- (1.) THIS is an appeal under Sec. 30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as "the Act") by the claimants of the deceased workman.
(2.) THE deceased Bhagirath Ram was a workman employed by the Food Corporation of India. He sustained injuries by an accident arising out of and in the course of his employment resulting in his death on 17 -4 -1979. On that date he was working on his duty in Food Storage Depot, Pipar City. At about 12. 45, p. m. , while he was working, stock of full load gunny bags suddenly fell on him and he died instantaneously on the spot. THE father, mother and sister, being the dependents of the deceased workman, submitted an application for ordering deposit of compensation and award of compensation on 4. 9. 1979 claiming compensation to the tune of Rs. 18,000/, penalty upto 50% of the amount of award with interest) @ 6% from the date of accident till the date of payment. It was stated in the application that the monthly wages of the deceased amounted to Rs. 240/ - and the deceased was 19 years of age at the time of his death. It was also stated that the non -applicants gave assurance for making payment of the amount of compensation, but they did not fulfil their statutory duty and obligation. A notice was, therefore, served on the non -applicants on 28 -8 -1979, but the compensation has not been deposited or paid. The learned Commissioner issued notice, which was served on the non -applicants on 8 -10 -1979. However, on 28 -4 -1980 the District Manager, Food Corporation of India, Jodhpur, Shri Manu Nathani, presented an application stating that the matter was examined by the Legal Branch of Zonal Office (N), F. C. I, New Delhi. It was further stated that the amount of compensation actually works out to Rs. 16,800/ - @ Rs. 6/ - per day (monthly wages between 150/ - to 200/ -) in items of Schedule IV of the Act and not Rs. 18 000/ -. The amount could be deposited on passing Commissioner's order, setting the case accordingly within a month's time. A request was made to issue necessary orders for settling the case. On 16 -5 -1980 a cheque of Rs. 16. 800/ - was sent to the learned Commissioner. The learned Commissioner recorded the statements of Ramlal, and Ramkishan, and, thereafter heard the parties and passed the orders on 26 -5 -1980, wherein he determined the compensation to the tune of Rs. 16, 800/ -, payable in the manner as stated therein. The learned Commissioner, however, did not allow any penalty and interest. The prayer for penalty and interest was rejected, as the same was not found to be justified. Dis -satisfied with the refusal of prayer of penalty and interest the dependents have preferred this appeal. I have heard Shri B. L. Panwar, learned counsel for the appellants, and I. J. Lodha, learned counsel for the respondents. The only question, which has been canvassed in this appeal, is that the learned Commissioner has wrongly refused the prayer in respect of penalty and interest without assigning any reason and thus has acted in an arbitrary manner and the discretion has not been judicially exercised. At the out -set Shri Lodha, learned counsel for the respondents, raised a preliminary objection. The grant of penalty and interest was discretionary with the Commissioner. He did not find any justification for the award of penalty and interest, so it was refused. The discretion has been rightly exercised and exercise of discretion does not raise any substantial question of law, so the appeal is not maintainable under sec. 30 of the Act.
(3.) IT is true that under Sec. 30 of the Act, the appeal lies only when the appeal involves a substantial question of law. Shri Panwar, learned counsel for the appellants, urged that the appeal raises a substantial question of law, when discretion has been arbitrarily exercised by the Commissioner and no reasons have been assigned for refusal of the award of penalty and interest. According to Shri Panwar, there is no justification for refusal, as the learned Commissioner has not given any reason for the same. Shri Panwar urged that the employer was bound to deposit the compensation within one month from the date when the same fell due. The amount ought to have been voluntarily paid by the employer within one month of the accident, when the liability for compensation arose and it was at that time that the compensation fell due. The compensation was deposited as late as on 16 -5 -1980, much after service of notice. Thus, there was gross laches and delay on the part of the respondents to deposit the amount of compensation. In the absence of any justification for deposit of the amount of compensation so late, the Commissioner should have awarded the penalty and interest. Thus, non -award of penalty and interest, without any justifiable reason and wrong exercise of discretion raises a substantial question of law. I find force in the above submissions of Shri Panwar. The only reason assigned by the learned Commissioner is that the award of penalty and interest is not justified. Why it is not justified, has not been stated. Thus, no reason has been assigned for refusal. In the circumstances it cannot be said that the discretion has been rightly exercised. When discretion has not been rightly exercised on sound judicial principles and when it is arbitrarily exercised, then it raises a substantial question of law and the same can be interfered with in appeal under Sec. 30 of the Act. Thus, I do not find any force in the preliminary objection raised by Shri Lodha. Now the question arises as to whether the appellants are entitled to award of penalty and interest. Shri B. L. Panwar, learned counsel for the appellants, mainly emphasised for award of interest and not for penalty. He urged that the appellants are entitled to interest after expiry of one month from the date of the accident, as there was statutory obligation of the employer to deposit the amount of compensation within one month from the date it fell due. Sec. 4a provides for compensation to be paid when due and penalty for default. Sub -sec. (1) of Sec. 4a lays down that compensation under sec. 4 shall be paid as soon as it falls due, and under sub -sec. (2) the employer is under an obligation to make provisional payment to the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman. Sub -sec. (3) of Sec. 4a is relevant, which reads, - " (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 may direct that, in addition to the amount of arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty. " Sub section (1) of Sec. 3 provides that if personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II. Section 4 provides for the amount of compensation. Thus the amount of compensation is to be calculated in accordance with the provisions contained in Sec. 4 and the liability for compensation arises under Sec 3, when personal injury is caused to a workman by accident arising out of and in the course of his employment. Thus, it can be said that the compensation under Sec. 4 falls due when liability for compensation arises under Sec. 3 and compensation falls due when a personal injury is caused to a workman. According to Sub -section (3) of Sec. 4a, if an employer commits default in paying compensation due under the Act within one month from the date it fell due, the Commissioner is empowered to direct the employer for payment of simple interest at the rate of six per cent per annum on the amount due and also for the payment of a further sum not exceeding fifty per cent of the amount due by way of penalty, if in the opinion of the Commissioner there is no justification for the delay. ;