Food Corporation Of India vs Asharani Sahoo & Ors

The appeal is directed against an order dated October 26, 2018 passed by the Commissioner under the Workmen's Compensation Act, 1923.

Two principal grounds are urged by the appellant-employer: that the tribunal failed to take into account that no compensation was payable in this case since a dependant of the deceased erstwhile workman had been granted compassionate appointment by the employer; and, even if some compensation would still be due, the assessment made by the tribunal is completely awry.

According to the appellant, the purpose of compensating the dependants or the heirs or family members of a deceased workman by the employer is to ensure that the loss of the breadwinner of the family does not affect the day to day life of the family. The appellant says that it is for the selfsame purpose that an 'out of turn' employment is given to a dependant of a deceased workman by way of compassionate appointment. The employer contends that if relief in the form of compassionate appointment has been granted, the dependants or the heirs of the deceased workman no longer qualify to seek compensation under the Act of 1923.

In support of such contention, a judgment reported at (2016) 9 SCC 627 (Reliance General Insurance Company Limited V. Shashi Sharma) is cited. In that case, the heirs of the deceased victim in the motor accident were paid a lump sum amount under a scheme of the Haryana government that provided for compassionate assistance to dependants of deceased government employees. The Supreme Court held that once a lump sum amount had been paid following the death of the victim, and as a consequence of his accidental death, the quantum of compensation that would otherwise be payable under Section 166 of the Motor Vehicles Act would stand reduced to the extent of the one-time grant or financial assistance received.

The dictum in Shashi Sharma steers clear of the ratio decidendi in Helen C. Rebello [(1999) 1 SCC 90], where it was held that merely because the nominees or heirs of a deceased person got a substantial amount under a life insurance policy, it would not disentitle such persons from receiving compensation in respect of the road accident. In Helen C. Rebello, the Supreme Court had held that the life insurance polices had to be seen to operate in a different field, so to say, and the quantum of compensation that would be payable by the offending vehicle or the insurance company which covered the offending vehicle would not be lessened to the extent of the money received under any life policy.

Apart from the fact that accidents mostly take place in the rural areas and the victims are rustics who have scarcely other modes of income or life policies and it is only in the odd case that a well-to-do person suffers a road accident, it is evident that it depends from person to person as to whether such person obtains a life cover or not. It also depends on the financial position of such person and as to the quantum of the life policy. Since a life policy is obtained upon payment of a premium and the life policy is not specific to any motor accident or death as a result thereof, in Helen C. Rebello it was held that the money paid under life policies to the dependants or heirs of a victim in a road accident case would not be taken into account to offset the compensation otherwise due under the provisions of the Act of 1988.

In Shashi Sharma, since the lump sum payment was as a consequence of the accident suffered by the victim, the heirs of the victim could not have unjustly enriched themselves by receiving compensation on pecuniary grounds without taking into account the money otherwise received for the same cause.

It is true that in some cases, the dependants or heirs of a deceased employee get an 'out of turn' opportunity to be given employment on compassionate grounds. However, it is only the opportunity to be appointed which is a consequence of the death or incapacitation of the original employee. The compensation paid to the employee granted employment on compassionate basis is not by way of damages for the accident suffered by the original employee; such compensation is against the services rendered by the employee appointed on compassionate basis and the salary or perquisites made available to such employee cannot be treated as damages or compensation to the family.

It must also be noticed that the compassionate appointment in this case was a result of the service conditions that covered the victim in this case. It was not obligatory on the part of the employer to extend compassionate appointment to the dependants or heirs of its deceased employees who died in harness. But merely because such a service condition exists, it would not imply that the compensation due under the Motor Vehicles Act for a road accident would have to be offset by some amount as a result of compassionate appointment being given to a dependant or heir of the deceased employee.

It is now that the quantum awarded is corrected. It is apparent on the face of the impugned award that the tribunal erred in granting the huge quantum of compensation without noticing the cap as to the compensation that can be granted under the Act of 1923. The parties here agree that the multiplying factor or the factor under the Act of 1923 that would operate in this case is 139.13. Thus, 50 per cent of the maximum permissible amount of Rs.8,000/- multiplied by 139.13 would be the quantum of compensation. Such amount works out to Rs.5,56,520/-.

In addition, the respondents herein are entitled to interest in accordance with the Act of 1923 at the rate of 12 per cent per annum simple from a month after the accident till payment. Such interest on the sum of Rs.5,56,520/- works out to Rs.5,47,067.00 as on date. Thus, the total amount due is Rs.11,03,587.00 together with interest at the rate of 12 per cent per annum on the principal sum of Rs.5,56,520/- from today till the date of payment. It is hoped that the entire payment will be cleared by the employer within a month from date. Upon the Commissioner being satisfied that the entire amount due in terms of this order has been paid by the employer to the respondents herein, the Commissioner should direct refund of the deposit made by the employer in the office of the Commissioner.

It is submitted by the respondents that the third respondent is now married and the fifth and sixth respondents have been described by their nick names and not their formal names. It will be open to the respondents to bring an appropriate application before the Commissioner for the Commissioner to take cognizance of such facts, if necessary.

FMA 188 of 2019 along with CAN 846 of 2019 and CAN 6606 of 2019 are disposed of.

There will be no order as to costs.

Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.