Signed by: BHABAGRAHI JHANKAR v. Advocates appeared in the case through Hybrid Mode

Judgment

-09.01.2026 Dr. Sanjeeb K Panigrahi, J.

1. The present appeal has been filed by the employer (East Coast Railway) assailing the order dated 20.03.2024 passed by the Commissioner for Employees’ Compensation-cum-Joint Labour Commissioner, Headquarters, Bhubaneswar in E.C. Case No. 5 of 2023.By the said order, the Commissioner allowed the claim application filed by the dependants of the deceased employee and awarded compensation under the Employees’ Compensation Act, 1923 on account of his death stated to Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 have occurred due to an accident arising out of and in the course of employment. I. FACTUAL MATRIX OF THE CASE:

2. The brief facts of the case as narrated by the appellants are as follows: i. The claim proceedings were instituted by the parents/legal dependants of late Sri Nishant Kumar, who, as pleaded, was employed as an Assistant Loco Pilot (Electrical) under the Chief Crew Controller, East Coast Railway, Talcher. It was pleaded that the deceased was on duty in connection with railway operations and that while so discharging his official duty, he suffered a fatal accident. ii. According to the claim petition, on 05.03.2023, the deceased was booked for duty at about 20:40 hours along with a Loco Pilot (Goods) from Talcher. It was further pleaded that on 06.03.2023, the deceased was found dead after having been run over by a running train bearing No. 20822 (Express) at K.M. 421/1-3 DN between Rajathgarh and Machhpur. The claimants asserted that the said death was the result of an accident arising out of and in the course of his employment with the employer. iii. The claimants stated that at the time of the incident, the deceased was about 31 years of age and was drawing monthly wages inclusive of allowances. On such basis, the claimants sought compensation under the Employees’ Compensation Act, 1923 and also claimed interest at the statutory rate from the date of accident till payment. The claim petition sought a lump sum amount as Signature Not Verified

Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 compensation, computed by applying the statutory factors under the Act. iv. The employer contested the claim before the Commissioner. In substance, while not disputing the employment relationship pleaded by the claimants, the employer raised a contention on the mode of computation of wages for the purposes of compensation payable under Section 4 of the Act. The employer asserted that for computation of compensation, the monthly wages were required to be taken at Rs. 15,000/- in view of the Central Government Notification dated 03.01.2020 issued under Section 4(1-B) of the Act. It was further stated that the Railway Board had adopted the said wage figure for the purpose of computation by issuing Railway Board’s RBE No. 64/2021 dated 02.09.2021. v. On the above premise, the employer deposited a sum of Rs. 15,44,625/- before the Commissioner by way of demand draft on

07.07.2023, stating the same to be the compensation calculated at fifty percent of wages (Rs. 7,500/-) multiplied by the relevant age factor (205.95). It was also stated by the employer that apart from the statutory deposit, the family of the deceased had been paid Rs. 10,000/- towards funeral assistance and a further sum of Rs. 25,00,000/- as an ex-gratia payment under the Railway Board’s policy (referred to as RBE No. 139 of 2016), being immediate assistance to the bereaved family. vi. The Commissioner proceeded to determine the compensation payable. In the impugned order, the Commissioner assessed the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 “monthly wages” for the purposes of computation by taking into account the wages of the deceased during the twelve months immediately preceding the accident, in terms of the statutory computation contemplated under the Act. On such assessment, the Commissioner recorded that the total wages for the last twelve months preceding the accident were Rs. 5,40,187/-, and accordingly computed the average monthly wage as Rs. 45,015.58, rounded to Rs. 45,016/-. vii. Applying fifty percent of the said monthly wages (i.e., Rs. 22,508/-) and multiplying the same with the age factor applicable for 31 years (i.e., 205.95), the Commissioner quantified the compensation amount at Rs. 46,35,522.60, rounded to Rs. 46,35,523/-. The Commissioner thus held that the claimants/dependants were entitled to compensation of Rs. 46,35,523/- under the Employees’ Compensation Act, 1923 on account of the death of the employee. viii. Under the impugned order dated 20.03.2024, the employer was directed to deposit: (a) the balance compensation amount after adjusting the earlier deposit of Rs. 15,44,625/-, quantified in the order as Rs. 30,90,898/-; (b) simple interest at 12% per annum on the total compensation amount of Rs. 46,35,523/- from the date of accident i.e. 06.03.2023 till 07.07.2023, assessed in the order at Rs. 1,87,452/-; and (c) simple interest at 12% per annum on the balance compensation amount of Rs. 30,90,898/- from 07.07.2023 till the date of actual payment. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 The deposit was directed to be made within the time stipulated in the order for onward disbursement to the claimants. ix. Aggrieved by the aforesaid order, the employer has preferred the present appeal. It is stated in the memorandum of appeal that the employer disputes the method adopted by the Commissioner in computing the monthly wages by relying upon the actual wages drawn during the preceding twelve months, and contends that the statutory notification fixing monthly wages for the purpose of computation ought to have been applied. It is also stated that the employer seeks consideration of payments allegedly made to the family by way of funeral assistance and ex-gratia assistance under Railway policies. x. For the purposes of maintainability of the appeal, it is pleaded that the employer has complied with the requirement under Section 30(1) of the Employees’ Compensation Act, 1923 by depositing the amount payable under the order appealed against and obtaining the requisite certificate from the Commissioner. The appeal is thus directed against the award dated 20.03.2024 passed in E.C. Case No. 5 of 2023, particularly in relation to the wage figure adopted for computation, the resultant quantum of compensation, and the II.

