An Injured vs P.Satishkumar1. Specific
2023 Latest Caselaw 3189 AP

        THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

         CIVIL MISCELLANEOUS APPEAL No.97 of 2023

JUDGMENT:

An injured claimant filed this Civil Miscellaneous Appeal

under Section 30 of the Employees Compensation Act,

1923(hereinafter referred to as act, 1923). In this appeal, he

assails the order dated 02.01.2023 of the learned Commissioner

for Employees Compensation and Deputy Commissioner of

Labour, Kurnool in E.C.No.1 of 2019.

2. The appellant is Sri.D.Nagarjuna, while working as

operator on stone crushing machine under the Employment of

1st respondent, in the course of employment met with an

accident on 03.03.2014. As a result of which his right hand was

amputated and he sustained 80% of permanent disability. The

employees working under the 1st respondent unit was covered

by the insurance policy issued by the 2nd respondent. As the

respondents did not pay the compensation for injury sustained

by the appellant he filed an application U/s.22 of E.C.Act, 1923

before the Commissioner for Employees compensation and

Deputy Commissioner of Labour, Kurnool seeking compensation

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of Rs.15,00,000/- together with interest @18% per annum from

the date of accident till date of realization against both

respondents. The learned Commissioner conducted inquiry and

allowed the petition in part by granting compensation to the

appellant of Rs.8,20,109/- under section 4 of Employees

compensation Act and further awarded 12% interest thereon till

date of payment of compensation. But he omitted to grant

interest on compensation amount from the date of incident till

date of order.

3. Aggrieved by the impugned order passed by the learned

Commissioner for awarding less compensation and restricting

the interest @ 12% per annum from the date of Order/Award till

the date of payment under the impugned order dated

02.01.2023 passed in E.C.No.1 of 2019 and consequently

omitting to grant interest from the date of incident till date of

award @ 12% per annum and also further for non quantification

of the medical expenses, the appellant filed this Appeal under

Section 30 of Employees Compensation Act,1923.

4. In terms of Section 30 of the Act, 1923 an appeal could be

admitted only when it discloses substantial questions of law

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involved in the appeal. On 17.03.2023, this Court admitted this

appeal on the following substantial questions of law:

1. Whether the ceiling limit of monthly wages fixed by the commissioner at Rs.8000/- under the guise of Central Govt notification S.O 1258(E) Dt.31.05.2010 is erroneous, perverse and not in consonance with principles laid down by the Hon'ble Apex Court of India?

2. Whether the learned commissioner ought to have taken actual monthly wages of the employee for the purpose of multiplying wages with relevant factor U/Sec.4(1)(b) of E.C. Act,1923?

3. When does the payment of compensation U/Sec.4 of E.C Act, 1923 falls due and consequently what is the point in time from which interest would be payable on the amount of compensation as provided U/Sec.4A(3) of E.C Act,1923?

4. Whether the learned Commissioner committed serious error of law by denying interest on compensation amount from the date of accident till date of adjudication?

5. Whether the Appellant is entitled to compensation of Rs.25,62,840/- and interest thereon from the date of accident till realization U/Sec.4A(3)(a) of E.C Act, 1923?

6. Whether the Commissioner can grant medical expenditure incurred by the Appellant without determination of exact amount payable U/Sec.4A(3) (a) of E.C Act, 1923?

5. The prayer in this appeal is in the following terms:

"For the reasons stated above, the appellant prays that this Hon'ble Court may be pleased to set aside the impugned order dt.02.01.2023 passed in E.C.No.1 of 2019 on the file

Dr. VRKS, J C.M.A.No.97 of 2023

of the Commissioner for Employees Compensation and Deputy Commissioner of Labour, Kurnool in restricting the interest on compensation granted from the date of Order/Award and may be pleased to Award compensation of Rs.25,62,840/- instead of Rs.8,20,109/- as fixed by the Commissioner for Employees Compensation and Deputy Commissioner of Labour, Kurnool with 12% P.A of simple interest thereon from the date of accident/incident till date of realization and may be pleased to award a sum of Rs.1,00,000/- towards medical expenses."

6. Despite notices being served for respondent No.1, no

appearance was made and for respondent No.2, learned

Standing Counsel made appearance. Learned counsel on both

sides submitted arguments.

