The Project Director And Another vs Smt. Ch. Ramulamma And Another
2024 Latest Caselaw 28 Tel

Citation : 2024 Latest Caselaw 28 Tel
Judgement Date : 3 January, 2024

Telangana High Court

The Project Director And Another vs Smt. Ch. Ramulamma And Another on 3 January, 2024

      HONOURABLE SMT.JUSTICE M.G.PRIYADARSINI

        CIVIL MISCELLANEOUS APPEAL No.308 of 2014

JUDGMENT:

1. Aggrieved by the order dated 30.01.2013 passed in

W.C.No.03 of 2010, on the file of the learned Commissioner for

Employees' Compensation and Assistant Commissioner of

Labour, Patancheru, Medak District (hereinafter be referred as

'the Commissioner'), the Appellants/Opposite party Nos.1 & 2

filed the present Appeal.

2. For the sake of convenience, the parties hereinafter be

referred as they were arrayed before the Commissioner.

3. The brief facts of the case are that the applicants filed an

application under Section 4A of the provisions of Employees

Compensation Act, 1923 (for short, 'the Act') requesting to direct

the respondents to deposit an amount of Rs.3,06,180/- along

with applicable interest which was awarded by the learned

Commissioner towards compensation to the applicants on

21.02.2012 and also 50% on the awarded amount as penalty

for non-compliance of the order within the stipulated time.

4. It is the contention of the learned counsel for applicants

that as per the order dated 21.02.2012 passed in W.C.No.03 of

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2010 by the learned Commissioner, both the opposite parties

are directed to deposit an amount of Rs.3,06,180/- towards

compensation within '30' days from the date of receipt of the

order, failing which the applicants would be entitled for interest

@ 7.5 % per annum on the amount of compensation from the

date of filing the claim application till the date of order and

further interest @ 12% per annum from the date of expiry of one

month time from the date of order passed by the learned

Commissioner till the date of realization.

5. Both the opposite parties received the said order copy and

subsequently notices were also issued to show cause as to why

the application filed by the applicants under Section 4A of the

Act should not be allowed. But the opposite parties did not

appear before the Court nor filed any counter to that effect.

6. Therefore, the learned Commissioner, considering the

submission made by the learned counsel for applicants, allowed

the application filed by the applicants directing both the

opposite parties to deposit the awarded amount along with

interest @ 7.5% from the date of application till the date of order

and interest @ 12% per annum from the date of expiry of one

month period from the date of order till the date of realization

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and also awarded a penalty equal to 50% of the awarded

amount within fifteen days from the date of receipt of copy of

order.

7. Aggrieved by the same, opposite party Nos.1 & 2 filed the

present appeal.

8. Heard both sides.

9. The main contention of the learned counsel for appellants

is that the learned Commissioner erred in entertaining the

application filed by the applicants under Section 4A of the Act

and went wrong in imposing 50% penalty on the awarded

amount and the same is liable to be set-aside.

10. Per contra, the submission of the learned counsel for the

respondents is that the Commissioner, after considering all the

aspects, had rightly imposed penalty of 50% on the awarded

compensation for which the interference of this Court is not

necessary.

11. Though several grounds have been raised in the grounds

of appeal, the main contention raised by the learned Counsel for

the appellants is that the learned Commissioner erred in

imposing penalty against the opposite party Nos.1 & 2 under

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Section 4A of the Act in the event of failure to deposit the

compensation granted within the stipulated period. Therefore,

without going into the merits of the case, this case is being

disposed of by confining the ambit only to the extent of penalty

and interest.

12. At this juncture it is pertinent to rely upon the decision of

the erstwhile High Court of Andhra Pradesh in a case between

Divisional Manager, Oriental Insurance Company Limited,

Hyderabad v. Zarina Bee and another 1, wherein the erstwhile

High Court of Andhra Pradesh held as under:

"6. Mr. Subba Rao, the learned Counsel fairly conceded that, in view of the stipulated terms of the policy to indemnify the owner regarding the compensation to be paid by him, the Insurance Company did not challenge the award as a whole but has confined itself in regard to the liability to pay the penalty and interest. Such contention of the insurer in this case has all the force. The learned Commissioner under the Act has not considered this aspect of the matter in the true legal perspective but fastened the liability without any reason. The grievance of the learned Counsel is that even the explanation given by the insurer by filing the

1997 (2) ALD 489

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counter as to why the amount of compensation was not deposited within the stipulated time was not considered. At any rate, part of the award in question imposing penalty on the appellant cannot be sustained."

13. It is also pertinent to rely upon the Judgment of the

Hon'ble Apex Court in a case between L.R.Ferro Alloys Limited

v. Mahavir Mahto and another 2 , wherein the Honourable

Supreme Court held as follows:

"In Ved Prakash Garg v. Premi Devi and Ors., this Court after examining the entire scheme of the Act held that payment of interest and penalty are two distinct liabilities arising under the Act, while liability to pay interest is part and parcel of legal liability to pay compensation upon default of payment of that amount within one month. Therefore, claim for compensation along with interest will have to be made good jointly by the Insurance A Company with the insured employer. But, so far as the penalty imposed on the insured employer is on account of his personal fault Insurance Company cannot be made liable to reimburse penalty imposed on the employer. Hence the compensation with interest is payable by the Insurance Company but not

(2002) 9 Supreme Court Cases 450

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penalty. Following the said decision and for the reasons stated therein we modify the order made by the High Court to that extent.

14. Considering the submissions of the learned Counsel for

the opposite party Nos.1 & 2 and in view of the principle laid

down in the above decisions, this Court is inclined to interfere

with the findings of the learned Commissioner to the extent of

deleting the penalty imposed under Section 4-A of the Act.

15. Accordingly, the Civil Miscellaneous Appeal is allowed- in-

part. The order dated 30.01.2013 passed in W.C.No.03 of 2010,

on the file of the learned Commissioner for Employees'

Compensation and Assistant Commissioner of Labour,

Patancheru, Medak District, is modified to the extent of deleting

the penalty imposed by the learned Commissioner under

Section 4A of the Act. There shall be no order as to costs.