SHANTILATA SETHY AND ANOTHER versus M/S DIVISIONAL MANAGER, THE NEW INDIA INDIA ASSURANCE COMPANY LIMITED AND ANR. on 11 December 2021

[2021] 12 S.C.R. 145

SHANTILATA SETHY AND ANOTHER

v.

M/S DIVISIONAL MANAGER, THE NEW INDIAINDIA ASSURANCE COMPANY LIMITED AND ANR.

(Civil Appeal Nos. 7657-7658 of 2021)

DECEMBER 11, 2021

[DR. DHANANJAYA Y CHANDRACHUD ANDA. S. BOPANNA, JJ.]

Workmen’s Compensation Act, 1923: s.4 – Victim-deceasedwas working as a helper in a truck belonging to second respondent-employer – On the fateful day, while helper was makingarrangements for loading of rice bags, the driver of the truckallegedly lost control of truck and dashed into the helper who struckagainst a tree on the side of road – He succumbed to his injuriesnext day – Parents of the deceased filed claim petition under the1923 Act – Deceased was 24 years old at the time of accident andwas receiving a salary of Rs. 2400 per month and Rs. 25/- everydaytoward food expenses – Commissioner held that in terms of s.4 ofthe Act, where the death of a workman results from an injury,compensation shall be an amount equal to fifty percent of themonthly wages of the deceased multiplied by the relevant factor –The relevant factor for 24 years being 218.47, Commissionerdetermined compensation at Rs.2.64 lacs – First respondent wasdirected to pay compensation along with interest at 12% p.a. fromthe date of accident till realization – High Court modified the awardby reducing the compensation to Rs.1.98 lacs – High Courtproceeded on the basis that there was no material on the record toindicate that the monthly salary of the deceased at the time of deathwas Rs.2,400 – High Court consequently proceeded on the basis ofa minimum wage of Rs.910, to which a multiplier of 218.47 wasapplied resulting in a recomputed compensation of Rs 1.98 lacs –On the point of interest, High Court held that there was no provisionin the Act to grant interest on the compensation from the date of theaccident – Subsequently, the payment of interest was reduced from12% to 8% from the date of award till realization – Instant appealfiled by parents of deceased – Held: The claim was not disputed by

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Athe employer – There was absolutely no basis for the High Court toreduce the award on the ground that there was no material toestablish the salary that the deceased was earning at the time of theaccident – There was no justification for the insurer to take a matterinvolving such a paltry sum of compensation based on the facts ofthe case to the High Court and to allow a poor farmer and his wifeBwho have already lost the solace of an earning member of the familyinto a long drawn out litigation – Rs.25 that was paid by as foodexpense by the employer would fall within the ‘special expensesthat he is entitled to by the nature of his employment’ which isspecifically excluded by the provision – Therefore, the totalCcompensation to be paid is as follows: (50% of 2400) x 218.47=Rs. 2,62,164 – First respondent is directed to pay said amount alongwith an interest of 12% from the date of accident till it is realised –In addition, the appellants shall be entitled to costs quantified at Rs1 lakh towards for meeting their costs and expenses of theproceedings which have been conducted in the courts below.D

Disposing the appeals, the Court

Conclusion

Disposing the appeals, the Court

HELD: 1. Families of the victims of motor accidents cannotrealize rights under law so long as litigation continues to be astratagem and source of harassment and torture. In the presentEcase, the claim was on the basis that the deceased was earningan amount of Rs 2,400 per month. The claim was not disputed bythe employer. There was absolutely no basis for the High Courtto reduce the award on the ground that there was no material toestablish the salary that the deceased was earning at the time ofFthe accident. There was no ground to proceed on the basis of theminimum wage, particularly when there was nothing untoward orexaggerated in the claim for compensation based on the salarywhich was earned by the deceased. The second respondent hasin his written statement and affidavit, stated that the deceasedhelper was receiving a salary of Rs 2400/month. This statementGhas not been discredited. The deceased was an informal worker,who was working as a helper in a transport business under thesecond respondent, earning a meagre wage of Rs. 2400 at thetime of the accident. Such employees are not provided receiptson the payment of wages, nor can it be reasonably assumed that H

the employer would maintain receipts for the payment of wagesto his employees. [Paras 7, 8][150-C-G]

