Gujarat High Court
Kalubhai Kasnabhai Damor vs Executive Engineer on 30 September, 2025
NEUTRAL CITATION
C/FA/208/2006 JUDGMENT DATED: 30/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 208 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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Approved for Reporting Yes No
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KALUBHAI KASNABHAI DAMOR & ORS.
Versus
EXECUTIVE ENGINEER & ANR.
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Appearance:
MR BJ TRIVEDI(921) for the Appellant(s) No. 1,2,3
MS JIGNASA B TRIVEDI(3090) for the Appellant(s) No. 1,2,3
MS AGNEYA MANKAD, ASST. GOVERNMENT PLEADER for the
Defendant(s) No. 1
MR AM PAREKH(562) for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 30/09/2025
ORAL JUDGMENT
1. Present appeal is filed by the appellants - original claimants against the judgment and award dated 02.04.2004 passed by the learned Commissioner for Workmen's Compensation at Ahmedabad in Workmen's Compensation Case No.90 of 1986, whereby the learned Commissioner has partly allowed the application filed by the appellants and awarded compensation of Rs.47,405.35ps. alongwith 6% interest and 25% penalty.
2. The short facts giving rise to present appeal are that, the appellant No.1 and his deceased wife were labourers and the Page 1 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined appellant Nos.2 and 3 were their children. That, the appellant No.1 and his wife were employees of the respondent No.2 - Contractor and were working as labourers and earning Rs.15/- per day. That, on 25.09.1986, when they were digging sand from the pond near Sarkhej, the cliff broke down and the wife of appellant No.1 and other female labourers got buried under the said cliff, as a result of which, they got injured and were admitted in hospital. That, the wife of appellant No.1 died during treatment and therefore, the appellants had claimed compensation of Rs.37,440/- by filing Workmen's Compensation Case being Workmen's Compensation Case No.90 of 1986, whereby the learned Commissioner has awarded compensation as aforesaid vide its judgment and award dated 02.04.2004.
2.1 That, the respondents had filed their written statements at Exh.-48 & 6 respectively denying all the allegations made in the application. The respondent No.1 had contended before the learned Commissioner that the appellant No.1 was employed by the respondent No.2 - Contractor to whom the contract of work was allotted and therefore, under such circumstances, the respondent No.1 was not liable to pay any compensation. The respondent No.2 had contended that there was no employer-employee relationship between them and therefore, he has denied the liability.
2.2 That, after considering the pleadings of both the sides, the learned Commissioner had framed the issues at Exh.-8 referred in para-5 and the same were replied in para-6. After considering the documentary as well as the oral evidence led before the Court, the learned Commissioner has partly allowed the application of the appellants and awarded compensation vide its judgment and award Page 2 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined dated 02.04.2004.
3. Being aggrieved and dissatisfied with the aforesaid judgment and award passed by the learned Commissioner, the appellants - original claimants have filed the present First Appeal under Section 30 of the Workmen's Compensations Act, 1923.
3.1 The appellants have framed following substantial questions of law for consideration of this Court :
(1) Whether the principal employer i.e. the respondent no.1 could have been exempted in view of the provisions of S.12 of the Workmen's Compensation Act, 1923?
(2) Whether the imposition of penalty equivalent to 25% of the amount of compensation without discussing the aspect in the judgment in view of Section 4A of the Workmen's Compensation Act, 1923 is proper and legal?
4. Heard Mr. B.J. Trivedi, learned counsel appearing for the appellants - original claimants, Ms. Agneya Mankad, learned Assistant Government Pleader, appearing for the respondent No.1 and Mr. A.M. Parekh, learned counsel appearing for the respondent No.2.
5. Learned counsel Mr. Trivedi for the appellants has submitted that the learned Commissioner has committed a serious error while awarding only 6% interest as the impugned award was passed in the year 2004 and the amendment in Sections 3 and 4 came into force in the year 2000. He has submitted that the learned Commissioner has Page 3 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined also committed a serious error while considering penalty at 25% which is inconsistent and inadequate instead, the learned Commissioner could have awarded penalty @ 50% and thus, the learned Commissioner has committed a jurisdictional error while passing the impugned judgment and award and therefore, the present appeal is required to be considered on the above mentioned substantial questions of law. He has submitted that the learned Commissioner has committed a grave error while fastening the liability of penalty and interest upon the respondent No.1 while the principal employer i.e. respondent No.2 was not held liable for the same. Learned counsel Mr. Trivedi has referred and relied upon the recent decision of the Hon'ble Apex Court rendered in case of Kamal Dev Prasad vs. Mahesh Forge, reported in [2025] INSC 591 and submitted that in the above referred decision, the Hon'ble Apex Court, after considering the facts of the case, has allowed the appeal in part and awarded 12% interest and penalty @ 50% and therefore, under such circumstance, he has urged that the present appeal is required to be allowed and the rate of interest and penalty are required to be modified.
