Gujarat High Court
M/S Moorthi Engineering Works Through ... vs Tulsi Harji Maheshwari Sinch on 7 March, 2025
NEUTRAL CITATION
C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025
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Reserved On : 27/02/2025
Pronounced On : 07/03/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1103 of 2024
With
CIVIL APPLICATION (FOR WITHDRAWAL/DISBURSEMENT OF AMOUNT)
NO. 1 of 2024
In R/FIRST APPEAL NO. 1103 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
✔
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M/S MOORTHI ENGINEERING WORKS THROUGH ITS PROP. KAMBALA
SIKHAGRA MOORTHI
Versus
TULSI HARJI MAHESHWARI SINCH & ORS.
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Appearance:
MR. HEMAL SHAH(6960) for the Appellant(s) No. 1
DELETED for the Defendant(s) No. 3
MR AMAN A SAMA(11691) for the Defendant(s) No. 1
MR YOGI K GADHIA(5913) for the Defendant(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
CAV JUDGMENT
1. The present appeal is filed by the employer-original respondent under Section 30 of the Workmen's Compensation Act, 1923, challenging the legality of the judgment and order dated 09.06.2023 passed by learned Workmen Compensation Commissioner, Page 1 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Labour Court, Gandhidham, District-Kachchh in W.C. (Non Fatal) No.16 of 2023 (henceforth, "the impugned judgment and order") 1.1 By the said impugned judgment and order, the learned Workmen Commissioner has partly allowed the application preferred by the respondent-workman and opponent no.2 is held liable to pay the compensation of Rs. Rs.9,01,975/-,. The learned Workmen Commissioner has also awarded interest on the aforesaid award amount at the rate of 12% per annum and penalty to the extent of 50% i.e. Rs.4,50,988/-, which is directed to be paid by the present appellant/ original opponent no.1. The opponent no.3-Manager of Kandla Energy and Chemical Limited is exonerated from such liability of payment of compensation, interest or penalty to the respondent- workman.
2. In order to appreciate the controversy raised in the present appeal, appropriate would be to look into the relevant facts of the case, which are summarized hereunder:
2.1 The respondent no.1-workman is the original applicant before the learned Workmen Commissioner, Labour Court. The original opponent no.1 is the employer and opponent no.3 is the contractor, who had engaged the workman and had deputed him at Page 2 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined the work site. On 01.11.2012, while the applicant workman was discharging his duties under instructions of the opponent no.1-
contractor, because of the negligence of the driver in movement of the crane bearing no.GJ-12-AN-1049, the crane slipped out from the joint and accidentally fell on the right leg of the applicant-workman. Because of the aforesaid accident, the workman had sustained serious injuries including fracture on various parts of the body. The workman was operated on, whereby his right leg was amputated. 2.2 Considering the nature of injuries sustained and the medical expenses incurred by the applicant-workman, and the future loss towards his earning capacity, the applicant-workman approached the Labour Court seeking compensation of an amount of Rs.9,01,975/- along with interest at the rate of 18% from the date of occurrence of the accident on 01.11.2012 till its actual realization. 2.3 The aforesaid application was preferred on 02.05.2013 before the learned Workmen Commissioner, Labour Court, Gandhidham, Kachchh, which was registered as Workman Compensation (Non Fatal) Application No.16 of 2013. The opponent no.1 had availed insurance coverage from opponent no.2 Insurance company for any untoward accident which may have occurred on the work site, both under the Motor Vehicles Act as well as under the Page 3 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Workmen's Compensation Act, 1923. The opponent no.2-Insurance Company had issued such policy in the name of opponent no.1, and were therefore joined as opponents to hold them jointly and severally liable to pay the amount of compensation as determined by the learned Workmen Commissioner.
2.4 The applicant had averred that at the time of accident he used to earn a monthly salary of Rs.7,500/- and on the date of accident, his age was around 15 years. The date of birth of the applicant mentioned in the application is 20.04.1991. 2.5 Before the learned Labour Court, the opponent nos. 1 and 2 were duly served with the court's notice, who have entered their appearance through their respective counsels. The applicant-workman had preferred application at Exh.19 seeking impleadment of Kandla Energy and Chemicals Limited. Considering the submissions of the opponent no.1, who claims to be his contractor, such application was allowed and the opponent no.3 was joined as party to the proceedings. The written statement was submitted by the opponent no.1 at Exh. 31 disputing the averments made in the original application filed by the applicant-workman and his liability to pay such compensation paid for. The opponent no.2- Insurance Company had also submitted its written statement at Exh.15. The dispute about the Page 4 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined age of the applicant was raised and liability to pay such an amount of compensation was objected to. The relationship of the employee and employer was also disputed.
2.6 The Insurance Company had raised an objection with regard to non production of the insurance papers before the Court. Though the policy, which was produced was one pertaining to workmen's compensation; however, the liability to pay interest on such compensation, was vehemently objected by the Insurance Company. Before the learned Workmen Commissioner, the applicant workman had entered the witness box and his deposition was recorded at Exh.25. The applicant workman had also examined a Medical Officer namely Dr. H. C. Hotchandani at Exh 33. Apart from the aforesaid oral evidence, the following documentary evidence were also brought on record. The details of which are reproduced hereunder:
Oral Evidences :-
1. Affidavit of Evidence of the applicant, Tulsi Harji Maheshvari, vide Exhibit 25
2. Affidavit of Evidence of the witness, Dr. H. C. Hotchandani, vide Exhibit 33 Documentary Evidences :-
Sr. No. Particulars Exhibits Page 5 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined 1. A photocopy of the election card of 4/1 the applicant A photocopy of the discharge card of 2. Kandala Energy and Chemicals Ltd. 4/3 given by Dr. Hotchandani 3. A photocopy of the insurance policy 4/4 given by respondent No. 2 A photocopy of the letter addressed 4. to respondent No. 2 written by 4/5 respondent No. 1 5. A photocopy of the licence issued by 4/8 licence authority
6. Salary register of October-2012 given 35 by respondent No. 1
7. A true copy of the FIR filed regarding 36 the incident of accident A true copy of the Panchnama 8. prepared regarding the incident of 37 accident
9. A true copy of the certificate issued 38 by Kandala Energy Chemicals A true copy of the permanent 10. disability certificate issued by G. K. 39 Hopital, Bhuj
11. A true copy of School Leaving 40 Certificate of the applicant
12. An original photograph of the 41 amputated right leg of the applicant
13. A true copy of the details of medical 42 expenses of the applicant Page 6 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined True copies of the details of the
14. injections and medical instruments 43, 71 used in the hospital of Dr. Hotchandani, Pieces - 2 44 to 52, 54, 62, 66,
15. True copies of the bills of Sunrise 68, 70, 72 Medical Stores, Pieces - 26 to 76, 82, 85, 87, 89, 92, 90 53, 59, 61, True copies of the prescriptions 65, 67, 69, 16. written by Dr. Hotchandani, Pieces - 80, 81, 83, 14 84, 86, 88, 91, 96 21, 56, 58,
17. True copies of the reports of Rajabhai 63, 64, 77, Bloodbank, Pieces - 09 78, 79, 99
18. A true copy of the report of Shraddha 57 Pathology Laboratory
19. A true copy of the leave certificate 60 written by Dr. Hotchandani
20. Payment receipt given by Dr. 93 Hotchandani
21. Discharge card given by Dr. 94 Hotchandani 22. TPR chart given by Dr. Hotchandani 95 True copies of the treatment reports 23. written by Dr. Hotchandani, Pieces - 97, 98 02 Page 7 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined
24. An original permanent disability 100 certificate issued by Dr. Hotchandani A copy of Form No. 21 submitted to the office of Deputy Director, 25. Industrial Safety and Health by 101 respondent after informing regarding the incident An original register AD receipt by which a copy of an evidence affidavit 26. of the applicant and applications of 102 compensation to respondent Nos. 1 and 3 were sent An original register AD receipt by which a copy of an evidence affidavit 27. of the applicant and applications of 103 compensation to respondent Nos. 1 and 3 were sent 28. An original acknowledgment receipt 104 2.7 The applicant workman had submitted his pursis at Exh.105 declaring his closure of his evidence stage. As against, the aforesaid evidence of the applicant workman, the opponent no.2 had submitted his affidavit of examination-in- chief through a responsible officer namely Kambala Shikhagara Murthi at Exh.106. Apart from the aforesaid oral evidence, the opponent no. 2 had tendered the certified copy of the insurance policy at mark 16/1. The respective opponents have tendered their pursis declaring closure of their evidence stage at Exh.107 and Exh.108 respectively. Page 8 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025
NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined 2.8 Upon overall appreciation of the evidence brought on record and the submissions made by learned advocates appearing for the respective parties, the learned Workmen Commissioner had framed issues at Exh.110. The translated version of the same reads as under:
"(I) Whether the applicant proves that he is the employee of the opponent ?
(ii) Whether the applicant proves that the accident had occurred at the time of his employment with the opponent ?
(iii) To what extent the permanent disability is sustained by the applicant due to the accident?
(iv) Whether the applicant proves his age at the time of the accident and what was his monthly salary ?
(v) Whether the opponents are held liable to pay compensation to the applicant? If yes, then what amount?
(vi) Whether the opponents are liable to pay an amount of penalty and interest on the amount of compensation?Page 9 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025
NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined
(vii) Whether the Insurance Company is held liable?
(viii) What order?"
