Sh. Laldaihchhuaka vs Sh. Zothankima & Anr.

Mr. Michael Zothankhuma, J.—Heard Mr. A.R. Malhotra, counsel for the appellant. Also heard Mr. Lalfakawma, counsel for respondent No.

2 i.e. New India Assurance Company Ltd.

The appellant by way of this appeal has challenged the quantum of compensation awarded to the appellant/applicant vide judgment and order

dated 18.9.2015 passed by the Commissioner, Workmen Compensation in WC Case No. 17/2014. The appellant/applicant had been awarded

Rs. 206,660/- with interest @ 9% per annum from the date of filing.

The appellant�s counsel submits that judgment and order dated 18.9.2015 has been challenged on three grounds, namely-

1) Age of the deceased

2) Rate of interest and the effective date for calculation of interest and

3) Quantum of income of the deceased to be considered while applying Section 4 (1)(a) of the Employee�s Compensation Act, 1923.

The appellant�s counsel submits that the Commissioner, Workmen Compensation (�learned Commissioner� in short) has taken the age

of the deceased to be 33 years old on the basis of the Police report and the post mortem examination report. The Police report and the post

mortem examination report having clearly stated that the age of the deceased was 23 years old, the appellant�s counsel submits that the learned

Commissioner has allegedly made an unintentional error or there has been a typographical error in the impugned judgment and order.

The appellant�s counsel also submits that as the age of the deceased as per his Driving Licence is 24 years old, the appellant would not have any

objection if the deceased age is taken to be 24 years of age at the time of his death.

The appellant�s counsel submits that the learned Commissioner has awarded 9% interest from the date of filing of the application. The

appellant�s counsel submits that as per Section 4A of the Employee�s Compensation Act, 1923, the rate of interest cannot be less than 12%

per annum and that the due date for payment of interest has to be calculated w.e.f. the date of the accident. In this regard, the appellant�s

counsel has relied upon the case of Praveenbhai S. Khambhayata v. United India Insurance Company Limited and Others reported in

(2015) 11 SCC 417.

With regard to the question of the due date of payment being the date of accident, the appellant has relied upon the judgment of the Apex Court

in the case of Saberabibi Yakubbhai Shaikh and Others v. National Insurance Company Limited and Others reported in (2014) 2 SCC

298.

The appellant�s counsel submits that while computing the claim of compensation payable to the appellant, the learned Commissioner has

taken Rs. 1000/- to be the loss of dependency by the appellant. The appellant�s counsel submits that as per Section 4 (1)(a) of the

Employee�s Compensation Act, 1923, the loss of dependency of the appellant/applicant has to be taken to be 50% of the monthly wages of the

deceased. The appellant�s counsel submits that as per Section 2 (1)(d)(iii)(b) of the Employee�s Compensation Act, 1923, the appellant

being the father of the deceased, he comes within the definition of dependent and is accordingly entitled to receive compensation as per the

provision of Section 4(1)(a) of the Employees Compensation Act, 1923.

Mr. Lalfakawma, counsel for the respondent No. 2 i.e. Insurance Company submits that there seems to have been some error in the impugned

judgment and Award dated 18.9.2015 passed in WC No. 17/2014 with regard to the age of the deceased. He submits that the Insurance

Company does not have any objection in taking the age of the deceased to be 24 years at the time of his death. With regard to the question of

payment of interest and the due date applicable for payment, the counsel for the respondent No. 2 submits that the interest should be calculated

w.e.f. the date of claim petition as per Section 4A of the Employee�s Compensation Act, 1923.

The counsel for the respondent No. 2 submits that the Employee�s Compensation Act, 1923 having reflected the different degree of

dependency of the appellant/applicant by use of the word �wholly dependent� and �part dependent�, the law makes a difference

between the two.

The counsel for the respondent No. 2 also submits that the evidence on record having clearly reflected the fact that the appellant/applicant

received Rs. 1000/- per month from his deceased son who was earning Rs. 10,000/- per month, the learned Commissioner rightly computed the

compensation payable to the appellant on the basis of the loss of dependency of Rs. 1000/- per month. The counsel for the respondent No. 2 thus

submits that the appellant cannot claim more money than what he is entitled and that though Employee�s Compensation Act, 1923 is a beneficial

legislation, the appellant cannot be allowed to enrich himself unjustly.

Mr. Lalfakawma, learned counsel for the respondent No. 2 submits that as per Sub-Section 5 of Section 8 of the Employee�s

Compensation Act, 1923 (herein after referred to as the 1923 Act), the compensation deposited in respect of the deceased employee has to be

apportioned among the dependents of the deceased as the learned Commissioner thinks fit and that if any money is still left, the same is to be

returned to the person who deposited the amount. He thus submits that as the learned Commissioner has been given the power to apportion the

compensation amount, the same implies that the appellant/applicant can only be given compensation depending upon the amount of dependency.