7. A perusal of the record and the impugned Order would

disclose that the subject matter accident occurred on

03.03.2014 and the claim was not preferred soon thereafter but

it was filed about five years subsequent to it. The question of

limitation was considered by the learned Deputy Commissioner

of Labour at page No.5 of his order and after giving appropriate

reasons and by invoking powers under Section 10 of the Act,

1923 it condoned the delay.

8. The accident occurred at Sortur Village of the state of

Karnataka. The injured employee is a permanent resident of

Pandirlapalli Village, Dhone Mandal, Kurnool District. He chose

Dr. VRKS, J C.M.A.No.97 of 2023

to prefer this claim before learned Deputy Commissioner of

Labour at Kurnool. Respondent No.2, New India Assurance

company put an objection. In the impugned order after

furnishing elaborate reasons and acting in terms of Section 21

of the Act, 1923, the jurisdiction issue was decided holding that

the authority at Kurnool was competent to decide the dispute.

9. The assertion of the employee and the admission of it by

the employer/respondent No.1 in his counter filed before the

lower authority indicated that injured employee's monthly wage

was Rs.20,000/-. The contentions of respondent No.2 New India

Assurance Company was about absence of proof of wages. On

due consideration that was negatived by the learned Deputy

Commissioner.

10. After considering the entire material on record and after

considering the arguments advanced on both sides it assessed

compensation in terms of Section 4(1)(C) of the Act, 1923. On

noticing a notification issued by the Central Government which

prescribed the ceiling limit of monthly wage at Rs.8,000/-,

compensation was assessed by applying the relevant factor in

schedule 4 of the Act, 1923 which was at 213.57. It calculated

60% of the monthly wage at 12,000/- and by virtue of Central

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Government notification ceiling limit of monthly wage was

considered at Rs.8,000/- and it granted compensation

8000X60/100X213.57X80%=Rs.8,20,109/-. The following order

was passed by the learned Deputy Commissioner, Kurnool.

"Accordingly, a compensation amount of Rs.8,20,109/- is awarded to the applicant D.Nagarjuna, ex-operator of stone crushing machine, of DRN Infrastructure Hubli U/s 4 of the Employees Compensation Act as on date of accident and 12% interest thereon till the date of payment of compensation as per Section 4A of the said Act. Further, the applicant I is also entitled the amount incurred towards medical expenditure for treatment of injuries caused during the course of employment U/s 4 (2) (A) of the EC Act. Hence, the OP 1 &OP2 are directed to comply with above direction jointly and severally responsible for payment of above awarded compensation to the applicant.

The opposite party No.2 is directed to deposit the awarded amount within 60 days from the date of this award before the Commission.

With the above direction, the application is disposed off."

11. Aggrieved of the above order, which failed to grant

compensation that was prayed for, the injured employee

preferred this Civil Miscellaneous Appeal. Learned Standing

Counsel for respondent No.2 M/s New India Assurance

Company submits that the amount that was awarded was

deposited by it and in the case at hand, there was no relevant

proof showing that the appellant was earning Rs.20,000/- and

Dr. VRKS, J C.M.A.No.97 of 2023

in such circumstances the lower authority appropriately

considered the monthly wage at Rs.8,000/- and it accordingly

granted compensation as well as interest and there is nothing to

interfere with it. As against it, learned counsel for appellant

submits that the Rs.8,000/- cap on the monthly wage adopted

by the lower authority is incorrect and is against the law.

Interest falls due from the date of accident but the lower

authorities failed to grant it in accordance with law. Learned

counsel submits that medical expenses should have been

quantified and granted and the learned lower authority failed to

do it.

12. Learned counsel for appellant in support of the

contentions cited K.Sivaraman V. P.Satishkumar1. specific

attention of the Court is drawn through Para No.26 of this

judgement which is extracted here:

"Prior to Act 45 of 2009, by virtue of the deeming provision in Explanation II to Section 4, the monthly wages of an employee were capped at Rs.4,000/- even where an employee was able to prove the payment of a monthly wage in excess of Rs.4,000/-. The legislature, in its wisdom and keeping in mind the purpose of the 1923 Act as a social welfare legislation did not enhance the quantum in the deeming provision, but deleted it altogether. The

(2020) 4 SCC 594

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amendment is in furtherance of the salient purpose which underlies the 1923 Act of providing to all employees compensation for accidents which occur in the course of and arising out of employment. The objective of the amendment is to remove a deeming cap on the monthly income of an employee and extend to them compensation on the basis of the actual monthly wages drawn by them. However, there is nothing to indicate that the Legislature intended for the benefit to extend to accidents that took place prior to the coming into force of the amendment."

