From Which Date is Compensation for Mishap Calculated?

In view of binding nature of two judgments delivered by larger Benches of the Supreme Court in the cases - Pratap Narain Singh Deo v. Srinivas Sabata - 1976 (1) SCC 289 and Kerala State Electricity Board v. Valsala K. - (1999) 8 SCC 254, in the judgment of the case - K. Sivaraman & Others v. P. Sathiskumar & Another, delivered on February 13, 2020,Justice Dr Dhananjaya Y. Chandrachud and Justice Ajay Rastogi have held , at the Apex-Court , that the relevant date for determination of compensation payable is the date of accident and benefit of the Act 45 of 2009 does not apply to the accidents which took place prior to its coming into force from January 18, 2010.

The Supreme Court has pointed out that in the present case, the accident occurred on January 31, 2008, that is prior to the coming into force of Act 45 of 2009. Consequently the HC erred in extending the benefit of Act 45 of 2009 which deleted Explanation II to Section 4 to the present case. A division bench at the Madurai Bench of the Madras High Court was required to determine the compensation payable on the date of the accident on which date the deemed cap of Rs 4,000/- as monthly wages was applicable.

Though the accident took place in 2008, the appeal is being decided over 12 years later. The SC took note of the fact that following the order of remand by the HC, the employer deposed as PW2 and stated that the decease3d had worked in his establishment for about three years. The employer duly proved Exhibit P5 in the course of his evidence which was the monthly pay certificate indicating that the deceased was drawing monthly wage of Rs 32,000/- , including expenses towards food. Significantly, no appeal was filed by the respondents against the judgment of the HC enhancing the compensation.

In view of this the SC was not inclined to interfere with the award of compensation ordered by the HC in exercise of its inherent jurisdiction to do complete justice under Article 142 of the Constitution. After clarification, the SC dismissed the appeal.

The Workmen's Compensation Act, 1923 is a social beneficial legislation and its provisions and amendments thereto must be interp0reted in a manner so as not to deprive the employees of the benefit of the legislation. The object t of enacting this Act was to ameliorate the hardship of economically poor employees who were exposed to risks in work, or occupational hazards by providing quicker and cheaper 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.

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,ooo/- even where an employee was able to prove the payment of monthly wage in excess of Rs 4,000/-. The Legislature in its wisdom and keeping in mind the purpose of the 1923 Act as 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 arise 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 actually monthly wages drawn by them.

The appeal in this case arose from a division bench judgment passed by Madurai Bench of the Madras HC on June 1, 2017.In an appeal arising from a decision of the Deputy Commissioner for Employee's compensation, the HC enhanced the compensation payable under the 1923 Act from Rs 4,33,060/- to Rs 8,86,120/- The HC had also awarded interest at the rate of 12 pc per annum from the date of the accident.

In the proceedings before the Supreme Court, which were instituted under Article 136 of the Constitution, notice was issued on July 26, 2019. Since the appellants were represented by the first appellant in person, on July 26, 2019, the SC directed that an amicus curiae be nominated by the SC Legal Services Committee.

The appellants are the father, mother, sister and brother of Dinesh Kumar, who died in the course of an accident on January 31, 2008. On the date of the accident, the deceased was 26 years of age and was engaged to drive a trailor lorry . A truck came from the opposite direction and dashed against the trailor, in Kota, Rajasthan, on the NH 12.

On March 26, 2014, the Deputy Commissioner for employee's Compensation allowed the claim by an award in the amount of Rs 4,33,060/-. He had proceeded ex parte. The appellants approached the HC for enhancement of compensation. On No9vember 23, 2015, the HC remanded the case to the Deputy Commissioner for fresh determination.

On remand the Commissioner maintained the award. He proceeded on the basis that in terms of the notification issued under section 4(1B) of the 1923 Act , whatever be the monthly pay received by a person, the jurisdiction of the adjudicating authority was subject to a ceiling of Rs 4,000/- a month in computing monthly wages of an employee.

In appeal filed in the HC, its division bench took into consideration a notification issued by the Central Govt., in the meantime , on May 31, 2010 and took the position that having due regard to the fact the legislation in question is a social welfare legislation, the enhanced income of Rs 8,000/- per month should form the basis of the computation. Thus, applying the multiplicand in terms of Schedule IV, the HC enhanced the computation to Rs 8,86,120/-.After this decision by the HC, the SC was moved through this appeal against this HC judgment.

In conclusion, the SC held that the total compensation payable to the appellant shall quantified at Rs 8,86,120/-on which interest shall be payable at 12 pc per annum from the date of the accident. The liability for the payment of the compensation will be joint and several. The compensation has been ordered to be paid within two months from the date of receipt of the certified copy of this order.