2.9 While considering the aforesaid issues, the learned Commissioner, after taking into consideration the evidence in light of the submissions made by respective parties, by the impugned judgment and order, partly allowed the claim application holding the opponent no.2- Insurance Company liable to pay an amount of Rs.9,01,975/- to the applicant workman. The learned Workmen Commissioner took into consideration the admission of the opponent no.1- employer, who in his cross examination, has admitted that he is the employer of the applicant workman, and the accident had taken place at the work site. The learned Workmen Commissioner has also noticed that the occurrence of the accident at the work site which has resulted into permanent disability during the course of employment of the applicant, has also been established through the documentary evidences including the true copy of the FIR produced on record at Exh.36, the panchnama of place of the of accident at Exh. 37. Thus, the learned Workmen Commissioner has answered the issue no.1 in affirmative in favour of the applicant workman.Page 10 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025
NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined 2.10 As regards the injuries sustained by the applicant workman, the learned Workmen Commissioner has taken into consideration the disability certificate produced on record at Exh.110, whereby the Medical Officer has assessed 90% of permanent disability of the applicant workman of the body as a whole. The aforesaid documentary evidence has been established by the applicant workman through the witness namely Dr. H. C. Hotchandani, who has been examined at Exh.33. In fact, during the cross examination at the instance of the opponents, it has transpired that the applicant workman has sustained 100% disability. The learned Workmen Commissioner has therefore, noticed the fact that the injuries sustained with regard to amputation of his right leg, is a schedule injury, and considering Schedule-1, Part-2 as provided at entry 16, the applicant workman has sustained 90% of permanent disability causing loss of his earning capacity. The learned Workmen Commissioner has, therefore, answered issue no. 3 in favour of the applicant workman in affirmative.
2.11 As regards the age of the applicant workman, the learned Workmen Commissioner has noticed from the evidence of the applicant workman that he was aged around 21 years, when he was examined before the Labour Court. The copy of the election card, Page 11 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined which is produced by the applicant workman at Mark 4/1 indicates the date of birth of the applicant workman as 20.04.1991, whereas the accident had taken place on 01.11.2012. In such circumstances, the Court has believed the date of birth of the applicant workman, and arrived at a finding that the applicant workman was aged around 21 years at the time of the accident.
2.12 As regards the basic salary of the applicant workman is concerned, the wage register has been produced by the applicant at Exh. 32, which reflects the basic salary of the applicant workman as Rs.7500/- per month. Apart from the aforesaid wage register, the notification dated 31.05.2010 issued by the Ministry of the Labour and Employment is produced on record which suggests that the minimum Rs.8,000/- basic pay is required to be taken into consideration, which has been amended and given effect from 01.06.2010 whereas the accident had taken place on 01.11.2012. Taking note of the aforesaid notification, the learned Workmen Commissioner has believed the case of the applicant workman of earning amount of Rs.7,500/- per month, and has therefore, answered issue no.5 in favour of the applicant workman.
2.13 As regards the issue raised at No.5 to 7 are concerned, considering the overall evidence brought on record, the learned Page 12 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Workmen Commissioner has held the opponent no.2- Insurance Company liable in light of the insurance policy produced on record at mark 16/1 by opponent no.2 wherein the period of appointment is indicated is 28.12.2011 to 27.11.2012, and noticing the fact that the accident had occurred on 01.11.2012, has held the opponent-
Insurance Company liable to indemnify the opponent no.1 employer, in view of the fact that the policy was under Workmen's Compensation Act as well.
2.14 As regards the amount of compensation is concerned, the learned Workmen Commissioner noticing the age of the applicant workman as 21 years and his salary at the rate of Rs. 7,500-/ per month and considering Section 4 of the Employees Compensation Act, 1923, has applied 60% to the basic salary i.e. Rs.4500/- and relevant factor of 222.71 considering his age of 21 years, and has thereby computed total amount of compensation as Rs. 10,02,195/-.
2.15 Considering the fact that the applicant workman has sustained 90% permanent disability of body as a whole and has also resulted into loss of earning capacity, the applicant workman is held entitled to amount of compensation of Rs.9,01,975/- with interest at the rate of 12% from the date of the accident till its realization. As regards, penalty is concerned, learned Workmen Commissioner has Page 13 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined taken note of the fact that in view of the provisions of Section 4(A)(1) of the Employees Compensation Act, 1923, and the demand of compensation and since the employer did not accept the liability to the extent claimed, the employer was required to deposit of the provisional payment based on the extent of liability, which he accepted and such payment was required to be deposited with the learned Workmen Commissioner or to the employee as the case may be without prejudice of the right of the employee to make further claim. However, in the present case, the opponent no.1- employer had failed to deposit any of such provisional payment nor has placed on record the copy of the policy.
2.16 In such circumstances, the learned Workmen Commissioner, considering the judgment of this Court in the case of New India Assurance Co. Ltd. versus Kamlaben Prabhakar Chaudhary & 3 Other(s) reported in 2020 ACJ 195, the learned Workmen Commissioner, considering the insurance policy produced on record at Exh.33, has noticed that the coverage was only limited to the amount of compensation, and it does not include the coverage for penalty or interest, and has therefore held the opponent no.1, employer liable to penalty of 50% of the principal amount of compensation awarded to the applicant workman. Considering the Page 14 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined judgment of the Hon'ble Supreme Court in the case of T.S. Shylaja vs Oriental Insurance Co. & Anr reported in 2014 (2) SCC 587, and other judgments, has arrived at a conclusion to award 12% simple interest on the principal amount, to be paid by the opponent no.1-employer.
The learned Workmen Commissioner has also followed the precedents laid down by the Hon'ble Supreme Court as well as by this Court on the issue of the liability to pay the interest from the date of the occurrence of accident till its realization, to be paid by the opponent no.1- employer.
3. Hence, being aggrieved and dissatisfied with the aforesaid impugned judgment and order dated 09.06.2023 passed by learned Workmen Compensation Commissioner, Labour Court, Gandhidham, District-Kachchh in W.C. (Non Fatal) No.16 of 2023, the opponent no.1- present appellant herein has approached this Court by preferring the present appeal under Section 30 of the Employees Compensation Act 1923.
4. Learned advocate Mr. Hemal Shah appearing for the appellant employer was heard at the admission stage, challenging the liability of the appellant- employer towards the 50% of the penalty and 12% of the interest on the amount of compensation being determined by the learned Workmen Commissioner. Apart from Page 15 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined raising the grounds, disputing its liability, the appellant has raised following substantial questions of law for consideration of this Court:
"(a) Whether the learned Workman Commissioner has committed error in holding that the appellant to be liable to pay interest at 12% to the employee on the awarded amount even when the policy of insurance is in existence and does not have any exclusion clause under section 4(3)(a) of employees compensation act?
(b) Whether the learned Workman Commissioner has committed error in holding the present appellant liable to pay 50% of the awarded amount as penalty under section 4(a) (3) of the Employees Compensation Act?
(c) Whether the learned Workman Commissioner has committed error in not determining the compensation at an exhorbitantly high amount?"
5. The respondents were duly served. Learned advocate Mr. Aman Sama had entered his appearance on behalf of the respondent no.1-original applicant workman and learned advocate Mr. Yogi Gadhia has appeared on behalf of respondent no.2- Insurance Company. The respondent no. 3 was deleted from the array of the parties. Upon hearing the learned advocates appearing for the respective parties and noticing the insurance policy placed on record, Page 16 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined this Court vide order dated 06.09.2024 had admitted the appeal and in the application for stay, had stayed the implementation, operation and execution of the impugned order till final disposal of the appeal, on condition that the appellant- employer shall deposit 50% of the interest amount within a period of one month thereafter. The direction was also issued to file an undertaking before this Court that, if the appeal is dismissed, he shall deposit the remaining amount of interest before the learned Workmen Commissioner.
6. It transpires from the order sheet, that note for speaking to minutes was moved by the learned advocate Mr. Aman Sama appearing for the respondent workman, which came to be rejected by this Court vide order dated 12.09.2024, thereby not entertaining the note. The respondent no.1 workman had, therefore, preferred separate application seeking withdrawal/disbursement of the amount, which was registered as Civil Application No.1 of 2024. The matter was pressed for hearing by the respondent no.1 by raising grievance that having sustained serious injuries as of amputation of right leg, the applicant is in critical financial condition as he is unable to resume his previous occupation as a skilled worker.
7. Considering the submissions of the learned advocates appearing for the respective parties, this Court had fixed the hearing Page 17 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined of the main appeal with the consent of learned advocates appearing for the respective parties. The matter was finally heard. Written submissions were directed to be placed on record along with the list of authorities. The matter was, thereafter, reserved for orders.
8. Learned advocate for the respondent workman, had raised a preliminary objection with regard to the maintainability and entertainment of the Appeal under Section 30 of the Workmen's Compensation Act, 1923, mainly by raising two grounds. Learned advocate has invited my attention to the third proviso appended to sub-section (1) of Section 30 of the Employees Compensation Act,1923, which mandates that no appeal by an employer under Clause (a) shall be entertained unless the memorandum of appeal is accompanied by a certificate issued by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.
8.1 By referring to the aforesaid proviso, learned advocate had further pointed out that till date, he has received an amount of Rs. Rs.1,35,296-/ only as against the remaining outstanding amount of Rs. 18,40,030-/ as on date which is 30.01.2025, which includes the amount of penalty as well as interest at the rate of 12% as awarded by the learned Workmen Commissioner. The attention of this Court was Page 18 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined invited to the fact that the accident had occurred on 01.11.2012, the impugned order came to be passed on 09.06.2023. The First Appeal was preferred by the employer with an application seeking condonation of delay on 23.08.2023. After the delay was condoned, the appeal was registered on 15.03.2024.
