Karnataka High Court
Senior Divisional Personnel Officer vs Smt.Lakshmi @ Lakshmamma on 5 November, 2024
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NC: 2024:KHC:44546-DB
MFA No.6570/2022
C/w MFA No.8629/2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF NOVEMBER, 2024
PRESENT
THE HON'BLE MRS JUSTICE K.S.MUDAGAL
AND
THE HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL
MISCELLANEOUS FIRST APPEAL NO.6570/2022 (ECA)
C/W
MISCELLANEOUS FIRST APPEAL NO. 8629/2022 (ECA)
MFA No.6570/2022:
BETWEEN:
1. SENIOR DIVISIONAL PERSONNEL OFFICER
SOUTH WESTERN RAILWAY
DIVISIONAL OFFICE
BENGALURU CITY RAILWAY
STATION COMPLEX
BENGALURU - 560 023
2. THE DIVISIONAL RAILWAY MANAGER
SOUTH WESTERN RAILWAY
DIVISIONAL OFFICE
BENGALURU CITY RAILWAY
STATION COMPLEX
Digitally BENGALURU - 560 023
signed by K S
RENUKAMBA 3. THE C.A.O
Location: SOUTH WESTERN RAILWAY OFFICE
High Court of
Karnataka FA AND CAO, HUBLI - 580 020
KARNATAKA ...APPELLANTS
(BY SRI CHANDRACHUD A, ADVOCATE)
AND:
SMT.LAKSHMI @ LAKSHMAMMA
W/O LATE RAJ @ P RAJA
@ RAJU @ C P RAJU
AGED ABOUT 59 YEARS
R/AT NO.08, 1ST A CROSS
BEHIND NATIONAL ENGLISH SCHOOL
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MFA No.6570/2022
C/w MFA No.8629/2022
8 FEET MAIN ROAD, M K NAGAR
YESHWANTHAPUR
BENGALURU - 560 022 ...RESPONDENT
(BY SRI MALLIKARJUNA N S, ADVOCATE)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 30(1) OF THE EMPLOYEES' COMPENSATION ACT, 1923
PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED
23.06.2022 PASSED IN E.C.A.NO.121/2018 ON THE FILE OF THE VI
ADDITIONAL JUDGE, COURT OF SMALL CAUSES AND ADDITIONAL
CHIEF METROPOLITAN MAGISTRATE & MACT, BENGALURU
(SCCH-2).
MFA No.8629/2022:
BETWEEN:
SMT.LAKSHMI @ SMT.LAKSHMAMMA
W/O LATE RAJ @ P RAJA
@ RAJU @ C P RAJU
AGED ABOUT 60 YEARS
R/AT NO.08, 1ST A CROSS
BEHIND NATIONAL ENGLISH SCHOOL
8 FEET MAIN ROAD, M K NAGAR
YESHWANTHAPUR
BENGALURU - 560 022 ...APPELLANT
(BY SRI MALLIKARJUNA N S, ADVOCATE)
AND:
1. SENIOR DIVISIONAL PERSONNEL OFFICER
SOUTH WESTERN RAILWAY
DIVISIONAL OFFICE
BENGALURU CITY RAILWAY
STATION COMPLEX
BENGALURU - 560 023
2. THE DIVISIONAL RAILWAY MANAGER
SOUTH WESTERN RAILWAY
DIVISIONAL OFFICE
BENGALURU CITY RAILWAY
STATION COMPLEX
BENGALURU - 560 023
3. THE C.A.O
SOUTH WESTERN RAILWAY OFFICE
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MFA No.6570/2022
C/w MFA No.8629/2022
FA AND CAO
HUBLI - 580 020
KARNATAKA ...RESPONDENTS
(BY SRI CHANDRACHUD A, ADVOCATE)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 30(1) OF THE EMPLOYEES' COMPENSATION ACT, 1923
PRAYING TO MODIFY THE JUDGMENT AND AWARD DATED
23.06.2022 PASSED IN ECA NO.121/2018 ON THE FILE OF THE VI
ADDITIONAL JUDGE, COURT OF SMALL CAUSES AND ADDITIONAL
CHIEF METROPOLITAN MAGISTRATE & MACT, BENGALURU
(SCCH-2) ALLOWING THE CLAIM PETITION FOR COMPENSATION.
