K SIVARAMAN & ORS. versus P SATHISHKUMAR & ANR. on 13 February 2020

1. This appeal arises from a judgment of a Division Bench of theMadurai Bench of the Madras High Court dated 1 June 2017. In anappeal arising from a decision of the Deputy Commissioner forEmployee’s Compensation, the High Court enhanced the compensationpayable under the Employee’s Compensation Act 1923[1] fromRs. 4,33,060 to Rs. 8,86,120. The High Court has awarded interest atthe rate of 12% per annum from the date of the accident.

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2. In the present proceedings which have been instituted underArticle 136 of the Constitution, notice was issued on 26 July 2019. Sincethe appellants were represented by the first appellant in person, thisCourt, by its order dated 26 July 2019, directed that an amicus curiaebe nominated by the Supreme Court Legal Services Committee.Accordingly, Mr. S Mahendran, learned counsel, has been nominated asthe amicus curiae, whom we have heard in support of the appeal.

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3. The appellants are the father, mother, sister and brother ofDinesh Kumar, who died in the course of an accident on 31 January2008. On the date of the incident, the deceased was 26 years of age andwas engaged as a driver of a trailor lorry. While the vehicle was beingdriven on NH 12 in Kota, Rajasthan, a truck bearing registration No.MH 19 Z 1696 came from the opposite direction and dashed against thetrailor, resulting in the death of Dinesh Kumar. At the time of the accident,the deceased was in the employment of the first respondent. A claimunder the 1923 Act was lodged before the Deputy Commissioner forEmployee’s Compensation, Madurai on 29 April 2013. On 26 March2014, the claim was allowed by an award in the amount of Rs. 4,33,060.

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1 ‘‘1923 Act’’

AThe Deputy Commissioner had proceeded ex parte. The appellants filedan appeal[2] before the Madras High Courtfor enhancement of thecompensation.

4. The High Court, by its judgment dated 23 November 2015,remanded the proceedings to the Deputy Commissioner for determinationBafresh. While remanding the proceedings, the High Court noted thatthough the appellants had filed a salary certificate as Exhibit P5 to establishthat the monthly income of the deceased was Rs. 32,000, no witnesswas examined on behalf of the employer to prove the salary certificate.However, acceding to the request of the appellants that they should befurnished with an opportunity to examine the employer’s witness inCsupport of Exhibit P5, the High Court considered it in the interests ofjustice to remand the proceedings.

5. On remand, the Commissioner for Workmen’s Compensation,Madurai, by an order dated 4 March 2016, maintained the award ofcompensation in the amount of Rs. 4,33,060. Before the Commissioner,Don remand, the appellants examined PW2, the owner of the vehicle whichwas being driven by the deceased. During the course of his evidence, hestated as follows:

“I am the 1[st] respondent in this case under W.C. CaseNo.74/2011 is under tail in this court is known to me. IEreceived summons 3 times from the court. For the last twosummons, as my own lorries were working in the otherstates and I also have to go there, I was unable to comeand adduce witness for the court summon. The accidentplatform trailor lorry TN 28 AB 1933 belongs to Sathishkumar. The deceased Dinesh Kumar S/o Sivaraman workedFas a driver. In 2008, (31.1.2008) when going to Pandicherito Rajasthan Sironi before Kotta town the opposite comingtarras lorry dashed face to face and caused accident. Assoon as the accident occurred in the same occurrence placeDinesh Kumar died. Before accident he worked for aboutG3 years. He was having proper driving license. He washaving license for driving heavy vehicles. The Ex.P.5monthly pay certificate was issued by me. In it, for deceasedDinesh Kumar I was paying Rs. 32,000 per month (includingfood expenses) but pay of Rs. 25,000. The vehicle involvedHin the accident has been properly insured with2 CMA (MD) 344 of 2014

2[nd] respondent company of M/s Reliance General InsuranceCompany. At the time of accident, the insurance was incurrent.”

