Madras High Court
P.Ramesh vs Ravi on 27 January, 2021
C.M.A.No.897 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.01.2021
CORAM
THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM
C.M.A.No.897 of 2018
P.Ramesh ..Appellant
Vs.
1.Ravi
2.National Insurance Company Limited,
Third Party Cell HUB,
No.46, Regina Mansion,
Moore Street, Parrys,
Chennai 600 001. ..Respondents
Prayer : Civil Miscellaneous Appeal filed under Section 30 of the
Employees Compensation Act, 1923, against the Award dated
30.11.2017 made in W.C.No.68 of 2016 on the file of the Deputy
Commissioner of Workmen's Compensation -I, Chennai -6 and the
award copy was received on 26.02.2018.
For Appellant : Ms.A.Subadra for
Ms.M.Malar
For Respondents : Mr.S.Vadivel for R2
R1 - Exparte
1/22
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C.M.A.No.897 of 2018
JUDGMENT
The award dated 30.11.2017 passed in W.C.No.68 of 2016 is
under challenge in the present civil miscellaneous appeal.
2. The question of law mainly raised in the present appeal is
whether the fixation of deeming cap with respect of monthly income
under the provisions of the Employees Compensation Act, is correct or
not.
3. The fact in nutshell to be considered are that on 17.01.2016 at
about 3.30 a.m. while the claimant was travelling as a cleaner in a lorry
belongs to the first respondent bearing Registration No. TN-21-AL-5728
proceeding at NH-4 Road near Kyadigere Gate, Chitra Durga,
Karnataka, the accident occurred and the claimant sustained both bone
fracture and toes are amputated and he sustained multiple grievous
injuries all over the body. An application was filed seeking
compensation under the Workmen Compensation Act.
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4. The Deputy Commissioner of Labour considered the
documents and evidence produced by the respective parties and arrived
at the conclusion that the accident occurred during the course of the
employment and accordingly, fixed the liability on the second
respondent Insurance Company. The compensation of Rs.4,39,188/- was
granted along with an interest at the rate of 12% per annum.
5. The learned counsel for the appellant is of the view that the
monthly salary fixed by the Deputy Commissioner of Labour as
Rs.8000/- as per the Central Government notification, is erroneous. The
first contention is that a sum of Rs.8000/- fixed under the Act by the
notification is the minimum wages which is to be adopted for calculating
the compensation and not the ceiling. The deeming cap which in
prevalence prior to 18.01.2010, was taken away by way of an
amendment on 18.01.2010 and notification in this regard was published
in the Government of India Gazette on 31.05.2010. Therefore, fixing a
deeming cap of Rs.8000/- as per the Central Government notification is
perverse and not in consonance with the principles laid down by the
Hon'ble Apex Court of India.
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6. It is contended that the Government of Tamil Nadu under the
provisions of the Minimum Wages Act, issued a Government Order in
G.O. 2D No.91, Labour and Employment Department, dated 12.12.2013,
stating that Rs.9808/- would be the minimum wages for the purpose of
considering the cases for grant of compensation and for payment of
wages. Once the Government of Tamil Nadu issued a revised minimum
wages under the provisions of the Minimum Wages Act, such amount is
to be atleast granted for the purpose of compensation and therefore, the
fixation of Rs.8000/- is not in accordance with law.
7. The learned counsel for the second respondent opposed to the
said contentions by stating that Section 4 of the Employees
Compensation Act stipulates the amount of compensation. In the said
provision, there is a consistent mention regarding the monthly wages to
be fixed for grant of compensation. When there is a consistent
mentioning about the monthly wages, it is to be taken into account for
the purpose of granting compensation. Thus, it is implied that the
monthly wages fixed by the Central Government under Section 4(1B) is
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C.M.A.No.897 of 2018
to be adopted. In other words, the intention of the Act is to fix monthly
wages in consonance with the Central Government notification issued
under Section 4(1B). Therefore, the Deputy Commissioner of Labour
has no option, but to fix a sum of Rs.8000/- which is the deeming cap
under Section 4 (1B) of the Act.
8. Though it is contended that the word deeming cap has been
removed in the amendment dated 18.01.2010, the learned counsel is of
the opinion that Section 4 repeatedly contemplates “monthly wages” and
therefore, the monthly wages stipulated in the provision is in
consonance with the Central Government notification issued. Therefore,
for all purposes, the ceiling fixed by the Central Government is taken
into account for calculation of compensation and the higher amount
cannot be fixed.
9. It is further contended that when the Employees Compensation
Act which is the Central Act, contemplates monthly wages to be fixed,
then, the minimum wages Act by the Government of Tamil Nadu, cannot
be taken into consideration for the purpose of calculation of
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compensation and therefore, the appeal is liable to be dismissed.
