amount of compensation andimposing penalty for failure to furnish the satisfactory explanation.The show cause notice contemplated by section (b) of section 3 ofsection 4-A of the Act is with reference to the arrears of the amountof compensation determined to be payable by the employer alongwith the interest payable thereon. This finding would arise onlyupon determination of the compensation by the Commissionerunder section 19 of the said Act. Hence, the show cause noticecontemplated is after passing the order by the Commissionerdetermining compensation.”11.These decisions are followed by this Court in First AppealNo. 1592 of 2011 holding that -“8.It is not disputed in the instant matter, that the Commissionerfor Workmen’s Compensation did not call upon the employer to showcause as to why the amount of penalty shall not be recovered fromhim thereby depriving the employer to putforth his submissions asregards circumstances compelling the employer in respect of hisfailure to pay the compensation within stipulated period. Therefore,the order passed by the Commissioner for Workmen’s Compensation,to the extent specified above, needs to be quashed and set aside. 9.The appeal thus deserves to be allowed and the matterrequires to be remitted back to the Commissioner for Workmen’sCompensation with a direction to extend an opportunity to theemployer to show cause as to why the amount of penalty shall not berecovered from him and after extending an opportunity of hearing to {6} fa3257-18.docthe appellant – employer, the Commissioner shall proceed to decidethe issue as regards imposition of penalty as contemplated by Section4-A of the Workmen’s Compensation Act.”12.Case in hand is squarely covered by the aforestated ratioand observations, as admittedly the Commissioner has failed toissue notice under section 4-A (3) (b) of the Workmen’sCompensation Act to the appellant before imposing penalty.Hence, the appeal deserves to be allowed and the same ishereby allowed. The direction issued by the Commissioner forWorkmen’s Compensation, Parbhani in clause (3) of theJudgment and Award dated 8th January, 2016 passed in W.C.F.A.No. 5 of 2012 is set aside and the learned Commissioner isdirected to extend an opportunity of hearing to the appellant toshow cause in respect of the proposed order of recovery ofpenalty, as contemplated under section 4-A (3) (b) of theWorkmen’s Compensation Act.13.Parties are directed to appear before the learnedCommissioner on 26th August, 2024 and as such, no separatenotice is required for their appearance before the learnedCommissioner.14.Workmen’s Compensation Commissioner shall decide thematter within a period of three months from the date of receipt {7} fa3257-18.docof writ of this order.15.In view of disposal of the First Appeal, Civil Application No.6764 of 2024 is disposed of. [NITIN B. SURYAWANSHI]JUDGE drp/fa3257-18.doc