Karnataka High Court
Oriental Insurance Co. Ltd. vs Dharma Gowda Dharma on 8 July, 1994
Equivalent citations: 1994ACJ1007, ILR1994KAR2282, 1994(3)KARLJ264
ORDER Mohan Kumar, J.
1. This is an appeal preferred by the Insurance company against the Award passed by the Commissioner for Workmen's Compensation, under Section 30 of the Workmen's Compensation Act, 1923, hereinafter referred to as 'the Act'. The learned Counsel appearing for the 1st respondent has raised a preliminary objection regarding the maintainability of the Appeal.
2. The contention of Mr. Ashok Haranahalli, learned Counsel for the 1st respondent, put across commendably well is that the Appeal will not lie, as the appellant has not complied with the requirement of Third Proviso to Section 30(1) of the Act and, therefore, it has to be rejected and cannot be entertained or admitted for consideration at all.
3. Section 30 of the Act reads thus :
"30 APPEALS
(a) an appeal shall lie to the High Court from the following orders of a Commissioner namely :-
(a) an order awarding as compensation a lumpsum whether by way of redemption of a half monthly payment or otherwise or disallowing a claim in full or in part for a lumpsum;
(aa) an order awarding interest or penalty under Section 4-A;
(b) an order refusing to allow redemption of a half monthly payment;
(c) an order providing for the distribution of compensation among the dependents of a decreased workman, or disallowing any claim of a person alleging himself to be such dependent;
(d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of Sub-section (2) of Section 12; or
(e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions :
provided that no appeal shall lie against any order unless a substantial question of law is involved in the appeal and, in the case of an order other than an order such as is referred to in Clause (b), unless the amount in dispute in the appeal is not less than three hundred rupees :
Provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties.
Provided further that no appeal by an employer under clause
(a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.
(2) The period of limitation for a an appeal under this section shall be sixty days.
(3) The provisions of Section 5 of the Indian Limitation Act, 1908 shall be applicable to appeals under this Section".
In this case, admittedly, the Memorandum of Appeal was not accompanied by a Certificate of the Commissioner for Workmen's Compensation to the effect that the appellant had deposited the amount payable under the Award. On the contrary, on the date of presentation of the Memorandum of Appeal to this Court, the appellant had made the said deposit of the amount warded, before this Court. This, according to the Counsel for the 1st respondent is nor proper compliance of law to render the Appeal competent.
The Third Proviso to Section 30 of the Act relied upon by the learned Counsel for the 1st respondent states (omitting words not relevant to the context) that : "no appeal by an employer under Clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate.... to the effect that the appellant has deposited....... the amount payable under the order appealed against". According to him, it means that no appeal shall lie at all unless such a certificate as contemplated under the Third Proviso accompanies the Memorandum of Appeal. He fortifies his submission by relying on the decision of this Court in M. R. Mishrikoti v. Muktumsab Hasansab Asoti, 1972 II KLJ 449. This Court considered similar question in the said decision. A Division Bench of this Court had to consider the effect of filing an appeal without complying with the requirement of the proviso, referred to supra. At paragraphs Nos. 6 and 7, the learned Judge stated as hereunder :
6. In the aforesaid proviso, the term 'employer' is used in contradistinction to the injured workman or the dependent of deceased workman who had made an application for compensation and who can also appeal from an order of the Commissioner if he feels aggrieved by such order. The intention of the Legislature in enacting that proviso appears to be that the injured workman or the dependent of a deceased workman who has been awarded compensation by the Commissioner, should not be put to any difficulty in realising such amount of compensation on account of any recalcitrance of the employer or on account of the vicissitudes of his (the employer's) financial position after he prefers an appeal. This object of the Legislature will be defeated, if we accept the interpretation put forward by Mr. Joshi and hold that that proviso is applicable only to an appellant who admits that he was such employer had not to an appellant who disputes the finding by the Commissioner that he was such employer. Hence, we are unable to accept the contention of Mr. Joshi that the appellant could file the appeal without depositing the amount of compensation as he was denying his having been the employer in relation to the deceased workman.
