New India Assurance Co. Ltd. vs Lakshmi and Others

Ratnam, J.—This appeal, at the instance of the New India Assurance Company Limited, has been preferred against the award of the Motor

Accidents Claims Tribunal (V Addl. Sub. Court), Tiruchirappali in M.C.O.P. No. 267 of 1983. The 6th respondent herein owned a tractor PTL

8009 and a trailer PTL 8063 and they had been insured with the appellant. On 4.6.1983, one Kaliamurthy, husband of the 1st respondent and

father of respondents 2 to 5, who was employed as a loadman, was proceeding in the trailer, to go to the fields to lift a load of sugarcane at that

time, an accident took place resulting in Kaliamurthy falling down and the trailer running over and killing him instantaneously. The case of

respondents 1 to 5 was that Kaliamurthy lost his life owing to the rash and negligent driving of the tractor and the trailer belonging to the 6th

respondent by its driver and in respect of that, compensation in a sum of Rs. 50,000 should be awarded to them. This claim was repudiated by the

6th respondent on the ground that the driver of the tractor drove it cautiously and carefully and that deceased Kaliamurthy was employed only as a

cleaner and the liability to pay compensation in respect of the death of Kaliamurthy would be that of the appellant. The amount of compensation

claimed was also characterised to be excessive. The appellant repudiated the claim of the respondent 1 to 5 contending that the 6th respondent

was liable to pay compensation, as under the terms of the policy, the Insurance Company was not liable to pay compensation in respect of

passengers carried in the tractor. Further, the appellant also disputed its liability to pay the compensation, as claimed by respondents 1 to 5.

1(a) Before the Tribunal, on behalf of the respondents 1 to 5, Ex.A1 was marked and the 1st respondent and another were examined as P.Ws.1

and 2, while, on behalf of the appellant and the 6th respondent, Exs.B1 to B11 were filed and the 6th respondent and another gave evidence as

R.Ws.1 and 2. On a consideration of the oral as well as documentary evidence, the Tribunal found that the accident resulting in the death of

Kaliamurthy took place only on account of the rash and negligent driving of the tractor and the trailer by the driver of the 6th respondent and that

the deceased was employed under the 6th respondent as a loadman and not as a cleaner. Considering the terms of the policy, Ex.B1 (same as

Ex.B11), the Tribunal found that the appellant was liable to pay compensation to respondents 1 to 5 in accordance with the provisions of the

Workmen''s Compensation Act and for computing the compensation payable, the Tribunal took into account the age of the deceased at 35 at the

time of the accident and applying S. 4 and Schedule IV to the Workmen''s Compensation Act, as amended by Act 22 of 1984, determined the

compensation awardable to respondents 1 to 5 in a sum of Rs. 23,647.20 and directed the appellant to pay that amount. It is the correctness of

the award so passed that is questioned in this appeal.

The only contention urged by learned Counsel for the appellant was that the right of respondents 1 to 5 to claim compensation in respect of the

death of Kaliamurthy arose on the day on which the accident took place, viz., 4.6.1983 and the quantum of compensation awardable to

respondents 1 to 5 under the provisions of the Workmen''s Compensation Act (hereinafter referred to as the Act) got fixed and determined on the

basis of Section 4and Schedule IV as the then stood and the Tribunal was in error in having applied Section 4 and Schedule IV of the Act, as

amended by Act 22 of 1984, which was operative from 1.7.1984 to quantify the compensation payable to respondents 1 to 5 , in respect of an

accident that took place on 4.6.1983. Reliance in this connection was placed by learned Counsel for appellant upon the decisions in Oriental Fire

and Genl. Ins. Co. Ltd. Vs. Bidi and Others, Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, ; Padma Srinivasan Vs. Premier

Insurance Company Limited, ; Kochu Velu Vs. Purakkattu Joseph and Others, ; General Manager, Western Railway Vs. Lala Nanda Motilal Vs.