6. As against that, the learned AGP Ms. Mankad and the learned counsel Mr. Parekh, appearing for the respective respondents, have supported the impugned judgment and award passed by the learned Commissioner and contended that there is no any infirmity or any irregularity committed by the learned Commissioner, as there is no substantial questions of law, as proposed by the learned counsel Mr. Trivedi, is involved in the present appeal. It is contended that the accident took place in the year 1986 and therefore, the date of accident is required to be considered and not the date of amendment, Page 4 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined which subsequently came into force in the year 2000 and therefore, they have urged that no interference is required to be called for in the present appeal and the present appeal be dismissed.
7. I have heard the learned counsels appearing for the respective parties and perused the material placed on record. I have also gone through the impugned judgment and award passed by the learned Commissioner. After considering the documentary as well as the oral evidence led by both the sides and after considering the nature of injury sustained by the deceased wife of the appellant No.1, the learned Commissioner has rightly awarded compensation of Rs.47,405.35ps. alongwith 6% interest and 25% penalty. The Hon'ble Apex Court, in the recent decision rendered in case of M. Rajendran and others vs. M/s. K.P.K. Oils and Proteins India Pvt. Ltd., reported in 2025 (0) INSC 1144, has summarized the principles on retrospective application of legislations. Though, the case on hand is under Workman's Compensation Act and it is a beneficiary legislation but, so far as the implication of the law in retrospective effect is concerned, the Hon'ble Apex Court has time and again clarified the said aspect. In the present case, the accident had occurred in the year 1986 and the amendment in Sections 3 and 4 of the Act had came into force from 08.12.2000 and, therefore, the law which was prevailing at that relevant point of time would be applicable. At this juncture, it would be fruitful to refer to Section 4A of the Act, which is reproduced hereunder :
Section 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 the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional Page 5 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the1[employee], as the case may be, without prejudice to the right of the 1[employee] to make any further claim.
3[(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
(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.
4[(3A) The interest and the penalty payable under sub-section (3) shall be paid to the 1[employee] or his dependant, as the case may be.] 7.1 So far as the penalty is concerned, in the case on hand, the respondent No.1 - principal employer and the respondent No.2 had failed to establish before the learned Commissioner that they had paid the amount of compensation to the workman within a period of 30 days from the date of accident and no justifiable reason was stated before the learned Commissioner and when it is the discretion exercised by the learned Commissioner that maximum upto 50% the learned Commissioner can impose penalty upon the employer, herein the present case, after considering the facts of the case, the learned Commissioner has imposed 25% penalty which, in my opinion, is not required to be interfered with. At this juncture, it would be appropriate Page 6 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined to refer to the decision of this Court rendered in case of Jayantilal and Corporation, Rajkot vs. Garasia Rajvirba Udesinh, reported in [1991] 2 GLR 726, wherein, it has been observed and held in para-12 as under :
"12. Under Sec. 4A(3) of the Act, where any employer is in default in paying the compensation due under the 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 per cent 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 per cent of such amount, shall be recovered from the employer by way of penalty. It is apparent from the above provision that where any employer is in default in paying the compensation due under the Act within one month from the date it fell due, the Commissioner can direct for payment of penalty not exceeding 50 per cent of the amount of award and interest at the rate of six per center annum. Thus, the liability is fasten under the statute on the employer. When an accident arises out of and in the course of the employment, the employer becomes statutorily, liable for payment of compensation as soon as the aforesaid injury or death is caused the workman. If the employer fails to make even provisional payment under Sec. 4A(2) of the Act, but challenges the jurisdiction of the Commissioner and/or the claim of the workman, he is liable to pay interest and penalty.
Having regard to the provisions of Sec. 4A(3) of the Act, it is very clear that it is beneficent provision made for the benefit of the workmen/employees and having regard to the scheme of the Act, the provision for payment of interest and penalty have been enacted with a view to deter the employer from taking facile pleas and unreasonable defence for avoiding payment of compensation which statutorily becomes payable. So, while reading the entire Section, it is the scheme of the said provisions of the Act, that the employer or the master should immediately make good the loss suffered by the workman. Thus, it is crystal clear that the employer is bound to pay the compensation payable under the Act. So, a statutory duty is cast on the employer to pay or deposit the amount of compensation payable. If the employer fails to pay the amount of compensation and commits default without any reasonable cause or justification, the Commissioner is entitled to award penalty, not exceeding 50 per cent of the amount of compensation. Therefore, the learned Commissioner has, rightly awarded the full amount of penalty and interest on the amount of compensation and finding on this point by the learned Commissioner is fully justified."
