( 1 ) THIS appeal has been preferred by the two appellants, namely, the Executive Engineer and the Superintendent Engineer, Karnataka Electricity Board, Hubli, under Section 30 of the Workmen's Compensation act, challenging the order dated 29-02-1996 passed by the Commissioner for Workmen's Compensation, Hubli, in case No. WCA/nf 30 of 1989. Brief relevant facts of the case are the following.

( 2 ) THE 1st respondent was working as a cleaner in the establishment of the appellants. He was placed incharge of the duties of a driver at the relevant point of time. On 19-08-1988 at about 8. 15 p. m. , the Jeep which the 1st respondent was driving, met with an accident at Shadambi cross, on the P. B. Road, while returning from Shiggaon. Due to the accident, the 1st respondent/driver sustained fracture in his right leg and some other injuries on his face. He was admitted for treatment to the K. M. C. Hospital, Hubli and was discharged after treatment on 21-11-1988. Subsequently, the 1st respondent filed an application claiming compensation under the Workmen's Compensation Act. The appellants submitted a statement of objections disowning any responsibility for payment of compensation. On the basis of the evidence on record, the commissioner has held that there is a disability to the extent of 30 to 40% caused to the 1st respondent by the accident. The Commissioner has also held that there is 60% loss in the earning capacity of the 1st respondent. On this basis, the Commissioner awarded compensation to the extent of Rs. 60,498. The Commissioner has also ordered the payment of penalty at the rate of 20% on the amount of compensation in addition to interest at the rate of 6% p. a, on the amount of compensation.

( 3 ) LEARNED Counsel for the appellant has putforth the following submissions:"12. The rinding of the Commissioner that there was loss of earning capacity of the first respondent to the extent of 60% is without any basis. The Commissioner himself has held that there is disability to the extent of 30% to 40% caused to the first respondent as a result of the accident. Even this finding is without any acceptable evidence. The appellant has established that the first respondent was getting the same salary which he was getting earlier. There was neither any disability nor any loss in the earning capacity. However, the Commissioner has held that there is loss in the earning capacity of the first respondent to the extent of 60%. There is no correlation between the loss in earning capacity and the extent of disability sustained by the first respondent. The finding of the Commissioner that there is loss of earning capacity to the extent of 60% is without any basis. 13. The Commissioner has not given proper reasoning to come to the conclusion that the first respondent is entitled to compensation of Rs. 60,498/ -. 14. There are several other factual inaccuracies in the order of the Commissioner. 15. The order for payment of penalty by the Board is without any authority of law. The payment of penalty by an employer would arise if the employer wilfully or deliberately refuses to pay the amount of compensation. In the case under consideration, the case of the appellant was that the accident did not result in any permanent disablement of the first respondent either totally or partially and as such the question of payment of compensation did not arise. However, the amount of compensation has been deposited by the appellant immediately after order was communicated to the appellant. Penalty is payable only if the commissioner records an opinion that there is no justification for delay in payment of compensation, 16. There is no application of mind on the part of the commissioner while awarding penalty. The Commissioner has to frame an issue on the question of levy of penalty, hear the employer and then pass a suitable order justifying levy of penalty. In the case under consideration, the Commissioner had not framed any issue regardin