10. This Court is of the considered opinion that the statement of
objects and reasons categorically enumerates that the general principles
of workmen's compensation command almost universal acceptance and
India is now nearly one amongst civilised countries in being without
legislation embodying those principles. For a number of years, the more
generous employers have been in a 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 workmen, along with the
comparative poverty of the workmen themselves, renders it advisable
that they should be protected, as far as possible from hardship arising
from accidents. An additional advantage of legislation of this type is that
by increasing the importance for the employer of adequate safety
devices, it reduces the number of accidents to workmen in a manner that
cannot be achieved by official inspection. Further, the encouragement
given to employers to provide adequate medical treatment for their
workmen should mitigate the effects of such accidents as do occur. The
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C.M.A.No.897 of 2018
benefits so conferred on the employee added to the increased sense of
security which he will enjoy, should render industrial life more attractive
and thus increase the available supply of labour.
11. With reference to the purpose and the object, this Court is of
the opinion that a constructive interpretation of the provision is
imminent and such interpretation alone would satisfy the purpose and
object of the legislation. The judgment of the Hon'ble Supreme Court of
India in the case of K.Sivaraman and Ors Vs. P.Sathishkumar and
Anr in C.A.No.9046 of 2019, the Apex Court, in clear terms, has
interpreted as follows:
“26. 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.4000/-
even where an employee was able to prove the payment
of a monthly wage in excess of Rs.4000/-. 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 amendment is in
furtherance of the salient purpose which underlies the
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1923 Act of providing to all employees compensation for
accidents which occur in the course of an 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.”
12. The Apex Court considered various provisions of the
Employees Compensation Act. While interpreting those provisions, the
Court came to the conclusion that the objective of the amendment is to
remove the deeming cap on the monthly income of the employee and
extend to them the compensation of monthly wages drawn by them.
Therefore, the interpretation now to be followed as per the judgment of
the Hon'ble Supreme Court, is to be adopted by the High Court while
considering the case for grant of compensation, more specifically, while
fixing the monthly income with reference to the Government
notifications.
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13. In a common parlance, if the straight interpretation is adopted
in such cases, it would cause not only injustice and it will result in grant
of unjust compensation. The Courts have repeatedly held that 'just
compensation' is to be arrived for the purpose of mitigating the
circumstances arising on account of unforeseen accidents. Therefore, the
principles of 'just compensation' must be the basis for interpreting these
welfare provisions and therefore, the straight formula cannot be adopted
for the purpose of grant of compensation, more specifically, in fixing of
monthly income. In such cases of grant of compensation, if straight
jacket formula is adopted, the same would result in an inadequate grant
of compensation and the principles of just compensation is not only
diluted and the principles of justice is also compromised.
14. The concept of social justice adopted by we people of India
under the Constitution includes the social protection. The concept of
social protection, is an integral part of the concept of social justice.
Thus, the social protection which being the purpose and object of the
Act 1923, it should be read in consonance with the constitutional
principles. When the social justice is enunciated under the Constitution
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of India, the welfare legislations are to be read in consonance with the
principles of social justice and to provide adequate protection from any
kind of discrimination or injustice. The economic imbalance is also to be
eliminated to the extent possible and the same is also the constitutional
perspective. Equality of status contemplates removal of inequalities and
more specifically economic inequalities.
15. The directive principles of State policy provides that the
citizens, men and women equally, have the right to an adequate means
of livelihood, Article 39(a) says so. Article 39(c) states that the
operation of the economic system does not result in the concentration of
wealth and means of production to the common detriment, of course,
equal pay for equal work is also the principle enunciated.
16. A cogent reading of all these provisions under the directive
principles of State policy, the States are expected to strive hard to
achieve these principles by not creating discrimination in the matter of
fixation of pay or grant of compensation, which should be in accordance
with the cost index prevailing during the relevant point of time. The
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C.M.A.No.897 of 2018
living condition as well as the cost index of the relevant period of time
are the criteria for the purpose of fixation of minimum wages and to
grant compensation with reference to the Act, 1923. Therefore, all these
aspects are to be considered for the purpose of interpreting the
provisions of the Employees Compensation Act. It is not as if Section 4
to be read with reference to the monthly wages and such a prescription is
to be restricted based on the notification issued by the Central
Government under Section 4(1B). If such restriction is imposed, then,
there is no scope to meet out the concept of social protection, which is
an integral part of the social justice enunciated under the Constitution of
India.
