Case at a Glance
A 50-year-old carpenter died after falling from the 14th floor of a construction site to a platform on the 11th floor in January 2017. The Employees’ Compensation Commissioner awarded Rs 9,33,540 with 12% interest. The insurer appealed, arguing that the wage notified under Section 4(1B) is a ceiling and that its policy excluded interest. The Kerala High Court held that the notified wage is not a maximum and actual wages can be used, and that the interest exclusion was neither pleaded nor proved. It dismissed the appeal.
The deceased, Mohana Sundaram, a 50-year-old carpenter employed by Shilpa Projects & Infrastructure (I) Ltd., fell on 13 January 2017 from the 14th floor of a building to a platform on the 11th floor while lifting a jacky, and was brought dead to hospital. His wife and children claimed Rs 10,00,000 plus funeral expenses before the Commissioner for Employees’ Compensation, Alappuzha (ECC No. 52 of 2018), on a monthly wage of Rs 12,000. The employer remained ex parte.
The Commissioner awarded Rs 9,18,540 as compensation and Rs 15,000 as funeral expenses — Rs 9,33,540 in all — with 12% interest from 13 January 2017, payable within 30 days. The New India Assurance Company, the employer’s insurer, appealed, and also sought to produce the full insurance policy through an application for additional evidence (I.A. No. 2 of 2025).
The Key Question Before the Court
Is the monthly wage notified by the Central Government under Section 4(1B) of the Employees’ Compensation Act a ceiling on the wages that can be taken to compute compensation, and could the insurer escape liability for interest under a policy exclusion?
Actual Wages Count; Unpleaded Exclusions Do Not
Justice S. Manu, relying on K. Sivaraman v. P. Sathish Kumar, (2020) 02 SC CK 0035 and on the Kerala High Court’s decision in Chairman & Managing Director, KSEB v. Sudhish, (2026) 03 KL CK 1681, 2026 (2) KLT 621, held that the wage notified under Section 4(1B) is not a maximum and that actual wages can be used to compute compensation. The observations in United India Insurance Co. Ltd. v. Bindhu Venugopal, 2018 (1) KLT 655, were, the Court said, made without argument on the point and could not be treated as binding.
On interest, the Court found that the question did not arise because the insurer had neither pleaded nor proved the policy exclusion before the Commissioner; its written statement did not plead it. The application to produce the full policy at the appellate stage was rejected, since the policy schedule had been produced before the Commissioner. The Court left open, for an appropriate case, the wider conflict in decisions on an insurer’s liability for interest, including those in Harshadbhai Modhiya, (2006) 04 SC CK 0061, Kunnel Engineers and Rekha Chaudhary, (2026) 02 SC CK 1798. Holding that “no substantial question of law arises for consideration”, it dismissed the appeal.
What the Court Actually Held
- The wage notified under Section 4(1B) of the Employees’ Compensation Act is not a ceiling; actual wages can be taken for computing compensation.
- The observations in Bindhu Venugopal were made without argument on the point and are not binding on this issue.
- The insurer could not avoid interest because it neither pleaded nor proved the exclusion; its application to produce the full policy at the appeal stage was rejected.
- No substantial question of law arose; the appeal was dismissed and the Commissioner’s award of Rs 9,33,540 with 12% interest stands.
Why This Judgment Matters
- Construction-site deaths are common, and the wage basis often decides how much a family receives.
- It clarifies, for Kerala, that the notified wage does not cap compensation.
- It shows that an insurer’s policy defences must be pleaded and proved before the Commissioner.
What Should Advocates Take Away From the Judgment?
For Workers’ Families
- Prove the worker’s actual wages; the notified wage is not a cap.
- Interest at 12% can run from the date of the accident where the award is upheld.
For Counsel
- Insurers must plead and prove any policy exclusion, including on interest, before the Commissioner.
- Appeals under the Act lie only on substantial questions of law.
- Note the open question on insurer liability for interest flagged by the Court.
Key Takeaways
- Actual wages, not a notified figure, can be used to compute compensation.
- An unpleaded policy exclusion will not help the insurer in appeal.
- Additional evidence at the appeal stage was refused.
- The award of Rs 9.33 lakh with 12% interest was upheld.
Frequently Asked Questions
What is Section 4(1B) of the Employees’ Compensation Act?
It allows the Central Government to notify a monthly wage for the purposes of computing compensation. The Kerala High Court held that this notified wage is not a ceiling and actual wages can be used.
Did the insurer have to pay interest?
Yes. The Court said the question of a policy exclusion on interest did not arise because the insurer had not pleaded or proved it.
Can an insurer produce new documents in appeal?
Here, the Court rejected the insurer’s request to produce the full policy, noting that the policy schedule was already before the Commissioner and the exclusion was not pleaded.
Conclusion
The Kerala High Court has upheld compensation for the family of a carpenter who died in a fall at work, and confirmed that the notified wage does not cap the wages that can be proved.
Practical takeaway: In employees’ compensation claims, lead evidence of actual wages; insurers must raise any policy exclusion in their written statement and prove it.
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