THESE MISCELLANEOUS FIRST APPEALS COMING ON FOR
FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED
THEREIN AS UNDER:
CORAM: HON'BLE MRS JUSTICE K.S.MUDAGAL
AND
HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL
ORAL JUDGMENT
(PER: HON'BLE MRS JUSTICE K.S.MUDAGAL)
These appeals arise out of judgment and award in
E.C.A.No.121/2018 passed by VI Additional Judge, Court of
Small Causes and Additional Chief Metropolitan Magistrate &
MACT, Bengaluru (SCCH-2) (for short 'the Commissioner')
under the Employee's Compensation Act, 1923 ('the Act' for
short).
2. The appellants in M.F.A.No.6570/2022 were
respondent Nos.1 to 3 and the respondent in the said appeal
was the claimant before the Commissioner in
E.C.A.No.121/2018. For the purpose of convenience, the
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parties are referred to henceforth according to their ranks
before the Commissioner.
3. Claimant is the wife of deceased Raja S/o. Joseph.
He was working in South Western Railways as Technician
Grade-III in the office of Senior Section Engineer, Carriage &
Wagon Depot, Yeshwanthapur, Bengaluru. He had joined the
services on 01.08.1983. On 10.03.2014, when Raja was
working in second shift, a train which was running in the
reverse mode on the railway track hit him and due to the fatal
injuries suffered in the accident, he died at the spot. On
internal investigation by the department of respondent No.1, it
was held that death occurred during the course of
employment.
4. The claimant made petition before the
Commissioner under Section 22 of the Act claiming
compensation of Rs.25,00,000/- on the ground that the
accident and death occurred during the course of employment
and as such she has lost her bread winner. It was alleged that
despite demand of the claimant, the respondents deposited
only Rs.5,42,240/- on 16.03.2018 after long delay of 4 years
from the date of the incident. She further claimed that the
deceased was earning basic salary of Rs.11,740/- in addition
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to other components of salary and the respondents are liable
to pay Rs.25,00,000/- with interest at 18% per annum.
5. Respondents denied exact time of the death of the
employee claiming that there were no eyewitnesses. They
contended that they are not liable to pay the compensation, on
the humanitarian ground they have already deposited
Rs.5,42,240/-. Therefore the claimant is not entitled to
compensation of Rs.25,00,000/- nor interest, thus sought
dismissal of the petition.
6. The Commissioner on framing necessary issues,
recorded evidence of both parties. On behalf of the claimant,
her son as Special Power of Attorney holder was examined as
PW.1 and got marked Exs.P1 to P26. On behalf of the
respondents, Smt.Uma Sharma, Senior Divisional Personnel
Officer-II was examined as RW.1. No documents were marked
on their behalf.
7. The Commissioner on hearing the parties, by the
impugned judgment and award held that the accident occurred
during the course of employment and relying on Ex.P6 service
certificate, considered his date of birth as 30.12.1958 and his
age as 56 years. Based on Ex.P20 salary slip his monthly
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income was considered at Rs.26,102/-. In view of Section 4 of
the Act, considering his age, the Commissioner deducted 50%
of Rs.26,102/- for the purpose of compensation, applied
relevant factor of 131.95/- and awarded compensation at
Rs.17,22,079/- on the head of loss of dependency. The
Commissioner in all awarded Rs.17,37,079/- with interest at
12% per annum on different heads as follows:
Sl. Head of Amount/Rs.
No. compensation
1 Loss of dependency 17,22,079.00
2 Funeral Expenses 5,000.00.00
3 Interest 12% p.a., from the date of
accident i.e., 10.03.2014 till
its realization
4 Cost 5,000.00
5 Penalty 5,000.00
TOTAL 17,37,079.00
8. Challenging the award, the employer has preferred
M.F.A.No.6570/2022 and the claimant has preferred
M.F.A.No.8629/2022.
9. This Court on hearing the parties, admitted the
appeals to consider the following substantial questions of law:
M.F.A.No.6570/2022:
In considering the income of the deceased
workman at Rs.26,102/- without giving deduction to
Rs.3,040/- paid to the employee towards
transportation/G, whether the Commissioner acted
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contrary to Section 2(m) of the Employee's
Compensation Act, 1923?