6. The Commissioner, however, proceeded on the basis that interms of the notification issued under Section 4(1B) of the 1923 Act,whatever be the monthly pay received by a person, the jurisdiction ofthe adjudicating authority was subject to a ceiling of Rs. 4,000 per monthin computing the monthly wages of the employee. Taking the monthlysalary at Rs. 4,000, the Commissioner applied a multiplicand of 215.28 interms of Schedule IV (the deceased being 26 years of age) and arrivedat a figure of Rs. 4,30,560 to which an additional amount of Rs 2,500was added towards funeral expenses. A total award in the amount ofRs. 4,33,060 was decreed as the compensation payable to the appellants.

7. In an appeal filed before the High Court, the Division Benchtook note of the fact that in pursuance of the order of remand, the salaryof deceased employee had been proved to be Rs. 32,000 per month.The High Court noticed that though the accident had taken place on 31January 2008, the petition for compensation had been lodged on 28January 2011 and was decided by the Commissioner on 4 March 2016.

8. In the meantime, a notification was issued by the CentralGovernment on 31 May 2010 in the following terms:

“S.O.1258(E) – In exercise of the powers conferred by sub-section(1B) of Section 4 of the Employee’s Compensation Act, 1923, (gof 1923), the Central Government hereby specified, for the purposeof Sub-Section (1) of the said section, the following amount asmonthly wages, with effect from the date of publication of thisnotification in the official gazette, namely – Eight thousand rupees.”

9. The High Court was of the view that having due regard to thefact that the legislation in question is a social welfare legislation, theenhanced income of Rs 8,000 per month should form the basis of thecomputation. Thus, applying the multiplicand in terms of Schedule IV,the High Court enhanced the compensation to Rs. 8,86,120.

10. In appeal before this Court, the learned amicus curiae urgedthat both the Commissioner and the High Court have erred - theCommissioner having adopted a figure of Rs. 4,000 per month and theHigh Court, Rs. 8,000 per month. The learned amicus curiae submittedthat in terms of the provisions of Section 4(1)(a) of the 1923 Act, where A

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Adeath has resulted from injury, the compensation payable is an amountequal to fifty per cent of the monthly wages of the deceased employeemultiplied by the relevant factor. The relevant factor is specified inSchedule IV and for the deceased who was 26 years old on the date ofthe accident, the multiplicand would be 215.28. The learned amicuscuriae submitted that under sub-section (1B) of Section 4, the CentralBGovernment is empowered to issue a notification specifying, for thepurposes of sub-section (1), the monthly wages in relation to an employeeas it may consider necessary. However, it was submitted that thenotification does not impose a cap or ceiling on the monthly wages whichform the basis of calculating the compensation due and payable. WhereCthe actual wages of an employee are proved to be in excess of theamount which is specified in the notification, there is no bar in adoptingthe monthly wages so proved in terms of Section 4(1)(a). The learnedcounsel buttressed this submission by adverting to Act 45 of 2009, whichtook effect from 18 January 2010 and deleted the deeming provision inExplanation II to Section 4[3]. Moreover, it was urged by the learnedDamicus curiae that the method of calculating wages is specified in Section5. It was urged that clause (a) of Section 5 will be attracted to thepresent case where the employee was, during a continuous period of notless than twelve months immediately preceding the accident, in the serviceof the employer.E

11. The learned amicus curiae, at a belated stage, sought todistinguish the judgments of this Court in Pratap Narain Singh Deo vSrinivas Sabata[4](“Pratap Narain Singh”)and Kerala State ElectricityBoard v Valsala K[5](“Valsala”)in which it was held that the date relevantfor the determination of compensation payable under the 1923 Act is the Fdate of the accident and that the benefit of an amendment enhancing theamount of compensation shall not apply to accidents that take placeprior to its coming into force. To support this, the amicus curiae reliedon the judgments of this Court in New India Assurance Company G

3 “Explanation II – Where the monthly wages of a workman exceed four thousandrupees, his monthly wages for the purposes of clause(a) and clause(b) shall be deemedto be four thousand rupees only.”

4 (1976) 1 SCC 289H5 (1999) 8 SCC 254

Ltd. v Neelakandan (“Neelakandan”),[6] and National Insurance CoLtd. v Mubasir Ahmed[7](“Mubasir Ahmed”).