7. Mr. Joshi next contended that the failure of appellant to deposit such amount of compensation and to produce along with the memorandum of appeal the certificate of such deposit, should be regarded as a mere irregularity which does not render the appeal invalid. We are unable to accept this contention. As stated earlier, such deposit and production of a certificate of such deposit, are pre-requisites for presenting the memorandum of appeal and the absence of such deposit and non-compliance with such requisites, cannot be regarded as a mere irregularity not affecting the validity of the appeal."
Therefore, according to him, there is no question of relaxing the condition mentioned in the Third Proviso to Section 30(1) of the Act. But when we advert to the subsequent paragraphs of the said judgment, it indicates the fact that the Appeal could have been maintained even without the Memorandum of Appeal Accompanying such a deposit and such presentation of the Appeal would be only defective. This is what the Bench says regarding this aspect.
"8. Lastly, Mr. Joshi urged that we should postpone hearing the appeal and grant time to the appellant to deposit the amount of compensation and to produce the certificate of such deposit, that the memorandum of appeal should be regarded as being presented on the date of production of such certificate, that the delay in filing the appeal should be condoned and that thereafter the appeal should be heard on merits.
9. At least when the Officer raised the objection that the memorandum of appeal was not properly presented on account of the omission to make such deposit and to produce such certificate, the appellant became aware of the infirmity in his appeal. Yet he took no steps to remedy such infirmity. The amount of compensation awarded by the Commissioner, was also not so large as to be beyond the means of the appellant whom, according to his own admission, owned a motor lorry at one point of time. Hence, at this distance of time, we do not find any good grounds to accede to the request of Mr. Joshi".
If this prohibition contained in the proviso was treated as an absolute prohibition by the Division Bench, then the above observation in the said decision would not have been found a place. Therefore, one is led to believe that this Court also considered that non-compliance of the provisions of the said Proviso is not fatal and at the initial stage a curable defect.
4. Section 8 of the Act declares that any compensation payable by an employer to the worker/legal heir as compensation computed under the Act shall be deposited with the Commissioner and he alone shall distribute the same. Sub-section (3) of the Section 8 states that a receipt issued by him indicating the deposit shall be deemed to be sufficient discharge of the amount of compensation awarded. One may at once notice that the wording used in Section 30 of the Act does not anywhere indicate that the appeal will be maintainable only if the amount awarded as per the impugned award is discharged. In this context, Section 30-A, which was also introduced along with the proviso may also be noticed. It confers power on the Appellate Court to control the disbursement of the amount awarded by the Commissioner. Hence, when such express power is also conferred, it may not be the intention of the Legislature to condition the right of Appeal of the aggrieved party only after he discharges the liability under the Award. Such a restriction being brought in by interpreting Section 8(3) in that manner would be unnecessarily fettering the right of Appeal.
5. A perusal of the Statute shows that there were valid reasons for incorporating the proviso and Section 30-A. The Workmen's Compensation Act, as enacted in 1923, did not contain the proviso referred to above. The said proviso was introduced to the present Act by means of the Amending Act XV of 1933. The objects and reasons set out for incorporating the said Section (which was introduced to the Parent Act by Section 17 of the Amending Act) state as follows :
"Section 8 of the Act does not prescribe any particular period during which compensation be distributed by him, but it is doubtful whether he can, without statutory authority, withhold a payment for the periods which are sometimes necessary for the decision of an appeal by a High Court. These amendments seek to confer the necessary authority of the Commissioner to withhold payment of compensation pending the decision of the appeal. In order to prevent hardship power is at the same time given to the Commissioner to distribute small sum for the maintenance of the opposite party during the pendency of the appeal. This sum which can in no case exceed Rs. 100 and is intended to be disbursed in necessitous cases only will not be recoverable."
5. It is to be noted that the proviso as also Section 30-A of the Act were enacted keeping in full view of the scope of Section 8 of the Act. The legislative intent as disclosed from what is extracted above is to safeguard that the money awarded should be available for the disposal to the workman without depending on the final disposal of the Appeal. Alternatively, it can also be stated that the money awarded should be available for disposal even during the pendency of the Appeal. Section 30-A of the Act incorporated by Act XV of 1933 along with the proviso contemplates postponement of disbursement of the composition under Section 80 of the Act, if the Appellate Court so directs. It means that the Appellate Forum exercising the power under Section 30 of the Act has ample power to control the funds deposited with the Commissioner under the Act. Section 30-A achieves this result. If Section 30-A has to be given full filed to operate, then necessarily one has to hold that Section 8 of the Act is subject to the power of that the appellate Court may exercise under Section 30-A of the Act and the deposit and disbursement contemplated under Section 8 can be controlled by the Appellate Forum while exercising the appellate jurisdiction.