He submits that as the appellant/applicant was dependent upon the deceased for Rs. 1,000/- per month, the learned Commissioner has correctly

calculated the compensation under Section 4 of the 1923 Act on the basis of amount of dependency, i.e Rs. 1,000/-. In this respect, the counsel

for the respondent No. 2 has relied upon the Judgment of the Apex Court in Oriental Insurance Company Limited v. Dyamavva & Others

reported in 2013 9 SCC 406, wherein, the Apex Court has held at par 13 as follows:

Sub-sections (1) to (3) of Section 8 extracted above leave no room for any doubt that when a workman during the course of his employment

suffers injuries resulting in his death, the employer has to deposit the compensation payable, with the Workmen�s Compensation Commissioner.

Payment made by the employer directly to the dependants is not recognised as a valid disbursement of compensation. The procedure envisaged in

Section 8 of the Workmen�s Compensation Act, 1923 can be invoked only by the employer for depositing compensation with the

Workmen�s Compensation Commissioner. Consequent upon such ""suo moto"" deposit of compensation (by the employer) with the

Workmen�s Compensation Commissioner, the Commissioner may (or may not) summon the dependants of the employee concerned, to appear

before him under sub-section (4) of Section 8 aforesaid. Having satisfied himself about the entitlement (or otherwise) of the dependants to such

compensation, the Commissioner is then required to order the rightful apportionment thereof amongst the dependants, under sub-sections (5) to

(9) of Section 8 of the Workmen�s Compensation Act, 1923. Surplus, if any, has to be returned to the employer

Mr. A.R. Malhotra, learned counsel for the appellant on the other hand submits the procedure under Section 8 of the 1923 Act is applicable

only when the employer Suo Moto deposits compensation in respect of a deceased employee and Section 8 is not attracted in cases whether

money is deposited by the employer after the Award is made by the learned Commissioner as per Section 4 of the 1923 Act. In this regard, he

submits that paras 13 & 17 of the Oriental Insurance Company Limited (Supra), when read together clearly clarifies the point that Section 8 of the

1923 Act is attracted only when the employer acts Suo Moto by depositing compensation in respect of a deceased employee. He also submits

that the question of apportionment arises only when there are more dependents than 1 (one). He also submits that in the present case, there being

only 1 (one) dependent, the learned Commissioner has to follow the provisions of Section 4 of the 1923 Act by taking into consideration the entire

income of the deceased and the amount worked out has to be paid to the appellant/applicant, even if the said amount may be higher than the

amount received by the appellant/applicant during the lifetime of the deceased.

I have heard the learned counsel for the parties. The following substantial questions of law are framed:-

(1) Whether the finding of the learned Commissioner with regard to the age of the deceased Vanlalfela is based on evidence.

(2) Whether the learned Commissioner could have awarded interest which was not in consonance with Section 4A (3)(a) of the Employees

Compensation Act, 1923.

(3) Whether as per Section 4A of the Employees Compensation Act, 1923 the payment of compensation and interest would be from the date of

accident or from the date of the Order of the Ld. Commissioner.

(4) Whether the yard stick applicable towards fixation of amount of compensation under Motor Vehicles Act, 1988 would be applicable to a claim

made under the provision of the Employees Compensation Act, 1923.

On perusal of the Lower Court Record, I find that the learned Tribunal seems to have committed inadvertent error in taking the age of the

deceased to be 33 years old. In view of the fact that the driving license of the deceased shows the deceased to be 24 years old at the time of his

death and as the counsel for the parties have agreed that the age of the deceased should be taken to be 24 years old, this Court holds that the age

of the deceased at the time of his death to be 24 years old.

With respect to what would be the rate of interest applicable in case of default in paying the compensation due under the 1923 Act within one

month from the date it fell due, Sub Section 3 of Section 4A states that the Commissioner shall direct the employer to pay simple interest thereon

at the rate of 12% per annum. The Apex Court in the case of Praveenbhai S. Khambhayata v. United India Insurance Company Limited and

Others (Supra) has held that the legal representatives of the deceased employee are entitled to statutory interest @ 12 % per annum. Accordingly,

the interest is to be calculated @ 12% per annum.

