First Appeal No.1562 of 2009,Civil Application No.7076 of 2008

5th August, 2009

Petitioner Counsel: Shri. S. V. CHANDOLE,Shri. V. G. SAKOLKAR
Respondent Counsel: Shri. T. B. BHOSALE,Shri. M. D. SHINDE,Shri. DHANANJAY DESHPANDE

Cases Cited:
Ved Prakash Garg Vs. Premi Devi, 1997(8) SCC 1 [Para 3,4]

JUDGMENT

JUDGMENT :- This appeal challenges the judgment and award dated 12.2.2008 passed by the learned Commissioner, Workmen's Compensation under the Workmen's Compensation Act, 1923 ("said Act" for the sake of brevity) in WCP 15 of 2006, holding the appellant and respondent No.5 jointly and severally liable to pay the compensation of Rs.2,83,742/- to the claimants. It was further held that the claimants shall be entitled to 50 per cent penalty on the compensation amount from the appellant and respondent No.5. The trial Court has further directed that the interest on compensation at the rate of 12 per cent per annum, from the date of petition, till realisation of the entire amount be paid.

2. Learned counsel for the appellant challenges the findings recorded by the trial Court in respect of issue of relationship of employer and employee. Learned counsel has invited my attention to paragraph No.12 of the order passed by the trial Court, wherein, the list of employees has been referred to, which was handed over by the Contractor to the appellant and it did not include the name of deceased Mangal Aare. The trial Court has considered the entire evidence available on record, including those of the witnesses examined and recorded a categorical finding that all the documentary evidence shows that the deceased was in the employment of respondents at the relevant time. This finding is based on evidence. There is no perversity in recording such a finding. There is no question of law, which arises out of such a finding recorded by the trial Court. In this respect, provisions of Section 12 of the said Act needs to be seen, which fastens the liability of the employee on the principal employer. In view of this, so also finding recorded by the Court below, there is no infirmity in the findings fastening liability upon the appellant.

3. Learned counsel for the appellant also challenges the order of imposing 50 per cent penalty on the amount of compensation on the ground that the penalty would be leviable only upon passing of the order by the learned Commissioner determining the liability and after giving show cause notice as contemplated by Section 4-A(3)(b) of the said Act, as has been held by the apex Court in its decision in the case of Ved Prakash Garg Vs. Premi Devi [1997(8) SCC 1]. Where the employer does not accept his liability, one month's period will start running from the date of the order of the learned Commissioner. The order of the learned Commissioner, in this case, has been passed on 12.2.2008. Thus, the amount became due and payable on 12.3.2008. If the employer fails to pay the said amount, after the period of one month from the date of such determination, then 12 per cent interest, along with 50 per cent penalty becomes payable by the employer, subject to further satisfaction about the delay, after receiving show cause notice for failure to pay the amount. This seems to be the correct position and hence the order passed by the learned Commissioner, imposing penalty to the extent of 50% of the amount of compensation is not justified. It is only if the appellant fails to make the payment within the period of one month and is given a show cause notice calling upon to give the explanation for delay, the order regarding penalty can be passed by the learned Commissioner. In view of this, the order dt. 12.2.2008 passed by the learned Commissioner, imposing penalty to the extent of 50 per cent of the amount of compensation needs to be quashed and set aside.

4. Learned counsel for the appellant further contended that the trial Court was wrong in imposing the interest at the rate of 12 per cent per annum from the date of the petition till its realization. He invited my attention to the provisions of Section 4-A of the said Act as well a the decision of the apex Court in the case of Ved Prakash (supra), in support of his contention that where the employer does not accept his liability, the period of one month will start running from the date of the order of learned Commissioner. In view of this law laid down by the Apex Court and provisions of Section 4-A of the said Act, in my view, the learned Judge of the trial Court was wrong in granting interest at the rate of 12 per cent per annum from the date of filing of the petition till its realization.

5. In view of the aforesaid adjudication, the appeal is partly allowed and the impugned judgment and award dt.12.2.2008 passed by the Commissioner for Workmen's Compensation in WCP 16 of 2006 is modified as follows :-

(A) The order holding original respondents 1 and 2 i.e. Appellant and respondent No.5 herein, jointly and severally liable to pay the compensation to claimants is maintained.

(B) The order imposing 50 per cent penalty on the compensation amount is quashed and set aside.

(C) The order holding that the claimants are entitled to the interest on the compensation amount at the rate of 12 per cent per annum from the date of petition till its realisation is modified to the extent that the interest at the rate of 12 per cent per annum shall become payable only after expiry of period of one month from 12.2.2008 and not prior to that.

There shall, however, be no order as to costs.

6. In view of the fact that the appeal itself has been disposed of finally, Civil Application No.7076 of 2008 does not survive and accordingly stands disposed of, with no order as to costs.

Ordered accordingly.