BEFORE THE HON'BLE HIGH COURT OF CHHATTISGARH AT BILASPUR Chhattisgarh State Civil Supplies Corp. Ltd., Through its Managing Director Katchhari Chowk, Bal Ashram, Raipur Tah. and Distt. Raipur ,5S°, M.A<<<1)^"'/06 ~7^ —-APPELLANT Vs. (1) Commissioner for Workmen's Compensation, (Labour Court), Rajnandgaon. (2) Smt. Shantibai, Widow of late Punauram Satnami, ^R/o Village Paragpara, Tah- Pandaria, )istt- Kawardha (3) Laxminarayan Satnami, S/o late Punauram Satnami, > aged about 11 years, R/o Village Paragpara, Tah- Pandaria, Distt- Kawardha ^•';^ ^ y' (4) Punchram Satnami, \~ S/olate Punauram Satnami, / aged about 9 years, R/o Village Paragpara, Tah- Pandaria, Distt- Kawardha (Respondent No. 3 & 4 are being represented through their natural guardian and mother - Respondent No. 2 - Smt. Shantibai). (5) Chhattisgarh Ware House, ^ Q Through Branch Manager, / Ts^andaria, Tah- Pandaria, Dist- Kawardha RESPONDENTS APPEAL U/S 30 OF WORKMEN'S COMPENSATION ACT 1923 AGAINST AWARD DT. 21-9-06 fCOPY APPLIED ON 28.9.2006 RECEIVED ON 10.10.2006 PASSED^ BY COMMISSIONER FOR WORKMEN'S COMPENSATION ACT fLABOUR COURT^ RAJNANDGAON IN CASE N0. 1/WC ACT/05 FFATAL^ ORDERING ^THE APPELLANTTO DEPOSIT COMPENSATION OF RS. c^38.880/- AS COMPENSATION TOGETHER WITH INTEREST @ \6^ PER ANNUMFROM THE DATE OF FILING OF THE AiPltLICATION AND ALSO RS. 1,01,664/- TOWARDS PENALTY. 1 HIGH COURT OF CHHATTISGARH. BILA8PUR DB: Hon*ble I. M. QUDDUSI fls Hon'ble G. MINHAJUDDIN, JJ APPBLLANT: RE8PQNDBNT8: M.A(C1 No.SOO/2006 Chhattisgarh State Civil SuppUes Corporation Ltd. Vs. Gurubad Bai aad ofhers APPEAL UNDBR 8ECTION 30_< LWORKMBN>8 COMBPNSATION ACT. 1923 Appearance: Mr. N. K, Vyas, counsel for fhe appeUant Mr. H. B. Agrawal, Sr. Advocate with Mr. Paolcaj Agrawal, counsel for respondents 2 to 4, Mr. Rajendra Tripafhi, counsel for respondent no.5, ORAL ORDBR (10.08.2011) Per I.M. OUDDUSI, J. This appeal has been filed by fhe exnployer against fhe iaipugned award 21.09.2006 passed by fhe Coimnissioner for Worknien's Coinpensation Act (Labour Court) Rajnandgaon ia Case No, 1/WC Act/05 (Fatal) directmg to deposit coxapensation of Rs.3,38,880/- along-wifh interest @ 6% per aauuin as also fhe penalty @ 30% ofthe award that is Rs.1,01,664/-. This appeal was adniitted by order dated 22.12.2006 on fhe foUowuig substaatial question of law: "Whefher learaed Conmiissioner for Workmen's Corapensation, Rajnaadgaon vide its Award dated 21.09.2006 was justified ia imposiag a penalty of Rs,l,01,664/- (Rupees One Lakh one fhousaad six hundred sixty four) wifhout issuiag aay show cause notice aad wifhoiit affordiag aay opportunity of being :^ '.^•''^^^h, £i ^^:m^^s\ ^. ./.•^ heard to fhe appeUaat ignoring fhe provision of Sec. 4- A(3)(b) ofWorkmen's Compensation Act, 1923 ? 3. Durmg fhe course of hearmg fhe foUowiag substantial questions of law are found to be mvolved m tibds appeal. (i) Whefher fhe Coinmissioner could award an iaterest lesser fhan provided ia fhe statute i.e,, section 4-A(3)(a) ofthe Act, 1923. (u) Whether fhe amount feU due would be paid from fhe date of accideut or fhe date of adjudication by fhe Conunissioner or aay ofher date, 4. Brief facts of the case are fhat fhe claimants have filed aa application u/ s 22 & 23 of fhe Eraployee's Conipensation Act, 1923 for award of compensation stating iaterlia fhat fhe deceased Punauram Sataami was workiag as labour ia fhe warehouse of non-applicaat no. 1 situated m viUage Maapura, Tah.sU Paadariya. The Chhattisgarh State Warehouse/ respondent no.5 deals io. storing goods at large. AppeUaat/ Chhatdsgarh State Civil SuppUes Corporation handed over ftie task of storing its goods to rcspondent no.5. On 05.02.2004, Punauram. was taking out fh.e rice bags of fhe appeUaat froia fhe godown ofrespondeut no,5. WhUe puUiag out the rice bag froin fhe stock pile, suddenly sonie stacked rice bags fell on him and he was pressed