8.2 It was further submitted by the learned advocate that there is no deposit of further amount which includes the interest and the penalty. He has, therefore, submitted that in absence of deposit of such amount, which is assailed in the present appeal, the appeal itself is not required to be registered and is not maintainable. The reliance was placed on the decision of the Hon'ble Division Bench of this Court in the case of Haji Alias Yakub since deceased by his heirs Haji Abdulgani Haji and Another vs. Ayasabai Ismail decided on 21.12.1976 in First Appeal Nos.612, 613 to 618 of 1973, whereby the Court held the appeal incompetent on account of failure of mandatory condition of second proviso to Section 30 being not complied with. The reliance was also placed on the decision of the Full Bench of the Madhya Pradesh High Court in the case of New India Assurance Co. Ltd. vs. Smt. Savita Sen and others reported in 2004 (2) JLI 214. The reference was made by the Division Bench of the High Court of Madhya Pradesh to the larger Bench raising the question of law as to Page 19 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined whether third proviso to Section 30(1) of the Workmen's Compensation Act, 1923, requiring the employer to accompany certificate of deposit from the learned Workmen Commissioner for workmen's compensation of the amount of compensation along with memorandum of appeal, is applicable to the appeal filed by the insurer also? The Full Bench, by following the general rule of interpretation of statute and taking into consideration the provisions of beneficial legislature, has held that the interpretation which defeats the intent and the purpose of statute itself, should be avoided. The Hon'ble Full Bench, therefore, held that third proviso to Section 30(1) of the Workmen's Compensation Act, 1923 is equally applicable to the appeal filed by the insurer, and consequently, the appeal at the behest of the insurer without such certificate being accompanied, was held not maintainable. The attention of this Court was also invited to the decision of the Hon'ble High Court of Allahabad in the case of New India Assurance Co. Ltd. vs. Neeru Dabur reported in 2006 ACJ 2393, answering the similar issue, held that the appeal was not maintainable unless the entire amount due under the impugned judgment and award, was deposited and a certificate to that effect was attached. Looking to the inclusive nature of the term "employer" as defined under the Act of 1923, the Court held that even an Insurance Company is required to comply with the proviso. Learned Page 20 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined advocate had also placed reliance upon the decision of the Division Bench of the Hon'ble High Court of Madhya Pradesh in the case of Sabir and Brothers vs. Rajesh Sen and Another reported in 2015 3 MPLJ 551, noticing that the petitioner had not deposited the amount, which was otherwise a mandatory condition to be fulfilled, the Court, held that the appeal was not maintainable on the ground of non- compliance of the provisions of the Payment of Wages Act, 1936. 8.3 Secondly, the learned advocate has raised the issue of entertaining the appeal on the ground that no substantial questions of law arise for consideration in the present appeal in the facts of the case, which is the main requirement for entertaining an appeal under Section 30 of the Workmen's Compensation Act. 1923. In support of his contention, the learned advocate has placed reliance upon the decision of the Hon'ble Supreme Court in the case of T.S. Shylaja vs. Oriental Insurance Co., AIR 2014 SUPREME COURT 893 . 8.4 While referring to the relevant observations of the Hon'ble Supreme Court, learned advocate had pointed out that upon appreciation of the findings recorded by the learned Workmen Commissioner as well as by the High Court, the Hon'ble Supreme Court held that the High Court committed serious error, without adverting to the documents vaguely being referred thereby upsetting Page 21 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined finding of fact which the learned Workmen Commissioner had recorded. The Hon'ble Supreme Court further noticed that the High Court neither referred to nor determined any question of law much less a substantial question of law, which is a condition precedent for the maintainability of any of appeal under Section 30 of the Employees Compensation Act, 1923. The Hon'ble Supreme Court further observed that the High Court remained oblivious of the basic requirement of law for the maintainability of an appeal before it in as much as it treated the appeal to be one of the facts, and therefore held that the High Court had committed an error. 8.5 Apart from the aforesaid preliminary objections with regard to the maintainability and entertaining of the appeal, learned advocate have also addressed the Court on merits of the case. While referring to the findings and the reasons assigned by the learned Workmen Commissioner. The learned advocate had referred to the cross examination of the present appellant/original opponent no.1- employer, wherein he has fairly admitted that there exists the employer-employee relationship between the parties and the accident had occurred at the working site, and injuries were sustained by the workman, during the course of his employment. It is in the background of this admission of employer, and the documentary evidences Page 22 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined brought on record corroborating the aforesaid facts, the learned Commissioner has arrived at a conclusion about the existence of the employer/employee relationship and the occurrence of the accident at working site resulting into injuries to the workman during the course of employment. Thus, the basic requirement for entitlement of the compensation under the Employees Compensation Act has been verified by the learned Workmen Commissioner. In such circumstances, no error can be found with the approach of the learned Workmen Commissioner in awarding the compensation. As regards the amount of compensation awarded is concerned, it was pointed out that the learned Workmen Commissioner has strictly adhered to the statutory provision on the issue of penalty and the interest awarded at the rate of 12% from the date of the occurrence of the accident till realization of the amount is concerned. Learned advocate has pointed out that looking to the injury sustained by the workman, whereby there is amputation of the right leg leading to the case of 100% of functional disability, ultimately leaving the workman in a pitiable condition for the rest of his life without any capacity to do a skilled work, and the opponent employer having failed to make any provisional payment, no error can be found with the approach of the learned Workmen Commissioner in awarding the penalty at the rate of 50% and the interest at the rate of 12% on the principal amount, to Page 23 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined be realized from the employer. At this stage, learned advocate has invited my attention to the substantial questions of law being proposed in the present appeal. By referring to the aforesaid questions of law, learned advocate had submitted that in fact, no substantial questions of law arise for consideration, insofar as, in the facts of the case. He has, therefore, urged this Court not to entertain the appeal and to issue necessary direction to forthwith deposit the remaining amount of compensation including penalty and interest which may accrue till date, with the learned Workmen Commissioner, and further direction may be issued to the learned Workmen Commissioner to release such amount in favour of the respondent workman. The reliance was placed on the decision of the Hon'ble Supreme Court in the case of Fulmati Dhramdev Yadav & Anr. vs New India Assurance Co Ltd reported in 2023 LiveLaw (SC) 746 in this regard.
9. Mr. Hemal Shah, learned advocate on record for the appellant- employer, has vehemently objected to the issue as regards maintainability being raised at this stage. Learned advocate has invited my attention to the order of admission of appeal passed by the Co-ordinate Bench on 06.09.2024, to contend that the present respondent was duly served with the notice and was represented Page 24 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined through the learned advocate, who was heard at the time of admission of appeal. As regards, the contentions which are raised by the learned advocate of non compliance of the mandatory provisions under Section 30 of the Act is concerned, learned advocate had submitted that in the application seeking stay, upon appreciation of the grounds raised in the appeal, this Court had permitted the appellant- employer to deposit 50% of the interest amount before the learned Workmen Commissioner within period of two months thereafter, and has further directed to file undertaking stating that if the appeal is dismissed, he shall deposit the remaining amount of interest before the learned Workmen Commissioner. He has, therefore, submitted that this court cannot examine the issue of maintainability on the ground of non-compliance of mandatory provisions of Section 30 as it would amount to reviewing the earlier order of admission passed by the Co-ordinate Bench. 9.1 Even otherwise the plain reading of the third proviso to section 30 of the Act as interpreted, does not mandate deposit of amount of interest and penalty at the stage of presentation of appeal. A similar issue had arisen for consideration before the High Court of Jammu and Kashmir, in the case of Divisional Manager, JKSFC Bhaderwah vs. Mohammad Sharief, 2022 LiveLaw (JKL) 209, Page 25 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined wherein in similar set of facts, the employer had approached in Appeal under Section 30 of the Act of 1923 before the High Court against the order of the learned Workmen Commissioner holding the appellant therein to pay compensation with interest at the rate of 12% per annum from the date of the accident within period of 30 days from the date of passing of the order. The appellant assailed the order of the learned Workmen Commissioner in appeal, whereby the learned counsel representing the respondent raised a preliminary objection with regard to the maintainability of the Appeal in terms of Section 30 of the Workmen's Compensation Act, 1923, no appeal by an employer under Clause (a) can be entertained unless certificate of the Commissioner is filed along with the appeal to the effect that the appellant has deposited the amount payable under the assailed in the appeal.
9.2 Learned advocate had referred to Section 30 of the Employees Compensation Act, 1923, more particularly Clause (aa) which specifically provides for appeal against the amount of interest and penalty. It was further submitted that reading of third proviso with Section 30 (1)(A) of Section 30(1) (a) of the Act of 1923, clearly suggests that the mandatory requirement of depositing the amount payable under the order in Appeal is only in reference to Clause (a) of Page 26 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined sub-section 1 of Section 30. It was further pointed out that Clause (aa) under sub-section (1) of Section 30 has been introduced by amendment subsequently. However, no further corresponding amendment is made in the third proviso of sub-section (1) Section 30. Thus, upon interpretation of aforesaid two Clauses appearing under sub-section 1 of Section 30, in light of third proviso appearing under sub-section 1 of Section 30 of the Act,1923, the High Court of Jammu and Kashmir has held that the appeal shall be barred only in case where the memo is not accompanied by certificate issued by the Commissioner to the effect that the appellant had deposited the amount payable under an order appealed under Clause (a) of Section 30(1), and not in case of order assailed under Clause (aa) of subsequent Section 30 of the Act of 1923. The appeal was, therefore, held maintainable.
9.3 The attention of this Court was invited to the letter dated 03.10.2024 addressed to the learned Labour Court Judge, Gandhidham, Kachchh, whereby in view of the order dated 06.09.2024 passed by the Co-ordinate Bench, while admitting the appeal, and granting the conditional stay, as directed by the Co-ordinate Bench the 50% of the interest amount, as per the impugned order i.e. from period of 01.11.2012, till filing of the appeal i.e. 01.07.2023 to the Page 27 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined tune of Rs.5,77,264/- has been deposited by cheque i.e. at the rate of 12% interest for the period of 10 years and 8 months, which comes to total Rs. 11,54,528/-.
