IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision : 10.02.2025 Daya and another ...... Appellants versus Dharminder and another ...... Respondents CORAM : HON'BLE MR. JUSTICE PANKAJ JAIN Present: Ms. Geetanjali Bhatia, Advocate Mr. Kulvir Narwal, Advocate Mr. Amit Sheoran, Advocate and Mr. Abhisar Chaudhary, Advocate for the appellants.

None for respondent No.1.

Mr. Vinod Chaudhri, Advocate for respondent No.2.

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PANKAJ JAIN, J. (Oral)

1. Counsel for the appellants has drawn attention of this Court to the following observations made by the Commissioner while passing the impugned order under Workmen’s Compensation Act, 1923:-

“Under section 4-A of the Act, Compensation has to be paid as soon as it falls due, where the employee does not pay the same within one month from the date it false due, the commissioner is empowered to direct under sub section (a) of section 4-A3, interest at the rate provided therein and also penalty as contemplated by sub section (b) thereof. The Hon'ble Supreme Court of India in the case of 'Ved Parkash Garg Versus Prem Devi and others 1998 (1) JR (Labour and Service)-6’ has held that while imposing interest on the default of payment of the principal amount of compensation on the part of the employer as per section 4-A(3), no show cause notice is contemplated and employer needs not be heard in this connection. A simplicitor default in payment of compensation the time limit of one month from the date it falls due would automatically attract the provision for simple rate of interest under section 4-A(3)(A) of the Act as per the rate prescribed therein for such imposition of interest, no question of justification is countenances by the legislature. I, therefore direct that besides payment of compensation awarded above, the respondent no. 2 Insurance company shall also pay a simple rate of interest of twelve percent per annum on it from the date of 31.1.1998 of accident to the date of this order meet the claim for compensation along with interest as imposed on its by the Work-men's compensation under the Act.”

2. She further refers to the relief granted wherein though interest @ 12% has been ordered to be paid, however, there is no order with respect to penalty.

3. Per contra, Mr. Chaudhri does not dispute that penultimate paragraph and the relief clause of the award seem to be not in sync with each other. However, he submits that the finding recorded by the Commissioner with respect to no requirement of show cause notice before imposing penalty cannot be sustained.

4. I have heard counsel for the parties and have carefully gone through the records of the case.

5. Since the issue raised is with respect to penalty only, I need not go into the factual aspect.

6. Section 4A of 1923 Act deals with compensation to be paid when due and penalty for default. The same reads as under:-

“[4A. 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 the¹[employee], as the case may be, without prejudice to the right of the ¹[employee] to make any further claim.

3[(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 Commissioner shall--

(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent. per annum or at such higher, rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government by notification in the Official Gazette, on the amount due; and (b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the am