JAYA BISWAL vs. BRANCH MANAGER, IFFCO TOKIO GENERAL INSURANCE COMPANY LTD.

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.869 OF 2016 (Arising out of S.L.P. (C) No. 1903 of 2015) JAYA BISWAL & ORS. ………APPELLANTS Vs. BRANCH MANAGER, IFFCO TOKIO GENERAL INSURANCE COMPANY LTD. & ANR. ………RESPONDENTS J U D G M E N T V. GOPALA GOWDA, J. Leave granted. 2.The present appeal arises out of the impugned judgment and order dated 13.08.2014 passed in F.A.O. No. 472 of JUDGMENT 2013 by the High Court of Orissa at Cuttack, wherein the learned single Judge reduced the amount of compensation awarded to the appellants by the learned Commissioner for Employees’ Compensation from Rs.10,75,253/- to Rs.6,00,000/- and also waived the award of 50% penalty with interest. Page 1 2 3.The brief facts of the case required to appreciate the rival legal contentions advanced on behalf of the

truck driver with one Bikram Keshari Patnaik (respondent no. 2 herein). On 19.07.2011, he met with an accident while on his way to deliver wheat bags in the truck from Berhampur, Orissa to Paralakhemundi, Andhra Pradesh. He sustained severe injuries on the back of his head and died on the spot. The cleaner of the truck, who was present at the time of the accident, gave information regarding the accident to the Mandasa Police Station, Srikakulam, whose personnel reached the JUDGMENT spot and conducted the inquest, prepared the panchnama and sent the body of the deceased for post mortem. The cleaner also informed the father of the deceased (Appellant No.1 herein), who made arrangements for taking the dead body of his son back to the native village for cremation. On 03.11.2011, the appellants, being the father, mother and younger brother of the deceased, filed claim petition W.C. Case No. 61 of 2011 Page 2 3 before the Court of the Commissioner for Workmen’s Compensation, Berhampur, Ganjam District. The claim of

and during the course of employment of respondent no. 2 herein. They claimed that he was getting monthly wages at Rs.4,000/- per month, daily bhatta (allowance) at Rs.200/- which comes to Rs.6,000/- per month, along with additional trip benefit amounting to Rs.3,000/-, the total amounting to Rs.13,000/- per month. On this basis, they claimed a lump sum of Rs.18,00,000/- as pecuniary damages towards loss of past and future wages and loss of earning. They claimed additional amount of JUDGMENT Rs.20,000/- towards funeral expenses, Rs.30,000/- towards mental agony, physical shock and pain, and Rs.50,000/- towards expectation of life and Rs.1,00,000/- towards loss of estate, inconvenience and hardships caused to the family members of the deceased on account of the death of deceased. Page 3 4 4.In response, the owner of the truck, respondent no.2 herein filed a Written Statement and denied his

to his own negligence, as he had tried to enter the vehicle while it was in motion. Respondent no. 2 also contended that in any case he is not liable to pay the amount as claimed by the appellants. He submitted in the Written Statement that he has been paying only Rs. 100/- per day as wages, and Rs. 50/- per day as bhatta. Further, he had already given financial assistance to the father of the deceased for the cremation. The learned Employees Compensation - cum- Assistant Labour JUDGMENT Commissioner considered the above aspect of the matter at length and arrived at the conclusion that the deceased was working in the employment of Respondent no.2 at the time of his death and that he had lost his life in an accident caused during and in the course of his employment with Respondent no.2. The learned Commissioner relied upon the testimony of the witnesses Page 4 5 to construct the following chain of events leading up to the accident:

JUDGMENT Page 5 6

learned Commissioner that the death of the deceased had occurred due to an accident arising out of and during the course of the employment for which a compromise was sought to be reached by Respondent no.2 with the appellants, to the amount of Rs.3,50,000/-. Accordingly, the learned Commissioner came to the conclusion that the deceased was an ‘employee’ within the meaning of the Employee’s Compensation Act, 1923 (hereinafter referred to as the “E.C. Act”) and had JUDGMENT died in an accident arising out of and in the course of his employment under Respondent no.2. The learned Commissioner, relying on the date of birth of the deceased as 01.07.1984, as mentioned in the driver’s license and Transfer Certificate, came to the conclusion that the age of the deceased was 27 years at the time of the accident. On the question of the monthly wages being earned by the deceased at the time Page 6 7 of his death, the learned Commissioner concluded that the contentions advanced by Respondent no.2 that he was

the accident had occurred possessed a National Route Permit, and the deceased often drove the vehicle to destinations outside the state. He was also a highly skilled workman. In the light of the said fact stated by the appellants, the wages of Rs.4,000/- per month and bhatta of Rs.200/- per day and trip charges of Rs.3,000/- per month (i.e.Rs.13,000/- per month) seemed genuine. Accordingly, the learned Commissioner calculated the compensation as under: JUDGMENT Rs.8,000/- (wage limited to) x 50% x 213.57 (27 years of age factor) = Rs.8,54,280/- The learned Commissioner further awarded an interest @ 12% per annum to the appellants from the date of accident, as well as Rs.20,000/- as the cost of proceedings, the total amount of compensation thus coming to Rs. 10, 75, 253/-. Page 7 8 6.Aggrieved by the same, the Insurance Company filed an appeal under Section 30 of the E.C. Act before the High

the learned Commissioner. The learned single Judge of the High Court held as under: “Considering the submissions made by the learned counsel for the parties and keeping in view the findings of the Commissioner as given in the impugned award with regard to the quantum of compensation amount awarded and the basis on which the same has been arrived at, I feel, the interest of justice would be best served, if the awarded compensation amount of Rs.10,75,253/- is modified and reduced to Rs.6,00,000/- However the award of 50% penalty with interest @12% per annum is not proper and justified and the same is accordingly waived. Accordingly, the claimants are entitled to modified compensation amount of Rs.6,00,000/- on which no penalty or interest is payable. The impugned award is modified to the said extent only.” JUDGMENT 7.The present appeal has been filed by the appellants challenging the correctness of impugned judgment and order passed by the High Court. 8.Mr. Alakh Alok Srivastava, the learned counsel appearing on behalf of the appellants contends that the Page 8 9 High Court committed a grave error in entertaining an appeal under Section 30(1) of the E.C. Act, which reads as under:

JUDGMENT 9.The learned counsel contends that the High Court could not have entertained the appeal under Section 30(1) of the E.C. Act in the light of the fact that no substantial question of law was involved in the appeal. The learned counsel places reliance on a decision of this Court in the case of T.S. Shylaja v. Page 9 10 1 Oriental Insurance Co. & Anr. , wherein this Court held that the High Court committed an error in entertaining

substantial question of law. In that case, this Court held as under: “10. The only reason which the High Court has given to upset the above finding of the Commissioner is that the Commissioner could not blindly accept the oral evidence without analysing the documentary evidence on record. We fail to appreciate as to what was the documentary evidence which the High Court had failed to appreciate and what was the contradiction, if any, between such documents and the version given by the witnesses examined before the Commissioner. The High Court could not have, without adverting to the documents vaguely referred to by it have upset the finding of fact which the Commissioner was entitled to record. Suffice it to say that apart from appreciation of evidence adduced before the Commissioner the High Court has neither referred to nor determined any question of law much less a substantial question of law existence whereof was a condition precedent for the maintainability of any appeal under Section 30. Inasmuch as the High court remained oblivious of the basic requirement of law for the maintainability of an appeal before it and inasmuch as it treated the appeal to be one on facts it committed an error which needs to be corrected.” JUDGMENT 1 (2014) 2 SCC 587 Page 10 11 10. The learned counsel further places reliance on the decision of this Court in the case of National

