Divisional Manager vs Netrananda Sahu And Others
2023 Latest Caselaw 2234 Ori

        IN THE HIGH COURT OF ORISSA AT CUTTACK
                            FAO No.196 of 2019
(From the judgment dated 20th August, 2018 passed by the learned
Commissioner, Workmen's Compensation-cum-Assistant Labour
Commissioner, Odisha, Cuttack in W.C. Case No.295-D of 2003)


 Divisional   Manager,            National
 Insurance Company Ltd.                      ...                 Appellant

                                  -versus-

 Netrananda Sahu and Others                  ....            Respondents

Advocate(s) appeared in this case:-

            For Appellant        : Mr. P.K. Mahali, Advocate

            For Respondents      : Mr. D.K. Mohapatra, counsel for
                                   Respondents 1&2


              CORAM: JUSTICE B.P. ROUTRAY
                               JUDGMENT

20th March, 2023 B.P. Routray, J.

1. Present appeal by the insurer is directed against award dated 20th

August, 2018 passed by the learned Commissioner, Workmen's

Compensation-cum-Assistant Labour Commissioner, Odisha, Cuttack

in W.C. Case No.295-D of 2003 wherein compensation to the tune of

Rs.6,69,110/- along with interest @ 12% annum from the date of

accident has been directed to be paid on account of death of the

deceased workman arising out of and in course of his employment as

helper in truck bearing registration number OR 05 C 6435.

2. The main issue raised by the insurer is with regard to fixation of

remuneration of the deceased at Rs.6000/- per month prior to 18th

January, 2010, i.e. the date when the Employee's Compensation

(Amendment) Act, 2009 (hereinafter referred as '2009 Amendment

Act') came into force. It is submitted that, in the present case the

accident took place on 6th April, 2003 when as per Explanation-II to

sub-Section (1) of Section 4 of the Employee's Compensation Act,

1923 (hereinafter referred as 'E.C. Act 1923') was in force prescribing

maximum limit of monthly wages at Rs.4000/- only.

3. It is true that, Explanation-II attached to Section 4(1) of the E.C.

Act 1923 was deleted w.e.f. 18th January, 2010. Prior to that, said

explanation had capped the monthly wages of an employee at

Rs.4000/- by prescribing that, where the monthly wages of a workman

exceed four thousand rupees, his monthly wages for the purposes of

Clauses (a) & (b) shall be deemed to be four thousand rupees only.

4. In the case of Pratap Narain Singh Deo v. Srinivas Sabata,

1976 (1) SCC 289 and Kerla State Electricity Board v. Valsala K.,

(1999) 8 SCC 254, the Supreme Court have held that the date relevant

for determination of compensation payable under the 1923 Act is the

date of the accident and that, the benefit of an amendment enhancing

the amount of compensation shall not apply to accidents that take place

prior to its coming into force.

5. In the case of K. Sivaraman and others v. P. Sathish Kumar

and another, (2020) 4 SCC 594, which was a case relating to

compensation to the workman under the EC Act, 1923, the accident

took place on 31st January, 2008 and the High Court of Madras in

Madurai Bench enhanced the compensation granted by the Workman

Commissioner taking the income of the deceased workman as per

Notification dated 31st May 2010 issued after the 2009 Amendment

Act. This was challenged before the Hon'ble Supreme Court. The

Supreme Court on consideration of different other judgments including

the case of Pratap Narain Singh Deo (supra) and Valsala K. (supra)

held as follows:--

"24. The question before the Bench in Valsala K. was clearly whether an amendment to Section 4 and 4-A of the 1923 Act enhancing the amount of compensation and the rate of interest would be applicable to cases where the accident took place prior to the coming into force of the amendment. The Bench held that the benefit of an

amending Act enhancing the quantum of compensation would not apply to accidents that took place prior to the coming into force of the amendment. Though the learned Amicus Curiae sought to rely on the two-Judges Bench judgment of this Court in National Insurance Co. Ltd. v. Mubasir Ahmed, (2007) 2 SCC 349, it is sufficient at this stage to note that the subsequent judgment of this Court in Oriental Insurance Co. Ltd. v. Siby George, (2012) 12 SCC 540 noted that the judgment in Mubasir Ahmed is contrary to the judgments of this Court in Pratap Narain Singh Deo and Valsala K. and hence not a binding precedent.

25. The 1923 Act is a social beneficial legislation and its provisions and amendments thereto must be interpreted in a manner so as to not deprive the employees of the benefit of the legislation. The object of enacting the Act was to ameliorate the hardship of economically poor employees who were exposed to risks in work, or occupational hazards by providing a cheaper and quicker machinery for compensating them with pecuniary benefits. The amendments to the 1923 Act have been enacted to further this salient purpose by either streamlining the compensation process or enhancing the amount of compensation payable to the employee.