It is on this principle, learned counsel urges that while

the actual wage of Rs.20,000/- was believed by the learned

Deputy Commissioner, he ought to have considered that

Rs.20,000/-and ought not to have considered the cap of

Rs.8,000/-. On considering the submissions made on both

sides, it is to be stated that there is no force in the contention

raised by the learned counsel for appellant for the following

reasons.

13. Section 4 of act 1963 provides the principle for

computation of compensation. By virtue of act 45 of 2009,

several amendments were brought into for this Section 4. The

said amending Act came into force for most part of it on

18.01.2010. Earlier to this amendment, there was explanation II

to Section 4 whereunder the monthly wages of an employee

were capped at Rs.4,000/-. Thus, earlier to this amendment in

the year 2009 even if the employee was able to prove his

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monthly wage was in excess of Rs.4,000/-, by virtue of the cap

fixed by the Legislature, it was to be calculated only at

Rs.4,000/-. This explanation II to Section 4 was omitted by the

amendment Act in the year 2009. The effect of that amendment

is what the Hon'ble Supreme Court explained at Para No.26 of

their lordships' judgment which was extracted earlier in this

judgment. However, that is not the end of the matter. In the

amendment that was made in the year 2009, the legislature

brought in (1B) in Sub-section (1) of Section 4, it reads:

Section 4(1)(1B)

"The Central Government may, by notification in the official gazette, specify, for the purpose of sub-section 1, such monthly wages in relation to an employee as it may consider necessary."

14. Exercising powers under that provision Central Government issued the following notification on 31.05.2010. The same is extracted here:

"S.O.1258(E) - In exercise of the powers conferred by sub- section (1B) of Section 4 of the Employee's Compensation Act, 1923, (g of 1923), the Central Government hereby specified, for the purpose of Sub-Section (1) of the said section, the following amount as monthly wages, with effect from the date of publication of this notification in the official gazette, namely - Eight thousand rupees."

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15. These aspects could be noticed at Para No.8 and Para

No.14 of the judgement of the Hon'ble Supreme Court of India

referred above. Thus, the cap of Rs.8,000/- for the purpose of

considering monthly wages while computing compensation

under Section 4 as notified by the Central Government was

followed by the learned Deputy Commissioner of Labour in his

impugned order here. It is that aspect which is questioned by

the learned counsel for appellant based on what their lordships

of the Hon'ble Supreme Court of India explained at Para No.26

of the judgment. It has to be stated that in the said ruling, their

lordships were not concerned with Central Government

notification of the year 2010 and Sub-Section (1B) of act, 1923.

At Para No.15 their lordships stated that the question that fell

for consideration before their lordships was as to whether the

amending Act 45 of 2009 was prospective in operation or

retrospective in operation. In the case before their lordships,

accident occurred on 31.01.2008. By then by virtue of

explanation II cap of Rs.4,000/- was there. By the time the

matter came to be decided amending Act of the year 2009 came

into force. It was in those circumstances, Hon'ble Division

Bench of the Madurai Bench of Madras High Court thought it fit

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to apply the amending Act, 2009 retrospectively and thereby cap

of Rs.4,000/- was not considered and the actual wage was

taken into consideration. After giving various reasons and citing

various precedent at Para No.33 of its judgment, Hon'ble

Supreme Court of India found that the approach of the High

Court was erroneous and it ought to have decided the

compensation considering Rs.4,000/- cap and that the

amending Act, 2009 has no retrospective affect. It was never in

the consideration of their lordships as to whether under Sub-

Section (1B), Central Government was empowered to notify

monthly wages are not. For the complete picture of the legal

provisions, their lordships were pleased to mention those

provisions. However, those provisions did not fall for

consideration before their lordships. In that context of the

matter only the removal of the cap and its purport was laid

down by the lordships' at Para No.26 of the judgment. In the

case at hand, the subject matter accident occurred on

03.03.2014. By then amending Act, 2009 already came into

existence and by the time the case fell for consideration before

the Deputy Commissioner of Labour, Kurnool notification of the

year 2010 from the Central Government under Sub-Section (1B)

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came into existence. Bound by that notification and bound by

the legal mandate in Sub-Section (1B), Learned Deputy

Commissioner of Labour appropriately acted in accordance with

law. In the cited ruling, their lordships did not set aside Central

Government notification dated 31.05.2010. In the cited ruling,

the vires of Sub-Section (1B) was neither questioned nor

considered. Therefore, learned Deputy Commissioner, Kurnool

in terms of Central Government notification dated 31.05.2010

acted. Therefore it is to be upheld as it is in accordance with

law. Therefore, the contention of the appellant in challenge to

the cap of Rs.8,000/- applied by the learned Deputy

Commissioner of Labour is incorrect and is not in accordance

with law and therefore this contention is negatived.