17. Thus, any interpretation of any statute must run in consonance
with the constitutional principles. Otherwise, the purpose and object of
the statute is not met with. More so, the constitutional principles are
violated. Therefore, a constructive interpretation is to be adopted by
taking pragmatic view. What would be the pragmatic approach in such
circumstances? How to fix the monthly income of an employee, when
there is no proof of income? How to determine the quantum of
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compensation to be paid? Of course, unless the monthly income is fixed,
it may not be possible for the Courts to arrive at a definite conclusion
regarding the fixation of compensation. Thus, the fixation of monthly
income is an important factor in the cases where the compensation is to
be awarded.
18. Adopting the conventional procedures, the minimum wages
are fixed by the State and Union for the purpose of fixing the monthly
income. Undoubtedly prior to 18.01.2010, the date on which the
amendment was issued, the deeming cap was in force and as per the
deeming cap, a sum of Rs.4000/- was fixed as a monthly income.
However, in the amendment dated 18.01.2010, such a deeming cap was
removed and the Supreme Court also interpreted in the case of
K.Sivaraman and Ors Vs.Sathish Kumar and Anr, cited supra that
such deeming cap on the monthly income of the employee was removed
from the amendment. Therefore, the actual monthly wages of the
employee is to be taken into account for grant of compensation.
Therefore, the employee is at liberty to establish his monthly income by
submitting documents and evidences. Once an employee is able to
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establish his monthly income with an acceptable evidence, then, such
monthly income is to be taken into consideration for the purpose of
quantifying the compensation. In the cases where there is no proof is
available, then, the minimum wages notified by the Central Government
under Section 4(1B) is to be taken into account.
19. Thus, the object of fixation of monthly wages by the Central
Government, is to ensure that the employees are not discriminated or to
avoid discrepancies in quantifying the compensation. The authorities
may have their own notions and approaches in the matter of fixation of
monthly income. Such fixation cannot be at the discretion of the
competent authorities. In the event of granting discretion, there are
possibilities of discrepancies and denial of justice to the workmen. That
is the reason why the Central Government thought fit to issue a
notification regarding the minimum wages to be fixed for grant of
compensation. The fixation of minimum wages under Section 4(1B) has
got a definite object. The very object would be to eradicate the
discrimination and inconsistencies in the matter of fixation of monthly
income. However such fixation would not deprive the workmen from
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getting higher compensation based on his actual income if he is able to
establish the monthly income with acceptable evidence.
20. For example, the workmen working in Government Transport
Corporation is having definite evidence regarding his salary. The
workers working in Government factories are having proof for their
monthly income. Those workmen cannot be denied compensation on par
with their monthly income. Because the compensation must be in
commensuration with the status of the workmen and the income of the
workmen in order to protect the interest of the family and their
livelihood. In every legislation, the common purpose would be to grant
compensation in commensuration with the family status and to meet out
the livelihood. Another example would be the grant of maintenance in
matrimonial cases, the monthly maintenance is paid taking into account
the various factors including the family status. Therefore, there cannot
be a ceiling for the purpose of grant of maintenance in matrimonial
cases or equally grant of compensation in workmen cases. All such
welfare provisions are to be interpreted so as to ensure and protect the
livelihood of the workmen. While protecting the livelihood of the
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workmen, the income is to be fixed with reference to the actual income
established and if not, the minimum wages notified by the Central
Government.
21. The question arises, whether the minimum wages fixed by the
Government of Tamil Nadu can be adopted for the purpose of grant of
compensation under the Workmen Compensation Act. There is no
dispute that the Act is a welfare legislation. The principles to be
followed is to grant 'just compensation'. There cannot be any other
opinion that the compensation to be granted, must be not only adequate,
but in commensuration with the cost index of the relevant point of time.
Thus, if there is no revision of minimum wages by the Central
Government under the provisions of the Workmen Compensation Act,
and if such minimum wages are fixed by the particular State
Government, considering the cost index of the relevant point of time
under the provisions of the Minimum Wages Act, which is a general
law, then for the purpose of calculating the compensation, the minimum
wages fixed by the State can be adopted, so as to grant a 'just
compensation', which is the basic principle to be adopted. In the interest
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of justice, and to compensate the victim in commensuration with the
disability / suffering or otherwise, the Courts have to adopt a pragmatic
approach and once the minimum wages are fixed by the State concerned
under the provisions of the Minimum Wages Act, the said minimum
wages shall be taken into account for calculating the compensation,
provided such minimum wages are higher than that of the minimum
wages fixed by the Central Government under Section 4(1) of the
Workmen Compensation Act.