Thakurdas, ; U.P. State Transport Corporation Vs. Abdul Hameed, and Singareni Collieries Company Ltd. Vs. Commissioner for Workmen''s

Compensation and Another Based on the principles laid down in the aforesaid decisions, learned Counsel for the appellant further submitted that

the liability of the appellant would only be Rs. 18,000 and nothing more. On the other hand learned Counsel for respondents 1 to 5 contended that

the provisions of the Act are intended for the benefit and welfare of the workmen injured in the course of employment and its provisions ought to

receive an interpretation beneficial to the workmen, and, therefore, the view taken by the Tribunal on the quantum of compensation cannot be

taken exception to. It was also further contended that at the time when the Tribunal passed the award, amended Section 4 and Schedule IV to the

Act had come into force and that had been given effect to by the Tribunal and therefore, no infirmity attached to the qualification of the

compensation.

Before proceeding to consider the rival contentions put forward, it would be necessary to advert to Section 3 of the Act, which fixes the liability

of the employer for payment of compensation to workmen injured in an accident arising out of and in the course of his employment. Thereunder,

the liability of the employer to pay compensation is accordance with the provisions of Chapter II of the Act arises, when personal injury is caused

to a workman by an accident arising out of and in the course of his employment. In this case, deceased Kaliamurthy had been found by the

Tribunal to be a loadman, who had worked under the 6th respondent and lost his life, in the course of his employment as such workman. The

liability of the 6th respondent for payment of compensation for the the accident took place, in which deceased Kaliamurthy sustained injuries and

later died. However, the qualification remains to be done in accordance with the provisions applicable thereto, as on the date on which the

accident took place and in which the workman received injuries. Even so, having regard to the procedure laid down in the Act, for the computation

of the compensation, instant computation is not possible and necessarily, therefore, there is bound to be a time interval between the sustaining of

the injuries by the workman in the course of his employment and qualification of the compensation in accordance with the provisions of the Act and

the Schedule and its award either to the concerned workman or to his dependents. It would indeed be an ideal state of affairs, if compensation of

the injuries sustained by a workman in the course of his employment, is determined even on the very day of accident and made available to the

workman by the employer, but that is not possible, if the procedure laid down in the Act is rigidly adhered to, and there are bound to be

procedural delays. Meanwhile, if there is an alteration in the liability of the employer either under the provisions of the Act or under the schedule,

the employer cannot be subjected to such variations, as the right to secure compensation in respect of the injuries sustained by a workman in the

course of his employment, as well as the quantum, got crystalised, even on the date of the accident, though the qualification is delayed. By the

application of the amended Section 4 and Schedule IV of the Act in the instant case, it is seen that an additional or extra liability for payment of

compensation is fastened upon the employer in respect of the injuries sustained by the workman in the course of his employment and in the

absence of any clear or specific provision that the amended Section 4 and Schedule IV would be applicable, resulting in an increase in the liability

of the employer to pay compensation, it is difficult to apply the amended Section 4 of the Act, viz., Act 22 of 1984 or the amended schedule IV,

imposing a greater burden on the employer, for no fault of his. In view of the foregoing considerations, it follows that the liability of the 6th

respondent to pay compensation for the death of Kaliamurthy, who was a workman under the 6th respondent and who died in the course of his

employment and the quantum thereof, were fixed unalterably under the provisions of the Act and the schedule, as they stood on 4.6.1983, when

the accident took place. By the Workmen''s Compensation (Amendment) Act, 1934 (Act 22 of 1984), Section 4 and schedule IV were amended

and u/s 1(2) of the amending Act. The provisions of the amending Act came into force on 1.7.1984 by means of a notification in the Official

Gazette. There is no indication in the provisions of the amending Act that the amendments were intended to apply to proceedings, which were

pending on 1.7.1984. No doubt, u/s 3 and Section 7 of the Act 22 of 1984, it has been provided that Section 4 and Schedule IV of the principal

Act, Section 4 and Schedule IV amended, shall be substituted, but such substitution also, in the absence of a specific provision in that regard,

would only be on and from 1.7.1984 and not from any anterior or earlier point of time. Thus, having regard to the provisions of Act. 22 of 1984

and the scope and ambit of the operation of the provisions therein, it is seen that a proper interpretation of its provisions would be to hold that the

amended Section 4 and schedule IV would be effective and operative for purposes of computing compensation in respect of the injuries sustained

by the workman, during the course of his employment, on and after 1.7.1984 and not earlier.