3. attendant directions regarding interest and deposit. SUBMISSIONS ON BEHALF OF THE APPELLANTS: Learned counsel for the Appellants earnestly made the following submissions in support of his contentions: Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 i. The petitioner–employer contends that the impugned order dated

20.03.2024 passed in E.C. Case No. 5 of 2023 is illegal, arbitrary, contrary to the statutory scheme of the Employees’ Compensation Act, 1923, and liable to be set aside. It is urged that the Commissioner has erred in allowing the claim and directing payment of compensation of Rs. 46,35,523/-, along with interest, by adopting an impermissible method for determining the “monthly wages” of the deceased. According to the petitioner, the Commissioner has wrongly proceeded compute compensation on the basis of the deceased employee’s “actual” wages derived from the twelve months’ wage particulars preceding the accident, and has thereby inflated the wage figure and consequently the compensation payable. ii. It is submitted that, for the purpose of computation of compensation under Section 4 of the Act, the “monthly wages” cannot be taken beyond the amount specified by the Central Government in exercise of powers under Section 4(1-B). The petitioner asserts that the Central Government, through the Ministry of Labour and Employment, issued a notification dated

03.01.2020 specifying Rs. 15,000/- as the monthly wages for the purposes of sub-section (1) of Section 4, and that this notified figure is binding for computation. It is further contended that the Railway Board, by RBE No. 64/2021 dated 02.09.2021, adopted Rs. 15,000/- as the wages the purpose of calculation of compensation under Section 4, and the employer acted in Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 accordance with the said notification and instructions. On that footing, the petitioner states that compensation was calculated by taking 50% of Rs. 15,000/- (i.e., Rs. 7,500/-) and multiplying it with the relevant age factor of 205.95, resulting in Rs. 15,44,625/-, which amount was deposited before the Commissioner on 07.07.2023 for disbursement to the dependants. iii. The petitioner further argues that the Commissioner failed to properly consider, set-off, or adjust the amounts already paid by the employer to the bereaved family by way of immediate assistance. It is stated that, apart from the statutory deposit, the employer paid funeral assistance of Rs. 10,000/- and also paid an ex-gratia lump sum of Rs. 25,00,000/- as per Railway Board policy (referred to as RBE No. 139 of 2016) to the family/legal heirs of the deceased. The petitioner asserts that non-consideration of these payments vitiates the award and renders it unsustainable. iv. It is further contended that the Commissioner’s interpretation that, after the 2009 amendment, there is no ceiling and the “actual wages” must invariably be taken, is erroneous and overlooks the legislative intent. The petitioner submits that earlier the wage ceiling for computation was periodically revised by Parliament through amendment Acts (1984, 1995, 2000), and thereafter Parliament, through the 2009 amendment, delegated the power to the Central Government to specify monthly wages for computation by notification in the Official Gazette. According to the petitioner, the omission of the earlier Explanation II does not mean that wage Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 limits were abolished; rather, the statutory mechanism was changed so that the Central Government would notify the wage figure from time to time. The petitioner relies on the Statement of Objects and Reasons and the memorandum regarding delegated legislation connected with the 2009 amendment to contend that the intent was not to remove any upper limit, but to shift the power of fixing the wage figure from Parliament to the Central Government. The petitioner accordingly submits that once the Central Government has notified Rs. 15,000/- as the relevant monthly wage figure, the Commissioner was bound to apply it and could not travel beyond it by adopting “real wages”. v. In support, the petitioner places reliance on the decision of the High Court of Madras dated 01.07.2022 in C.M.A. No. 3388 of 2017, wherein, as per the petitioner, the High Court upheld computation by applying the maximum wage as notified (Rs. 8,000/- at the relevant time) instead of adopting actual wages. It is submitted that the reasoning in the said decision supports the petitioner’s case that Section 4(1-B) and the notifications issued thereunder prescribe the maximum monthly wages that can be taken for computation, and therefore the award based on actual wages is contrary to law. The petitioner also submits that the Commissioner wrongly relied on the Supreme Court’s decision in Civil Appeal No. 9046 of 2019 (arising out of SLP (C) No. 18110 of 2019), contending that the said decision is distinguishable and not applicable to the present case. According to the petitioner, that case Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 pertained to an accident that occurred prior to enhancement of the notified wage figure, and the Supreme Court’s observations were made in that context; further, it is contended that the Supreme Court, in that matter, exercised powers to do complete justice under Article 142, and therefore the decision cannot be mechanically applied to justify adopting actual wages in the present case where the 2020 notification specifying Rs. 15,000/- was in force. vi. On these grounds, the petitioner submits that the Commissioner’s computation of average monthly wages at Rs. 45,016/- by taking the last twelve months’ wages (Rs. 5,40,187/-) and dividing by 12, and the consequent award of Rs. 46,35,523/-, is arbitrary, contrary to the statutory notifications and the scheme under Section 4(1-B), and liable to be set aside. The petitioner accordingly prays for admission of the appeal, calling for records of E.C. Case No. 5 of 2023, and setting aside the impugned order dated 20.03.2024, with consequential reliefs. III. SUBMISSIONS ON BEHALF OF THE RESPONDENTS:

4. Learned Counsel for the Respondents earnestly made the following submissions in support of his contentions: i. The respondents (claimants/dependants) submit that the present appeal has been filed by the employer challenging the order dated

20.03.2024 passed by the Commissioner for Employees’ Compensation-cum-Joint Labour Commissioner, Headquarters, Bhubaneswar in E.C. Case No. 5 of 2023 on grounds that the order Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 is illegal, contrary to law and evidence, and that it does not consider payments allegedly made as immediate assistance. The respondents contend that these grounds are misconceived. According to them, the impugned order is reasoned and is based on the applicable statutory provisions as well as the ratios laid down by the Supreme Court and various High Courts. They submit that the Commissioner has carried out a detailed calculation in the award, and has also excluded from “wages” the components which are not legally includible, and therefore the core dispute raised by the employer regarding computation of wages does not warrant interference. ii. The respondents rely upon the statutory definition of “wages” under Section 2(1)(m) of the Employees’ Compensation Act, 1923 and submit that wages include all privileges or benefits capable of being estimated in money, except those specifically excluded, namely travelling allowance, the value of travelling concession, employer’s contribution towards pension/provident fund, and sums paid to cover special expenses entailed by the nature of employment. They assert that, in the present case, the deceased employee was drawing Rs. 34,959/- per month inclusive of Pay, D.A. and H.R.A., and that other components such as basic pay, dearness allowance, house rent allowance, overtime wages, kilometer allowance, night duty allowance, allowance headquarters duty and leave allowance fall within the ambit of “wages” within the meaning of Section 2(1)(m), subject only to Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 statutory exclusions. They submit that the Commissioner has correctly deducted Rs. 15,678/- from the total earnings towards items such as transport allowance and cell allowance (treated as non-wage components), and has thus arrived at the admissible wage figure in accordance with law. On this basis, the respondents contend that the Commissioner’s computation is consistent with the Act and does not suffer from any infirmity. iii. The respondents further submit that the method for computation of monthly wages is specifically provided in Section 5(a) of the Act and is squarely applicable as the deceased was in continuous employment under the employer, which, according to them, is an admitted position. They argue that under Section 5(a), the monthly wages are to be determined as one-twelfth of the total wages which fell due for payment in the twelve months immediately preceding the accident. They contend that the Commissioner has correctly applied this statutory method and, on that basis, has rightly held the compensation payable to be Rs. 46,35,523/- in terms of Section 4(1)(a), i.e., fifty percent of the monthly wages multiplied by the relevant factor. iv. On the employer’s reliance on the notification dated 03.01.2020 and Railway Board RBE No. 64/2021 to adopt Rs. 15,000/- as monthly wages, the respondents submit that the employer’s interpretation is incorrect. They contend that the notification does not state that Rs. 15,000/- is the maximum wage, and therefore it cannot be applied as a wage ceiling to reduce compensation where the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2026 16:26:20 employee’s actual monthly wages are higher. They further submit that, in any event, a government circular/notification cannot override statutory provisions, and the computation must follow Sections 4 and 5 of the Act read with the definition under Section 2(1)(m). The respondents rely on the decision of the Supreme Court in K. Sivaraman & Ors. v. P. Sathishkumar & Anr.1 to submit that the object of the 2009 amendment was to remove the deeming cap and extend compensation on the basis of the actual monthly wages drawn by the employee, and therefore the Commissioner was justified in adopting actual wages as per law. They also rely upon the decision of the Supreme Court in Ashok Ram Parhad and others v. State of Maharashtra and others2, to submit that government resolutions cannot override statutory rules, and on that premise contend that the notification dated 03.01.2020 cannot control or curtail the statutory computation prescribed under the Act. v. The respondents also support the award of interest. They submit that the compensation determined, i.e., Rs. 46,35,523/-, became payable immediately in terms of Section 4-A of the Act, and since the employer made only a provisional payment of Rs. 15,44,625/- on 07.07.2023 i.e. about four months after the accident dated

06.03.2023; the Commissioner rightly awarded simple interest at 12% per annum on the total compensation from the date of accident till 07.07.2023, quantified at Rs. 1,87,452/-, and further