22. It is needless to state that the notification issued by the
Central Government under Section 4(1B) is to be followed all over the
Nation and that shall be the minimum wages. However, if any
enhancement is made by any State by invoking the provisions of the
Minimum Wages Act, then such minimum wages, which is more
beneficial to the victims shall be followed for the purpose of fixing the
monthly income. This happens because there is a long interval in fixing
minimum wages under the provisions of the Employees Compensation
Act by the Central Government. In between the State Governments are
reviewing the minimum wages to be paid under the Minimum Wages
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Act. The Act being a welfare legislation, the beneficial income fixed
under the provisions of the Minimum Wages Act shall be adopted, so as
to fix the compensation. In the event of not granting the minimum
wages with reference to the price index during the relevant point of
time, then the victims are not only deprived, but the principles of 'just
compensation' is diluted. Fixing of monthly income with reference to the
minimum wages arises only in cases, where the monthly income is
unable to be established by the claimants with an acceptable evidence.
When a workman is not having adequate evidence to establish the
monthly income, then the statute requires that the minimum wages as
applicable is to be fixed for quantifying the compensation. The method
of calculation is also contemplated under Section 5 of the Workmen
Compensation Act. Thus, the principles of 'just compensation' is to be
scrupulously followed by the Courts, while calculating the
compensation with reference to the Statute.
23. As far as Sections 4 and 5 of the Workmen Compensation Act
is concerned, the method of calculating the wages are contemplated.
However, there is no reference with regard to the monthly wages to be
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notified by the Central Government. Thus, the cogent reading of the
entire scheme of the Act as well as the statement of objects and reasons
and taking note of the fact that the claimants are entitled for 'just
compensation', the workman should not be deprived of the benefit of
enhancement made either by the Central Government or by the State
Government under the provisions of the Minimum Wages Act regarding
the monthly income. The Courts are bound to ensure the beneficial
monthly income fixed under the provisions of the Minimum Wages Act,
which is a general Act. Irrespective of the fact, whether such fixation is
done by the Central Government by issuing a notification or by the State
Government by issuing appropriate orders.
24. The minimum wages of Rs.8,000/- was fixed by the Central
Government with effect from 18.01.2010. If any accident occurred in the
year 2013 or 2014, definitely the said amount cannot be adequate to
meet out the family expenditures of the legal heirs in the event of death
of an employee. In such circumstances, the Courts cannot do the
exercise to assess the prevailing cost index during the relevant point of
time. However, the Courts are bound to ensure and minimize the
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inequalities in the matter of grant of compensation.
25. Thus, this Court has no hesitation in holding that the
minimum wages notified by the Central Government under Section
4(1B) of the Act, 1923 is applicable all over the Nation in general and in
particular, if any State fixed the minimum wages under the provisions of
the Minimum Wages Act, which is higher than that of the minimum
wages fixed by the Central Government, then the minimum wages fixed
by the State Government, which is more beneficial is to be adopted for
the purpose of fixing the monthly income of the employee concerned.
This is to be followed, because the employee concerned is working in
the particular State and the State has enhanced the minimum wages to be
paid to the workman. Therefore, in the event of not adopting the
minimum wages notified by the State, which is higher than that of the
Central Government Notification, then there will be an inequality of
fixing minimum wages, in the matter of fixing monthly income and
grant of compensation.
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26. Thus, in the present case, the Deputy Commissioner of Labour
fixed the monthly income of Rs.8000/- for the purpose of calculating the
compensation. The Government of Tamil Nadu issued G.O. 2D No.91,
Labour and Employment Department, dated 12.12.2013, fixing the
minimum wages as Rs.9808/-. Thus the benefit of the State notification
is to be granted for the purpose of calculating the compensation.
Accordingly, this Court is inclined to enhance the monthly income of
the workmen from Rs.8000/- to Rs.9808/- and the total compensation
payable to the claimants is Rs.5,38,445/- along with interest at the rate
of 12% per annum from the date of expiry of 30 days from the date of
accident.
27. The second respondent Insurance Company is directed to
deposit the difference amount of compensation along with accrued
interest, within a period of 12 weeks from the date of receipt of a copy
of this order. On such deposit, the claimants are permitted to withdraw
the amount by filing appropriate application and payments are to be
made through RTGS.
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28. Thus, the award dated 30.11.2017 in W.C.No.68 of 2016
stands modified and C.M.A.No.897 of 2018 stands allowed in part. No
costs.
27.01.2021
Index: Yes/No
Speaking order/Non-Speaking Order
gsk/kak
To
The Deputy Commissioner of Workmen's Compensation -I
Chennai -6.
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C.M.A.No.897 of 2018
S.M.SUBRAMANIAM, J.
gsk/Kak
C.M.A.No.897 of 2018
27.01.2021
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