FOCUS ENERGY LIMITED Vs. NEELAM DEVI

JUDGEMENT

(1.) THIS first appeal is filed under Section 30(aa) of the Employee's Compensation Act, 1923 (in short "the Act") against the impugned orders of the Commissioner dated 23.4.2014 and 15.5.2014. By the order dated 23.4.2014, the Commissioner directed the appellant/employer to pay penalty of 25% of the principal amount. By the order dated 15.5.2014, the application of the appellant/employer for setting aside the ex parte order dated 23.4.2014 imposing penalty of 25% of the principal amount was dismissed, and which application was filed on the ground that the representative of the appellant could not reach on 23.4.2014 till 12.00 PM on account of a traffic jam. Firstly, it requires to be noted that as per the provision of Section 4A(3)(b) of the Act, an employer is liable to pay, in addition to the principal amount of compensation which, is determined under Section 4, penalty upto 50% of the amount of compensation payable, if the amount of compensation is not paid to the affected employee within a period of one month from the date of the accident.

(2.) IT is then required to be noted that before issuing of a penalty order, the proviso to Section 4A(3) of the Act mandates that a show cause notice should be issued against the employer providing the employer an opportunity to give explanation as to why the principal amount of compensation was not paid to the employee within one month and consequently why penalty be not imposed for not paying the employee compensation within one month of the accident. Supreme Court in the judgment in the case of The Oriental Insurance Company Ltd. v. Siby George and others, : (2012 -4) 168 PLR 598 (SC) has held that proceedings under the proviso to Section 4A of the Act with respect to imposition of penalty are consequent proceedings which arise post passing of the main order of compensation i.e. in the main order awarding compensation, an order of imposition of penalty cannot automatically be passed in view of the proviso to Section 4A(3) of the Act because an employer is entitled to a specific show cause under the proviso and thereafter give explanation as to why the employer had failed to pay/deposit the principal amount of compensation in one month. In case the explanation of employer is accepted, the Commissioner has power to waive the penalty or reduce the penalty. Para 8 of the said judgment in the case of Siby George (supra) is relevant and the same reads as under: -

(3.) I am unable to agree with the aforesaid argument urged on behalf of the appellant because the Supreme Court in the case of Siby George (supra) has clarified that penalty proceedings cannot take place simultaneously alongwith adjudication of compensation to be awarded to the employee, and penalty proceedings are only post/subsequent to awarding of compensation and after giving a specific show cause notice for the penalty aspect. The observations of the Supreme Court in Siby George's case (supra) in view of the language of the proviso to Section 4A(3) of the Act which requires a specific show cause notice on the aspect of penalty upto 50% if the penalty is proposed to be imposed. Therefore, the contention of the appellant is misconceived that since the original order of compensation dated 13.11.2013 did not award penalty, in spite of the same having been prayed in the main petition, there could hence not take place subsequent proceedings for imposition of penalty post the passing of the main order of compensation on 13.11.2013.