9.4 He has, therefore, submitted that once the competent Court in the present appeal has passed a conditional order, which has been duly complied with, this Court may not entertain such a plea of the respondent workman on the issue of maintainability. As regards the submissions made by learned advocate on substantial questions of law is concerned, learned advocate had Invited my attention to the proposed substantial questions of law while assailing the impugned order passed by the learned Workmen Commissioner. It was pointed out that the learned Workmen Commissioner failed to appreciate that the appellant agency was duly covered by the insurance policy, and therefore, it was for the Insurance Company to make good the payment of compensation to the injured workman. The attention of this Court was also invited to the fact that the accident had taken place on 01.11.2012, and the appellant agency had reported to the Insurance Company about such incident immediately thereafter. In fact, the medical expenses were also borne out at the initial stage by the appellant agency. He has, therefore, submitted that a neat question of law arises for consideration, in a case where the insurance Page 28 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined policy is available and is in force on the date of the accident then, whether the employer can be held liable to pay interest and penalty to the employee on the awarded amount when there does not exist any exclusion clause in the policy ?
9.5 While disputing the liability of the appellant agency towards the penalty at the rate of 50% of the awarded amount as fixed by the learned Workmen Commissioner in view of Section 4(A)(3) of the Employees Compensation Act is concerned, the attention of this Court was invited to the insurance policy produced on record, more particularly, exclusion clause provided in the policy, where it is mentioned "Not Applicable". The interpretation of which, according to learned advocates, suggests that it was a comprehensive policy and there was no exclusion of any of the liability towards the compensation, which may be fixed under the Workmen's Compensation Act. He has, therefore, submitted that a substantial question of law is proposed as to whether the learned Workmen Commissioner has committed error in holding the present appellant liable to pay 50% of the awarded amount as penalty under Section 4(A) (3) of the Employees Compensation Act, 1923. Learned advocate had, therefore, urged this Court that once the appeal is admitted, this Court is bound to examine the aforesaid substantial questions of law Page 29 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined being raised, and therefore, the contention raised by the learned advocate for the respondent workman about entertaining the appeal, in absence of substantial questions of law, does not deserve any merits. He has, therefore, urged this Court to allow this appeal and to quash and set aside the impugned judgment and order qua liability of the appellant towards the interest at the rate of 12% and penalty of 50% of the awarded amount as determined by the learned Workmen Commissioner.
10. Mr. Yogi K. Gadhia, learned advocate on record for the respondent- Insurance Company, as though supported the case of the appellant on the issue of maintainability of appeal as regards the compliance of Section 30 of the Employee's Compensation Act, 1923 is concerned, however, he has objected to the submissions made by the learned advocate for the appellant with regard to the liability towards the interest and penalty amount so determined by the learned Workman Commissioner.
10.1 Learned advocate for the Insurance Company has strongly objected to the submissions made by the learned advocate appearing for the appellant that there was an exclusion clause where the reference was made "Not Applicable" to be interpreted as there is no exclusion with regard to the coverage of liability, qua the payment of Page 30 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined interest and penalty of the awarded amount is concerned, it was pointed out that in fact once the insurance policy is issued, it was expected of the appellant employer to produce on record the entire insurance policy. However, for the reasons best known, the same was not produced on record and in fact, the insurance policy has been brought on record by the respondent - Insurance Company. The learned Judge, upon appreciation of the aforesaid policy, has rightly fixed the liability of the appellant-employer to make such payment towards interest and the penalty of the awarded amount as it was for the employer to make good the provisional payment at the initial stage, failing which, the consequence of the penalty as envisaged under the Act, has been applied.
10.2 Learned advocate Mr. Yogi Gadhia has relied upon the un- reported judgment of this Court in the case of New India Assurance Co. Ltd. vs. Malaya Parida & Anr. delivered in First Appeal No.1891 of 2007 on 14.06.2024, whereby the Co-ordinate Bench had accepted the case of the appellant- Insurance Company by relying upon the judgment in the case of New India Assurance Co. Ltd. vs. Hiralal Gomaji Moriya reported in 2011 II CLR 21.
10.3 By making the aforesaid submissions, he has, therefore, objected to the prayers of the appellant, and has supported the Page 31 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined impugned judgment and order passed by the learned Workmen Commissioner.
11. Considering the controversy involving around interpretation of terms and conditions of the insurance policy in light of the two page extract of insurance policy placed on record at Exh. 33, this Court upon hearing the learned advocates appearing for the respective parties and the submissions made on the issue of maintainability of appeal on the ground of non-deposit of entire amount of compensation including the interest and the penalty at the instance of the appellant employer, had directed the respondent no.2- Insurance Company to place on record the entire copy of the policy including the terms and conditions as referred to in the policy. On the next date of hearing, the entire copy of policy was placed for consideration on record by the respondent no.2-Insurance Company. Learned advocate Mr. Hemal Shah appearing for the appellant employer had strongly objected to the production of the aforesaid policy at this stage of appeal, as the entire policy was not forming part of the record before the learned Workmen Commissioner in the original proceedings.
12. Before examining the merits of the case since the learned advocates appearing for the respective parties have addressed this Page 32 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Court on the neat question of law being raised as regards the maintainability of appeal, in view of non-compliance of the mandatory provisions of Section 30 of the Employees Compensation Act, 1923, is concerned it would be appropriate for me at the outset to deal with the aforesaid issues on maintainability and entertaining of appeal .
13. At this stage, it would be relevant to reproduce the aforesaid provisions. Thus, Section 30 of the Employees Compensation Act, 1923 reads as under:
"30. Appeals.--
(1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely
(a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum;
(aa)an order awarding interest or penalty under section 4A;
(b)an order refusing to allow redemption of a half-
monthly payment;
(c)an order providing for the distribution of Page 33 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined compensation among the dependants of a deceased employee, or disallowing any claim of a person alleging himself to be such dependant;
(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 n thousand rupees or such higher amount as the Central Government may, by notification in the Official Gazette, specify:
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 Page 34 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined 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 an appeal under this section shall be sixty days.
(3)The provisions of section 5 of the Limitation Act, 1963 (36 of 1963), shall be applicable to appeals under this section."
14. The entire controversy on the issue of maintainability is pinned on the third proviso appended to sub-section (1) of Section 30 of the Act of 1923, which mandates filing of memorandum of appeal accompanied by a certificate by the Commissioner to the effect that the appellant under Clause (a) has deposited with the learned Workman Commissioner, the amount payable under the order appealed against. The first glimpse of third proviso to sub-section (1) of Section 30 indicates that the applicability of such proviso, is restricted to reference to Clause (a) under sub- section (1) of Section 30 of the Act. Clause (aa) which provides for an appeal to the High Court from the order of the Commissioner against an order awarding interest or penalty under Section 4 (A) has been inserted by Act 8 of 1959 with effect from 01.06.1959. However, there is no corresponding amendment being effected in the original third proviso of Section 30(1) mandating the deposit of the order awarding interest or penalty Page 35 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined under Section 4(A) where such order is appealed against .
15. Learned advocate for the appellant has placed reliance upon the decision of the High Court of Jammu and Kashmir wherein the question had arisen for consideration about the maintainability of appeal against an order passed by the learned Workman Commissioner awarding interest at the rate of 12% per annum from the date of accident within 30 days from the date of the award, fixing the liability of the employer. The preliminary objection was raised by the counsel for the respondent workman with regard to the maintainability of appeal on the ground of non deposit of the interest awarded. A similar contention was raised that reading of Clause (aa) with third proviso to Section 30 (1) of the Act, does not mandate such production of certificate along with the appeal memo, which otherwise required in case of an appeal under Clause (a) to Section 30(1) of the Act.
16. The learned Judge was of the view that the sole intention of not giving corresponding amendment in the third proviso, is with a view to see that at least there is deposit of the compensation amount in order to avoid and obviate the sufferings of the employee. Otherwise, it would be prolonged in view of preferring the appeal at the instance of the employee. It is for these reasons, the legislation Page 36 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined has mandated the appellant to at least deposit the compensation amount first of the order appealed and to produce such certificate at the time of presentation of the appeal.
17. The learned judge was of the view that the appellant - employer had to at least deposit the compensation amount first of the order appealed and to produce such certificate at the time of presentation of the appeal. The Court had placed reliance upon the decision of the different High Courts in the case of Sasa Enterprises vs. Pramod Kumar reported in 1984 (1) ACC 455, United India Insurance Company vs. Shaik Alimuddin and Anr. reported in 1994 (3) ALT 321 and The Executive Engineer (Electrical) Karnataka Electricity Board, Hubli and anr. Vs. Hajarat Ali Mailasab and Anr. reported in 1999 ACC 377, to hold that there was no room of doubt that an appeal by employer against an award of compensation under Clause (a) of Section 30 (1) of this Act is barred unless memo of appeal is accompanied by certificate issued by the Commissioner to the effect that the appellant had deposited the amount payable under the order of appeal against. However, no such certificate is required if an employee prefers to question the award of interest or penalty in case a composite award both under Section 30(1) (a) and 30(1)(aa) of the Act is assailed. It would amount to sufficient compliance of the Page 37 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined provisions where a certificate with respect to payment of compensation under Section 30(1)(a) is produced without any certificate with regard to payment of interest or penalty under clause (aa) of sub-section (1) of Section 30 of the Act.