12. Section 4(1)(a) of the Act contains the following provision:

“4. Amount of compensation.—(1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:—

(a) where death resultsan amount equal to fifty per cent of the from the injurymonthly wages of the deceasedemployee multiplied by the relevantfactor;

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an amount of one lakh and twenty

thousand rupees, whichever is more;”

13. The proviso to the above provision stipulates that the CentralGovernment may, by notification in the Official Gazette, from time totime, enhance the amount of compensation mentioned in clauses (a) and(b). Clause (b) deals with a case involving permanent total disablementresulting from the injury. The expression “relevant factor” is defined inExplanation I to be the factor specified in Schedule IV. Prior to Act 45of 2009, Section 4 contained Explanation II, which was in the followingterms:

“Explanation II – Where the monthly wages of a workman exceedfour thousand rupees, his monthly wages for the purposes ofclause(a) and clause(b) shall be deemed to be four thousand rupeesonly.”

14. By Act 45 of 2009, which came into force on 18 January2010, Explanation II came to be deleted. Sub-section (1B) was introducedin Section 4 to read as follows:

“(1-B) The Central Government may, by notification in the OfficialGazette, specify, for the purposes of sub-section (1), such monthlywages in relation to an employee as it may consider necessary.”

15. The question before this Court is whether the benefit of Act45 of 2009 deleting the deeming provision in Explanation II which capped 6 Civil Appeal Nos. 16904-09 of 1996

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Athe monthly wages of an employee at Rs 4,000 would also apply toaccidents which took place prior to the coming into force of its provisionsi.e. 18 January 2010 and where final adjudication is pending. In assessingwhether the Act 45 of 2009 applies retrospectively, it is necessary toanalyze the relevant precedents of this Court. In Pratap Narain Singh,the first respondent was in the employment of the appellant and sufferedBinjuries which arose out of and in the course of employment. It wascontended that the Commissioner committed an error of law in imposinga penalty on the appellant under Section 4A(3) of the 1923 Act as thecompensation payable had not fallen due until it was ‘settled’ by theCommissioner under Section 19 of the 1923 Act. Section 4A reads:C“4A. Compensation to be paid when due and penalty for default.-

(1) Compensation under section 4 shall be paid as soon as it fallsdue.

(2) In cases where the employer does not accept the liability forDcompensation to the extent claimed, he shall be bound to makeprovisional payment based on the extent of liability which heaccepts, and, such payment shall be deposited with theCommissioner or made to the employee, as the case may be,without prejudice to the right of the employee to make anyfurther claim.E

(3) Where any employer is in default in paying the compensationdue under the Act within one month from the date it fell due,the Commissioner shall –

(a) Direct that the employer shall, in addition to the amount ofFthe arrears, pay simple interest thereon at the rate oftwelve percent per annum or at such higher rate notexceeding the maximum of the lending rates of anyscheduled bank as may be specified by the CentralGovernment, by notification in the Official Gazette, on theamount due; and G

(b) If, in his opinion, there is no justification for the delay,direct that the employer shall, in addition to the amount ofarrears and interest thereon, pay a further sum notexceeding fifty per cent of such amount by way ofpenalty…”

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16. In terms of Section 4A(1), compensation under Section 4 ispayable “as soon as it falls due.” Section 4A(2) contemplates a situationwherein the employer, though accepting the liability to pay compensationto the injured employee, disputes the quantum of compensation payable.In such cases, sub-section (2) enjoins the employer to make a provisionalpayment based on the extent of accepted liability by depositing it withthe Commissioner or by paying it directly to the employee. Section 4A(3)stipulates that where an employer defaults in paying compensation withinone month from the date on which it falls due, the Commissioner isempowered to direct the payment of interest as well as an additionalamount as arrears for an unjustifiable delay in making payment. Section19 of the Act reads:

“19. Reference to Commissioners.- (1) If any question arises inany proceedings under this Act as to the liability of any person topay compensation (including any question as to whether a personinjured is or is not an employee or as to the amount or duration ofcompensation (including any question as to the nature or extent ofdisablement), the question shall, in default of agreement be settledby a Commissioner…”

17. Section 19 stipulates that any question arising in any proceedingunder the Act shall, in the default of an agreement, be settled by theCommissioner. A four judge Bench of this Court rejected the contentionurged by the appellant and held that compensation “falls due” on thedate of the accident. Consequently, the Commissioner was empoweredto impose interest or penalty for the duration prior to the settling of theclaim or where there was unjustified delay in making good the paymentof compensation. The Court held:

“18…The employer therefore became liable to pay thecompensation as soon as the aforesaid personal injury was causedto the workman by the accident which admittedly arose out ofand in the course of the employment. It is therefore futile tocontend that the compensation did not fall due with after theCommissioner’s order dated May 6, 1969 under section 19. Whatthe section provides is that if any question arises in any proceedingunder the Act as to the liability of any person to pay compensationor as to the amount or duration of the compensation it shall, indefault of an agreement, be settled by the Commissioner. Thereis therefore nothing to justify the argument that the employer’s A

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liability to pay compensation under section 3, in respect of theinjury, was suspended until after the settlement contemplated bysection…

19. The appellant was thus liable to pay compensation as soon asthe aforesaid personal injury was caused to the appellant, andthere is no justification for the argument to the contrary. It wasthe duty of the appellant, under section 4A(1) of the Act, to paythe compensation at the rate provided by section 4 as soon as thepersonal injury was caused to the respondent. He failed to do so.What is worse, he did not even make a provisional payment undersub-section (2) of section 4 for, as has been stated, he went to theextent of taking the false pleas that the respondent was a casualcontractor and that the accident occurred solely because of hisnegligence. Then there is the further fact that he paid no heed tothe respondent’s personal approach for obtaining the compensation.It will be recalled that the respondent was driven to the necessityof making and application to the Commissioner for settling theclaim, and even there the appellant raised a frivolous objection asto the jurisdiction of the Commissioner and prevailed on therespondent to file a memorandum of agreement setting the claimfor a sum which was so grossly inadequate that it was rejected bythe Commissioner. In these facts and circumstances, we have nodoubt that the Commissioner was fully justified in making an orderfor the payment of interest and the penalty.”

18. The Court held that though Section 19 empowered theCommissioner to decide claims or objections under the Act, the obligationto pay compensation to an injured employee was not suspended until theCommissioner settled the amount payable in the case of a disputebetween the employer and the employee. Section 4A deals with whenthe obligation for the payment of compensation as required under the1923 Act arises. For the purposes of Section 4A of the 1923 Act, theobligation to pay compensation arises on the date of the accident. Wherean employer disputes the quantum of compensation payable, it is enjoinedto make a provisional payment to the Commissioner or the employeepending the settlement of the claim. This is in order to ensure that anemployer does not escape its obligation to make good the payment ofcompensation or unduly delay its payment on frivolous grounds.

19. In Neelakandan, the accident had taken place prior to thecoming into force of an amendment to the 1923 Act whereunder the deemed income had been increased from Rs. 1000 to Rs. 2000. Thequestion before the Court was whether the benefit of the amendmentwould extend to accidents which took place prior to its coming into forceand where the final adjudication of the amount payable was pending. Atwo judge Bench of this Court held that though the accident in questiontook place in 1981, the benefit of the amendment would apply to accidentsthat took place prior to the coming into force of the amendment in thefollowing terms:

“It is not disputed that Section 4 of the Act was amended in 1995by Amendment Act 30 whereunder the deemed income has beenincreased from Rs. 1000 to Rs. 2000. Learned counsel for theInsurance Company has vehemently contended that since theaccident took place in the year 1981, the law operating on thatdate is applicable and as such the workmen are not entitled to thebenefit of the amendment. We do not agree with the learnedcounsel. We are finally determining the right of workmentoday. The Act is a special legislation for the benefit of thelabour. Keeping in view the scheme of the Act we are ofthe view that the only interpretation which can be given tothe amendment is that is any benefit is conferred on theworkmen and the said benefit is available on the date whenthe case is finally adjudicated, the said benefit should beextended to the workmen. We, therefore, hold that thecompensation to be paid to the heirs of the workmen has to becalculated on the basis of the actual wages – Rs 1800 – drawn bythem…”

20. The Court noted that the 1923 Act is a social welfare legislationfor the benefit of employees. Consequently, taking into account the schemeof the Act, the court must adopt an interpretation which extends a benefitto the employee on the date of the final adjudication of the claim. Wherea case is pending final adjudication and an amendment is enactedincreasing the amount of compensation payable, the enhanced amountwould be applicable in the determination of the quantum of compensationpayable. Conspicuous in its absence in the submission advanced by thelearned amicus curiae is how a subsequent Bench of this Court dealtwith the position of law laid down in Neelakandan.

