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2011 Supreme(MP) 1177
MADHYA PRADESH HIGH COURT
I.M.Quddusi, G.Minhajuddin, JJ.
Chhattisgarh State Civil Supplies Corporation Ltd. - Appellant
Versus
Gurubari Bai and others - Respondent
Misc. Appeal (C) No. 500-2006
Decided On : 10-08-2011
Mr.N.K.Vyas, Advocate for the Appellant, Mr.H.B.Agrawal, Sr.Advocate and Mr.Pankaj Agrawal, Advocate with him for the Respondent Nos.2 to 4
The court clarified the definition of 'employer' under Section 2(e) and emphasized the mandatory nature of provisions related to interest and penalty under Section 4-A (3).
Headnote:
Workmen's Compensation Act - Employer - Section 4-A (3) (b), Section 4-A (3) (a), Section 2(e)
Fact of the Case:
The appeal was filed by the employer against an award directing to deposit compensation for the death of an employee who sustained injuries at work. The employer contested the imposition of penalty without notice and the assessment of interest.
Finding of the Court:
The court found that the employer fell within the definition of 'employer' under Section 2(e) of the Workmen's Compensation Act. It also held that the Commissioner erred in assessing the monthly income of the deceased and in imposing a lower interest rate. The court remitted the matter for adjudication afresh.
Issues: Imposition of penalty without notice, assessment of interest, employer's liability for compensation
Ratio Decidendi: The court interpreted the provisions of Section 4-A (3) (b) and Section 4-A (3) (a) and determined the employer's liability and the Commissioner's discretion in imposing interest and penalty.
Final Decision: The matter was remitted for adjudication afresh, and the amount in deposit was to be kept in fixed deposit pending the final decision.
As per I.M. Quddusi, J.:-
1. This appeal has been filed by the employer against the impugned award 21-9-2006 passed by the Commissioner for Workmen's Compensation Act (Labour Court), Rajnandgaon in Case No. 1/WC Act/05 (Fatal) directing to deposit compensation of Rs. 3,38,880/- along with interest @ 6% per annum as also the penalty @ 30% of the award that is Rs. 1,01,664/-.
2. This appeal was admitted by order dated 22-12-2006 on the following substantial question of law :-
"Whether learned Commissioner for Workmen's Compensation, Rajnandgaon vide its Award dated 21-9-2006 was justified in imposing a penalty of Rs. 1,01,664/- (Rupees One Lakh one thousand six hundred sixty four) without issuing any show-cause notice and without affording any opportunity of being heard to the appellant ignoring the provision of Section 4-A (3) (b) of Workmen's Compensation Act, 1923 ?"
3. During the course of hearing the following substantial questions of law are found to be involved in this appeal :-
(i) Whether the Commissioner could award an interest lesser than provided in the statute, i.e.. Section 4-A (3) (a) of the Act, 1923.
(ii) Whether the amount fell due would be paid from the date of accident or the date of adjudication by the Commissioner or any other date.
4. Brief facts of the case are that the claimants have filed an application under Section 22 and 23 of the Employee's Compensation Act, 1923 for award of compensation stating inter alia that the deceased Punauram Satnami was working as labour in the warehouse of non-applicant No.1 situated in Village Manpura, Tehsil Pandariya. The Chhattisgarh State Warehouse/respondent No. 5 deals in storing goods at large. Appellant/Chhattisgarh State Civil Supplies Corporation handed over the task of storing its goods to respondent No. 5. On 5-2-2004, Punauram was taking out the rice bags of the appellant from the godown of respondent No. 5. While pulling out the rice bag from the stock pile, suddenly some stacked rice bags fell on him and he was pressed under those bags, as a result of which, he sustained grievous injuries on his head, neck and back and died on 7-2-2004 during the course of treatment in Ambedkar Hospital. At the time of accident, the deceased was aged about 45 years and was earning Rs. 4000/- per month. The claimants being legal representatives have claimed compensation to the tune of Rs. 4,00,000/- for the death of deceased.
5. Before proceeding further it is necessary to peruse the definition of "employer" given in sub-section (e) of Section 2 of the Workmen's Compensation Act, which is quoted below :-
"2. (e) "employer" includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him."
6. Section 4-A (1) provides that compensation under Section 4 shall be paid as soon as it falls due. The provisions regarding imposing of interest as well as penalty have been given in clauses (a) and (b) of sub-section (3) of Section 4. Therefore, the provisions of Section 4-A are also liable to be perused which are quoted as under :-
"4-A. Compensation to be paid when due and penalty for default.- (1) Compensation under Section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commiss