18. I have closely gone through the aforesaid precedents. However, the same are not binding to this Court, more particularly, in light of the decision of the Hon'ble Division Bench of this Court in the case of Haji Aliyas Yakub (supra). The Hon'ble Division bench was examining the prayer seeking challenge to the vires of second proviso to Section 30(1) of the Act which laid down this mandatory condition of pre-deposit of the amount payable under the order to be made first before entertaining such appeal. The Hon'ble Division Bench took into consideration the object of the legislation to provide for the deposit of the amount as a condition precedent for presentation of appeal was to see that the poor victims, who are the dependents, are not deprived of such benefits because of pendency of appeal as any delay in providing such benefit, would tantamount to denial of the benefits. As such, the Hon'ble Division Bench further observed that the speedy disposal and speedy availability of the benefit to the concerned dependents being a statutory object underlying, this condition prescribed has to be read as mandatory in nature to be fulfilled by the Page 38 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined employer. If he wants to file an appeal, no such distinction could ever be made in the context of the legislation. The Hon'ble Division Bench thus refused to entertain the prayer of the counsel for the appellant to extend time to enable him to pay/ deposit the amount. The Court refused to extend the period and held the appeal incompetent. Appropriate would be to reproduced the relevant observations of the Hon'ble Division Bench :
" 3. The legal position in this connection has already been settled by their Lordships by the final decision in Anant Mills v. State of Gujarat. Their Lordships pointed out that the right of appeal was a creature of a statute. Without a statutory provision creating such a right the person aggrieved was not entitled to file an appeal. Therefore, their Lordships failed to understand as to why the legislature, while granting the right of appeal could not impose conditions for the exercise of such right. In the absence of any special reasons there appeared to be no legal or constitutional impediment to the imposition of such conditions. Their Lordships painted out that it was permissible to prescribe such conditions. It was in terms stated that it was permissible to enact a law that no appeal should lie against an order relating to an assessment of tax unless the tax hud been paid. In fact, such a provision was on the statute book in Section 30 of the Indian Income Tax Act, 1922, where the proviso was enacted, like our second proviso, to Section 30 that no appeal shall lie Page 39 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined against an order under Sub-section (I) of Section 46 unless the tax had been paid. Their Lordships pointed out that such conditions merely regulated the exercise of the right of appeal so that the same was not abused by a recalcitrant party and there was no difficulty in the enforcement of trie order appealed against in case the appeal was ultimately dismissed. It was open to the legislature to impose an accompanying liability upon a party upon whom a legal right was conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition in case the party concerned sought to avail of the said right was a valid piece of legislation and there would be no contravention of Article 14 in it. A disability or disadvantage arising out of a party''s own default or omission could not be taken to be tantamount to the creation of two classes offensive to Article 14 of the Constitution, especially when that disability or disadvantage operated upon all persons who made the default or omission. Looking to the salutary object of such a provision to ensure the deposit of the amount claimed from the Appellant in case he sought to file an appeal, the vires of such a provision had been upheld on the ground that such a provision of deposit as a condition precedent for filing an appeal would not violate the equality guarantee enshrined in Article 14. The same view is reiterated by the Full Bench decision in Narandas v. Gujarat Sales Tax Tribunal 17 G.L.R. 977, where a similar provision in Page 40 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined the Bombay Sales Tax Act and the Gujarat Sales Tax Act imposing a condition on the Appellant that he should deposit the amount of tax assessed before his appeal could be entertained was not held one violative of Article 14 of the Constitution. Mr. Shah, however, argued that these cases must be distinguished in their own context that there was discretion left in the authority while here the provision is absolutely mandatory giving no discretion to the authority. The Full Bench having in terms referred to the aforesaid provision in the income tax Act, 1922, and having not referred in upholding the validity of this provision to the discretion of the authority, it is obvious that no such contention can now be urged to make any such frivolous distinction. Besides, the present context is of Workmen''s Compensation Act where the object of providing for this deposit as a condition precedent is to see that the poor victims or dependents are not denied this benefit. Any delay in such benefit would be tantamount to denials of the benefit as such. The speedy disposal and speedy availability of the benefit to the concerned dependents being the statutory object underlying this condition prescribed as a mandatory condition to be fulfilled by the employer. If he wants to file an appeal, no such distinction could ever be made in the context of the present legislation. The very conduct of the recalcitrant employer completely justifies the view taken by their Lordships.Page 41 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025
NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined
4. Mr. Shah had also argued before us that this Court had no jurisdiction to proceed in this matter in view of the Presidential notification, even if this was not treated as a review of the earlier order of the learned Single Judge. The present proceeding is not for enforcement of the fundamental rights and in such a context reliance on Article 359 is thoroughly misplaced by Mr. Shah. The present question has arisen in the context of this appeal which is found to be not competent. It is only to support maintainability of this appeal that this contention as to the validity of this law has been raised by Mr. Shah. The Presidential notification, if at all, would take away the locus standi of Mr. Shah to urge this contention and it could not operate as a bar to this Court disposing of this appeal as per the settled law. The legal position is well settled that to such an appeal provision where a mandatory condition of deposit is laid down, there is no bar of Article 14. Therefore, this is not a proceeding in any sense for enforcement of the fundamental rights which would require to be stayed as contended by Mr. Shah. In any event, if Mr. Shah has no locus standi to raise such a contention and if the position is so thoroughly well settled, on such dilatory pleas this Court could never help an employer to enable him to deny this benefit of the award.
5. In the result these appeals are thoroughly incompetent and they cannot be entertained because the mandatory condition of the second Page 42 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined proviso in Section 30 has not been complied with. At the end Mr. Shah asks for some time to enable him to pay up the deposit. Even after all these years the Appellant has evaded payment and never cared to make deposit and his conduct completely disentitles him from claiming any extension of period even assuming that such extension could be granted. Therefore, we find no reason to give any time as asked for. In the result all these appeals stand dismissed as incompetent. The Appellants shall pay costs of the Respondents.
6. Mr. Shah asks for a certificate for appeal under Article 133(1). There is no substantial question of law involved of wide general importance which in our opinion requires to be certified as fit for appeal to the Supreme Court and the request is summarily rejected in all these matters."
19. As pointed out by learned advocate for the appellant, the aforesaid judgment does not deal with the Clause (aa) of sub-section 1 of Section 30 of the Act, and the third proviso. The question, therefore, arises for consideration as to whether this Court can interpret the provision in a restricted manner, which would otherwise frustrate the very object of the legislation. In my view, in light of the aforesaid object of the legislation as ruled out by Hon'ble Division Bench of this Court, with all respect to the reasons assigned by the Page 43 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined learned judge in the case of Divisional Manager, JKSFC Bhaderwah (supra), I am of the view that the aforesaid interpretation adopted by the learned Judge does not serve the object of the legislation.
20. It is settled legal position of law that though the general rule of interpretation of statute is that the words are to be given their ordinary and natural meaning however, it is equally settled legal position that while interpreting the provisions of beneficial legislation, the provisions are to be interpreted in a manner which helps in achieving the object sought to be achieved by the legislature and also to advance cause of justice. The Full Bench of the Madhya Pradesh High Court in the case of Smt. Savita Sen (supra) was called upon to decide on question of law preferred by the Division Bench as to whether the third proviso to Section 30(1) the Workmen's Compensation Act, 1923, requiring the employer to accompany certificate of deposit from the Commissioner for workmen's compensation of the amount of compensation along with the memorandum of appeal, is applicable to the appeal filed by the insurer also. Though, the question posed was with regard to the applicability of the third proviso in case of insurer as well, in a way, the Full Bench has taken a broad view, taking into consideration the beneficial legislation in the field of labour laws enacted with a view to Page 44 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined involve to protect the interest of the workmen and to provide expeditious final settlement of the disputes, and therefore, proceeded to interpret the proviso appearing under sub-section (1) of Section 30 of the Act, to be made applicable in case of the insurer as well. It would be appropriate to take into consideration the relevant observations of the Hon'ble Division Bench in this regard, which are as under:
"4. The entire controversy in these matters centers around the third proviso to Section 30(1) of the Act, which mandates the filing of a certificate of deposit of the amount of compensation along with the memorandum of appeal at the behest of the employer. The question posed before us is whether the word 'employer' used in the third proviso is to be given literal meaning confining its applicability to the appeal filed at the behest of the employer only, or a wider and liberal interpretation is to be given to the word to include the insurer also keeping in view the purpose sought to be achieved by adding third proviso in the year 1933.
5. The General Rule of interpretation of statute is that the words and the language used by the Legislature are to be given their ordinary and natural meaning. The Apex Court said in Directorate of Enforcement v. Deepak Page 45 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Mahajan (AIR 1994 SC 1775) :
"32. True, normally Courts should be slow to pronounce the Legislature to have been mistaken in its constantly manifested opinion upon a matter resting wholly within its will and take its plain ordinary grammatical meaning of the words of the enactment as affording the best guide, but to winch up the legislative intent, it is permissible for Courts to take into account of the ostensible purpose and object and the real legislative intent. Otherwise, a bare mechanical interpretation of the words and application of the legislative intent devoid of concept of purpose and object will render the legislature inane......"
6. Workmen's Compensation Act is a beneficial piece of legislation in the field of Labour Laws enacted with a view to protect the interest of the workmen and to provide expeditious final settlement of their disputes. This becomes apparent from the following paragraphs, from the statement of objects and reasons of the Act :--
"The general principles of Workmen's
Compensation command almost universal
acceptance and India is now nearly alone amongst civilized countries being without legislation embodying these principles. For a number of years the more generous employers have been in Page 46 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined the habit of giving compensation voluntarily, but this practice is by no means general. The growing complexity of industry in this country, with the increasing use of machinery and consequent danger to the workmen, alongwith the comparative poverty of the workmen themselves, renders it advisable that they should be protected, as far as possible, from hardship arising from accidents.
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx A consistent endeavour has been made to give as little opportunity for disputes as possible. Throughout the Bill, in the definitions adopted, the scales selected, and the exceptions permitted, the great aim has been precision, in order that in as few cases as possible should the validity of a claim for compensation or the amount of that claim be open to doubt. At the same time, on unanimous recommendation of the committee, provision has been made for special Tribunals to deal cheaply and expeditiously with any disputes that may arise, and generally to assist the parties in a manner which is not possible for the ordinary Civil Courts."
