Bharat Carriers Ltd. vs Fayez Sekh & Ors.
2014 Latest Caselaw 297 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  FAO No. 98/2013 & CM No. 3257/2013 (Stay)

%                                              16th January, 2014
BHARAT CARRIERS LTD.                                       ...... Appellant
                 Through:                Mr. K.P.Singh, Advocate.


                          VERSUS

FAYEZ SEKH & ORS.                                          ...... Respondents
                          Through:       Ms. Pratibha Nain Chauhan,
                                         Advocate.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.    The present appeal filed under Section 30 of the Employee's

Compensation Act, 1923 impugns the order dated 27.11.2012 passed by the

Commissioner imposing a penalty of 50% under Section 4A of the

Employee's Compensation Act, 1923.

2.    The only argument urged on behalf of the appellant/employer is that

the claim of penalty in the main case was in fact made by the dependants of

the workman, and who were the applicants before the Commissioner in the

main compensation claim, but that claim petition was allowed in terms of the

order dated 10.8.2010 without allowing the prayer of penalty, and therefore,
FAO 98/2013                                                                   Page 1 of 4
 it is argued that this prayer of the applicants/dependents which is now

allowed by the impugned order dated 27.11.2012 of awarding penalty

amount is illegal because this prayer for awarding the penalty amount is

deemed to have been rejected in accordance with the principles akin to

Explanation V of Section 11 CPC in the first order dated 10.8.2010 itself and

consequently a subsequent application under Section 4A for penalty did not

lie.

3.     The argument urged on behalf of appellant appeared in the first blush

to have some substance because the impugned order of penalty dated

27.11.2012 has been passed after the main order dated 10.8.2010 awarding

compensation was passed and which does not show awarding of any penalty,

though such prayer was made, and thus which in a way can be said to have

deemed to be rejected. However, on a deeper examination of the case it is

found that really the order which has now been passed on 27.11.2012 is

pursuant to the proviso to sub-Section 3 of Section 4A of the Employee's

Compensation Act as per which penalty cannot be imposed on the employer

unless first a specific show-cause notice is given to the employer for

showing cause as to why penalty be not imposed i.e the employer is entitled

to show that he is not responsible for delay in payment of compensation as

required by law under 4A(1) and with respect to which aspect there was no
FAO 98/2013                                                               Page 2 of 4
 show cause notice in the original proceedings in which compensation was

claimed and awarded.      In law it is only on the failure of the employer to

show cause as to why the penalty order should not be passed i.e the

justification which is sought to be given is not accepted, that the penalty

order can thereafter be passed. Accordingly, since while disposing of the

main compensation case vide the order dated 10.8.2010 there were no

proceedings which are shown to have taken place under proviso to sub-

Section 3 of Section 4A, therefore it cannot be said that the issue of penalty

was in fact decided in the main original compensation proceedings/petition

which was decided on 10.8.2010.

4.    It also requires to be noted that proceedings for imposition of penalty

are consequent upon a finding first being arrived at that compensation is

payable to an employee on account of accident happening during the course

of employment. It is only after the finding that compensation is payable is

first arrived at, that thereafter justification has to be sought by issuing of a

show cause notice as to why there was delay in payment of the

compensation. Therefore, it is nothing illegal that consequent upon

finalization of proceedings for determination of compensation, that

thereafter, proceedings under Section 4A are initiated, and in the facts of the

present case it accordingly took place for being held that the same were not
FAO 98/2013                                                                  Page 3 of 4
 decided at the time of passing of the Award of compensation in the main

proceedings.

5.    In view of the above, I do not find any merit in the appeal, and the

same is therefore dismissed, leaving the parties to bear their own costs.

6.    The amount of penalty which has been deposited by the appellant

before this Court be released by the Registry of this Court alongwith accrued

interest thereon if any to the respondent nos.1 and 2 within a period of four

weeks from today.




JANUARY 16, 2014                              VALMIKI J. MEHTA, J.

ib