Delhi High Court
Union Of India Through Divisional ... vs Smt. Prem Devi & Anr. on 10 February, 2014
Author: Valmiki J. Mehta
$~14
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 390/2013 & CM 16113/2013 (stay)
% 10th February, 2014
UNION OF INDIA THROUGH DIVISIONAL RAILWAY
MANAGER, NORTHERN RAILWAY ..... Appellant
Through Mr. Amit Dubey, Mr. Ravi Tyagi,
Advocates
versus
SMT. PREM DEVI & ANR. ..... Respondents
Through Mr. Rajesh Tyagi, Advocate
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This first appeal has been filed under Section 30 of the Employees'
Compensation Act, 1923 impugning the order dated 24.5.2013 by which the
application under Section 4(A) of the Act has been allowed and appellant
has been fastened with the liability of the interest and penalty.
2. It is now settled law in view of the judgment of the Supreme Court in
the case of Pratap NarainSingh Deo Vs. Srinivas Sabata & Anr., 1976
FAO 390/2013 Page 1
ACJ 141; 1976(1) SCC 289 that unless the compensation amount is
deposited within one month of the date of the accident, the employer will be
liable to interest and penalty. Issue of penalty arises if sufficient cause is not
shown for deposit of the compensation amount within one month of the date
of the accident.
3. In the present case, admittedly, the accident which resulted in the
death of the employee Sh. Inder Lal Meena, took place on 12.12.2010, and
the appellant/Railways deposited compensation amount on 27.4.2011 i.e
after more than one month, and that too only 50% of the compensation and
not the entire amount. Therefore, both in the letter and spirit the
requirement of deposit of compensation within one month of the accident
has not been complied with. In fact, the balance 50% of the compensation
was paid as late as on 4.9.2012 before the Commissioner i.e almost after two
years of the accident. Taking all aspects into consideration the
Commissioner has refused to accept the reason given for delay in deposit of
the compensation amount within one month and has awarded interest and
penalty especially in view of the factum of the Government Notification
dated 31.5.2010 by which the wage limit increased to Rs. 8,000/-. The
relevant paragraphs of the impugned order are paras 3 to 6 and which read
FAO 390/2013 Page 2
as under:
"3. The fact of the matter is that Late Shri Inder Lal Meena
was under the employment of Northern Railway and died on
12.12.2010 during the course of his employment. In discharge
of liabilities/duties, respondent/employer Divisional Railway
Manager, Northern Railway deposited Rs. 3,06,180/- on
27.04.2011 as compensation amount, which was only 50% of
the Principal amount. Employer of the deceased failed to
deposit entire amount of compensation with this Court within
prescribed period i.e. one month of the death of the employee.
Petitioners, therefore, prayed for release of balance amount of
compensation along with interest for delayed period over the
compensation amount and for imposition of penalty to the tune
of 50% of the entire compensation amount, upon respondent.
In order to give an opportunity to the respondent to explain the
reasons why the prayer of the petitioner not be accepted, a
notice was served upon the respondent. During the course of
proceedings, Respondent has deposited the balance amount of
Rs. 3,06,180/- before the Commissioner on 4.9.2012.
Respondent in their reply pleaded that Railway is a big
department and there are many Administrative formalities and
levels of approval for getting sanction for the compensation
amount so that the compensation amount could not get
deposited in time. Oral arguments were forwarded by the
respective counsels from both the sides.
4. I have carefully gone through the case file and
submissions made by the parties. In the instant case the
accident occurred on 12.12.2010 and the principal amount of
compensation was deposited by the employer in two
instalments on 27.4.2011 and 4.9.2012 respectively. As per
section 4-A (3) (a) (b) of the Employee's Compensation Act
and the case law settled by Hon'ble Supreme Court of India in a
case titled as Pratap Narain Deo Vs. Srinivas Sabata cited at
1976 ACJ 141 the claimant is entitled to interest from the date
of accident which occurred on 12.12.2010 till the date of
deposited by principal amount and as per mandate of the Act as
given in section 4-A the rate of interest is 12% p.a. It has been
FAO 390/2013 Page 3
further stated that the claimant is also entitled to penalty to the
extent of 50% of the principal amount as per section 4-A(3) (b)
of the Workmen's Compensation Act now Employee's
Compensation Act.
5. On the basis of law settled by the Hon'ble Supreme
Court in the aforesaid case, the plea of the respondent for
waiver of interest is non-maintainable. And, therefore, the
respondent is liable to pay interest @ 12% from the date on
which the amount fell due (12.1.2011) till its realization
(27.4.2011 and 4.9.2012) which amounts to Rs. 60,187/-.
6. Regarding penalty, respondent in his written argument
stated that delay in making payment to the claimants the
procedural requirement which the Railway has to follow as per
their normal work practice, and hence they are not liable for
penalty. The respondent stated that since no time frame has
been devised by the Railway administration for processing the
claim at various levels of authorities, the delay happened. In
the absence of any time bound procedure and the bureaucratic
set up of the organization, this kind of delay at various levels of
scrutinisation of claim is against the interest of the claimant/s.
It is well settled that this Act is a piece of social security and
welfare legislation and therefore any reason for delay due to
Administrative hindrances prevailing in any organization does
not fall within the scope of the meaning of justifiable reason
and hence liable for penalty. Although the Railway has
deposited the payment in the Commissioner's office on
27.4.2011, this was only 50% of the entitled amount. The
Govt. of India vide Gazette Notification published on 31 st May,
2010 has already increased the wage limit to Rupees "Eight
Thousand". It is clearly understandable that the Railway
Administration while processing the claim during the period
December, 2010-March 2012 has not taken into cognizance the
increased wage limit and therefore paid compensation at the old
wage rate which laid to the sufferance of the
claimants(deceased family). In view of the above deliberations,
the respondent is held unreasonable while causing delay in
making payment attracting section 4-A (3) (b) and is liable to
pay penalty @ 25% of the compensation amount (Rs.
FAO 390/2013 Page 4
6,12,360)-)."
4. An appeal under Section 30 is entertained only if there is a substantial
question of law. I do not find any substantial question of law raised in the
present appeal taking the fact that not only the first amount deposited was
well after one month, and that too only 50%, and the balance 50% was
deposited around two years of the accident.
5. In view of the above, there is no merit in the appeal and the same is,
therefore, dismissed, leaving the parties to bear their own costs. It will be
open to the appellant to seek recovery against the concerned officers who
are found guilty of lapse of causing huge monetary loss to the organization,
and it will also be open to the appellant to initiate appropriate departmental
proceedings against the guilty officials.
VALMIKI J. MEHTA, J
FEBRUARY 10, 2014
godara
FAO 390/2013 Page 5