M.F.A.No.8629/2022:
(i) In determining the age of the deceased at 56
years despite entry in Ex.P6- the Service
Register in that regard, whether the
Commissioner has committed perversity?
(ii) In awarding penalty of only Rs.5,000/- under
the impugned award, whether the
Commissioner acted contrary to the provision
of Section 4A(3)(b) of the Employee's
Compensation Act, 1923?
10. Heard both side on the above framed substantial
questions of law.
11. Sri Chandrachud.A, learned Counsel for the
respondent/employer submits that in assessing the income of
the deceased, the Commissioner ought to have deducted the
allowances given towards transportation and night duty
allowance as that does not constitute regular income of the
employee. He further submits that since the employer has
deposited Rs.5,42,240/- on 16.03.2018, the Commissioner
ought not to have awarded any penalty.
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12. Per contra, Sri Mallikarjuna.N.S., learned Counsel
for the claimant justifies the income taken on the ground that
all those components were part of regular salary of the
deceased/employee. He further submits that even according to
Ex.P6/Service Register, the age of the deceased was 55 and
not 56 years. Therefore the order of the Commissioner in that
regard is perverse. He further submits that the Commissioner
ought to have awarded 50% of compensation as penalty, in
addition to such compensation..
13. In support of his submissions, he relies on the
judgment of the Hon'ble Supreme Court in Shobha v. Vithalrao
Shinde Sahakari Sakhar Karkhana Ltd.1
Analysis
Reg. Compliance of Section 2(m) of the Act/Substantial
Question of law in M.F.A.No.6570/2022:
14. In Ex.P20 salary slip, monthly salary of
Rs.26,102/- of the deceased is shown as follows:
Basic Salary : Rs.11,620/-
DA : Rs.10,458/-
Transport/G : Rs. 3,040/-
Night Duty Allowance : Rs. 984/-
_________________
Total Salary : Rs.26,102/-
(2022) 13 SCC 172
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15. There is no dispute that in considering the
compensation, total wages of the employee has to be taken
into consideration. Section 2(1)(m) of the Act defines wages
which reads as follows:
" (m) "wages", includes any privilege or benefit
which is capable of being estimated in money, other than
a travelling allowance or the value of any travelling
concession or a contribution paid by the employer of an
employee towards any pension or provident fund or a
sum paid to an employee to cover any special expenses
entailed on him by the nature of his employment;"
16. Reading of the above provision clearly shows that
wages do not include travelling allowances or value of any
travelling concession or contribution paid by the employer to
an employee towards any pension or provident fund or sum
paid to an employee to cover any special expenses. Therefore
the Commissioner was in error in including transportation
charges in the income. Further the night duty allowance is not
regular salary. That he acquired whenever he performs night
duty. Therefore the Commissioner ought not to have included
that also in the wage components. Therefore on deduction of
the same, the wage of the employer comes to (Rs.26,102/- -
(Rs.3,040 + Rs.984) Rs.4,024) = Rs.22,078/-.
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17. As per Section 4(a) of the Act in assessing
compensation, what has to be taken into consideration is the
amount equal to fifty percent of the monthly wages. Therefore
to deduct 50% of the monthly wages of the deceased and
apply multiplier with relevant factor, the Commissioner ought
to have taken income at Rs.11,039/- (22,078x50%). Thus the
substantial question of law is answered accordingly.
Reg. Substantial Question Nos. 1 & 2 in M.F.A.No.8629/2022:
18. As per the service certificate Ex.P6, the date of
birth of the deceased was 30.12.1958. Incident in question
took place on 10.03.2014. As per the date of the said incident,
the employee had completed age of 55 years. Therefore
consideration of age at 56 years by the Commissioner is
erroneous. The age ought to have been considered at 55
years. For the age of 55, the relevant factor as per Schedule
IV of the Act is Rs.135.56/-. Therefore total compensation is
Rs.11,039 x 135.56/- = Rs.14,96,446.84/- rounded off to
Rs.14,96,447/-.
