Nanda and Others vs Bhikaji Ghanshyam Shingane

B.P. Dharmadhikari, J.—Heard finally by consent of parties.

Advocate Mr. N.B. Kalwaghe, for petitioners/dependants contend that Commissioner for Workmen''s Compensation and Labour Court, Buldhana has in W.C.A. (F) Case No. 11 of 2004 (old Case No. 6 of 2001), failed to exercise jurisdiction to award interest at 12 per cent. He invites attention to the provisions of Section 4-A(3) Clause (a) of the Workmen''s Compensation Act, 1923 to contend that grant of 12 per cent interest was mandatory. He further argues that in view of provisions of Clause (b) of that sub-section, interest ought to have been awarded also on penalty amount awarded to the dependants. In order to show that he could not have challenged this non-grant of interest in appeal u/s 30, he relies upon the judgment of Hon''ble Madhya Pradesh High Court in the case of Krishna Bai and Others Vs. Krishanlal and Another, .

Advocate Mr. S.R. Deshpande, on the other hand, invites attention to Section 30(1)(a) of the Act, to contend that the statute permits filing of appeal even when interest is not awarded. He further relies upon the provisions of Section 4-A(3) to urge that in any case claim for interest on penalty amount is not supported by those provisions.

It is thus obvious that there is no award of interest in the present matter. The operative part of the judgment dated 4.7.2007 delivered by the Commissioner for Workmen''s Compensation, is as under:

(1) The application at Exh. 1 is allowed.

(2) The non-applicant is directed to deposit compensation of Rs. 1,25,952 in this Court within three months from the date of this order.

(3) The non-applicant is directed to deposit 50 per cent penalty on the amount of compensation, i.e., Rs. 62,976 in this Court within three months from the date of this order.

(4) No order as to costs.

Thus the Commissioner has awarded Rs. 1,25,952 as compensation and amount of Rs. 62,976 as penalty under the provisions of Section 4-A(3) (b) of the Act. Interest u/s 4-A(3)(a) has not been awarded. The scheme of Section 30 itself is very clear and said section contemplates appeal against the order awarding compensation and against order awarding interest on penalty. The appeal is to be entertained only if substantial question of law is involved and in case of any appeal filed by the employer, the appeal is required to be accompanied by certificate of Commissioner that the employer has deposited with him amount payable under order, appealed against. Thus if there is no award of interest at all to the claimants/dependants, they cannot file appeal u/s 30 of the Act. Hon''ble Madhya Pradesh High Court has in the above referred ruling, taken a similar view after appropriate discussion in the matter. This Court also in Namdeo Patil Vs. Bharat Patil and Another, observed that in case of non-grant of interest and penalty contemplated u/s 4-A of the Act of 1923, no remedy by way of appeal u/s 30 of the Act of 1923, is made available to the workman. In view of these decisions and view, I do not find it necessary to dwell any more upon this aspect in the present writ petition.

Insofar as award of interest is concerned, provisions of Section 4-A(3)(a) are mandatory. The minimum interest prescribed is 12 per cent and, therefore, the Commissioner has failed to exercise the jurisdiction available to him by not awarding any interest. It is significant to note that the Commissioner has under Clause (b) thereof awarded 50 per cent of the amount of compensation as penalty. Thus having found no justification on part of employer for not depositing the compensation immediately when imposition of penalty was found necessary, not awarding the statutory interest is nothing but failure to exercise the jurisdiction.

Advocate Mr. Kalwaghe claims interest on amount of compensation and penalty also. He has relied upon the word ''arrears'' appearing in Sub-section (3) (a) to state that said word includes amount of compensation as also penalty. He states that when the amount is not deposited within time, the penalty accrues and, therefore, legislature has deliberately used the word ''arrears'' to denote jointly the amount of compensation as also the amount of penalty.

Advocate Mr. Deshpande has invited attention to the fact that in Sub-clause (b), the Commissioner is required to record a finding that there was no justification for the delay in depositing compensation and thereafter only penalty can be awarded. He further states that Sub-clause (b) itself uses the word amount of interest, separately and amount of arrears contemplated by Sub-clause (a) are different.

The amount of penalty contemplated by Sub-clause (b) is a distinct head and hence law does not contemplate grant of interest on penalty. Perusal of these provisions together show that the word ''arrears'' as used in Section 4-A(3)(a) also covers the contingency in which employer may have deposited part of compensation. The provisions of Sub-clause (3) (a) do not cover amount of penalty at all, because the penalty is leviable under Sub-clause (b), if the arrears of compensation are found to be withheld by the employer without any justifiable reason. Language in Sub-clause (b) shows that in that event the Commissioner may in addition to the amount of those arrears and interest awarded under Sub-clause (a) award further sum not exceeding 50 per cent of ''such amount'' by way of penalty. Thus the statute contemplates the compensation as arrears. The amount of interest under Sub-clause (a) is distinct grant and amount of penalty grant is a distinct grant. The penalty to be granted, therefore, has to be 50 per cent of the amount of arrears and accordingly, the same has been granted. The demand for grant of interest on amount of penalty is, therefore, not supported by this provision.

In the circumstances, writ petition is partly allowed. Petitioners are found entitled to 12 per cent interest on amount of Rs. 1,25,952 from the date of accident, i.e., 28.12.2000. Rule accordingly. However, in the circumstances of the case, there shall be no order as to costs.