under fbLOse bags, as a result ofwhich, he sustained grievous iajuries on his head, neck and back aad died on 07.02.2004 diiring fhe course of treatoaient ia Anibedkar Hospital. At fhe tiine of accident, fhe deceased was aged about 45 years aad was eammg Rs,4000/- per inonth. The Claioiaats being legal representatives have claiaied ^^. ^. •^^ ^^ compensation to fhe tune of Rs.4,00,000/- for fhe death of deceased. S. Before proceeding farfher it is necessary to peruse fhe definition of <<eniployer?? given ia sub-section (e) of section 2 of fhe Workmen's Corapensation Act, which is quoted below : "2(e) "einployei^ iacludes aay body of persons whefher incorporated or not aad aay niaaaguig agent of aa einployer aad the legal representative of a deceased eniployer, aad when fhe services of a workinaa are teniporarily lent or let on hire to aaofher person by fhe person wifh whoin fhe workinan has entered iato a contract of sen^ice or apprenticeship, mLeaas such ofher person while fhe workraaa is workuig for him^ 6. Section 4A(1) provides fhat coiiipensation u/s 4 shall be paid as soon as it faUs diie. The provisions regardiag imposiag of iaterest as weU as penalty have been given ia Clauses (a) & (b) of sub-section (3) of Section 4. Therefore, fhe provisions of section 4-A are also Uable to be perused which are quoted as under: 4A. 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 fhe eiaployer does not accept fhe UabUity for compensation to the extent clahned, he shaU be bound to niake provisional payinent based on fhe extent of UabUity which he accepts, aad, such payinent shaU be deposited with the Conunissioner or niade to fhe workaiaa, as fhe case inay be, witiiout prejudice to the right of the workiaaa to niake aay furfher clami, 8. (3) Where aay employer is iu default m payiag the coinpensation due under fhis Act withia one xnonth froni the date it feU due, fhe Coinmissioner shall— (a) direct fhat fhe euiployer shall, ia addition to the amount offhe arrears, pay siniple iaterest tibLereon at the rate of twelve per ceut per aanuni or at such higher rate not exceediag fhe maxiaium of fhe lendiag rates of any scheduled baak as may be speci&ed by fhe Centaral Goveraxnent, by notification ia fhe Ofiicial Gazette, on tiie ainount due; aad (b) tf, in. his opiaion, fhere is no justification for fhe delay, direct fhat fhe einployer shaUy in addition to fhe amount of fhe arrears, aiid iaterest fhereon pay further $um not exceediag fifty per cent of such amoiint by way ofpenalty: Provided fhat aa order for fhe payinent of peualty shaU not be passed under clause (b) wifhout givmg a reasonable opportunity to the eniployer to show cause why it shoiild not be passed. Explaaation.—For fhe purposes of this sub-section, "scheduled baak^ ineans a bank for fhe tune being iacluded ia the Second Schedule to fhe Reserve Baak of IndiaAct, 1934 (2 of 1934). Learaed counsel for ftie appellaiit has subnutted fhat the deceased was not aa eiaployee of fhe appeUaat but he was aa eaiployee ofrespondent no.5 (Mukaddam) who was doiag work for the appeUaat aad engaged workmen for undertakmg fhe work of fhe appeUant, A perasal of fhe evidence of Non-AppUcaiit Witaess naoiely Jitendra Kuiuar, who was Distdct Manager of Appellaat/ State CivU SuppUes Corporation, shows fhat he has admitted m his cross examination that fhe names of labourers engaged on 05.02,2004 were mentioned ia the Register. But fhe said register was not produced in thie Court by fhe appeUant. The ^ learaed Cominissioner has held fhat negUgence on the part of appeUaat is made out; fhe appeUaat has not explaiaed any justified reasons ia not fiUng the crucial docuinents aad fhe deceased was workiag under fhe control of fhe appeUaut, 9. In view of fhe above discussion, we are of fhe opiaion fhat the appeUaiit is aii exnployer wifhia tfae definition of "eiaployer^ given ia section 