21. In Valsala, the question before a three judge Bench of thisCourt was whether an amendment to Section 4 and 4A of the 1923 Act A

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Aenhancing the amount of compensation and the rate of interest would beapplicable to cases where the accident took place prior to the cominginto force of the amendment. This Court noted that various High Courtsin the country had taken the uniform position that the relevant date fordetermining the rights and liabilities of the parties is the date of theaccident. Relying on the judgment of this Court in Pratap Narain Singh,Bthe Court overruled the judgment in Neelakandan and held thatthe benefitof an amendment whereunder the compensation payable was increased,would not apply to accidents that took place prior to its coming intoforce. The Court held:

“4. A two-judge Bench of this Court in New India Assurance CoCLtd. v. V.K. Neelakandan however, took the view that theWorkmen’s Compensation Act being a special legislation for thebenefit of the workmen, the benefit as available on the date ofadjudication should be extended to the workmen and not thecompensation which was payable on the date of the accident.DThe two-judge Bench in Neelakandan case however, did not takenotice of the judgment in Pratap Narain Singh Deo case as itpresumably was not brought to the notice of their Lordships. Bethat as it may, in view of the categorial law laid down by thelarger Bench in Pratap Singh Deo case the view expressed bythe two-judge Bench in Neelakandan case is not correct.”E

22. In the course of the judgment in Valsala, the three judge Benchalso affirmed the full judge Bench judgment of the Kerala High Court inAlavi” to the extent it is in accord with the judgment of the larger bench”in Pratap Narain Singh. The Court held:

F“5. Our attention has also been drawn to a judgment of the FullBench of the Kerala High Court in United India Insurance Co.Ltd v. Alavi wherein the Full Bench precisely considered the samequestion and examined both the above-noted jugdments. It tookthe view that the injured workman becomes entitled to getcompensation the moment he suffers personal injuries of the typesGcontemplated by the provisions of the Workmen’s CompensationAct and it is the amount of compensation payable on the date ofthe accident and not the amount of compensation payable onaccount of the amendment made in 1995, which is relevant.The decision of the Full Bench of the Kerala High Court, to theHextent it is on accord with the judgment of the larger Bench of this Court in Pratap Narain Singh Deo v Srinivas Sabata laysdown the correct law and we approve it.”

23. In Alavi, a full judge Bench of the Kerala High Court wasrequired to adjudicate whether Sections 4 and 4A of the 1923 Act asamended in 1995 enhancing the amount of compensation and rate ofinterest would be applicable to claims in respect of death and permanentdisablement resulting from accidents which occurred prior to 15September 1995 i.e. the date on which the amended provisions cameinto force. In all the appeals before the Court, the accident as well assettling of the claims by the Commissioner took place prior to the cominginto force of the amending provisions enhancing the quantum ofcompensation payable. The Court relied on the decision of this Court inPratap Narain Singh and held that the Amending act enhancingcompensation would apply only to accidents that took place after thecoming into force of the amendment. The Court held:

“17. Right to claim compensation as well as the obligation to paythe same are created by the statute itself. It is well-settled rule ofinterpretation that if the law is procedural, there is, no doubt, apresumption that it applies to pending proceedings. If the law issubstantive in nature, the normal presumption against retrospectivitystill holds good, subject to the principle that the Court must look tothe question whether the rights of the parties at thecommencements of the proceedings were intended to be modifiedeither expressly or by necessary implication: Neeli v. NarayanaPilla[(1992) 2 K.L.J. 937, 950]. If the amended provisions aregiven effect to in the matter of awarding enhanced compensationeven with regard to the accident which occurred prior to 15September 1995, and the claim was decided prior to the samedate, the law applicable is the unamended provisions of theWorkmen’s Compensation Act, 1923. But if the claim could notbe settled prior to 15 September 1995 going by the Division Benchdecision in Asokan case (vide supra), those claimants would getthe benefit of the Amendment Act. In other words, the benefitwould depend on when the case is decided either prior to 15September 1995 or subsequent. This was never the intention ofthe Legislature…”

