Amarnath Baldev Raj and Another vs Commissioner under the Workmen's Compensation Act and Others

I.K. Kotwal, J.—This judgment will govern the disposal of Civil First Misc. Appeals No. 42 and 43 of 1976 as these are directed against

the same order and raise common questions of law and fact.

Two claim petitions i.e. one against the Appellant in Appeal No. 42 and the other against the Appellant in Appeal No. 43' were brought by

Respondent No. 2 -m both the appeals for compensation resulting from death of some of the employees of the Appellants under the provisions of

the Workmen's Compensation Act, 1923 hereinafter referred as the Act. Both the petitions were allowed and compensation was awarded in

favour of the claimants. Since there was some delay in depositing the compensation awarded, the Assistant Labour Commissioner, Doda, with

powers of a Commissioner under the Act, passed a general order on 27-6-1976 against as many as five employers, including the Appellants

imposing penalty on them by taking recourse to the provisions of Sub-section (3) of Section 4-A of the Act. Whereas a sum of Rs. 4,000/- was

awarded against the Appellant in appeal No. 42, a sum of Rs. 4,750/- was awarded against the Appellant in Appeal No. 43. These appeals are

directed against the aforesaid order.

It is common ground that the Appellants were not heard before the impugned order came to be passed against them. Whereas the contention

raised on behalf of the Appellants is that they could not have been penalized unheard, the contention raised on behalf of the opposite, partyaa that

it was not necessary to do so as the satisfaction to be reached by the Commissioner was merely a subjective one which was not open to objective

test. In other words, once the Commissioner was subjectively satisfied that there was no justification for the delay in depositing the compensation,

he could impose the, penalty and his decision could not be assailed either on a question of fact or on a question of law Decision of these rival

contentions, therefore turns upon the construction to be placed upon Sub-section (3) which for ready reference is reproduced as below:

(3) When, any employer is in default in paying the compensation- due under this 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 percent, per annum on the amount due together with, if in

the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty percent, of such amount, shall be recovered

from the employer by way of penalty.

On its plain language, the Sub-section empowers the Commissioner to allow simple interest at the rate not more than 6 percent per annum on

the amount of compensation awarded provided the same remains unpaid for a period exceeding one month after it has fallen due. It further

empowers him to impose penalty not exceeding fifty percent of the said amount, if he is further satisfied that there was no justification for the delay

in making the payment of the amount of compensation awarded. To put it the other way round if it is shown that there was sufficient cause for the

delay in making the payment; he cannot impose any penalty, though he may still award simple interest not exceeding six percent per annum. This is

distinctly borne out from the expression ""if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty

percent of such amount, shall be recovered from the employer by way of penalty"" occurring in Sub-section (3). What was the season for not

making payment without delay can be known to that person alone who is required to make the payment and to none else. Unless therefore he is

called upon to show cause for the delayed payment, it is not reasonably possible for the Commissioner to come to the conclusion whether or not.

there are any justification for delay. He cannot Be allowed to reach his satisfaction at his whim and caprice simpliciter, when an appeal is also

provided against his order imposing penalty under Sub-section (3) of Section 4-A. His approach has to be objective; He must record his reasons

fat; coming to the con caution that l feel was no justification for the delay in making the payment of compensation awarded and thereby provide an

opportunity to the appellate court to see whether or not his order is justified which satisfies the test of objectivity, Where a finding of fact has been

recorded without any material the same can be challenged on a question of law. Obligation on the part of the Commissioner to hear the party

adversely affected is clearly implicit in Sub-section (3), for no one can be condemned unheard. An interpretation of Sub-section (3) not requiring

the Commissioner to hear the party adversely affected before imposing penalty against it would be plain obnoxious. Furthermore, the very fact that

the order of the Commissioner is appealable knocks the bottom of Mr. Kotwal's contention that the order is not justifiable. His reliance upon

Lilavati Bai Vs. The State of Bombay, is clearly misplaced because the provisions of Section 6(4)(a) of the Bombay Land Requisition Act, 1948

which fell for interpretation by their Lordships of the Supreme Court are not on the same subject or of the same matter as the provisions of Sub-

section (3) which is being interpreted presently. It is well settled that observations made in relation to the provisions of one statute cannot be

applied with reference to the provisions of another statute unless both the statutes are in pari material with each other. The impugned order

imposing penalty against the Appellants having been admittedly passed at their back, stands vitiated.

In the result the appeals are allowed and the impugned order is set aside but in the peculiar circumstances of the case, without any order as to

costs.