) Divisional Manager, Oriental Insurance Co. Ltd. … v. Kuna Behera and another
Case Details
Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 IN THE HIGH COURT OF ORISSA AT CUTTACK FAO No.617 of 2020 (From the judgment dated 16th September 2019 passed by the Commissioner for Employees’ Compensation-Cum-Divisional Labour Commissioner, Dhenkanal in E.C. Case No.15 of 2017) Divisional Manager, Oriental Insurance Co. Ltd. …… Appellant Versus Kuna Behera and another ….… Respondents Advocate(s) appeared in this case:- For Appellant For Respondents : :
Legal Reasoning
Mr.P.K.Mahali, Advocate Mr.A.S.Nandy, Advocate (For Respondent No.1) CORAM : JUSTICE B.P. ROUTRAY JUDGMENT 15th December, 2023 B.P. Routray,J. 1. Present appeal by the Insurer is directed against the judgment dated 16th September 2019 passed by the Commissioner for Employees’ Compensation-Cum-Divisional Labour Commissioner, FAO No.617 of 2020 Page 1 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 Dhenkanal in E.C. Case No.15 of 2017, wherein compensation to the tune of Rs.10,95,198.00 has been granted along with interest on account of injuries sustained by the injured in course of his employment as a driver of Tata LPT Truck bearing registration no.OD-15F-0651. 2. The seminal issue raised by the Insurer is with regard to fixation of remuneration of the deceased-workman at Rs.9,500/- per month. It is the submission of the Insurer that as per Explanation II of Section 4(1) of the Employees’ Compensation Act, 1923 (hereinafter referred to as ‘the Act’), the same should not be more than Rs.8,000/- per month. According to the Insurer, the said Explanation of the Act prescribes the maximum limit of monthly wages of Rs.8,000/- only prevailing on the date of accident. 3. The case of the workman-Respondent is that, while he was serving as the driver in a Tata LPT Truck bearing registration no.OD- 15F-0651, met with the accident due to dashing of the truck against a tree resulting sustenance of injury and permanent amputation of right hand below the elbow. The date of accident is on 22nd September 2017. 4. Presently, clause (a) & (b) of Section 4(1) of the Act does not contain any Explanation II, which has been deleted by Act 45 of FAO No.617 of 2020 Page 2 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 2009 w.e.f. 18-1-2010. Prior to its omission, Explanation II was read as follows: “Explanation II.-Where the monthly wages of a workman exceed four thousand rupees, his monthly wages for the purposes of clause (a) and clause (b) shall be deemed to be four thousand rupees only.” 5. By way of Amendment, Explanation II was deleted with effect from 18th January 2010 and prior to that, the said Explanation had capped the monthly wages of an employee at four thousand rupees by prescribing that where the monthly wages of a workman exceed four thousand rupees, his monthly wages for the purpose of clause (a) & (b) shall be deemed to be four thousand rupees only. But, by way of Amendment on 18th January 2010, the same was deleted and subsequently vide Official Gazette No.SO1258 (E) dated 31.05.2010, the word four thousand was replaced by the word eight thousand. 6. It needs to be mentioned here that upon deletion of Explanation-II, Section 4(1-B) was introduced with effect from the same date, i.e. 18th January, 2010. Said Section 4(1-B) states that the Central Government may by notification specify for the purpose of Sub-Section (1) such monthly wage in relation to an employee as it may consider necessary. In pursuance to the provisions of Section 4(1-B), subsequent notifications dated 31st May, 2010 and 3rd January, 2020 were prescribed FAO No.617 of 2020 Page 3 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 stating the amount of monthly wage at rupees “eight thousand” and “fifteen thousand” respectively. The issue involved herein is that whether such prescription of the amount of monthly wage after 18th January, 2010 would have the effect of deeming cap on the wage of the employee to be calculated for the purpose of compensation under the EC Act. 7. The Employee’s Compensation Act, 1923 is undoubtedly a socio-beneficial legislation and its provisions and amendments must not be interpreted to deprive the poor employee of the benefits under the Act. In K. Sivaraman and Others v. P. Sathishkumar and Another, (2020) 4 SCC 594 the Hon’ble Supreme Court have observed that the Legislature keeping in mind the purpose of EC Act, 1923 did not enhance the quantum in the deeming provision but deleted it altogether. The relevant observation is reproduced below:- “26. Prior to Act 45 of 2009, by virtue of the deeming provision in Explanation II to Section 4, the monthly wages of an employee were capped at Rs 4000 even where an employee was able to prove the payment of a monthly wage in excess of Rs 4,000. The legislature, in its wisdom and keeping in mind the purpose of the 1923 Act as a social welfare legislation did not enhance the quantum in the deeming provision, but deleted it altogether. The amendment is in furtherance of the salient purpose which underlies the 1923 Act of providing to all employees compensation for accidents which occur in the course of and arising out of employment. The objective of the amendment is to remove a deeming cap on the monthly FAO No.617 of 2020 Page 4 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 income of an employee and extend to them compensation on the basis of the actual monthly wages drawn by them. However, there is nothing to indicate that the legislature intended for the benefit to extend to accidents that took place prior to the coming into force of the amendment.” 