2. There was no justification for the insurer to take a matterinvolving such a paltry sum of compensation based on the factsof the case to the High Court and to allow a poor farmer and hiswife who have already lost the solace of an earning member ofthe family into a long drawn out litigation. The judgment and orderof the High Court would have to be set aside. Section 2(m) of theAct defines ‘wages’ to include “any privilege or benefit which iscapable of being estimated in money, other than a travellingallowance or the value of any travelling concession or acontribution paid by the employer of a *[employee] towards anypension or provident fund or a sum paid to a *[employee] to coverany special expenses entailed on him by the nature of hisemployment”. Therefore, Rs 25 that was paid by as food expenseby the employer would fall within the ‘special expenses that he isentitled to by the nature of his employment’ which is specificallyexcluded by the provision. [Paras 9, 10][150-G-H; 151-A-C]

North East Karnataka Road Transport Corporation vsSujatha (2019) 11 SCC 514 : [2018] 13 SCR 1043 –referred to.

Case Law Reference

[2018] 13 SCR 1043referred toPara 6

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.7657-7658 of 2021.

From the Judgment and Order dated 30.11.2018 of the High Courtof Orissa, Cuttack in FAO No.305 of 2016 and Order dated 01.02.2019in Review Petition No.261 of 2018 in FAO No.305 of 2016.

Anirudh Sanganeria, Adv. for the Appellants.

Abhishek Gola, Viresh B. Saharya, Akshat Agrawal, AnshulMehral, Advs. for the Respondents.

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AThe Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD J.

1. Leave granted.

2. These appeals arise from the judgments of a Single Judge ofBthe High Court of Odisha in FAO No 305 of 2016 dated 30 November2018 and in Review Petition No 261 of 2018 dated 1 February 2019.

3. The facts of the case are as follows: The deceased workman,who is the son of the appellants, was working as a helper in a truckbearing registration No OR – 04 A 1225 belonging to the secondCrespondent, who was his employer. The truck was insured with the firstrespondent. At 11 am on 30 October 2004, when the truck was carryinggoods from Paradeep to Jadupurgoda, the driver negotiated with a personto carry back thirty bags of rice to Chandikhol on its return trip. Thedriver instructed the deceased helper to get down from the truck andmake necessary arrangements for loading of the rice bags. The driverDof the truck is alleged to have lost control of the truck and dashed intothe helper who struck against a tree on the side of the road. The workmansuccumbed to his injuries on 1 November 2004.

4. The appellants filed an application before the Court ofCommissioner[1] claiming a compensation of Rs. 3,00,000 under theEprovisions of the Workmen’s Compensation Act 1923[2]. The deceasedwas twenty-four years old at the time of the accident and was receivinga salary of Rs. 2400/- per month, and Rs. 25/- everyday towards foodexpenses. The amount was admitted by the employer. The claim forworkman’s compensation was disposed of on 29 February 2016. It wasFobserved that any special expense paid to the employee by nature of hisemployment is covered within the meaning of ‘wages’ under Section2(m) of the Act. Therefore, the total monthly wages at the time of theaccident were calculated to be Rs.2425/month. According to Section 4of the Act, where the death of a workman results from an injury, thetotal amount of compensation shall be an amount equal to fifty percentGof the monthly wages of the deceased multiplied by the relevant factor.According to the IVth Schedule of the Act, the relevant factor for 24years is 218.47. The total computation was calculated to be as follows:

1 Case No. 273-D/2004

H2 “The Act”

(50% of 2425) X 218.47 = Rs.2,64,898.87. The first respondent wasdirected to pay a compensation of Rs. 2,64,895/- along with interest at12% p.a. from the date of accident till realization.

5. On appeal, the High Court by its judgment dated 30 November2018, modified the award by reducing the compensation to Rs 1,98,807.70and the interest from 12% to 8% from the date of the award till realization.The High Court has, while reducing the claim for compensation, proceededon the basis that there was no material on the record to indicate that thesalary of the deceased at the time of death was Rs 2,400 per month.The High Court consequently proceeded on the basis of a minimumwage of Rs 910, to which a multiplier of 218.47 was applied resulting ina recomputed compensation of Rs 1,98,807.70. On the point of interest,the Court held that there is no provision in the Act to grant interest on thecompensation from the date of the accident. Subsequently, the paymentof interest was reduced from 12% to 8% from the date of award tillrealization. The review filed against the judgment was dismissed by anorder dated 1 February 2019.