16. 12% interest was granted by the learned Deputy

Commissioner of Labour. The operative portion of the order of

the learned Deputy Commissioner of Labour is in a way not

appropriately worded and because of that the date from which

12% interest was to be calculated could not be easily

understood. Compensation falls due from the date of accident.

Interest has to be calculated on the quantified compensation

payable from the date of accident. That has been the law which

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could be seen in Shobha V. The Chairman, Vithalrao Shinde

Sahakari Sakhar Karkhana Ltd2. Appellant understood that

the compensation was awarded only from the date of order but

not from the date of accident. On a keen reading of the

impugned order the operative portion shows that the order used

the words "As on date of accident and 12% interest there on till

the date of payment of compensation". It is from these words

one could say that the compensation was awarded on the day

when it fell due and interest was awarded from the date of

accident itself. However, if the intendment of the order is

otherwise, with a view to set it right, this Court holds that 12%

interest that was awarded by the learned Deputy Commissioner

of Labour shall be paid by the respondents on the compensation

awarded from the date of accident i.e., 03.03.2014 till the date

of payment. To this extent, the ground urged in this appeal by

the appellant holds merit and is decided accordingly.

17. In the paper book presented, there is copy of the

application filed by this appellant before the lower authority.

There is absolutely no whisper as to how much amount was

2022 Livelaw (SC) 271

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spent by this injured employee towards his medical expenses.

Documents attached to it do not indicate any bills showing

expending of money for medicines and treatment. Throughout

the body of the petition there is no reference to a particular

amount being claimed towards medical expenses and treatment.

However, reading of the impugned order also shows that there is

absolutely no evidence produced about the money spent

towards medical expenses. It is in those circumstances, learned

Deputy Commissioner could not quantify the medical expenses.

However, he was sensible enough when it ordered that the

respondents shall pay actual amounts incurred by the injured

employee towards medical expenditure. In this appeal

substantial question raised is whether commissioner granting

medical expenditure without determination of exact amount is

correct or not. Thus, appellant is questioning his own failure.

He seeks awarding of Rs.1,00,000/- towards medical expenses.

Actual expense is a matter of fact to be pleaded and proved and

not a matter for any surmise. Since no material was produced

and no claim was made before the lower authority to determine

what exactly was the medical expenditure, the approach of the

learned Deputy Commissioner of Labour cannot be found fault

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with. Therefore, the prayer for awarding of Rs.1,00,000/-

towards medical expenses cannot be granted for want of

pleadings and evidence. The injured employee in his petition

sought for compensation of Rs.15,00,000/-. Lower authority

granted Rs.8,20,109/-. In this appeal, the appellant seeks for

Rs.25,62,840/-. This excess amount came to be claimed by

calculating Rs.20,000/- as monthly wage. That cannot be

granted by virtue of 2010 notification of the Central Government

fixing a cap of Rs.8,000/-. Therefore, the claim for additional

compensation has no merit.

18. In the result, this appeal is allowed in part. Entire order of

the learned Deputy Commissioner of Labour dated 02.01.2023

in E.C.No.1 of 2019 is upheld with a modification that 12%

interest per annum is to be calculated on compensation amount

of Rs.8,20,109/- and that shall be payable from the date of

accident i.e.,03.03.2014 till the date of payment of

compensation. The liability is joint and several between the

respondents. The amount deposited by respondent No.2 shall be

given due credit and the balance amount shall be remitted by

respondent No.2 within three months from the date of this

order. There shall be no order as to costs.

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As a sequel, miscellaneous applications pending, if any,

shall stand closed.

_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 16.06.2023 DVS

Dr. VRKS, J C.M.A.No.97 of 2023

THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

CIVIL MISCELLANEOUS APPEAL No.97 of 2023

Date: 16.06.2023

DVS