Considering the nature of the liability of the employer to pay compensation in respect of injuries sustained by a workman in the course of his

employment, in Pratap Narain Singh Deo Vs. Srinivas Sabata and Another, , the Supreme Court pointed out that the employer became liable to

pay compensation, as soon as the personal injury was caused to the workman by accident, which arose out of and in the course of his employment

and that it is futile to contend that the claim for compensation did not fall due, till it is determined by the Commissioner by an order u/s 19 of the

Act. This decision clearly establishes that the liability of the employer to pay compensation for the injuries sustained by a workman in the course of

his employment arises when the injury is sustained and the quantum of compensation also should be worked out in accordance with the provisions

of the Act, as they then stand, though the actual qualification may be done at a later point of time after considerable time interval.

Oriental Fire and Genl. Ins. Co, v. Bidi 1972 ACJ 191 dealt with a case of the effect of the amendment to schedule IV of the Act, during the

pendency of proceedings, in respect of the injuries sustained by a workman in the course of his employment. Under the amended provisions, the

dependents were entitled to be paid a higher compensation that on the date of death of the workman under the unamended schedule and the

Tribunal awarded the higher compensation under the amended schedule. While holding that the compensation in accordance with the unamended

schedule alone, which was in force on the date of death of the workman, was payable, it was pointed out that the normal rule of construction of

statutes is that its operation is prospective unless it is made retrospective either expressly or by necessary implication and that rights and liabilities

under the Act, not crystalised on the date of death of the workmen and the making of an application is only a procedural matter and therefore, the

compensation under the unamended schedule alone should be paid. This decision fully supports the stand of the appellant regarding the

applicability of the unamended schedule IV in the matter of determining the quantum of compensation awardable to respondents 1 to 5.

Even in a case where under the terms of the policy, the liability of the Insurance Company was restricted to Rs. 20,000, but a subsequent

amendment to the provisions of the Motor Vehicle Act, increased such liability of the Insurance Company to Rs. 50,000, it was held by the

Supreme Court in Padma Srinivasan Vs. Premier Insurance Company Limited, that the Insurance Company was liable to pay the higher

compensation for, the extent of the liability of the Insurance Company is determined with reference to the date of accrual of the cause of action, i.e.

the date of the accident. The principle of this decision would also reinforce the stand of the appellant that the date of the accident fixes the liability

of the employer and the quantum and not the provisions in force at the time of the quantification of the compensation. Again in Kochu Velu Vs.

Purakkattu Joseph and Others, the question arose whether the amendment of Schedule IV of the Act, which was given retrospective effect from

1.10.1975, would apply in respect of a claim for compensation for the injuries sustained on 16.6.1972 and it was pointed out that the right to

receive compensation arose when the injury was sustained and the law as it then stood, would determine the quantum of compensation and also

the obligation of the employer to pay the same. Referring to Section 6 of the General Clauses Act, the Court pointed out that the rights acquired

and the obligations incurred, would not be affected, unless there was a different intention and that the legislative intent was clear that it did not affect

the rights and obligations acquired prior to that date. Applying this principle to the facts of this case, it follows that when deceased Kaliamurthy

was involved in the accident on 4.6.1983 and received injuries and died later, the liability of the 6th respondent as an employer for payment of

compensation in accordance with the provisions of Section 4 and Schedule IV, as they then stood, got unalterably fixed and determined on that

date and the amended Section 4 and Schedule IV, which came into operation on 1.7.1984, imposing a higher or additional burden on the

employer for payment of compensation, would not be applicable.

