Man Bahadur vs Kamal Dev Puri and Another

V.K. Gupta, C.J.—In this appeal the limited relief claimed by the appellant is that the Commissioner under Workmen''s Compensation while passing the award on November 10, 1999 and under challenge in this appeal had not ordered the payment of penalty by the employer-respondent No. 1 despite, the fact that admittedly the employer had committed default in paying the compensation due under the Act within one month from the date it fell due. Mr. K.D. Sood, learned counsel appearing for the appellant has drawn my attention to Section 4-A(3)(b) of the Workmen''s Compensation Act, 1923 which reads thus:

"4-A. Compensation to be paid when due and penalty for default.

(1).........................

(2)........................

(3)(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty percent of such amount by way of penalty:

Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.

Explanation. For the purposes of this sub-section, "scheduled Bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934)]."

Sub-section 3-A of Section 4-A of the Act reads thus:

"[(3-A) The interest and the penalty payable under Sub-section (3) shall be paid to the workman or his dependent, as the case may be.]"

Undoubtedly, the compensation amount was not paid within one month from the date it fell due and therefore, the employer is liable to pay penalty. The penalty amount cannot exceed 50% of the award amount and in this case the award amount, even though originally assessed at Rs. 66,411 has now been reduced to Rs. 26,564.40. The employer is thus liable to pay penalty on the aforesaid award amount, not exceeding 50% of the same.

The appeal accordingly is allowed and it is directed that the employer shall pay an amount of Rs. 10,000 to the appellant by way of penalty. This payment shall be made within two months from today failing which it shall attract interest liability thereupon @ 12% per annum, starting from today, till the amount is paid.