1. This judgment will govern the disposal of Civil First Miscellaneous Appeals Nos. 42 and 43 of 1976, as these are directed against the same order and raise common questions of law and fact.
2. Two claim petitions, i.e, one against the appellant in Appeal No. 42 and the other against the appellant in Appeal No. 43 were brought by respondent 2 in both the appeals for compensation resulting from death of some of the employees of the appellants under the provisions of the Workmen's Compensation Act, 1923, hereinafter referred as the Act. Both the petitions were allowed and compensation was awarded in favour of the claimants. Since there was some delay in depositing the compensation awarded, the Assistant Labour Commissioner, Doda, with powers of a Commissioner under the Act, passed a general order on 27 June, 1976, against as many as five employers, including the appellants imposing penalty on them by taking recourse to the provisions of Sub-sec. (3) of S. 4-A of the Act. Whereas a sum of Rs. 4,000 was awarded against the appellant in Appeal No. 42, a sum of Rs. 4,750 was awarded against the appellant in Appeal No. 43. These appeals are directed against the aforesaid order.
3. It is common ground that the appellants were not heard before the impunged order came to be passed against them. Whereas the contention raised on behalf of the appellants is that they could not have been penalized unheard, the contention raised on behalf of the opposite-party is that it was not necessary to do so, as the satisfaction to be reached by the Commissioner was merely a subjective one which was not open to objective test. In other words, once the Commissioner was subjectively satisfied that there was no justification for the delay in depositing the compensation, he could impose the penalty and his decision could not be assailed either on a question of fact or on a question of law. Decision of these rival contentions, therefore, turns upon the construction to be placed upon Sub-sec. (3) which for ready reference is reproduced as bleow:
“(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of 6 per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding 50 per cent of such amount, shall be recovered from the employer by way of penalty”.
4. On its plain language, the sub-section empowers the Commissioner to allow simple interest at the rate not more than 6 per cent per annum on the amount of compensation awarded provided the same remains unpaid for a period exceeding one month after it has fallen due. It further empowers him to impose penalty not exceeding 50 per cent of the said amount, if he is further satisfied that there was no justification for the delay in making the payment of the amount of compensation awarded. To put it the other way round if it is shown that there was sufficient cause for the delay in making the payment, he cannot impose any penalty, though he may still award simple interest not exceeding 6 per cent per annum. This is distinctly borne out from the expression
“if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding 50 per cent of such amount, shall be recovered from the employer by way of penalty,”
occurring in Sub-sec. (3). What was the reason for not making payment without delay can be known to that person alone who is required to make the payment and to none else. Unless, therefore, he is called upon to show cause for the delayed payment, it is not reasonably possible for the Commissioner to come to the conclusion whether or not there is any justification for the delay. He cannot be allowed to reach his satisfaction at his whim and caprice simpliciter, when an appeal is also provided against his order imposing penalty under Sub-sec. (3) of S. 4-A. His approach has to be objective. He must record his reasons for coming to the conclusion that there was no justification for the delay in making the payment of compensation awarded and thereby provide an opportunity to the appellate Court to see whether or not his order is justified which satisfies the test of objectivity. Where a finding of fact has been recorded without any material the same can be challenged on a question of law. Obligation on the part of the Commissioner to hear the party adversely affected is clearly implicit in Sub-sec. (3), for no one can be condemned unheard. An interpretation of Sub-sec. (3) not requiring the Commissioner to hear the party adversely affected before imposing penalty against it would be plainly obnoxious. Furthermore, the very fact that the order of the Commissioner is appealable knocks the bottom of Sri Kotwal's contention that the order is not justiciable. His reliance upon Lilawati Bai v. State of Bombay, [A.I.R 1957 S.C 521], is clearly misplaced because the provisions of S. 6(4) of the Bombay Land Requisition Act, 1948, which fell for interpretation by their Lordships of the Supreme Court are not on the same subject or of the same matter as the provisions of Sub-sec. (3) which is being interpreted presently. It is well settled that observations made in relation to the provision of one statute cannot be applied with reference to the provisions of another statute unless both the statutes are in pari materia with each other. The impugned order imposing penalty against the appellants having been admittedly passed at their back, stands vitiated.
5. In the result the appeals are allowed and the impugned order is set aside but in the peculiar circumstances of the case, without any order as to costs.