General Manager, Western Railway Vs. Lala Nanda dealt with the scope of schedule IV, as amended by Act, 65 of 1976, in the case of

workman, who suffered injuries on 11.10.1971 and the amendment to schedule IV enhanced the compensation payable retrospectively from

1.10.1975. The Commissioner awarded compensation at the enhanced rates effective from 1.10.1975; though the injuries had been sustained on

11.10.1971. It was pointed out by the Allahabad High Court that the liability of the employer got crystalised on the day on which the accident took

place and the injuries are sustained and the computation of liability has also to be made in the light of the existing rates of compensation as found in

Schedule IV at the time when the accident took place. To similar effect is Motilal Vs. Thakurdas, where it had been laid down that the yardstick

for the award of compensation was schedule IV as it stood on the date of the accident and the amended schedule IV could not be adopted for

qualification of compensation. Again in U.P. State Transport Corporation Vs. Abdul Hameed, dealing with the applicability of the amended

schedule IV by Central Act 65 of 1976 effective from 1.10.1975, in respect of an accident that took place on 29.3.1975, it was pointed out that it

would be incongruous to say that the accident took place on 29.2.1975, but that the compensation awarded should be at the rates, which were in

force on and from 1.10.1975, and that would justify the award of compensation as per the provisions of Schedule IV, as they stood in the date of

the accident. In Singareni Collieries Company Ltd. Vs. Commissioner for Workmen''s Compensation and Another the accident took place on

12.8.1979 and compensation in sum of Rs. 26,880 was awarded by the Commissioner. While the employer disputed his liability to pay the amount

determined as compensation, the injured worker took up the stand that he was entitled to the higher compensation as per amended schedule IV of

the Act.

In considering the question whether the claim for higher compensation, as made by the workman, was sustainable on the basis of amended

Schedule IV under the Workmen''s Compensation (Amendment) Act, 1984 (Act 22 of 1984), the Court pointed out that unless there are express

provisions in the amending Act or necessary implications, the amending Act cannot be treated as retrospective, increasing the burden of the

employer. Referring to Section 4 of the Act and Section 3 of the amending Act, the Court laid down that the use of the words ''substituted

provision'' could not be read as if incorporated in the Act since its inception and that the increase in the liability under the amended Section 4 read

with schedule IV would be a pointer in deciding whether the amendment is retrospective or not and the fortuitous mere circumstances that some

matter were pending cannot be taken advantage of by the workmen as against other workmen, whose cases had been decided earlier before the

coming into force of the amending Act. This decision also clearly points out that unless the amending Act expressly or by implication makes the

amendment retrospective in operation, neither amended Section 4 of the Act nor the amended Schedule IV could be pressed into service for the

purpose of claiming entranced compensation thereunder, though the injuries might have been sustained the workman prior to the amendment.

The aforesaid decisions clearly support the stand of the appellant-Insurance Company that compensation should be paid to respondents 1 to 5 at

the rates provided under the unamended schedule IV as on 4.6.1983 when the accident took place and that again, even according to the appellant,

would be Rs. 18,000. It is true that the provisions of the Act have been enacted with a view to make available compensation to injured and

disabled workmen, but the award of such compensation has to be computed and determined within the four corners of the provisions of the Act

and considerations of beneficial legislation or liberal interpretation cannot be permitted to colour the clear intention of the provisions of the Act and

the argument of learned Counsel for respondents 1 to 5 cannot, therefore, be accepted.

Thus, on a due consideration of the facts and circumstances of the case and also the provisions of the unamended and amended Act and

Schedule IV, it has to be held that the Tribunal was in error in having awarded to respondent 1 to 5 a sum of Rs. 23,647/32, when the correct

amount for which the appellant could be made liable was Rs. 18,000 only and this was also not disputed by respondents 1 to 5 and respondents 1

to 5 would therefore, he entitled to this sum of Rs. 18,000 together with interest at 9% p.a. on the sum of Rs. 18,000 from 4.10.1985, till the date

of deposit of the amount before the Tribunal. The C.M.A. is, therefore, allowed in part to the extent indicated and the award of the Tribunal will

stand modified accordingly. There will be no order as to costs.