7.2 It would also be appropriate to refer to the decision of this Court rendered in case of Radhabehn Wd/o Narasibhai S. Patel vs. Mulji Kanji Dhord, reported in [1992] 2 GLH 528, wherein, it has Page 7 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined been observed and held in para-19 and 20 as under :
"19. As said above, the accident happened on Mar. 12, 1988 and the deceased died on Mar. 16, 1988. The compensation under the WC Act, therefore, fell due latest on Mar. 16, 1988. Under Sec. 4A of the WC Act, it is provided that the compensation under Sec. 4 shall be paid as soon as it falls due. Under Sub-Sec. (2) of Section 4A of the WC Act, a duty is cast upon the employer who does not accept the liability for compensation, to the extent claimed, to make provisional payment based on the extent of liability which he accepts, and to deposit such payment with the Commissioner or to make such payment to the workman and such deposit or such payment shall be without prejudice to the workmen's right to make a further claim. Sub-Section. (3) of Sec. 4A of the WC Act to which we will have a further occasion to refer in detail, provides for two things : (1) a direction about simple interest at the rate of 6 % and (2) a direction for recovery from the employer of a further sum not exceeding 50 % of the amount of compensation, by way of penalty. Thus, a bare reading of Sec. 4A of the WC Act makes it clear that if the employer does not pay or deposit the amount of compensation at least to the extent the liability for which he accepts, within the month from the date on which the compensation fell due, the Commissioner may direct payment of simple interest @ 6 % (six per cent) per annum on the amount of compensation. In the present case as indicated hereinabove the compensation fell due latest on the date the deceased died, i.e. latest on Mar. 16, 1988. Respondent No. 1 as the employer, was therefore, duty bound to pay to the claimants or to deposit before the Commissioner within one month from Mar. 16, 1988, compensation amount payable to the claimants, or at least that much amount by way of compensation the liability for which he admitted. Nothing of this sort has been done by Respondent No. 1. On the contrary, the appellants as the claimants were required to issue a notice dated Apr. 26, 1988 both to the employer-Respondent No. 1, and to the Insurance Company-Respondent No. 2. The office copy of that notice has been produced on record of the case at Exh. 38. The notice was sent to the two respondents under registered post acknowledgement due. The postal acknowledgement under the signature of Respondent No. 1 is at Exh. 40 and the postal acknowledgement showing the receipt of the notice by the Insurance Company is at Exh. 41. These postal acknowledgements show that the notice was received by Respondent No. 1 on or about May 7, 1988 and it was received by Respondent No. 2 on May 2, 1988. In the notice, the claimants have stated all the relevant facts about the employment of the deceased with Respondent No. 1, about his monthly wages being Rupees 1,500/--, about the fact of the accident and about the death of the deceased, and they have, by the notice called upon the respondents to pay to them Rupees 1,30,000/-- by way of compensation within ten days from the receipt of the notice. In the notice they have also stated that if the amount of compensation as demanded in the notice was not paid, they would be constrained to move the Commissioner for Workmen Compensation at Baroda under the provisions of the Act, for getting the amount recoverable by them together with penal amount @ 50 %, costs and interest. Even within one month from the receipt of this notice, Page 8 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined Respondent No. 1, the employer did not care to pay or deposit the amount of compensation at least to the extent to which he admitted his liability. Respondent No. 1, therefore, clearly is liable to pay interest on the compensation amount in terms of Sec. 4A of the WC Act. The learned Commissioner has awarded 6 % interest and has made both the respondents liable for that award for interest. We will presently examine the liability of the Insurance Company for the amount of interest and will show that the Insurance Company is also liable to pay interest.
20. The amount of Rupees 85,428/-- payable to the claimants by way of compensation should, therefore, carry interest at the rate of 6 % p. a. from the date of the claim position till payment."
7.3 In view of above position, the fact remains that the accident took place in the year 1986, however, the amendment came into force subsequently in the year 2000, and the rate of interest prevailing prior to the amendment was 6%, which was subsequently amended to 12% and therefore, I do not find any merits in the contentions raised by the learned counsel Mr. Trivedi to interfere with the findings recorded by the learned Commissioner and hence, I am of the opinion that the present appeal is required to be dismissed.
8. In the result, the present appeal, being devoid of any merits, deserves to be dismissed and is hereby dismissed. The impugned judgment award dated 02.04.2004 passed by the learned Commissioner for Workmen's Compensation at Ahmedabad in Workmen's Compensation Case No.90 of 1986 is hereby confirmed. No order as to costs. Record & Proceedings, if received, be sent back to the concerned Court forthwith.
8.1 The amount of compensation as awarded by the learned Commissioner, if not deposited, the same shall be deposited before the learned Commissioner for Workmen's Compensation at Ahmedabad alongwith interest and penalty, within a period of 8 weeks Page 9 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025 NEUTRAL CITATION C/FA/208/2006 JUDGMENT DATED: 30/09/2025 undefined from the date of receipt of copy of this order. On deposit of the aforesaid amount of compensation, the same shall be disbursed in favour of the appellants - original claimants, after following due procedure and after verifying their bank details, through RTGS/NEFT.
(HEMANT M. PRACHCHHAK,J) Dolly Page 10 of 10 Uploaded by DOLLY CHETAN VADUKAR(HC01392) on Mon Oct 06 2025 Downloaded on : Mon Oct 06 23:20:10 IST 2025