6. On behalf of the appellant, it has been submitted that the HighCourt has completely failed to consider that the award of interest isgoverned by Section 4(A) of the Act. Moreover, it has been submittedthat the issue has been considered by this Court in North East KarnatakaRoad Transport Corporation vs Sujatha[3], where it has been held:

“20. …...The question as to when does the payment ofcompensation under the Act “becomes due” and consequentlywhat is the point of time from which interest on such amount ispayable as provided Under Section 4-A (3) of the Act remains nomore res integra and is settled by the two decisions of this Court.

21. As early as in 1975, a four Judge Bench of this Court in PratapNarain Singh Dea v. Srinivas Sabata and Anr. MANU/SC/0021/1975: (1976) 1 SCC 289 : AIR 1976 SC 222 speaking throughSinghal, J. has held that an employer becomes/liable to paycompensation as soon as the personal injury is caused to theworkman in the accident which arose out of and in the course ofemployment. It was accordingly held that it is the date of theaccident and not the date of adjudication of the claim, which ismaterial.”

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A7. The appeals before this Court indicate the manner in which thelitigation process can drag on for years. In consequence, a poor farmingfamily is lost in a long drawn out battle to secure a paltry compensationof Rs 2,64,895 awarded by the Commissioner of Labour under the Actfor the death of their son for an accident which took place in 2004. Afterthe Commissioner awarded compensation, the parents of the deceasedBworkman had to initially defend the proceedings brought by the insurerbefore the High Court and thereafter pursue their own challenge to thejudgment of the High Court before this Court. When will a high andmighty state owned insurance company realize its social conscience?Our conscience has been deeply disturbed by the manner in which aCfarmer and his spouse have been left to the mercies of legal procedure.Should the insurer have dragged the parents to the High Court over theaward of Rs 2.64 lakhs for the death of their wage earning son? It istime that there is a fundamental rethink on this. Families of the victimsof motor accidents cannot realize rights under law so long as litigationcontinues to be a stratagem and source of harassment and torture.D

8. In the present case, the claim was on the basis that the deceasedwas earning an amount of Rs 2,400 per month. The claim was not disputedby the employer. There was absolutely no basis for the High Court toreduce the award on the ground that there was no material to establishthe salary that the deceased was earning at the time of the accident.EThere was no ground to proceed on the basis of the minimum wage,particularly when there was nothing untoward or exaggerated in theclaim for compensation based on the salary which was earned by thedeceased. The second respondent has in his written statement andaffidavit, stated that the deceased helper was receiving a salary of Rs F2400/month. This statement has not been discredited. The deceasedwas an informal worker, who was working as a helper in a transportbusiness under the second respondent, earning a meagre wage of Rs.2400 at the time of the accident. Such employees are not provided receiptson the payment of wages, nor can it be reasonably assumed that theemployer would maintain receipts for the payment of wages to hisGemployees. There was no reason for the High Court to observe thatthere was no material to establish the wages paid.

9. As a matter of fact, we are clearly of the view that there wasno justification for the insurer to take a matter involving such a paltrysum of compensation based on the facts of the case to the High CourtH

and to allow a poor farmer and his wife who have already lost the solaceof an earning member of the family into a long drawn out litigation.Thus, and for the reasons that we have indicated, we are of the viewthat the judgment and order of the High Court would have to be setaside. Section 2(m) of the Act defines ‘wages’ to include “any privilegeor benefit which is capable of being estimated in money, other than atravelling allowance or the value of any travelling concession or acontribution paid by the employer of a *[employee] towards any pensionor provident fund or a sum paid to a *[employee] to cover any specialexpenses entailed on him by the nature of his employment”. Therefore,Rs 25 that was paid by as food expense by the employer would fallwithin the ‘special expenses that he is entitled to by the nature of hisemployment’ which is specifically excluded by the provision. Therefore,the total compensation to be paid is as follows: (50% of 2400) x 218.47=Rs. 2,62,164. The first respondent is directed to pay Rs. 2,62,164 alongwith an interest of 12% from the date of accident till it is realised.

10. In the event that the insurer has paid any part of thecompensation that has fallen due in pursuance of the order of theCommissioner of Labour, that shall be given due credit for in computingthe balance which is due and payable. The balance shall be paid over tothe appellants within a period of one month from the date of this order.The Commissioner shall personally ensure that the amount is paid overto the appellants. In addition, the appellants shall be entitled to costsquantified at Rs 1 lakh towards for meeting their costs and expenses ofthe proceedings which have been conducted in the courts below.

11. The appeals are allowed in the above terms.

12. Pending applications, if any, stand disposed of.

Devika Gujral

Appeals disposed of.

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