6. We may now advert to Section 30, the provision under which an aggrieved party is enabled to file an appeal. It is settled law that there is no inherent right of appeal except a right of appeal as created by the statute. What is the meaning of the expression 'lie' occurring in Sub-section (1) of Section 30 and in the provisos? Sub-section (1) says that an appeal shall lie to the High Court on the enumerated grounds. Thus, Sub-section (1) creates the forum for preferring appeal. The first proviso to Section 30(1) states that no appeal shall lie against any order unless it involves a substantial question of law; the second proviso states that no appeal shall lie in respect of an award passed based on an agreement; and the third proviso states that no appeal shall lie unless the Memorandum of appeal is accompanied by a deposit certificate. The question whether the enumerated grounds, namely, clauses (a) to (e) exist or the appeal involves a substantial question of law or it is against an agreed order will arise for consideration only at the stage when the appeal is entertained for consideration. Obviously, the expression 'lie' used in the proviso means, not at the stage when the Memorandum of appeal is presented but when it is entertained for consideration.
7. In Burton's Legal Thesaurus the verb 'lie' is defined to mean :
" (be sustainable) be allowable, be appropriate, be available, be established, be evident, be fitting be permissible, be permitted, be possible, be proper, be suitable, be suited, be supportable, be warranted, exist, extend, stand."
It means that the Appeal will be sustainable only if the conditions mentioned in the Section exist. In other words, the stage would be only when the Appellate Forum examines the appeal. In Civil Procedure Code 1908 also Section 96(4) declares that no appeal shall lie except on a question of law. Same as is the wording in Section 100. The consideration whether there exists a substantial question of law is not at the stage when the Memorandum of Appeal is presented, but at the stage when the Court decides to entertain or admit the appeal. Therefore, the interpretation that even the Memorandum of Appeal cannot be presented without the compliance of the requirement of the third compliance of the requirement of the third proviso may not be said to be the intention of the Legislature while enacting the said proviso. Therefore, the expression 'lie' occurring in Section 30 of the act means "to entertain" or "to admit to consideration".
8. If the meaning of the word 'lie' occurring in Section 30 is understood to mean "entertain" or "admit for consideration", then what would be the effect of an appeal presented without compliance of the proviso. As regards the first and second provisos. As regards the first and second provisos are concerned, if the Appellate Court finds that there is no substantial question of law or that the appeal is against an agreed order, then the appeal cannot at all be entertained. What then is the effect of non-compliance of the third proviso. The question as to what is the effect of similar clause had come up for consideration before the Supreme Court in several decisions and was fully considered in M/s. Lakshmi Ratan Engineering Works Ltd. v. Assistant Commissioner (Judicial), . In the said decision, the Supreme Court had stated as follows :
" (7) To begin with it must be noticed that the proviso merely requires that the appeal shall not be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due. A question thus arises what is the meaning of the word 'entertained' in this context? Does it mean that no appeal shall be received or filed or does it mean that no appeal shall be admitted or heard and disposed of unless satisfactory proof is available/ The dictionary meaning of the word 'entertain' was brought to our notice by the parties and both sides agreed that it means either "to deal with or admit to consideration". We are also of the same opinion. The question, therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it 'entertained' when it is admitted and the date is fixed for hearing or is it finally 'entertained' when it is heard and disposed of? Numerous cases exist in the law reports in which the word 'entertained' or similar cognate expressions have been interpreted by the Courts......................"
