* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 212/2013
% 18.02.2014
THE NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr. Sameer Nandwani, Adv.
versus
SMT MAINWATI & ORS ..... Respondents
Through: Ms. Pratima N. Chauhan with
Mr. Manoj Kumar, Advs.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This appeal is filed under Section 30 of the Employees' Compensation Act, 1923 against the impugned order of the Commissioner dated 22.11.2012 by which the Commissioner allowed the claim of interest and penalty under Section 4A of the Act.
2. Para 2 of the impugned order records that the appellant/Insurance Company did not appear in the proceedings and did not file any reply in the Section 4A petition i.e the proceedings under Section 4A remain uncontested.
3. The proceedings under Section 4A are consequential and supplemental proceedings to the main proceedings of grant of FAO 212/2013 Page 1 of 5 compensation under Section 10 of the Act. After compensation is awarded in the main proceedings, inasmuch as, there may be justification available for not making payment of compensation and thus for not granting of interest and penalty under Section 4A, notices are issued to the parties to show-cause for grant of interest and penalty.
4. In the present case inasmuch as the appellant failed to appear before Commissioner, Commissioner has in accordance with law awarded interest and penalty. Since the impugned order is a short order, the same is reproduced below:
"1. The applicant has moved an application dated 3.05.2011 under Section 4-A of the Employees' Compensation Act, 1923 stating that the respondents have failed to make the payment of compensation within the prescribed time limit i.e. 30 days from the cause of action and as such the claimant is entitled for interest for delayed period and penalty. Therefore, the respondents be directed to make the payment of penalty as per law to them.
2. Whereas, notices were sent to the respondents through Speed Post to appear before this Court and to explain/show cause as to why the interest and penalty as prayed by the claimant should not be imposed upon them. The respondent No.2 i.e. M/s New India Assurance Co. Ltd. through their advocate filed their reply stating that the present application for interest and penalty filed by the claimants is not maintainable and being insurer they have deposited the amount of compensation in this case after they were directed by this court. Therefore, respondent No.2 is not liable to pay any amount of interest and penalty. The respondent No. 1 also appeared and filed the written arguments. Thereafter, both the respondent did not appear/argue/file any document in support of their contention made in their replies. The FAO 212/2013 Page 2 of 5 respondent No. 1 have failed to establish that they had informed the Insurance Co. in time so that the Insurance Co. should have made the payment of compensation in time.
3. Whereas, after examination of the order dated 08.06.2009 passed in this case, perusal of the pleadings/documents filed by parties, it has been established that the respondent No.1 has neither informed the Insurance Co. nor made the payment of compensation to the claimant/dependant of deceased workman with prescribed period of 30 days from the date of cause of action. Therefore, it is decided that the claimants are entitled to receive the interest @ 12% simple interest per annum, for the delayed period of payment from 05.06.2006 to 28.07.2009 which comes to Rs.1,54,459/- from respondent No.2 and also to receive the penalty @ 50% of total compensation amount, which comes to Rs.2,04,491/- from respondent No.1 as per the provisions of Employees' Compensation Act, 1923 are rules made there under.
4. That keeping in view of above decision, the respondent 1 Smt. Kamlesh is directed to deposit the payment of penalty and respondent 2 i.e. New India Insurance Co. Ltd. is directed to deposit the payment of interest, as decided/mentioned above, in this court through Demand Draft/Pay Order in favour of "COMMISSIONER, EMPLOYEE'S COMPENSATION
- IX" within 30 days, failing which proceedings to recover the same, as an arrear of the land revenue, shall be initiated."
5. Counsel for the appellant sought to argue that the appellant was not served before the Commissioner in the Section 4A proceedings, however, I do not find that there is any such ground which is raised in this appeal or that the appellant ever filed an application before the Commissioner that an appellant was wrongly proceeded ex parte and the appellant be heard on merits before passing the order under Section 4A FAO 212/2013 Page 3 of 5 of the Act.
6. Counsel for the appellant contended that Section 10 applies even to proceedings under Section 4A i.e proceedings under Section 4A have to be filed within two years from the date of the incident/accident, however, this argument is only a specious argument because Section 10 by its very term is only with respect to filing of the original compensation claim petition and does not apply to filing of consequential proceedings under Section 4A. It is consistently held by Supreme Court that Section 4A proceedings are consequential proceedings, which commence after compensation being awarded on the main application being filed under Section 22 of the Act. It is only after the compensation claim petition is allowed and that judgment becomes final, only then can the proceedings under Section 4A of the Act commence. This argument of counsel for the appellant is also therefore rejected.
7. In view of the above, there is no merit in the appeal because the appellant was bound to give justification for non-grant of interest and penalty, but the appellant failed to contest the proceedings,and therefore there is no illegality in the impugned order granting interest and compensation.
FAO 212/2013 Page 4 of 5
8. In view of the above, the appeal is dismissed with costs of Rs.20,000/- Costs shall be paid within a period of 6 weeks from today.
VALMIKI J. MEHTA, J FEBRUARY 18, 2014 ak FAO 212/2013 Page 5 of 5