2(e) offhe Act 10. Learaed counsel for fhe appeUant has fiirfher subinitted fhat fhe Coniniissioner has wrongly assessed fhe inonfhly iaconie of fhe deceased as Rs.4000/- per inonfh as fhere was no proofof fhe same aad ia absence of aay proof, fhe iniaimiiin wages prevailiag at the tixne of accident should have been counted that was Rs.2205/- per month. If that is the position fhen it would be deemed that the appeUaats should have at-least deposited ftie coinpensation @ Rs.2205/- per nionfh after calculating ia accordance with fhe rclevaiit factor aiid the age given under fhe Worknien's Cohipensation Act ia view of sub- section (2) of section 4-A which provides fhat ia case fhe appeUaat employer does not accept the Uability for compensation, he shaU be bound to make provisional payment based on fhe extent of liability which he accepts, aiid, such payment shall be deposited wifh the Commissioner or made to the workmaa wifhout prejudice to fhe right of workniaa to make aay farther clami, In ofher words, ia the first place tiie employer has to accept aad make the payment eifher to the workmaa 6r to deposit wifh fhe Commissioner, but tliat has not been dond ia the iastaat case. Thereforc, it caiuiot be said fhat there was no delay on fhe part of fhe eniployer ia inakfcng payiaent ofadnutted UabiUty by it 11. Fiirther clause (a) of subsection (3) of section 4A of fhe Act provides fhat a simple iaterest on fhe acaount ofarrears @ 12% per aanumL or at such higher rate not exceediag fhe niaxiinuiu offhe lendiag rates ofaay Scheduled Baiik as may be speci&ed by fhe Central Gk)veranient by noti&cation ia fhe Official Gazette, on fhe amount due is Uable to be paid iiader fhe directions of the Commissioner aad fhe Commissioner shaU direct for that but shaU denote the inaadatory provision, In fhat view of fhe inatter, fhe Conunissioner was not eiapowered to exercise his discretion in reduciag fhe percentage of fhe iaterest. In aiiy case, iniaimuni iaterest @ 12% per aoiiiiin is to be imposed by fhe Conmiissioner aad fherefore, ia oiu* opioion, the Coiniaissiouer has erred ia granting sioiple iaterest @ 6% per aanum., 12. Furfher if fhe iniaioiuia wages is to be counted aad fhe appeUaat conies wifhia the defmition of 'eniployer" aad the amioiint due has not been paid despite service ofnotice upon it aad even after fhe expiry of one inonth froia the date appearaace before the Commissioner, in. such circumstances, at-least fhe Conimissioner should have considered the graat of iaterest fromi the date of expiry of one inonfh of fhe date of appearaa.ee as flie aniount should have fallen due aUeast on fhe date of appearaace before Conunissioner. 13. It is also to be noticed that penalty @ 30% has been unposed by fhe Coinndssioner wifhout giviag aay reasonable opportunily, In fhis regard, proviso to sub-section (3) of section 4-A, as quoted above\, clearly provides fhat no penalty caa be ioiposed without affordmg reasonable opportunity to the employer to show cause why it should not be imposed, Therefore, it is maadatory provision aad before imposiag penally, opportiinity was liable to be given which has not been given ia fhe iastaat case. 14. Siace atl the above aspects have not been considered by fhe Coinndssioner, we are of fhe opiaion that fhe inatter reqiiires reconsideration at its end and fherefore, we aUow fhis appeal in part aad remit fhe matter to fhe Commissioner for adjudication afresh at fhe earUest 15. The axaount which is already io. deposit shall be kept in fixed deposit ia aay Nationalized Baak so that interest may accrue fhereon aad the same shaU be subject to fhe final decision afresh by fhe Coininissioner ia fhe matter. 16. The parties shaU appear before the Comiaissioner on 21st of September, 2011. The lower Court Record shaU be sent back wifhout furfher delay. Sd/- I.M. Quddusi Judge Sd/- G. Minhajuddin Judge Rao