Vijay Ram vs Janak Raj

I.K. Kotwal, J.—This is employer's appeal against an order of Assistant Labour Commissioner, Udhampur, with powers of Commissioner

under the Workmen's Compensation Act, 1923 hereinafter called the Act, awarding a sum of Rs. 2,490/-, i.e., Rs. 1,260/- on account of

compensation for permanent partial disability u/s 4 of the Act, Rs. 630/- on account of compensation u/s 4-A of the Act and Rs. 300/- on account

of costs in favour of the workman Respondent.

The Respondent brought an application against the Appellant alleging that while he was working as a Mistry under him in his workshop at Salal,

he fell from a height of 24 feet and thereby sustained an injury resulting in the fracture of his right leg. He also enclosed with it a medical certificate

as well as a Skiagram showing fracture of his right femur. Notice of this application was given to the Appellant who appeared and filed his

objections on 19.4.1973 denying either that the Respondent was his employee or that he had sustained any injury. During the proceedings, the

Appellant did not accept the Doctor's opinion as contained in the certificate appended to the application showing 40 percent permanent residual

disability and insisted for the Respondent's examination by a Medical Board. This prayer was granted and the Respondent was got examined by a

board consisting of three doctors. The board also found that there was fracture of his right femur, which in its opinion had resulted in only 10

percent of the Respondent's permanent partial disability. The Commissioner gave opportunity to the parties to lead evidence. Whereas the

Respondent examined a few witnesses, the Appellant remained content with the statement of his partner Baboo Ram being brought on the record.

The Commissioner, on consideration of the evidence, allowed the Respondent's claim and passed the award impugned in the appeal.

Mr. Thakur has assailed the aforesaid award on the ground that the Commissioner has committed errors of law inasmuch as:

(i) he has awarded the sum without giving a finding either that the Respondent was employed by the Appellant or that the accident resulting in the

fracture of his right femur took place during the course of his employment;

(ii) he has relied upon the certificate issued by the Medical Board without orally examining the doctors constituting the same;

(iii) he has passed the impugned award without observing the rules framed under the Act; and (iv) he has misapplied Section 4-A in imposing the

penalty.

No one has appeared to defend the impugned award on behalf of the Respondent.

So far as the first ground is concerned, I find it totally baseless. There is a categorical finding of fact recorded by the Commissioner on

appreciation of evidence on the record that the Respondent had been employed as a Mistry by the Appellant and his wages had been fixed at Rs.

13/- per day. He has further found that the accident took place while the Respondent was working as a Mistry in the Appellant's workshop.

Whether or not the Respondent was employed by the Appellant, and whether or not the accident resulting in the fracture of his leg took place

during the course of his employment, were all questions of fact on which no appeal lay u/s 30 of the Act, which clearly restricts the right of appeal

to a substantial question of law only. Where on a particular point there is evidence far and against a finding-recorded by the Commissioner on

taking a particular view of the evidence, it cannot be questioned howsoever erroneous that rinding may be, as no question of law can be said to

have arisen in such a case. Where, however, a rinding of fact is based upon no evidence at all a substantial question of law arises and an appeal u/s

30 is competent. A similar view appears to have been taken by Calcutta High Court in Bhusan Chandra Ghose Vs. George Henderson and Co., .

In the present case the findings recorded by the Commissioner being based upon evidence, are not open to question merely because the

Commissioner has not appreciated the evidence correctly or that a different conclusion is also possible on appreciation of the same evidence.

While the Respondent's evidence was being recorded, he wanted the doctor to be examined, who had issued the certificate showing 40 percent

permanent partial disability in his favour. Before the doctor could be, however, examined, the Appellant as transpires from the interim order

recorded by the Commissioner on 16.7.1975, made a counter-prayer that instead of examining the said doctor, the Respondent may be asked to

get himself examined by a Medical Board and obtain a certificate from it, adding, that whatever opinion the Board would give in writing in its

certificate would be binding on him. This prayer, as already noticed, was granted. The Board examined the Respondent and issued a certificate in

his favour accordingly. This certificate was tendered in evidence by the Respondent and was admitted by the Commissioner in evidence by mutual

agreement of the parties. Clearly, therefore, the Appellant prevented the Respondent from examining the doctor by undertaking to be bound by

what was written in the certificate of the Board itself. He cannot now be heard to say that the same was inadmissible in evidence because the

doctors constituting the Board were not examined orally. The parties can by mutual agreement bind themselves by evidence which is otherwise not

admissible under law. No fault can, therefore, be found with the impugned award because the doctors constituting the Board were not orally

examined. For carrying out the purposes of the Act, the Government has framed certain rules u/s 32. Rule 24 confers discretion on the

