Delhi High Court
The New India Assurance Co Ltd vs Smt Mainwati & Ors on 18 February, 2014
Author: Valmiki J. Mehta
* 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
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
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
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.
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
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