24. The question before the Bench in Valsala was clearly whetheran amendment to Section 4 and 4A of the 1923 Act enhancing the amount A

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Aof compensation and the rate of interest would be applicable to caseswhere the accident took place prior to the coming into force of theamendment.The Bench held that the benefit of an Amending actenhancing the quantum of compensation would not apply to accidentsthat took place prior to the coming into force of the amendment.Thoughthe learned amicus curiae sought to rely on the two judge BenchBjudgment of this Court in Mubasir Ahmed, it is sufficient at this stageto note that the subsequent judgment of this Court in Oriental InsuranceCompany v Siby George[8 ]noted that the judgment in Mubasir Ahmedis contrary to the judgments of this Court in Pratap Narain Singh andValsala and hence not a binding precedent.

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25. The 1923 Act is a social beneficial legislation and its provisionsand amendments thereto must be interpreted in a manner so as to notdeprive the employees of the benefit of the legislation. The object ofenacting the Act was to ameliorate the hardship of economically pooremployees who were exposed to risks in work, or occupational hazardsDby providing a cheaper and quicker machinery for compensating themwith pecuniary benefits. The amendments to the 1923 Act have beenenacted to further this salient purpose by either streamlining thecompensation process or enhancing the amount of compensation payableto the employee.

E26. Prior to Act 45 of 2009, by virtue of the deeming provision inExplanation II to Section 4, the monthly wages of an employee werecapped at Rs. 4000 even where an employee was able to prove thepayment of a monthly wage in excess of Rs. 4,000. The legislature, in itswisdom and keeping in mind the purpose of the 1923 Act as a socialwelfare legislation did not enhance the quantum in the deeming provision,Fbut deleted it altogether. The amendment is in furtherance of the salientpurpose which underlies the 1923Act of providing to all employeescompensation for accidents which occur in the course of and arising outof employment. The objective of the amendment is to remove a deemingcap on the monthly income of an employee and extend to themGcompensation on the basis of the actual monthly wages drawn by them.However, there is nothing to indicate that the Legislature intended forthe benefit to extend to accidents that took place prior to the coming intoforce of the amendment.

27. The learned amicus curiae relied on the judgment of thisCourt in Commissioner of Income Tax v Vatika Township PrivateLimited[9] to contend that amendments that confer a benefit uponindividuals must be given retrospective application. In that case, thequestion before a Constitution Bench of this Court concerned whetherthe proviso to Section 113 which was inserted by the Finance Act 2002applied retrospectively. The scheme for block assessment was introducedin Chapter XIV-B to the Finance Act (w.e.f 1 July 1995) to curb taxevasion and expedite as well as simplify the assessments in such searchcases. By virtue of the proviso, a date was specified with reference towhich the rate of surcharge is payable upon block assessments. ThisCourt noted that the chapter for block assessment was a self-containedcode and that the effect of the proviso was to impose an additionalburden on the assessee. Consequently, it was held that the proviso didnot operate retrospectively. In the course of the judgment, this Courtheld:

“30. We would also like to point out, for the sake of completeness,that where a benefit is conferred by a legislation, the rule againsta retrospective construction is different. If a legislation confers abenefit on some persons but without inflicting a correspondingdetriment on some other person or on the public generally, andwhere to confer such benefit appears to have been the legislators’object, then the presumption would be that such a legislation, givingit a purposive construction, would warrant it to be given aretrospective effect. This exactly is the justification to treatprocedural provisions as retrospective. In Govt. of India v. IndianTobacco Assn. [(2005) 7 SCC 396], the doctrine of fairness washeld to be relevant factor to construe a statute conferring a benefit,in the context of it to be given a retrospective operation. Thesame doctrine of fairness, to hold that a statute was retrospectivein nature, was applied in Vijay v. State of Maharashtra [(2006) 6SCC 289]. It was held that where a law is enacted for the benefitof community as a whole, even in the absence of a provision thestatute may be held to be retrospective in nature. However, weare (sic not) confronted with any such situation here.”