Commissioner to dismiss in limine an application for compensation made u/s 22 of the Act after holding a preliminary enquiry under Rule 23. Rule

25 gives him a further discretion to dismiss such an application even on taking ex-parte evidence of the Petitioner. It is not, however, obligatory on

him to hold such enquiry or take such evidence before issuance of a notice to the opposite party. He may or he may not take recourse to these

rules. How would he proceed in the matter may all depend upon the peculiar circumstances of a given case. He may take recourse to Rule 24 or

25 where he is prima facie of the opinion that the claim is either false or frivolous according to the contents of the application itself. He may,

however, straightaway issue notice to the opposite party where he is prima facie satisfied that the case is genuine. Where the opposite party

appears and chooses to contest the claim, the Commissioner is bound to record its statement in writing, in case no written statement has been filed

by it. He has a discretion to record its statement even if a written statement has been filed by it. Then comes the stage of rules 28 and 29 on which

much stress has been laid on behalf of the Appellant. These rules for the sake of ready reference are reproduced as below:

Framing issues-(I) After considering any written statement and the result of any examination of the parties, the Commissioner shall ascertain

upon what material propositions of fact or of law the parties are at variance and shall thereupon proceed to frame and record the issues upon

which the right decision of the case appears to him to depend.

(2) In recording the issues, the Commissioner shall distinguish between those issues which in his opinion concern points of facts and those which

concern points of law.

Power to postpone trial of issues of fact where issues of law arises-When issues both of law and of fact arise in the same case, and the

Commissioner is of opinion that the case may be disposed of on the issues of law only, he may try those issues first, and for that purpose may, if he

thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined.

These rules, as appears from their language, are in substance a reproduction of Rules 1 and 2 of Order 14, CPC Admittedly, no issues were

framed in the case Mr. Thakur's contention is that the Commissioner by not following the procedure laid down in these rules has committed a

substantial error of law and his award stands vitiated on this ground simpliciter. This argument though a little attractive, is yet devoid of any force.

There is no sanctity, as such, behind framing of issues. Issues are framed merely with the object of focusing the attention of the parties on the

points, both of law as well as fact, on which they are at variance. If the parties go to the trial fully knowing each others cases, lead evidence in

support of their respective cases, discuss it before the court, and the court thereafter, decides the same, its decision will not be set aside in appeal

merely because no issue was framed. In saying, so, I am only following the principle laid down by their Lordships of the Supreme Court in

Nedunuri Kameswaramma Vs. Sampati Subba Rao, wherein it was held:

No doubt, no issue was framed, and the one which was framed could have been more elaborate, but since the parties went to trial fully knowing

the rival cases and led all the evidence not only in support of their contentions but in refutation of those of the other side, it cannot be said that the

absence of an issue was fatal to the case, or that there was that mis-trial which vitiates proceedings. We are, therefore, of opinion that the suit

could not be dismissed on this narrow ground, and also that there is no need for a remit, as the evidence which has been led in the case is sufficient

to reach the right conclusion. Neither party claimed before us that it had any further evidence to offer. We, therefore, proceed to consider the

central point in the case, to which we have amply referred already.

To the same effect are the observation made in Kunju Kesavan Vs. M.M. Philip I.C.S. and Others, .

In the instant case, the parties had gone to the trial fully understanding each others case. Whereas the Respondent examined a few witnesses, the

Appellant remained content with the statement of his partner Baboo Ram alone, and rightly so, because after his admission that the Respondent

had been employed as a Mistary by the firm. Wages too had been fixed at Rs. 13/- per day, the Appellant perhaps did not think it worthwhile to

lead any evidence. As appears from his award, the Commissioner had addressed himself to all the points in controversy between the parties while

making the same. Non-observance of rules 28 and 29 in these circumstances, was wholly inconsequential which did not vitiate the award. This

does not, however, mean that Commissioners under the Act can refuse to observe these rules at their sweet will. These rules, on the plain terms,

require a devout observance and a failure to do so at times may give rise to a substantial question of law requiring interference in appeal. It is a

different matter that failure to observe these rules in, the peculiar circumstances of this case is of no consequence.

I am not impressed by the broad contention of Mr. Thakur that a Commissioner under the Act, by not following the procedure laid down in the

rules framed under it, ipso facto mis-directs himself on a point of law. The procedure laid down in the rules is aimed at advancing the object of the

Act, which is undoubtedly to give speedy relief to the workman or his dependants. Where non-observance of the rules has not resulted in mis-

carriage of justice, consequential mis-direction on a question of law, if any, will not be of any consequence. Finding fault with the Commissioner's

award on the ground of non-observance of rules simpliciter is likely to result in delaying the proceedings, and thereby defeating the very object of

the Act and the rules made thereunder. With respect to the learned judge, if I may say so, I cannot subscribe to the view taken by them in

Ramautar Choudhary Vs. Sone Valley Portland Cement Co. Ltd., and K.S. Modi v. Bichitrananda Swain 1973 A.C.J. 250 that in all cases where

the rules have not been observed by the Commissioner his award shall stand vitiated. In my opinion, the law in these authorities has been stated too

widely.