After reviewing various authorities. Their Lordships stated as follows :
" (10) In our opinion these cases have taken a correct view of the word 'entertain' which according to the dictionary also means 'admit to consideration.' It would therefore appear that the direction to the Court in the proviso to Section 9 is that the Court shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of the payment of the admitted tax. This will be when the case is taken up by the Court for the first time. In the decision on which the Assistant commissioner relied, the learned Chief Justice (Desai C.J.) holds that the words "accompanied by" showed that something tangible had to accompany the memorandum of appeal. If the memorandum of appeal had to be accompanied by satisfactory proof, it had to be in the shape of something tangible, because no intangible thing can accompany a document like the memorandum of appeal. In our opinion, making "an appeal" the equivalent of the memorandum of appeal is not sound. Even under Order 41 of the Code of Civil Procedure, the expression "appeal" and "memorandum of appeal" are used to denote two distinct things. In Wharton's Law Lexicon, the word 'appeal" is defined as the judicial examination of the decision by a higher Court of the decision of an inferior Court. The appeal is the judicial examination; the memorandum of appeal contains the ground on which the judicial examination is invited. For purposes of limitation and for purposes of the rules of the Court it is required that a written memorandum of appeal shall be filed. When the proviso speaks of the entertainment of the appeal, it means that the appeal such as was filed will not be admitted to consideration unless there is satisfactory proof available of the making of the deposit of admitted tax".
This principle is further reiterated in the decision in Shyam Kishore & Ors. v. Municipal Corporation of Delhi & Anr. . In that decision, their Lordships were interpreting the expression "no appeal shall be heard or determined under Section 169 unless". Interpreting the expression, their Lordships stated as follows :
"....... In the present statutory context, it sounds plausible to say that such an appeal can be admitted or entertained but only cannot be heard or disposed of without pre-deposit of the disputed tax. Such an interpretation will provide some much needed relief from the harshness of the provision. These are not days in which the calculation of the property tax is simple and uncomplicated; the determination of the annual value of the property, except when based on the actual rent received from the property, involves various subjective factors and, not unoften, there is a wide gulf between the tax admitted to be due and the tax demanded. Sometimes, to compel the assessee to pay up the demanded tax for several years in succession might very well cripple him altogether. This apart, an assessee may not be able to deposit the tax while filing the appeal but may be able to pay it up within a short time, or at any rate, before the appeal comes on for hearing in the normal course. There is no reason to construe the provision so rigidly as to disable him from doing this. Again, when an appeal comes on for hearing, the appellate Judge, in appropriate cases, where he feels there is some great hardship or injustice involved, may be inclined to adjourn the appeal for some time to enable the assessee to pay up the tax. Though it will not be expedient or proper to encourage adjournment of an appeal, where it is ripe for hearing otherwise, only on this ground and as a matter of course, an interpretation which leaves some room for the exercise of a judicial discretion in this regard, where the equities of the case deserve it, may not be inappropriate................."
If the yard-stick laid down by the Supreme Court is applied to interpret the proviso to Section 30(1) of the Act, then the stage for consideration of the question regarding the compliance of the third proviso would arise only at the stage when the appeal is entertained for consideration.
9. On the basis of the decision of this Court, referred to above, it is contended that the point now raised is no more res integra. In view of what is stated in paras 8 and 9 of the decision reported in (1972) 2 Kar. L. J. 449 (supra), it cannot be said that this Court has finally pronounced on this point. Besides, that was a case where there was no deposit of the amount awarded at all either at the time of presentation of the appeal or when the appeal was entertained for consideration. There was no compliance of the proviso to Section 30 in any manner. The various aspects referred to above were also not brought to the notice of this court; no contention is seen advanced regarding the meaning of the expression 'lie' occurring in Section 30 of the Act, viz-a-viz other similar enactment; the decision (supra) was also not brought to the notice of this court. This observations in paras 8 and 9 indicate that it was assumed that the pre-deposit of the amount awarded is a condition precedent for filing the appeal. In these circumstances, I am of the view that the said decision can be passed as sub silentio. This principle is illustrated in the following passage from Salmond on Jurisprudence, 12th Edition, Page 153 :
"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the Court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although Point B was logically involved in the fact and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio.
A good illustration is Gerard v. Worth of Paris, Ltd. (1936) 2 ALL. E. R. 905. There a discharged employee of a company, who has obtained damages against the company for wrongful dismissal, applied for a garnishee order on a bank account standing in the name of the liquidator of the company. The only pointed argued was on the question of the priority of the claimants; debt, and, on this argument being heard, the Court to appeal granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal Lancaster Motor Co. v. Bremith Ltd. (1941) 1 K. B. 675 at 677 (C. A.), the Court, held itself not bound by its previous decision. Sir Wilfrid Greene, Mr., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed".