7. The Apex Court, while laying down guidelines Page 47 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined for interpretation of the provisions of a beneficial legislation, in The Chairman, Board of Mining Examination and Chief Inspector of Mines and Anr. v. Ramjee, (AIR 1977 SC 965), observed :--
"(1) ....... Judges must never forget that every law has a social purpose and engineering process without appreciating which justice to the law can not be done......"
(5) ....... Law is meant to serve the living and does not beat its abstract wings in the jural void. Its functional fulfilment as social engineering depends on its sensitized response to situation, subject-matter and the complex of realities which require ordered control. A holistic understanding is simple justice to the meaning of all legislations. ..."
(9) ..... To be literal in meaning is to see the skin and miss the soul of the Regulation. The judicial key to construction is the composite perception of the deha and dehi of the provision......."
8. The Apex Court while interpreting the provisions of Employees' State Insurance Act, in Transport Corporation of India v. Employees' State Insurance Corporation and Anr., (AIR 2000 SC 238), observed in Para 24 that :--
"Before parting with the discussion on this point, Page 48 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined it is necessary to keep in view the salient fact that the Act is a beneficial piece of legislation intended to provide benefits to employees in case of sickness, maternity, employment injury and for certain other matters in relation thereto. It is enacted with a view to ensuring social welfare and for providing safe insurance cover to employees who were likely to suffer from various physical illnesses during the course of their employment. Such a beneficial piece of legislation has to be construed in its correct perspective so as to fructify the legislative intention underlying its enactment......"
9. Thus, the provisions of a beneficial legislation are to be interpreted in a manner which helps in achieving the object sought to be achieved by the Legislature by enacting the said law and also advances the cause of justice.
10. In the above backdrop we now propose to consider the rival submissions of the learned Counsel for the parties.
11. M/s. Rajendra Tiwari, A.G. Dhande, Senior Advocates, Shri P.D. Gupta, Deputy Advocate General and Shri Naman Nagrath, Advocate appearing as 'amicus curiae', and Shri Narendra Chouhan, the learned Counsel for the claimants, contended that the term 'employer' used in the Page 49 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined third proviso to Section 30(1) of the Act, is to be interpreted to mean and include the employer or any other person challenging the award on his behalf or for protecting his interest. It was further submitted that Section 30 does not expressly provide for an appeal by the Insurer and such an appeal against the award is filed by the Insurer as he steps into the shoes of the employer on account of a contract of Insurance between them as such the Insurer can not escape from the liability of filing certificate of deposit of the amount of compensation along with the memorandum of appeal, as is mandated in the third proviso to Section 30, in the case of an appeal at the behest of the employer. The learned Counsel further submitted that any other interpretation of the word 'employer' used in third proviso is bound to frustrate the very object sought to be achieved by the Legislature.
12. M/s. M.S. Ruprah, Rakesh Jain and Anoop Nair, the learned Counsel, appearing for the appellants, on the other hand contended that the Courts while interpreting a provision of law should as far as possible give natural meaning to the words used by the Legislature and in no case it is permissible for the Court to add word in its anxiety to achieve the supposed object sought to be achieved by enacting the said law.
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13. Workmen's Compensation Act is a beneficial Legislation, whereby interest of the workmen is sought to be protected. The object of adding third proviso, to Sub-section (1) of Section 30, is to ensure the compliance of the award passed by the Commissioner for Workmen's Compensation in the event of dismissal of the appeal filed by the employer, so that the workmen is not required to run from pillar to post for getting the amount of compensation for years together. This becomes further apparent from the fact that the right of appeal under Section 30 is restricted by providing that an appeal under Section 30 would lie only on a substantial question of law. The literal interpretation of the term 'employer' as suggested by the learned Counsel for the appellants is bound to lead to an anamolous situation, where though the employer is required to deposit the amount of compensation before filing an appeal against the award and file certificate of deposit alongwith memorandum of appeal, but the Insurer, if chooses to file an appeal against the same award becoming liable to pay the compensation on account of a contract of insurance between the employer and the Insurer, can file appeal without depositing the amount of compensation and without certificate of deposit. This could never be the intention of the Legislature while adding third proviso to Section 30(1), of the Act.
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14. The matter needs to be examined from yet another angle. Section 30, of the Act, does not give any independent right of appeal to the Insurer. Virtually the right of appeal given to the employer is availed by the Insurer, who feels aggrieved by the award on account of the contract of Insurance between the insurer and the employer. How then the Insurer can be on a better footing than the employer ? It goes without saying that the said right can be availed by the Insurer under those restrictions only which are imposed on the employer.
15. Before dilating further on the issue, we deem it useful to refer to the decisions cited before us on this subject. These decisions can be broadly classified under two heads namely, giving literal interpretation to the word 'employer' used in third proviso to Section 30 of the Act, and holding that since the Insurer is not employer of the workmen concerned, it is under no obligation to file a certificate of deposit of the amount of compensation alongwith the memorandum of appeal; and the other set of decisions, giving liberal and wider interpretation to the term 'employer', and holding that since the Insurer steps into the shoes of the employer it is incumbent upon it to file a certificate of deposit of the amount of compensation alongwith the memorandum of appeal.
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16. In Northern India Insurance Co., Branch Indore v. Commissioner for Workmen's Compensation, Indore and Ors. (supra), Division Bench of this Court in a writ petition by the Insurance Company against the award held that the Insurance Company was a proper party and could file an appeal under Section 30, of the Act, against the award. It was in this context that following observations were made in Para 5 :
5....... The restriction contained in the proviso for depositing the amount is expressly limited to an appeal filed by the employer. Since the Insurance Company is not the employer, even that restriction is not applicable to the Insurance Company."
17. The above decision was later followed by Single Judges of this Court in National Insurance Company v. Saifuddin (1992 ACJ 736), and Oriental Insurance Company Limited v. Lalita Bai and Ors. (1998 ACJ 119).
18. However, contrary view has been taken, in New India Assurance v. Mohinder Singh and Anr. (1986 ACJ 1101), wherein Single Judge of this Court followed Division Bench decision of Kerala High Court in New India Assurance Co. v. M. Jayarama Naik and Anr. (1982 ACJ 3), and held Page 53 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined that third proviso is applicable to the appeal filed at the behest of the Insurance Company also, and Insurer's appeal filed without certificate of deposit was not maintainable.
19. Division Bench of Kerala High Court in New India Assurance Co. v. M. Jayarama Naik and Anr. (supra), took the view that third proviso of Section 30(1), of the Act, would be applicable to the appeal filed by the Insurer also. In Para 7, the Court said :
"7. But then the insurer is only stepping into the shoes of the insured, the employer, and the defence is not qua insurer but in the name of the insured and in his place. An appeal preferred on such grounds, if successful, will jeopardise the employee's right to recover the compensation from the employer also. What the insurer seeks in such an appeal is that the insured may be found to be not liable to pay the compensation and consequently, the insurer also may be held to be not liable. The primary relief sought for is the first mentioned relief and the other relief is consequent to the grant of that relief. Hence, such an appeal is preferred by the insurer for and on behalf of the employer and in his stead, though the aim of the insurer is to exonerate his own liability. What the insured can not do by Page 54 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined himself, viz., filing of an appeal without complying with the requirements of the third proviso to Section 30, of the Act, can not be done by another on his behalf. So the third proviso to Section 30 of the Act governs such appeals."
20. Similar view has been taken by a Division Bench of Karnataka High Court, in United India Insurance Co. Ltd. v. Kashimsab and Ors. (1993 ACJ 946), wherein it is held in Para 20 that :--
"20. Referring to the construction of the word 'employer' as found in the third proviso, we are of the view that we must construct the said proviso such as to give effect to the scope and object of the Act. In other words, we must construct that proviso with a view to advancing cause of justice and not to defeat it. The Supreme Court in a recent decision in AA.. Haja Muniuddin v. Indian Railways, 1993 ACT 235 (SC), has held in Para 5 as follows :--
'A view which advances cause of justice must be preferred to the one which defeats it. When an indigent person approaches the Tribunal for Compensation for the wrong done to him, the Tribunal can not refuse to exercise jurisdiction merely because he does not have the means to pay the fee. The ends of justice require that the Tribunal should follow the procedure laid down Page 55 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined in Order 33, of the Code, to do justice.' Thus, following the ruling of the Supreme Court in the above case, to construct the proviso 3 to Section 30(1), of the Act, we should not confine to the literal meaning of the Act, but on the other hand, we must hold, having regard to the object of the proviso and the fact that the insurer could be adjudged as if a judgment debtor under the decree, that in a case where an appeal is filed by the insurer challenging the judgment and award of compensation in favour of the workman, it can not be entertained unless it 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, or otherwise, the very object of the proviso would be defeated. In the instant case, since the insurer has not filed the certificate along with the appeal of having deposited the compensation amount awarded by the Commissioner, the appeal is not maintainable. It is not possible to accede to the contention of Mr. O. Mahesh that the Parliament intended to exempt the insurer from complying with the requirement of the third proviso to Section 30(1), of the Act."
21. Division Bench of Patna High Court has also decided the question in line with the views of the Kerala and Karnataka High Courts, in Oriental Insurance Co. Ltd. v. Renu Devi and Ors. (1997 ACJ Page 56 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined
808), holding that third proviso to Section 30(1), of the Act, would equally apply to the appeal filed at the behest of the Insurer and an appeal filed by the Insurance Company without a certificate of the Commissioner to the effect that it had deposited with him the amount payable under the order appealed against was not maintainable.