This brings me to the last contention regarding the ambit and scope of Section 4-A. This section reads as under:

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

(1) Compensation u/s 4 shall be paid as soon as it falls due.

(2) In cases where the employer does not accept the liability for compensation to the extent claimed he shall be bound to make provisional

payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman,

as the case may be, without prejudice to the right of the workman to make any further claim.

(3) Where 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.

The contention raised here is twofold. In the first place it has been urged that the compensation could not have fallen due till it was determined by

the Commissioner. Secondly, it has been argued that no penalty could have been imposed by the Commissioner unless he is satisfied that there was

no justification on the part of the employer to delay the payment of the compensation.

Section 4-A makes it obligatory on the part of the employer to pay the compensation as soon as it falls due. The expression ""falls due"" has not

been defined in the Act. There is difference of opinion between the High Courts of Allahabad and Bombay on the one hand and the High Court of

Orissa on the other hand over the connotation of this expression. Whereas the view taken by the High Courts of Allahabad and Bombay is that

compensation shall fall due as soon as the accident takes place, the view taken by the High Court of Orissa is that it shall fall due only after a notice

u/s 10-A has been served upon the employer. Margarida Gomes and Another Vs. Mackinnor Mackenzie and Co. Pvt. Ltd., ; Saraswati Press,

Dehradun v. Nand Ram 1971 A.C.J. 316 and Khilloo Cahandramma v. Hindustan Construction Co. Ltd. 1971 Lab. I.C. 135 . I am in respectful

agreement with the view taken by the High Courts of Allahabad and Bombay that compensation falls due as soon as the accident has taken place.

Right to claim compensation arises from the death or disablement of the workman, as the cases may be. There is no reason to postpone the

accrual of this right to a future date. Apart from some provisions noticed in the Bombay case, even Sub-clause (2) of Section 4-A casts an

obligation on the part of the employer to deposit at least that much amount with the Commissioner, which is due to the workman, or his

dependants, according to the extent of the liability admitted by the employer himself. The emphasis is thus clearly on prompt payment of the

compensation to carry out the object of the Act of providing immediate relief to the poor and helpless workman, or their dependants, as the case

may be. Making the compensation due either on the admission of the employer, or on its determination by the Commissioner, as suggested by Mr.

Thakur, would be clearly against the letter and spirit of the Act. Section 4-A is fairly wide in scope. A Commissioner exercising powers under the

Act may pass a composite order awarding compensation as well as imposing penalty at the conclusion of the trial of an application made to him u/s

He may even pass an order imposing penalty u/s 4-A after he has awarded the compensation. This may depend upon the peculiar facts of a

given case. But, in no case shall he impose a penalty u/s 4-A, unless he has given to the employer a prior reasonable notice of his intention to do

so, and thereby provided him an opportunity of showing cause for delayed payment of the compensation. Obligation on the part of the

Commissioner to hear the party to be adversely affected is implicit in Sub-section (3), for what was the reason for not making the 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 a conclusion whether or not there was any

justification for the delay. He cannot be allowed to reach his satisfaction at his whim or caprice simpliciter. In what form such a notice may be given

will further depend upon the facts of each case. In one case an issue on the plea of penalty may constitute such a notice, whereas in another case

such a notice may be reasonably inferred even from the pleadings of the parties coupled with their conduct during the trial. Furthermore, a

Commissioner imposing penalty shall have to state in his order, the reasons as to why he considers the delay in payment of compensation as being

without any justification, for the reasons thus stated may give rise to a substantial question of law necessitating interference with his order in appeal.

Failure on his part to give such reasons will invariably vitiate his order involving non-compliance with the statutory provisions of Sub-section (3)

itself.

In the instant case, apart from the fact that the Appellant had no notice, as such, of the Commissioner's intention to impose penalty, nor was

there any pleading to that effect, or an issue on the point, even the Commissioner in his order has not recorded a finding that delay in payment of

compensation was without any justification. His order to the extent it imposes penalty, cannot be upheld. It is, therefore, set aside to that extent

only. No fault can, however, be found with the rest of his order which is maintained.

With this modification, the appeal is dismissed, but in the circumstances of the case, without any order as to costs.