19. The accident in question took place on 10.03.2014.
As per Section 4A(3) of the Act, such compensation ought to
have been paid within one month from the date it falls due.
Thus compensation fell due on 09.04.2014. Whereas the
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employer deposited Rs.5,42,240/- before the Commissioner on
16.03.2018 i.e., close to four years after it fell due. Section
4A(3) of the Act which contemplates penalty in case of default,
reads as follows:
"4A. Compensation to be paid when due and
penalty for default.- (1) Compensation under section 4
shall be paid as soon as it falls due.
(2) In cases where the employer does not accept
the liability for compensation to the extent claimed, he
shall be bound to make provisional payment based on
the extent of liability which he accepts, and, such
payment shall be deposited with the Commissioner or
made to the employee, as the case may be, without
prejudice to the right of the employee to make any
further claim.
(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 shall-
(a) direct that the employer shall, in addition to
the amount of the arrears, pay simple interest thereon at
the rate of twelve per cent, per annum or at such higher
rate not exceeding the maximum of the lending rates of
any scheduled bank as may be specified by the Central
Government, by notification in the Official Gazette, on
the amount due; and
(b) if, in his opinion, there is no justification for
the delay, direct that the employer shall, in addition to
the amount of the arrears and interest thereon, pay a
further sum not exceeding fifty per cent, of such amount
by way of penalty:
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Provided that an order for the payment of penalty
shall not be passed under clause (b) without giving a
reasonable opportunity to the employer to show cause
why it should not be passed.
Explanation.- For the purposes of this sub-section,
"scheduled bank" means a bank for the time being
included in the Second Schedule to the Reserve Bank of
India Act, 1934 (2 of 1934).
3A. The interest and the penalty payable under
sub-section (3) shall be paid to the employee or his
dependant, as the case may be."
20. Learned Counsel for the claimant relying on the
above provision and the judgment of the Hon'ble Supreme
Court in Shobha's case referred to supra submits that the
Commissioner ought to have levied penalty of 50%. First of all
the provision itself clearly states that the Commissioner can
impose penalty not exceeding 50%. Therefore 50% is not the
rate fixed, but is the upper limit for awarding penalty. The
Commissioner has to appreciate justification offered by the
employer. Only justification offered by RW.1 was that they
found the death to be suspicious and therefore they held
enquiry. Only after receiving Enquiry Committee's report, they
can deposit the amount. To show that they had independent
enquiry and that occupied four years time, nothing was placed
on record. Therefore the Commissioner was not justified in
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imposing penalty of Rs.5,000/- for such inordinate delay. It is
true the deceased was employee of Railways itself and it
should have empathy for their employee and his family. But at
the same time, funds of the railways are also public funds. For
the lapses on the part of some administrative officers, railways
should not be unduly penalized. Balance has to be struck
between both. Therefore, we find awarding penalty of
Rs.25,000/- on that head meets the ends of justice. The
judgment of the Hon'ble Supreme Court in Shobha's case
referred to supra is not applicable to the facts of the present
case and the just compensation payable is as follows:
Sl. Particulars Compensation
No. in Rs.
1. Compensation under Section 4 14,96,447/-
2. Penalty 25,000/-
3. Funeral expenses 5,000/-
4. Costs 5,000/-
Total 15,31,447/-
21. Therefore the total compensation awarded is
Rs.15,31,447/-. The compensation awarded by the
Commissioner is Rs.17,37,079/-. Therefore, the compensation
payable is reduced by Rs.2,05,632/-(17,37,079 - 15,31,447).
The aforesaid compensation shall carry interest at 12% per
annum from the date of the accident till its deposit.
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22. For the aforesaid reasons, both appeals deserve to
be allowed in part. Hence the following:
ORDER
The appeals are allowed in part.
The petition in E.C.A.No.121/2018 is modified as follows:
The claimant is awarded compensation of Rs.15,31,447/-
with interest thereon at 12% per annum from the date of
accident till its realization.
The order of the Commissioner with regard to release of
the amount and the investment is maintained.
The amount in deposit and the trial Court records shall
be transmitted to the Commissioner forthwith.
In view of disposal of the appeals, pending IAs stood
disposed of accordingly.
Sd/-
(K.S.MUDAGAL)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
KSR