22. Division Bench of Andhra Pradesh High Court also considered this question in Gangireddy Venkateswara Rao and Anr. v. Divisional Manager, New India Assurance Co. Ltd. and Ors. [1999 (I) ACJ 262], and said in Para 7 that :--
"7. It is, therefore, obvious that the insurer steps into the place of the employer when he prefers an appeal against the order of the Commissioner directing him to pay the compensation. He would be preferring it as employer because he steps into the shoes of the employer and consequently the insurer is attracted by the 3rd proviso to Section 30(1), of the Act. The language of that proviso is a wee bit confusing because at one place the expression 'employer' is used and at another place 'appellant' is used - it begins by saying "provided further that no appeal by an employer under Clause (a) shall lie......" and it ends saying "...... a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed Page 57 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined against". It is well settled that the liability of the insurer is co-extensive and co-terminus with that of the insured, i.e., the employer herein and the insurer can not question the order awarding compensation by raising grounds which are not open to the employer so far as the quantum of compensation is concerned. The question whether the insurer can question the quantum of compensation awarded to a workman by preferring an appeal is another one - which we are not answering in these cases. Considering that the intendment in requiring the entire amount payable under the order appealed against to be deposited is to see that the fruits of the order are not denied or delayed and are assured and considering the fact that the Act itself is a beneficial legislation, we are of the view that the insurer can not be placed in a different position than that of the insured, i.e., the employer, in matters like this. We are, therefore, inclined to take the view that 'an employer' and 'the appellant' are used interchangeably for the purposes of the 3rd proviso. This is not doing violence to the language of the 3rd proviso; on the other hand, it is ironing the ruck created by the dual expressions used, i.e., 'employer' at one place and 'appellant' at another, by a process of interpretation to further the object and intendment of the legislature in enacting the 3rd proviso in accordance with the well established principles of interpretation. We are supported in Page 58 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined this view by the Division Bench decision of the High Courts of Mysore, Karnataka, Kerala and Orissa."
23. Single Judge of Orissa High Court, in National Insurance Co. Ltd. v. Narendra Samal and Anr. [1993 (II) ACT 1095], followed decision of the Division Bench of Kerala High Court, and held that since the Insurer steps into the shoes of the employer, third proviso to Section 30(1) is applicable to the appeal at the behest of the Insurance; Company. In this context, it is observed in Para 7 that :--
"7. ...... Reading Section 30, particularly its third proviso, the principle appears to be that if the appeal be such that by it the workman's right to the compensation awarded to him is placed in jeopardy, security for the workman must be provided for by the deposit of the amount of compensation and such a deposit would be essential to the maintainability of the appeal, if, on the other hand, the workman's right to the compensation awarded does not come into question in the appeal at all, there is no risk to the workman's getting the compensation awarded to him and there is thus no necessity for requiring anyone preferring such an appeal to deposit the compensation amount. Tested in the light of the said principle, there can be no scope for doubt Page 59 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined that the present appeal which concededly comes within Section 30(1)(a) put the right of the workman to receive the compensation ordered by the Commissioner in jeopardy. It is, therefore, my considered view that the third proviso to Section 30 is applicable to such an appeal and if the provision therein is not satisfied the memorandum of appeal can not be said to have been properly presented and the appeal can not be said to have duly instituted."
24. In New India Assurance Co. Ltd. v. Kartar Singh and Ors. (2001 ACJ 1651), Single Judge of the Punjab and Haryana High Court, while considering this question, observed in Para 13 that :--
"13. It can be found from the above quoted judgments that the different High Courts have taken different views regarding this question. No judgment of Apex Court or of this Court has been cited before me by any of the parties. It is also to be seen that except Section 30 of the Act, there is no other provision for filing an appeal. Insurance Company can file the appeal only because it steps into the shoes of the insured, i.e., the employer. It can not, therefore, have better rights than that of employer when there is no statutory provision for the same. If the employer is barred from filing an appeal without filing of the certificate of having deposited the amount there appears to be no Page 60 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined reason to say that the bar is not applicable to the Insurance Company. Of course, the words used in the proviso are that the employer is barred from filing the appeal without the certificate. As mentioned above, when there is no special provision regarding filing of the appeal by the Insurance Company and the Insurance Company files an appeal only because if steps into the shoes of the employer, the bar will be applicable to the insurance company also."
25. Contrary view has been taken by a Single Judge of Orissa High Court, in New India Assurance Co. Ltd. v. Manorama Sahu and Anr. [1993 (II) ACJ 930], wherein it has been held in Paras 6 to 8 that :--
'6. Employer is liable under Section 3 of the Act. A contractor being the principal employer under Section 12 of the Act was also made liable. Although liability of an insurer is limited under Section 14 of the Act, so far as workman in a motor vehicle is concerned, insurer was made liable by judicial precedent in the decisions reported in Bibhuti Bhusan Mukherjee v. Dinamani Dei, 1982 ACJ 338 (Orissa) and Oriental Fire & Gent. Ins. Co. Ltd. v. Matias Burla, 1986 ACJ 732 (Orissa). When in the Act the terms 'employer', 'principal employer' and 'insurer' have been used, each term has a separate meaning. Principal Page 61 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined employer is also employer under Section 3 of the Act and is to comply with the pre-condition under Section 30(1) third proviso. Insurer is thus not an employer. He only covers the risk of the employer under a contract. Because of the mandatory provision under the Motor Vehicles Act, he is liable. Thus, insurer not being an employer is not required to comply with Section 30(1) third proviso of the Act.
7. This question can be viewed from another angle. Right of appeal is a vested right. Where an impediment is intended to be created in respect of such vested right, legislature is required to express the same expressly. Unless there is express language or clear intendment of the legislature, Courts do not favour impediment being created to arrest exercise of a vested right of appeal. Procedural change is considered in a different light. Hence, an interpretation of third proviso that insurer would come within the meaning of employer would defeat the vested right on any person aggrieved to prefer an appeal and would create impediment which is to be avoided.
8. Mr. Satpathy, learned Counsel for the claimant, submitted that deposit being intended to protect interest of the workman, the term 'employer' in the third proviso to Section 30(1) of the Act Page 62 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined should be interpreted to include the insurer. If this interpretation is accepted, an impediment would be created in vested right of any person aggrieved who is not an employer. Accordingly, following the decision reported in New India Assurance Co. Ltd. v. Sankar Behera, 1988 ACJ 337 (Orissa), I am inclined to hold that the Insurer is not required to deposit the awarded compensation and obtain the certificate to accompany the memorandum of appeal. Appeal without such certificate is competent."
26. From the decisions referred to above, we gather that High Courts have taken divergent views on this question. However, majority of the High Courts namely :-- Kerala, Karnataka, Patna, Andhra Pradesh, Punjab and Haryana and Orissa have preferred a liberal and wider interpretation to the term 'employer' in the third proviso to Section 30(1), of the Act, and have held that as the Insurer gets the right to file an appeal against the award by stepping into the shoes of the employer on account of contract of insurance between them, the restrictions imposed by third proviso on the appeal at the behest of the employer would equally apply to the appeal filed by the Insurer meaning thereby, the appeal at the instance of the Insurer will also have to accompany a certificate from Commissioner for Workmen's Compensation that the amount of Page 63 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined compensation has been deposited and in the absence of such a certificate the appeal would not be maintainable.
27. The contrary view has been taken by Division Bench of this Court subsequently followed by Single Judges of this Court and Orissa High Court, holding that the pre-condition of filing of certificate of deposit under third proviso of Section 30(1) of the Act would apply to the appeal filed by the employer only and as the Insurer is not an employer of the concerned workman, it is under no obligation to file certificate of deposit along with the memorandum of appeal."
21. Thus, the Court has followed the majority of the High Court's rulings who have preferred to take a liberal and wider interpretation of the term "employer" in the third proviso to Section 30 (1) of the Act, and has held that the insurer gets the right to file an appeal against the award by stepping into the shoes of the employer on account of contract of insurance between them, and therefore, the restriction imposed by the third proviso on the appeal at the behest of the employer, would equally applicable to the appeal filed by the insurer. The Full Bench, therefore, held that the memorandum of appeal in case of the insurer was also required to be accompanied with Page 64 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined a certificate from the Commissioner that the amount payable under the order has been deposited and in absence of such certificate, the appeal would not be maintainable. In the aforesaid process, the majority of the view which prevailed among different High Courts while taking liberal and wider interpretation of the third proviso of sub-section (1) of Section 30 of the Employees Compensation Act also noted that the legislation intention was to require the entire amount payable under the order appeal against to be deposited in order to see that the fruits of the order are not denied or delayed, and are assured, considering the fact that the Act is a beneficial legislation.
22. Applying the aforesaid legal principles in the present controversy raised with regard to absence of Clause (aa) under the third proviso is concerned, in the opinion of this Court, the same analogy shall follow. This court is of the view that applying the legal principles laid down by the Hon'ble division bench of this court in the case of Haji Aliyas ( supra) as against the view adopted by the learned Judge in the case of Divisional Manager, JKSFC Bhaderwah (supra), would not only full fill the object of the statute as envisioned by the legislature but shall also advance the cause of justice. Applying the legal corollary that an interpretation of the statutory provision which defeats the intent and purpose for which the statute was enacted is to Page 65 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined be avoided, I am of the view that the pre-deposit of the amount payable at the stage of the presentation of appeal as prescribed under proviso to subsection (1) of section 30 of the Act of 1923, has to be read in case of the appeal filed under section 30(1) (aa) of the Act.