10. Now it takes us to the consideration of the question as to what is the effect of failure of compliance of the proviso to Section 30(1) in the manner indicated in the Section. If the meaning of the word 'lie' occurring in the proviso is interpreted to mean the stage of consideration of the appeal for being entertained, it would mean that the question as to non-compliance of the proviso will arise only at that stage when there should be a tangible proof of the deposit required under the law. The Section only states that the aggrieved party may file an appeal under the section and such appeal will not lie unless there is a substantial question of law. As held by , (supra), the appeal is the judicial examination of the dispute and the Memorandum of appeal contains the grounds on which the judicial examination is invited. It, therefore, follows that the stage at which the question of compliance with the requirement of proviso arises only when the dispute is taken up for being judicially examined by the Appellate Court and not at the stage of presentation of the Memorandum of Appeal in the office.
11. In the instant case, what has happened is that the appellant has made the deposit before this Court instead of before the Commissioner for Workmen's Compensation. It only means that there is compliance with the provisions of the Section, but not the compliance as contemplated under the proviso. By virtue of operation of Section 8(3) of the Act, it will not amount to a discharge of the obligation under the Award, but as we have seen earlier, there is no need to discharge the obligation in order to maintain an Appeal. Section 30-A of the Act contemplates conferment of power with the High Court to withhold payments pending decision of the Appeal. It is to be remembered that all rules procedure are intended to advance Justice and not to defeat it. By permitting the appellant to deposit the award amount before the Appellate Court, it only enables the Appellate Court to deal with the amount deposited more judicially and in exercise of its power under Section 30-A of the Act. There is no penal clause in Section 30 of the Act declaring that on the non-compliance of the third proviso, referred to above, the right of Appeal is forfeited and it should be rejected. The power conferred on the Appellate Court under Section 30-A to control the disbursement of the compensation under Section 8 of the Act has to be meaningful. Hence, the manner of deposit can be regulated by the Appellate Court in exercise of its power under Section 30-A. If so, it will be sufficient that the deposit is made before the Appellate court. The statute itself recognises the power of the Appellate court to issue orders even to withhold disbursement of the amount deposited under Section 8; it means, the discretionary powers of the Appellate Authority is expressly saved by the provisions of the Statute. It is well recognized principle that all Appellate Authorities are clothed with such powers to issue discretionary orders Judiciary in order to further the cause of Justice. If such a power is not recognised, then, the very appellate jurisdiction is rendered ineffective.
12. Therefore, it is in the interest of Justice that the exercise of this power should not be rendered nugatory and meaningless. For in a given case even before the Appeal is admitted for consideration, the Commissioner for Workmen's Compensation may even disburse the amount to the beneficiary without the knowledge of filing the appeal. May be in a given case where there is a substantial question of law to be considered by the Appellate Court and the Appellate court finds that such a question exists and that the original authority had awarded an astronomical figure as compensation, the Appellate Court would be rendered totally powerless to do justice to the party, if a strict interpretation as now contended is placed to the proviso. Therefore, the power of the Appellate Court should be recognised to do Justice between the parties with respect to lis brought before it for adjudication. The only construction, according to me, that can be, therefore, placed to Third Proviso to Section 30(1) is that before the Appeal is entertained for consideration, there should be the deposit of the amount awarded by the Commissioner which can be dealt with by the Appellate Court under Section 30-A of the Act if so needed.
13. The Appellate Court, if it entertains an appeal under Section 30 with respect to clause (a) can exercise all the powers of the Commissioner in adjudicating the questions. It can modify the Award and even reduce the compensation awarded as well. Thereafter the amount so quantified becomes the compensation awarded that has to be satisfied under Section 8 of the Act. It means, the Appellate Court exercises all the powers of the Workmen's Compensation Commissioner. Inferentially then a deposit made before the Appellate court at the time of presentation of the appeal and before the appeal comes up for consideration can also be treated as substantial compliance with the requirement of law.
14. I over-rule the preliminary objections of the learned Counsel for the 1st respondent and hold that the Appeal is maintainable. The office is directed to post the Appeal for admission.