1 2 fa.9.01 S.4-A ndm IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 9 OF 2001 Mrs. Heerabai Sakharam Wayase and others. ... Appellants Versus 1. Mrs. Alka Hanuman Chavan. 2. The New India Assurance Co. Ltd. ... Respondents ----- Mr. A.M.Utgikar for the Appellants. None for the Respondents. ----- CORAM : A.S.OKA, J. DATE : 12 th August, 2011. ORAL JUDGMENT: 1 The submissions of the learned counsel appearing for the Appellants were heard on the earlier date. As the Advocate for the Respondent No.2 was not present, judgment was not delivered. Even today, none appears for the Respondents. 2 The issue involved in this appeal is narrow. The Appellants are claimants in a claim application filed under the Workmen’s Compensation Act, 1923 (hereinafter referred to as “the 2 2 fa.9.01 S.4-A said Act”). The claim application was filed for claiming compensation on account of death of one Sakharam arising out of employment injuries. The claim application was not contested by Respondent No.1, who is the employer of the deceased and by the Respondent No.2 who is the insurer of the Respondent No.1. 3 The learned Commissioner for Workmen’s Compensation by judgment and order dated 14 th March, 2000 allowed the claim application and directed the Respondent Nos.1 and 2 to deposit an amount of Rs.2,11,790/- as compensation. The first submission of the learned counsel appearing for the Appellants is that the learned Commissioner has committed an error by not granting interest payable as per the clause (a) of sub-Section (3) of Section 4-A of the said Act. His submission is that this was a case where the Respondent No.1 never disputed the claim of the Appellants and therefore, this was a fit case to grant interest at the rate of 12% per annum. His second submission is that as there was a delay in deposit of the 3 2 fa.9.01 S.4-A compensation, this was a fit case where powers ought to have been exercised under clause (b) of sub-Section (3) of Section 4-A of the said Act by imposing penalty. He submitted that no reasons have been assigned by the learned Commissioner for not granting relief of interest and penalty. 4 I have carefully considered the submissions. Section 4-A of the said Act reads thus: “[4-A. Compensation to be paid when due and penalty for default. – (1) Compensation under section 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 shall – (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and 4 2 fa.9.01 S.4-A (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 per cent 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). [(3-A) The interest and the penalty payable under sub- section (3) shall be paid to the workman or his dependant, as the case may be.]] ” 5 In the case of Ved Prakash Garg Vs. V. Premi Devi and others (1998 SCJ 1), the issue arose before the Apex Court as to whether the Insurance Company which has insured the employer – owner of the vehicle against third party risk and against claim for compensation under the said Act is liable for the interest imposed against the employer. The Apex Court answered the issue in the affirmative by holding that the Insurance Company was liable to pay interest under Section 4-A of the said Act. The view taken by the Apex Court as far as liability for penalty is concerned is that the liability will 5 2 fa.9.01 S.4-A be only of the employer and the Insurance Company will not be liable. 6 Now coming to the facts of the case, the deceased was employed as a driver of the jeep of the Respondent No.1. The accident occurred on 1 st September, 1997. The claim application was filed on 19 th November, 1997. The roznama of the claim application is a part of the paper-book. The roznama shows that on at least on three occasions, time was granted to the Respondent No.2 to file written statement. Ultimately, on 9 th September, 1998, the application made by the Respondent No.2 for grant of time for filing written statement was rejected. Perusal of the roznama shows that on some of the dates, as the post of the learned Commissioner was vacant, the hearing of the application could not proceed. This is not a case where there was any default on the part of the Appellants which resulted into delay in the disposal of the proceedings. The learned Commissioner has not assigned any reason for not granting interest. Perusal of the roznama of the proceedings shows that there was no reason to deny 6 2 fa.9.01 S.4-A the interest. Considering the facts and circumstances of the case and the fact that the accident is of the year 1997, interest deserves to be granted at the rate of 9% per annum. As far as the penalty is concerned, there is no ground of challenge in the memorandum of appeal. In any event, as of today, the order directing the Respondent No.1 to pay penalty cannot be made as before passing the order of penalty, a reasonable opportunity is required to be given to the Respondent No.1 to show cause why it should not be passed. The Commissioner did not issue any such notice to the Respondent No.1. 7 Hence, the impugned judgment and order will require modification and I pass the following order: i. The impugned judgment and order is modified ; ii. The Respondent Nos.1 and 2 shall jointly and severally pay interest at the rate of 9% per annum on the sum of Rs.2,11,790/- from the date of filing of the claim application till the deposit of the amount ; 7 2 fa.9.01 S.4-A iii. Time of three months is granted to deposit the interest amount ; and iv. The appeal is partly allowed on above terms with no order as to costs. [ A.S.OKA, J ]