Mani vs Rathakrishnan
2021 Latest Caselaw 1889 Mad

                                                                             C.M.A.No.1800 of 2018


                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                  DATED : 29.01.2021

                                                       CORAM

                                   THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM

                                                C.M.A.No.1800 of 2018
                                                         and
                                                C.M.P.No.10847 of 2018

                     Mani                                                      ..Appellant

                                                          Vs.
                     1.Rathakrishnan
                     2.United India Insurance Company Limited,
                       5-8, Opp State Bank of India, Salem Main Road,
                       Rasipuram, Namakkal District.                         ..Respondents

                     Prayer : Civil Miscellaneous Appeal filed under Section 30 of
                     Workmen's Compensation Act, 1923 to set aside the order made in
                     W.C.No.666 of 2015 on the file of the Workmen's Compensation
                     Commissioner cum Deputy Commissioner of Labour, Coonor, Nilgiris
                     dated 12.09.2016 and for enhancement of compensation.


                                      For Appellant   : Mr.C.Kulanthaivel

                                      For R2          : Mr.I.Malar

                     1/26




https://www.mhc.tn.gov.in/judis/
                                                                                    C.M.A.No.1800 of 2018




                                                     JUDGMENT

The Award dated 12.09.2016 passed in W.C.No.666 of 2015 is

challenging in the present Civil Miscellaneous Appeal.

2.The substantial question of law raised by the appellant is that:

i) Whether the monthly wages fixed by the Commissioner is in consonance with the Central Government Notification issued under Section 4 (1) of the Employees Compensation Act.

ii) Whether the Deputy Commissioner of Labour is correct in fixing the permanent disability as 65% when the appellant was a driver and lost his total earning capacity.

iii) Whether the Deputy Commissioner of Labour is correct in not granting interest for the medical expenses spent by the appellant / claimant.”

3. There is no dispute between the parties regarding the factum of

accident. The employer and employee relationship was also established.

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However, the dispute arose is whether the monthly income of Rs.8,000/-

fixed by Deputy Commissioner of Labour is in consonance with the

minimum wages fixed for grant of compensation. Admittedly, the

accident occurred on 05.06.2014. The Government of Tamil Nadu

issued G.O.Ms.No.91 dated 12.12.2013, fixing the minimum wages as

Rs.9,309/-.

4. The learned counsel for the appellant states that the said

minimum wages is to be fixed for the purpose of calculating the

compensation. Contrarily, the Deputy Commissioner of Labour fixed a

sum of Rs.8,000/- as per the Central Government Notification dated

31.05.2010. Regarding the fixation of income, this Court elaborately

considered the issues in C.M.A.No.897 of 2018 dated 27.01.2021 and

the relevant paragraphs are extracted hereunder:

“10. This Court is of the considered opinion that

the statement of objects and reasons categorically

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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

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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 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

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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 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

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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.

13. In a common parlance, if the straight

interpretation is adopted in such cases, it would cause not

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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

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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 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

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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 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

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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

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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 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,

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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

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.

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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

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workmen from 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

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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 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

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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 of justice, and to compensate

the victim in commensuration with the disability /

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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

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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 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

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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 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

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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

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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 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

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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.”

5. In view of the principles decided in the case cited supra, the

appellant is entitled for the fixation of monthly income of Rs.9,309/- for

quantifying the compensation. Accordingly, this Court is inclined to

enhance the monthly income of appellant from Rs.8,000/- to Rs.9,309/-.

Therefore, the total compensation payable to the appellant is

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Rs.7,06,642/- and the total compensation along with medical expenses is

Rs.11,21,931/-.

6. As far as the interest is concerned, the appellant is entitled for

interest of entire Award amount including the medical expenses. The

Deputy Commissioner of Labour has failed to grant interest for the

medical expenses. The award amount and medical expenses is

inseparable and the total award amount is to be calculated inclusive of

the medical expenses sustained by the claimant and, therefore, the

interest of 12% on expiry of 30 days from the date of accident is paid

from the entire Award amount with reference to Section 4 (A) (3) (b) of

the Employees Compensation Act, 1923.

7. In this view of the matter, the appeal is set aside for the

modified compensation of Rs.11,21,931/- along with interest @ 12% per

annum with effect from the date of expiry of 30 days from the date of

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1800 of 2018

accident. The second respondent / Insurance Company is directed to

deposit the differential award amount along with the accrued interest

within a period of 12 weeks from the date of receipt of a copy of this

order and on such deposit the appellant claimant is permitted to

withdraw the amount by filing an appropriate application and all the

payments are made through the RTGS.

8. Consequently, the Award dated 12.09.2016 passed in

W.C.No.666 of 2015 stands modified and C.M.A.No.1800 of 2018

stands allowed in part. No costs. Consequently, connected

miscellaneous petition is closed.

29.01.2021

Pns Index: Yes/No Internet:Yes/No Speaking order/Non speaking order

https://www.mhc.tn.gov.in/judis/ C.M.A.No.1800 of 2018

S.M.SUBRAMANIAM, J.

Pns To

1.United India Insurance Company Limited, 5-8, Opp State Bank of India, Salem Main Road, Rasipuram, Namakkal District.

2. The Workmen's Compensation Commissioner cum Deputy Commissioner of Labour, Coonor, Nilgiris.

C.M.A.No.1800 of 2018

29.01.2021

https://www.mhc.tn.gov.in/judis/