would be maintainable subject to the limitations placed under Section 30 itself. 11. The learned counsel further contends that the High Court patently erred in waiving off the 50% penalty alongwith the 12% interest payable by Respondent No.1 in case of default without assigning the cogent reason. The learned counsel places reliance on a Four Judge Bench decision of this Court in the case of Pratap JUDGMENT 3 Narain Singh Deo v. Srinivas Sabata , wherein this Court held that the amount of compensation is payable from the date of accident and not from the date of award. The same was reiterated by a Division Bench of this Court in the case of Oriental Insurance Company 2 (2006) 2 SCC 641 3 (1976) 1 SCC 289 Page 11 12 4 Ltd. v. Siby George & Ors. , wherein after referring to several decisions of the Court, it was held that:

12. The learned counsel further contends that the High Court committed an error in reducing the amount of compensation awarded by the learned Commissioner without assigning any cogent reasons. Further, there was no discussion in the impugned judgment as to whether there was any connection between the death of the deceased and the use of the offending vehicle. The learned counsel places reliance on the decision of this JUDGMENT Court in the case of Harijan Mangri Siddakka & Ors. v. 5 Oriental Insurance Co. Ltd. & Anr. , wherein it was held as under: “We find that there is practically no discussion on the factual scenario as to whether there was any connection between the death and the use of the vehicle. It would depend upon the factual scenario in each case 4 (2012) 12 SCC 540 5 (2008) 16 SCC 115 Page 12 13 and there cannot be any strait jacket formula to be applied.” 13. The learned counsel further contends that the deceased

employment. He placed reliance on the decision of this Court in Mackinnon Mackenzie & Co. (P) Ltd. v. Ibrahim 6 Mohd. Issak , wherein it was held as under: “To come within the Act the injury by accident must arise both out of and in the course of employment. The words "in the course of the employment" mean "in the course of the work which the workman is employed to do and which is incidental to it." The words "arising out of employment" are understood to mean that during the course of the employment, injury has resulted from some risk incidental to the duties of the service, when, unless engaged in the duty owing to the master, it is reasonable to believe the workman would not otherwise have suffered. In other words, there must be a causal relationship between the accident and the employment. The expression "arising out of employment" is again not confined to the mere nature of the employment. The expression applies to employment as such-- to its nature, its conditions, its obligations and its incidents. If by reason of any of those factors the workman is brought within the zone of special danger, the injury would be one which arises "out of employment." To put it JUDGMENT 6 (1969) 2 SCC 607 Page 13 14

the High Court thus being wholly and patently erroneous is liable to be set aside and the order of award of compensation passed by the learned Commissioner be restored. 15. On the other hand, Mr. K.K. Bhat, the learned counsel appearing on behalf of the respondent Insurance Company contends that the High Court has been compassionate and reasonable in allowing even the amount of compensation it did award, considering the fact situation of the JUDGMENT case on hand. In fact, the appellants are not entitled to any compensation whatsoever when the deceased himself was solely negligent and responsible for the accident which resulted in his death. The learned counsel places reliance on the three judge Bench Page 14 15 decision of this Court in the case of Khenyei v. New 7 India Assurance Co. Ltd. , wherein it was held as under:

16. The learned counsel further contends that the Insurance Company is not liable to pay the penalty in any case. He places reliance on the decision of this Court in the 8 case of Ved Prakash v . Premi Devi & Ors. , wherein this Court held as under: “In other words the insurance company will be liable to meet the claim for compensation along with interest as imposed on the insured employer by the Workmen's Commissioner under the Compensation Act on the conjoint operation of Section 3 and Section 4-A Sub-section (3)(a) of the Compensation Act. So far as additional amount of compensation by way of penalty imposed on the insured employer by the Workmen's Commissioner under Section 4A(3)(b) is concerned, however, the insurance company would not remain liable to reimburse the said claim and it would be the liability of the insured employer alone.” JUDGMENT 17. We have heard the learned counsel appearing on behalf of both the parties. We are unable to agree with 7 (2015) 9 SCC 273 8 (1997) 8 SCC 1 Page 15 16 the contentions advanced by the learned counsel appearing on behalf of the respondent Insurance Company.