8. When the question of compensation comes for determination, the interpretation must be on the principles of just compensation, whether it is under the Motor Vehicles Act or Employee’s Compensation Act or under any other beneficial legislation. It is because no compensation should be an unjust compensation. The compensation to be computed cannot be inadequate or unjust. While determining compensation, the socio-economic condition and the cost factor at the relevant period of time in respect of the deceased and his family members are the common criteria required to be considered for the purpose of interpreting the provisions of the EC Act for fixing the minimum wage of the employee and for grant of compensation and a pragmatic approach should always be taken. Under the provisions of the EC Act, unless the monthly income of the employee is fixed, it would not be possible to determine a definite compensation. As per Section 5 of the EC Act the monthly wage of the employee should be the amount received for a continuous period of last 12 months preceding the accident divided by twelve. As per Section 4, the amount of compensation shall be, in case of permanent disablement, an amount FAO No.617 of 2020 Page 5 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 equal to 60% of the monthly wage multiplied by the age factor prescribed in Schedule IV. Therefore, the monthly wage of the deceased employee is an important consideration to quantify the compensation amount. As held by the Supreme Court in K. Sivraman’s case (supra) the objective of 2010 amendment was to remove the deeming cap on the monthly income of the employee and extend him the compensation on the basis of the actual monthly wage drawn by him. It is now therefore settled that the actual monthly wage of the employee has to be taken into account for grant of compensation. But here the question arose that where there was no material or incomplete material to determine the actual monthly wage of the employee, then what would the recourse. In the humble opinion of this court, in such circumstance where there is no clear material or acceptable evidence with regard to the actual monthly wage of the employee, then the rates prescribed by the Government as minimum wages for unskilled, skilled, semi-skilled and highly skilled labourers, as the case may be, read with the wages prescribed under section 4(1-B) of the E.C. Act, would govern the field. However, in the case at hand since materials are available on record to determine monthly wage of the injured workman, the same is determined accordingly. FAO No.617 of 2020 Page 6 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 9. So from the above analysis and discussions it becomes clear that the actual monthly wage of an employee is to be taken into account in determining the compensation amount. The actual monthly wages has to be brought on record by way of acceptable evidence. If the evidences and materials are unclear to determine the actual monthly wages, then the prescription of minimum wage rate during that relevant period read with the amount notified by appropriate government under Section 4(1-B) of the E.C. Act, is to be followed for determining the compensation amount. 10. In the case at hand, it has been brought on record that the injured workman was receiving monthly salary of Rs.9,500/- as driver of the truck. The same has been duly assessed by the Commissioner based on the evidences brought on record and other relevant factors. The owner has not only admitted the employment of the injured as driver of the truck, but also stated that he was paid wages of Rs.9,500 per month. This Court accordingly agrees with the finding of the Commissioner in this regard to hold the wages of the injured workman at Rs.9,500/- per month. 11. It is further submission of the Insurer that considering the permanent disability of the workman i.e. amputation of his right hand FAO No.617 of 2020 Page 7 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 below the elbow, the loss of earning capacity would be 70% as per the schedule of the Act. It is true that at Item-3 under Schedule-I, Part-II of the Act, the amputation of one hand would carry 70% loss of earning capacity. But, here it is to be remembered that the injured workman was a driver by profession and due such amputation of hand, he is forever debarred from driving any vehicle. Even he is not entitled for getting a driving license due to such disability. In Pratap Narain Singh Deo v. Srinivas Sabata and another, 1976 (1) SCC 289, the Hon’ble Supreme Court in a case of injury of a carpenter where he lost his left hand above the elbow, has assessed the loss of earning capacity at 100%. Further, in K.Janardhan v. United India Insurance Co. Ltd. and another, 2008 (3) T.A.C.793, concerning amputation of right leg from the knee of a tanker driver, the Supreme Court has assessed 100% loss of earning capacity. Keeping in view the nature of profession of the injured- workman in the case at hand, the Commissioner has rightly assessed his loss of earning capacity at 100% and therefore, no reason is seen to disturb the same. 12. In view of the discussions made above, the appeal being found devoid of merit is dismissed. The Insurer is directed to pay the entire compensation amount as per the impugned award. Since the entire FAO No.617 of 2020 Page 8 of 9 Signature Not Verified Digitally Signed Signed by: CHITTA RANJAN BISWAL Reason: Authentication Location: Orissa High Court, Cuttack Date: 26-Feb-2024 17:02:44 award amount has already been deposited before the Commissioner for Employees’ Compensation-Cum-Divisional Labour Commissioner, Dhenkanal, the same shall be disbursed in favour of the injured-claimant along with interest on such terms and proportion contained in the impugned award. Judge (B.P. Routray) C.R.Biswal, Secy. FAO No.617 of 2020 Page 9 of 9