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 and arising out of employment. The objective of the amendment is to remove an 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.

xxxxxx xxx xxx

31. The judgments in Rathi Menon v. Union of India, (2001) 3 SCC 714 and Union of India v. Rina Devi, (2019) 3 SCC 572 were both rendered by a Bench of two Judges of this Court. In Rina Devi, this Court resolved the apparent conflict between Rathi Menon and Kalandi Charan Sahoo v. South-East Central Railways, (2019) 12 SCC 387 by taking into account the judgments in Rathi Menon as well as the change in the position of law following the judgment. The position of law under the 1989 Act has thus been brought closer to the judgment of this Court in Pratap Narain Singh Deo which held that the date relevant for the determination of compensation would be the date of accident. The judgment in Rina Devi was recently followed by this Court in Union of India v. Radha Yadav, (2019) 3 SCC 410.

32. It is pertinent to note that no similar position of law for the determination of the higher amount of compensation payable was adopted under the 1923 Act by this court in Pratap Narain Singh Deo and Valsala K. This Court, being a Bench of two Judges, is bound by the categorical position of law laid down in Pratap Narain Singh Deo and Valsala K., both being judgments rendered by larger Benches of this Court. Consequently, we hold that the relevant date for the determination of compensation payable is the date of the accident and the benefit of Act 45 of 2009 does not apply to accidents that took place prior to its coming into force.

33. In the present case, the accident occurred on 31-1- 2008 i.e. prior to the coming into force of Act 45 of 2009. Consequently, the High Court erred in extending the benefit of Act 45 of 2009 which deleted Explanation II to

Section 4, to the present case. The High Court was required to determine the compensation payable on the date of the accident on which date, the deemed cap of Rs.4000 as monthly wages was applicable."

6. In view of the law propounded by the Supreme Court as above

the insurer is found justified in its contention that the enhanced amount

of remuneration beyond four thousand, as was limited in Explanation-

II prevailing on the date of accident, is not permissible. As stated

earlier, considering the date of accident on 6th April 2003, the monthly

income of the deceased should not exceed Rs.4000/- for the purpose of

computation of the compensation amount.

7. It is further contended by the insurer that the age of the deceased

as per the Voter Id. Card is 23 years against the assessment of the

Commissioner as 22 years and that, the insurer is not liable to pay the

interest amount @ 12% per annum from 2003 to 2018 since it was not

responsible for pendency of the claim application during that period.

8. The first contention of the insurer to dispute the age of the

deceased is found without substance since no copy of the Voter Id.

Card was filed before the Commissioner. Even the insurer did not file

any written statement and did not lead any evidence. It is seen that the

Commissioner relying on the contents of the post mortem examination

report took the age of the deceased as 22 years. Thus, in conspicuous

absence of materials regarding age of the deceased, no fault is seen in

the approach of the Commissioner in determining so. The age of the

deceased as such is also accepted by this court based on same

principles.

9. So far as the other contention raised by the insurer is concerned

that they are not liable to pay the interest, the same is found without

substance. It is incorrect to say that the claim application remained

pending for the laches of the claimants. When it is admitted that the

insurer has failed to file their WS and did not lead any evidence, it is

unfair on their part to put-forth such a contention now that they are not

liable to pay interest. As per Section 3 of the EC Act, 1923, the

employer is liable to pay compensation in accordance with the

provisions of the Act and Section 4-A stipulates that the compensation

shall be paid as soon as it falls due. Further, the employer is liable to

pay the interest upon his failure to make provisional payment, based on

the extent of liability, within the period of one month from the date of

accident. The insurer having taken the indemnity of payment of

compensation amount of the employer, it cannot escape from its

liability on the guise of attributing fault to the claimant for delayed

adjudication of the claim. Thus no merit is seen in such contention of

the insurer to waive the interest part. Moreover the EC Act, 1923 being

a beneficent legislation, its provisions cannot be interpreted in such a

way to deprive the poor workman or his dependents from the benefits.

10. In view of the discussions made above, fixing the remuneration

of the deceased workman at Rs.4000/- per month, the amount of

compensation is modified as follows:-

{Rs.4000 ÷ 2} x 221.37 (age factor) = Rs.4,42,740/-

A sum of Rs.5000/-, as granted by learned Commissioner, is

added to the amount towards funeral expenses. Thus the total amount

comes to Rs.4,47,740/-, which is payable along with interest @ 12%

per annum from the date of the accident.

11. It is submitted at the Bar that the total compensation amount as

directed by the Commissioner has already been deposited by the

Appellant, out of which 30% has already been paid to the claimants in

the meantime during pendency of the present appeal.

12. In the result, the appeal is disposed of with a direction to the

Commissioner to disburse the rest compensation amount in favour of

the claimants out of the amount kept before him in terms of the

modified compensation amount decided above along with

proportionate accrued interest thereon, and the rest amount, if any, be

refunded to the Appellant along with accrued interest thereof.

(B.P. Routray) Judge

M.K. Panda/Sr. Steno