28. This Court held, in line with settled precedent of this Court,that where (i) a legislation confers a benefit on some persons, (ii) without 9 (2015) 1 SCC 1

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Ainflicting a corresponding detriment on some other persons or the publicgenerally and (iii) where the conferral of such benefit appears to be theintention of the legislature, the presumption of prospective applicationmay stand displaced. Though amendments enhancing the compensationpayable under the 1923 Act confer a benefit upon employees, acorresponding burden is imposed on employers to pay a higher rate ofBcompensation. It is presumably for this reason that the three judge Benchof this Court in Valsala and the Kerala High Court in Alavi held that thebenefit of an amendment enhancing the rate of compensation does nothave retrospective application to accidents that took place prior to thecoming into force of the amendment. Further, as we have already noted,Cthere is nothing in Act 45 of 2009, either express or implied, to denote anintention of the legislature to confer the benefit of the amendment toaccidents that took place prior to its coming into force.

29. We also briefly note the position of law regarding the daterelevant for the determination of compensation payable under theDRailways Act 1989[10]. Chapter XIII of the 1989 Act titled ‘Liability ofRailway Administration for Death and Injury to Passengers due toaccidents’ stipulates an obligation on the railway administration to paycompensation to such extent “as may be prescribed” on the account ofuntoward accidents. In Rathi Menon v Union of India[11], the questionbefore a two judge Bench of this Court was whether the benefit of anEamendment enhancing the rate of compensation can be extended toaccidents that took place prior to the coming into force of the amendment.The Court assessed the scheme of the 1989 Act and held that the daterelevant for the determination of compensation payable shall be the dateof adjudication. Consequently, the benefit of an amendment enhancingFcompensation would be extended to accidents that took place prior tothe coming into force of the amendment. In the course of the judgment,this Court differentiated between the scheme of the 1923 Act and the1989 Act and addressed the contention raised on the basis of thejudgments of this Court in Pratap Narain Singh and Valsala in thefollowing terms:G

“…The scheme of the provision under the W.C. Act is materiallydifferent from the scheme indicated in Chapter XIII of the RailwaysAct. In the former, compensation payable is fixed in the Act itself 10 1989 ActH11 (2001) 3 SCC 714

through the schedule incorporated thereto. Section 4 of the W.C.Act shows that such compensation is to be linked with the monthlywages of the workman concerned. It also provides that the liabilityto pay compensation on the employer would arise not when theCommissioner passes the order but on the date of sustaining theinjury itself. A provision is made in Section 4A of W.C. Act thatwhere any employer is in default of paying the compensation duewithin one month the Commissioner shall direct the employer topay not only interest but in appropriate cases a penalty ranging upto 50% of the amount payable. The said scheme cannot be equatedwith the scheme in Chapter XIII of the Railways Act, as theprinciples involved have differences…”

Having distinguished the scheme of the 1923 Act and the 1989Act, the Court held that the judgments in Pratap Narain Singh andValsala have no bearing on claims under the 1989 Act.

30. Recently, a two judge Bench of this Court in Union of Indiav Rina Devi[12],considered an apparent conflict between the judgmentsin Rathi Menon and Kalandi Charan Sahoo v General Manager,South-East Central Railway, Bilaspur[13](“Kalandi”) regarding thedate relevant for the determination of compensation under the 1989 Act.Itwas contended that the judgment in Rathi Menon was premised on thebasis that there was no provision forthe payment of interest under the1989 Act and that there would be injustice if compensation is paid atmoney value prevalent at the time of the accident. It was on this basisthat the judgment in Pratap Narain Singh was distinguished. This Courtnoted that in Thazhathe Purayil Sarabi v Union of India[14](“Thazhathe”), it was held that under the 1989 Act, a claimant is alsoentitled to the payment of interest which accrues from the date of theincident. The decision in Thazhathe was subsequently followed by thisCourt in Kalandi and Mohamadi v Union of India.[15 ]Consequently,this Court held that since interest is now payable under the 1989 Act, thebasis of the judgment in Rathi Menon has changed. The Court held:

“15.3…We are of the view that law in the present context shouldbe taken to be that the liability will accrue on the date of the 12 (2019) 3 SCC 572