With regard to what would be the due date for payment of compensation under Section 4, Section 4A(1) of the 1923 Act states that

Compensation under section 4 shall be paid as soon as it falls due"" In the case of Saberabibi Yakubbhai Shaikh and Others v. National Insurance

Company Limited and Others (Supra) , the Apex Court held at para 8 & 10 as follows:

We have perused the aforesaid judgment. We are of the considered opinion that the aforesaid judgment relied upon by the learned counsel for

the appellants is fully applicable to the facts and circumstances of this case. This Court considered the earlier judgment relied upon by the High

Court and observed that the judgments in National Insurance Co. Ltd v. Mubasir Ahmed and Oriental Insurance Co. Ltd. V. Mohd. Nasir were

per incuriam having been rendered without considering the earlier decision in Pratap Narain Singh Deo v. Srinivas Sabata. In the aforesaid

judgment, upon consideration of the entire matter, a four-Judge Bench of this Court had held that the compensation has to be paid from the date of

the accident.

In view of the aforesaid settled proposition of law, the appeal is allowed and the judgment and order of the High Court are set aside. The

appellants shall be entitled to interest at the rate of 12% from the date of the accident. No costs.

Thus in view of the law laid down by the Apex Court, the appellant is entitled to statutory interest @ 12 % per annum on the Award from the date

of the accident.

With regard to whether the amount of compensation payable to the appellant has to be computed out of the total monthly wages of the

deceased, i.e. on Rs. 10,000/- per month or on the amount of loss of dependency of the appellant, i.e. Rs.1,000/- , it is necessary to reproduce

Section 4 (1)(a) of 1923 Act, which is as follows :-

(a) where death results an amount equal to (fifty

from the injury percent.)of the monthly wages of

the deceased employee) multiplied

by the relevant factor;

or

an amount of (one lakh and twenty

thousand rupees), whichever is

more;

Though the income of the deceased is Rs. 10,000/- per month, the Ministry of Labour and Employment have issued a notification dated

31.05.2010, which has been published in the Gazette of India dated 31.05.2010 in Part-II, Section 3, Sub-Section (ii) and which is to the

following effect:-

MINISTRY OF LABOUR AND EMPLOYMENT

NOTIFICATION

New Delhi, the 31st May, 2010

S.O. 1258(E)- In exercise of the powers conferred by subsection (1B) of Section 4 of the Employee�s Compensation Act, 1923 (8 of 1923),

the Central Government hereby specifies, for the purposes of subsection (1) of the said section, the following amount as monthly wages, with effect

from the date of publication of this notification in the Official Gazette, namely:-

Eight thousand rupees

[F. No. S-37012/1/2008-S.S.-I (Vol.II)]

S.K. DEV VERMAN, Jt. Secy.

As per the above notification, the income of the deceased has to be taken as Rs. 8000/- p.m.

In the case of National Insurance Co. Ltd. v. Manuhoram Imochouba Sharma & Anr. reported in 2005 3GLT 435, the Division

Bench of this Court has held that para 15, 18 & 21 as follows :-

The answer to the preliminary objection in the above manner leads us to the merits of the appeal. There is no dispute, rather admitted by the

learned counsel for the respondent No.1 that the application was filed by the applicant before the Commissioner as per the provisions of the

Workmen�s Compensation Act, 1923. Section 3 of the said Act deals with the employer�s liability for compensation. Section 4 of the Act

lays down the criteria towards fixation of the amount of compensation. Section 5 deals with the method of calculating the wages. Chapter 3 of the

Act deals with the detailed procedure relating to reference to the Commissioner, their appointments, power and procedure of the Commissioner

etc. The Workmen�s Compensation Act, 1923 is self contained Code having the inbuilt provision relating to payment of compensation by a

certain classes of employers to their workmen of compensation for injury by accident. Section 4 of the Act deals with the procedure relating to the

fixation of amount of compensation.

Admittedly, the applicant/respondent No. 1 did not make a claim under the Motor Vehicles Act, 1988, but he made a claim under the

provisions of the Workmen�s Compensation Act, 1923. As noticed above, the Act of 1923 is a self contained Code and Section 4 of the Act

itself lays down the criteria for fixation of compensation. Thus, the Commissioner was called upon to determine the compensation only as per the

provisions of the Workmen�s Compensation Act, 1923. But while doing so, he fixed the quantum invoking the provisions of Section 163-A of

the Motor Vehicles Act, 1988 which we are of the opinion that the Commissioner could not have invoked.

Altogether different criteria and liability are fixed under both the Acts. While it is the liability of the employer under the provision of

Workmen�s Compensation Act to pay compensation to the workmen on account of death or injury during the course of employment, it is the

liability of the Insurance Company on proved negligence and under the given circumstances specified under the provisions of Motor Vehicles Act,

1988. Thus on this score also the Commissioner could not have fixed the amount of compensation as has been fixed the impugned judgment and

award applying the parameters applicable to a case under the provisions of Motor Vehicles Act, 1988. There was no question of applying the said

provisions on an application made under the Workmen�s Compensation Act, 1923, more particularly, when the said Act of 1923 itself contains

inbuilt provisions towards fixation of the quantum of compensation in respect of the workmen suffering injuries during the course of employment.