23. Having held so, it would be appropriate to consider the fact that the payment of the interest arises on the amount of compensation when paid after delay. Similarly, the awarding of penalty arises at the stage, when there is a default on part of the employer to make even a provisional payment at the initial stage as required under Section 4(A) of the Act. Thus, non deposit of the amount towards the interest and the penalty awarded by the learned Workmen Commissioner at the stage of appeal, would further prolong the realization of the fruits of the entire amount of compensation. Such interpretation shall frustrate the very object of the Act which otherwise aims to provide immediate relief to the insured workman. The very fact that Clause (aa) has been inserted below Clause (a) of sub-section (1) of Section 30 goes to suggest that reading of the third proviso has not to be restricted to Clause (a) only but it has to be in context with the amount payable "under order appeal" which may include the composite award of an amount of compensation as well as the interest or the penalty under Section 4 (A) of the Act. Page 66 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025
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24. Indisputably in the present case, by impugned judgment and order, the learned Workmen Commissioner has awarded compensation of an amount of Rs.9,01,975/- with interest at the rate of 12% from the date of the accident until its realization, and has also further awarded 50% towards the penalty, which amounts to Rs.4,50,988/- being imposed upon the present appellant being the employer. It is an undisputed fact that the principal amount of compensation towards the liability fixed by the Insurance Company, has been deposited, the Insurance Company has not approached in appeal. The present appeal is restricted challenging the impugned judgment and order qua fixing the liability of the appellant employer to the extent of 50% of the penalty of the awarded amount of Rs. 4,50,988/- and 12% interest over the awarded amount of Rs.9,01,975/- from the date of the accident till filing of the present appeal.
25. Learned advocate for the appellant has failed to demonstrate that the Insurance Company was apprised about the separate clause included in policy fixing their liability of interest to be borne by the Insurance Company, and on account of their failure to deposit the amount of compensation, the employer was wrongly saddled with penalty. It is a settled legal position as held by the Apex Page 67 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined Court in the case of Ved Prakash Garg v. Premi Devi and others, reported in (1997) 8 SCC 1, whereby the Hon'ble Supreme Court after examining the entire scheme of the Act, has held that payment of interest and penalty are two distinct liabilities arising under the Act. The Court further held that liability to pay interest at a stage can be considered to be a part and parcel of legal liability to pay compensation, upon default of payment of that amount within one month. However, the liability to pay compensation along with interest by the Insurance Company has to be gathered from terms and conditions of the contract of insurance entered upon between the parties. In such a situation, the obligation of the insurance company would be in light of the terms and conditions of the contract of insurance. So far as the entitlement of the compensation under the Workmen's Compensation Act, 1923 at the instance of the injured workman is concerned, is to seek compensation from the employer. Thus, liability of the insurance company would be confined to the liability to indemnify the employer only against the amount of compensation ordered under the Workmen's Compensation Act.
26. This Court cannot lose sight of the decision of the Hon'ble Supreme Court in the case of L.R. Ferro Alloys Ltd. vs. Mahavir Mahto and Another reported in 2002 (9) SCC 450. The question Page 68 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined which had fallen for consideration before the Hon'ble Supreme Court in the aforesaid decision, was whether the entire liability including penalty and interest, was to be reimbursed by the Insurance Company. The Hon'ble Supreme Court ruled out that the payment of interest and penalty are though distinct liabilities under the Act, but the liability to pay interest is part and parcel of legal liability to pay compensation. It would be relevant to consider the relevant observations of the Hon'ble Supreme Court in this regard, which read as under:
"2. A claim was made by the respondent before the Commissioner under the Workmen's Compensation Act. The Commissioner determined the amount payable by way of compensation to the respondent. In addition he also quantified the penalty and interest payable for the delayed payment made by the appellant. The matter was carried in appeal to the High Court. There was no dispute regarding quantum of compensation payable, and all that was to be considered was whether the appellant is liable to pay the penalty and interest.
3. On that aspect of the matter the learned single Judge noticed that the compensation due under the statute had not been paid within one month from the date of accident and therefore appellant was liable to Page 69 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined pay penalty and interest from the date the amount became due and payable which meant the date of accident or at the latest one month thereafter. Therefore, the liability of the appellant being evident in those circumstances, the learned Single Judge declined to interfere with the order under appeal. The matter was carried in appeal further to the Division Bench and that appeal was dismissed holding that it was not maintainable in view of the decision in Smt.Chhaya Rani v. Smt. Dhan Devi 1997(2) All PLR 147.
4. Considering the facts and circumstances of this case we do not think the question raised before us as to whether any appeal lay on the Letters Patent side, need not' be examined in this case.
5. The only contention put forth before us is .that the entire liability including penalty and interest will have to be reimbursed by the Insurance Company and this aspect has not been examined by the learned single Judge in the High Court and needs examination at our hands. In Ved Prakash Garg v. Premi Devi and Ors. , this Court after examining the entire scheme of the Act held that payment of interest and penalty are two distinct liabilities arising under the Act, while liability to pay interest is part and parcel of legal liability to pay compensation upon default of payment of that amount within one month. Therefore, claim for compensation along with Page 70 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined interest will have to be made good jointly by the Insurance A Company with the insured employer. But, so far as the penalty imposed on the insured employer is on account of his personal fault Insurance Company cannot be made liable to reimburse penalty imposed on the employer. Hence the compensation with interest is payable by the Insurance Company but not penalty. Following the said decision and for the reasons stated therein we modify the order made by the High Court to that extent. The appeal is allowed in part accordingly."
27. Thus, the interest on the award amount, is to be treated as a component of the compensation. Though there is no appeal preferred at the instance of the employer disputing the principal amount. In other words, the principal amount has been admitted by the employer, no distinct circumstances have been pointed out by the learned advocate for the appellant to dispute their liability towards the payment of interest and the penalty amount. The liability is disputed only on the ground of the exclusion clause in the terms and conditions of the policy. I have closely examined the policy produced along with the policy clauses attached by the Insurance company. Under the special exclusion column, it is clarified as 'NA' which means not applicable which according to the learned advocate for the appellant agency has to be read as to Insurance company having Page 71 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined agreed to coverage of their liability towards interest and penalty as well , however, this court cannot ignore the policy clauses attached therewith which are to be treated as part and parcel of the policy. The reading of the relevant clauses clearly stipulates that the insurance granted is not extended to include : "(i) any interest and /or penalty imposed on the insured on account of the failure to comply with the requirements laid down under the W.C. Act, 1923". Though learned advocate on record has objected to production of such terms and conditions at appellate stage, this court having noted the arguments canvassed by the learned advocates for the respective parties had directed to produce on record the entire policy which otherwise the appellant being the insured was bound to produced on record before the learned Commissioner in original proceedings. Considering the issues raised which go to the root of the matter, this Court has directed the insurance company to produce on record the entire policy. On overall appreciation of the case in light of the evidence on record, the dispute raised with regard to the interpretation of the terms and conditions of the insurance policy, in the opinion of this Court, is nothing but abuse of process of court proceedings. Only with a view to procrastinate the benefit, which the respondent workman was otherwise entitled to, has been raised as a main defence. In fact, the burden was equally placed upon the appellant/ Page 72 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined original opponent in the original proceedings, to place on record the entire policy. As rightly pointed out by the learned advocate on record for the respondent-Insurance Company, the reading of the relevant Clause of the insurance policy clearly suggests that, there is no coverage to indemnify towards the liability of the payment of interest and the penalty amount under the terms and conditions of the insurance policy. In fact, on close examination of the findings and the reasons assigned by the learned Workmen Commissioner, no such defence has been raised by the appellant agency disputing their liability to make such payment. Learned advocate for the appellant has failed to point out any error in fact or in law committed by the learned Workmen Commissioner while fixing the liability of the appellant agency towards the interest and the penalty on the awarded amount. No material worth has been brought on record to contradict the aforesaid fact that a single penny towards the provisional payment has been made by the appellant-agency at the initial stage to compensate the injured workman. In such circumstances, on expiry of such period, in light of the mandatory provisions of Section 4(A) of the Act of 1923, the learned Workmen Commissioner has rightly imposed the penalty, and has rightly awarded the interest towards the awarded amount.
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NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined
28. Upon overall consideration of the legal positions and having examined the impugned judgment and order, no substantial question of law arises for consideration in the present appeal. The present appeal is devoid of any merits, and is therefore, held not maintainable.
29. In view of disposing of the present appeal, the appellant is directed to forthwith deposit the remaining amount in light of the undertaking filed by him before this Court as recorded in the order dated 06.09.2024. The interim relief granted by this Court vide dated 06.09.2024 is hereby vacated.
30. Upon deposit of the entire award amount with the learned Workman Commissioner, the learned Workmen Commissioner is further directed to release the entire award amount in favour of the respondent workman within a period of two weeks thereafter. The appellant is further directed to deposit a cost of Rs. 10,000/- towards the present litigation, to be deposited with the learned Workmen Commissioner forthwith, and the same shall be drawn in favour of the respondent workman.
31. With these observations, the present appeal stands dismissed. In view of these observations, the connected civil Page 74 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025 NEUTRAL CITATION C/FA/1103/2024 CAV JUDGMENT DATED: 07/03/2025 undefined application stands disposed of.
32. Records and proceedings are directed to be sent back to the concerned Court forthwith.
(NISHA M. THAKORE,J) FURTHER ORDER After the order was pronounced, learned advocate for the Appellant had prayed for stay of the order to enable the appellant to challenge the order in a higher forum. Learned advocate for the respondent workman had vehemently objected to the aforesaid prayer as the respondent workman has been deprived of entire amount of compensation. Considering the fact that the undertaking was filed by the appellant to make payment of part of the amount of compensation in the event of dismissal of the appeal, the order is stayed for a period of four weeks from date of obtaining certified copy failing which the appellant shall abide by his undertaking. At the expiry of the aforesaid period, the respondent workman shall be at liberty to apply for withdrawal of the deposited amount of compensation.
(NISHA M. THAKORE,J) SUYASH SRIVASTAVA Page 75 of 75 Uploaded by SUYASH KUMAR SRIVASTVA(HC01570) on Wed Mar 26 2025 Downloaded on : Fri Mar 28 22:41:11 IST 2025