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accident and the amount applicable as on that date will be theamount recoverable but the claimant will get interest from thedate of accident till the payment at such rate as may be consideredjust and fair from time to time. In this context, rate of interestapplicable in motor accident claim cases can be held to bereasonable and fair. Once concept of interest has beenintroduced, principles of Workmen Compensation Act cancertainly be applied and judgment of 4- Judge Bench inPratap Narain Singh Deo (supra) will fully apply. Wherever itis found that the revised amount of applicable compensation as onthe date of award of the Tribunal is less than the prescribed amountof compensation as on the date of accident with interest, higherof the two amounts ought to be awarded on the principle ofbeneficial legislation…

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15.4 Accordingly, we conclude that compensation will be payableas applicable on the date of the accident with interest as may beDconsidered reasonable from time to time on the same pattern asin accident claim cases. If the amount so calculated is less thanthe amount prescribed as on the date of the award of the Tribunal,the claimant will be entitled to higher of the two amounts…The4-Judge Bench judgment in Pratap Narain Singh Deo(supra) holds the field on the subject and squarely appliesEto the present situation.”

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This Court held that compensation under the 1989 Act would becalculated with reference to the date of the accident along with interestFpayable. However, if the amount calculated is less than the amountprescribed as on the date of the award of the Tribunal under the 1989Act, the claimant will be entitled to higher of the two amounts.

31. The judgment in Rathi Menon and Rina Devi were bothrendered by a Bench of two judges of this Court. In Rina Devi, thisCourt resolved the apparent conflict between Rathi Menon and Kalandiby taking into account the judgment in Rathi Menon as well as thechange in the position of law following the judgment. The position of lawunder the 1989 Act has thus been brought closer to the judgment of thisCourt in Pratap Narain Singh which held that the date relevant for thedetermination of compensation would be the date of the accident. The G

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judgment in Rina Devi was recently followed by this Court in Union ofIndia v Radha Yadav[16].

32. It is pertinent to note that no similar position of law for thedetermination of the higher amount of compensation payable was adoptedunder the 1923 Act by this Court in Pratap Narain Singh and Valsala.This Court, being a Bench of two judges, is bound by the categoricalposition of law laid down in Pratap Narain Singh and Valsala, bothbeing judgments rendered by larger Benches of this Court.Consequently,we hold that the relevant date for the determination ofcompensation payable is the date of the accident and the benefit of Act45 of 2009 does not apply to accidents that took place prior to its cominginto force.

33. In the present case, the accident occurred on 31 January 2008i.e. prior to the coming into force of Act 45 of 2009. Consequently, theHigh Court erred in extending the benefit of Act 45 of 2009 which deletedExplanation II to Section 4 to the present case. The High Court wasrequired to determine the compensation payable on the date of the accidenton which date, the deemed cap of Rs 4000 as monthly wages wasapplicable.

34. Though the accident took place in 2008, the appeal is beingdecided over 12 years later. We take note of the fact that following theorder of remand by the High Court, the employer deposed as PW2 andstated that the deceased had worked in his establishment for about threeyears. The employer duly proved Exhibit P5 in the course of his evidencewhich was the monthly pay certificate indicating that the deceased wasdrawing a monthly wage of Rs. 32,000, including expenses towards food.Significantly, no appeal was filed by the respondents against the judgmentof the High Court enhancing the compensation. In this view of the matter,we are not inclined to interfere with the award of compensation orderedby the High Court in exercise of the inherent jurisdiction of this Court todo complete justice under Article 142 of the Constitution. Having clarifiedthe law as noted above, the appeal shall stand dismissed.

35. Before concluding the judgment, it would be necessary tonote that in the office report dated 14 October 2019 and 18 November2019, it has been stated that service is complete on the respondents.

16(2019) 3 SCC 410

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A36. The total compensation payable to the appellant shall standquantified at Rs 8,86,120 on which interest shall be payable at 12% perannum from the date of the accident. The liability for the payment ofcompensation shall be joint and several. The compensation shall bepayable to the first and the second appellants jointly and severally by therespondents. The compensation shall be paid over within a period of twoBmonths from the receipt of a certified copy of the order. There shall beno order as to costs.

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Devika Gujral

Appeal dismissed.

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