The liability of the Insurance Company will be only to the extent of the liability fixed under the provisions of the Workmen�s Compensation Act,

1923 and not in respect of the manner and method in which the Commissioner in the instant case has fixed the liability against the Insurance

Company/appellant applying the provisions of the Motor Vehicles Act, 1988.

In the case of Oriental Insurance Company Limited v. Mohd. Nasir And Another reported in 2009 6 SCC 280, the Apex Court has

held at Para 23, 24 and 53 as follows:

Both the 1923 Act and the 1988 Act are beneficent legislation insofar as they provide for payment of compensation to the workmen

employed by the employers and/or by use of motor vehicle by the owner thereof and/or the insurer to the claimants suffering permanent disability.

The amount of compensation is to be determined in terms of the provisions of the respective Acts. Whereas in terms of the 1923 Act, the

Commissioner who is a quasi-judicial authority, is bound to apply the principles and the factors laid down in the Act for the purpose of determining

the compensation, Section 168 of the 1988 Act enjoins the Tribunal to make an award determining the amount of compensation which appears to

be just.

Both the Acts aim at providing for expeditious relief to the victims of accident. In these cases, the accidents took place by reason of use of

motor vehicles. Both the statutes are beneficial ones for the workmen as also the third parties. The benefits thereof are available only to the persons

specified under the Act besides under the contract of insurance. The statutes, therefore, deserve liberal construction. The legislative intent

contained therein is required to be interpreted with a view to give effect thereto.

The function of the Commissioner is to determine the amount of compensation as laid down under the Act. Even if no amount is claimed, the

Commissioner must determine the amount which is found payable to the workman. Even in the cases arising out of the 1988 Act, it is the duty of

the Tribunal to arrive at a just compensation having regard to the provisions contained in Section 168 thereof.

Thus, the law laid down by the Apex Court in Oriental Insurance Company Limited (Supra) makes it clear that the Commissioner is bound to

apply the principles and the provisions of the 1923 Act while calculating the compensation payable to the appellant/applicant. With regard to the

submission of the learned counsel for the respondent No. 2 that the appellant can only be given compensation depending upon the amount of

dependency, which he received during the life time of the deceased, as per Sub-Section 5 of Section 8 of the 1923, Act, it would be profitable to

refer to the decision of the Apex Court in Oriental Insurance Company Limited (S) wherein, it has held at para 17 that Section 8 of 1923, Act is

attracted only when the employer acts suo moto by way of depositing compensation in respect of a deceased employee. The fact situation in the

present case is completely different. The 1923, Act being a beneficial legislation and as the determination of the compensation has to be made as

per Section 4 of the 1923, Act, the learned Commissioner is bound to make the compensation as per the law laid down by the Apex Court in

Oriental Insurance Company Limited (S).

In the present case, the notification dated 31.05.2010 having clearly stated that monthly wages of the employee is to have a maximum limit of

Rs. 8,000/-, the income of the deceased has to be taken as Rs. 8,000/- per month, even though he was actually earning Rs. 10,000/- per month as

per the evidence adduced. By applying the law laid down by the Apex Court in Oriental Insurance Company Limited (Supra) and by the Division

Bench of this Court in National Insurance Company Limited (Supra), the amount of compensation has to be calculated on an amount equal to 50%

of the monthly wages of the deceased, which in this case would be Rs. 4,000/-. Accordingly, the compensation payable is calculated as per

Section 4(1)(A) of the 1923, Act as follows:

(1) 50% of Rs. 8,000 = Rs. 4,000

(2) The relevant factor of the deceased age of 24 = Rs.

years old 218.47

(3) Funeral expenses as per Section 4 (4) of the = Rs. 5,000

1923, Act

Accordingly, the compensation payable is as follows:

(1) Rs. 4,000 x 218.47 = Rs.

873880

(2) Funeral Expenses = Rs. 5,000

Total = Rs.

878880

The respondent No. 2 i.e. New India Assurance Company Limited is to deposit the above amount of Rs. 8,78,880/- with interest @ 12%

from the date of the accident with the learned Commissioner, Employees Compensation, for onward disbursement to the appellant/applicant. The

above said amount should be deposited within a period of 3 (three) months from the date of receipt of a certified copy of this Order.

The Judgment & Award dated 18.09.2015 passed by the learned Commissioner, Employees Compensation, Aizawl, Mizoram is modified to

the extent indicated above.

The appeal is allowed. Send back the LCRs.