The amendments to Sections 3 and 4 of the Workmen's Compensation Act, 1923, which enhanced interest and penalty rates come into force on December 8, 2000, and do not apply retrospectively to accidents that occurred in 1986.

ORAL JUDGMENT

1. Present appeal is filed by the appellants - original claimants against the judgment and award dated 02.04.2004 passed by the learned Commissioner for Workmen's Compensation at Ahmedabad in Workmen's Compensation Case No.90 of 1986, whereby the learned Commissioner has partly allowed the application filed by the appellants and awarded compensation of Rs.47,405.35ps. alongwith 6% interest and 25% penalty.

2. The short facts giving rise to present appeal are that, the appellant No.1 and his deceased wife were labourers and the appellant Nos.2 and 3 were their children. That, the appellant No.1 and his wife were employees of the respondent No.2 – Contractor and were working as labourers and earning Rs.15/- per day. That, on 25.09.1986, when they were digging sand from the pond near Sarkhej, the cliff broke down and the wife of appellant No.1 and other female labourers got buried under the said cliff, as a result of which, they got injured and were admitted in hospital. That, the wife of appellant No.1 died during treatment and therefore, the appellants had claimed compensation of Rs.37,440/- by filing Workmen's Compensation Case being Workmen's Compensation Case No.90 of 1986, whereby the learned Commissioner has awarded compensation as aforesaid vide its judgment and award dated 02.04.2004.

2.1 That, the respondents had filed their written statements at Exh.-48 & 6 respectively denying all the allegations made in the application. The respondent No.1 had contended before the learned Commissioner that the appellant No.1 was employed by the respondent No.2 – Contractor to whom the contract of work was allotted and therefore, under such circumstances, the respondent No.1 was not liable to pay any compensation. The respondent No.2 had contended that there was no employer-employee relationship between them and therefore, he has denied the liability.

2.2 That, after considering the pleadings of both the sides, the learned Commissioner had framed the issues at Exh.-8 referred in para-5 and the same were replied in para-6. After considering the documentary as well as the oral evidence led before the Court, the learned Commissioner has partly allowed the application of the appellants and awarded compensation vide its judgment and award dated 02.04.2004.

3. Being aggrieved and dissatisfied with the aforesaid judgment and award passed by the learned Commissioner, the appellants – original claimants have filed the present First Appeal under Section 30 of the Workmen’s Compensations Act, 1923.

3.1 The appellants have framed following substantial questions of law for consideration of this Court :

(1) Whether the principal employer i.e. the respondent no.1 could have been exempted in view of the provisions of S.12 of the Workmen’s Compensation Act, 1923?

(2) Whether the imposition of penalty equivalent to 25% of the amount of compensation without discussing the aspect in the judgment in view of Section 4A of the Workmen’s Compensation Act, 1923 is proper and legal?

4. Heard Mr. B.J. Trivedi, learned counsel appearing for the appellants – original claimants, Ms. Agneya Mankad, learned Assistant Government Pleader, appearing for the respondent No.1 and Mr. A.M. Parekh, learned counsel appearing for the respondent No.2.

5. Learned counsel Mr. Trivedi for the appellants has submitted that the learned Commissioner has committed a serious error while awarding only 6% interest as the impugned award was passed in the year 2004 and the amendment in Sections 3 and 4 came into force in the year 2000. He has submitted that the learned Commissioner has also committe