secure compensation to the poor workmen who suffer from injuries at their place of work. This becomes clear from a perusal of the preamble of the Act which reads as under: “An Act to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident.” This further becomes clear from a perusal of the Statement of Objects and Reasons, which reads as under: “……The growing complexity of industry in this country, with the increasing use of machinery and consequent danger to workmen, alongwith the comparative poverty of the workmen themselves, renders it advisable that they should be protected, as far as possible, from hardship arising from accidents. An additional advantage of legislation of this type is that by increasing the importance for the employer of adequate safety devices, it reduces the number of accidents to workmen in a manner that cannot be achieved by official inspection. Further, the encouragement given to employers to provide adequate medical treatment for their workmen should mitigate the effects to such accidents as do occur. The benefits so JUDGMENT Page 16 17 conferred on the workman added to the increased sense of security which he will enjoy, should render industrial life more attractive and thus increase the available supply of labour. At the same time, a corresponding increase in the efficiency of the average workman may be expected.” (emphasis laid by this Court) Thus, the E.C. Act is a social welfare legislation meant to benefit the workers and their dependents in case of death of workman due to accident caused during and in the course of employment should be construed as such. Section 3 of the E.C. Act provides for employer’s liability for compensation and reads as: “ 3 (1) If personal injury is caused to a workman by accident arising out of and in the course of his employment his employer shall be liable to pay compensation in accordance with the provisions of this Chapter” (emphasis laid by this Court) JUDGMENT 19. The liability of the employer, thus, arises, when the workman sustains injuries in an accident which arises out of and in the course of his employment. In the case of Regional Director, E.S.I. Corporation & Anr. v. Page 17 18 9 Francis De Costa & Anr. , a Three Judge Bench of this Court held as under:

JUDGMENT 20. The learned counsel appearing on behalf of the appellants has also rightly placed reliance on the decision of this Court in the case of Mackinnon 9 (1996) 6 SCC 1 Page 18 19 Mackenzie (supra). In the facts of the instant case, the deceased was on his way to deliver goods during the

attempt to regain control of the truck, which given the situation, any reasonable person would have tried to do so. The accident, thus, fairly and squarely arose out of and in the course of his employment. 21. The next contention which needs to be dispelled is that the appellants are not entitled to any compensation because the deceased died as a result of his own negligence. We are unable to agree with the same. Section 3 of the E.C. Act does not create any JUDGMENT exception of the kind, which permits the employer to avoid his liability if there was negligence on part of the workman. The reliance placed on the decisions of this Court on Contributory negligence like the Three Judge Bench decision in the case of Mastaan (supra) is wholly misplaced as the same have been passed in relation to the Motor Vehicles Act, 1988, and have no Page 19 20 bearing on the facts of the case on hand. The E.C. Act does not envisage a situation where the compensation

The above reasoning has been subsequently adopted by several High Courts. In the case of Janaki Ammal v. 11 Divisional Engineer , the High Court of Madras held as under:

10 1939 AC 71 11 (1956) 2 LLJ 233 Page 20 21

JUDGMENT 22. Thus, what becomes clear from the preceding discussion is that the deceased died in an accident which arose in and during the course of employment. The learned counsel for the appellants has rightly placed reliance on the decision of this Court in the case of T.S. Shylaja (supra), wherein referring to proviso of Section 30 of the E.C. Act, this Court held as under: “What is important is that in terms of Page 21 22

In the light of the well reasoned and elaborate order of award of compensation, the High Court could not have reduced the compensation amount by more than half by merely mentioning that it is in the ‘interest of justice’. It was upon the High Court to explain how exactly depriving the poor appellants, who have already lost their elder son, of the rightful compensation JUDGMENT would serve the ends of justice. 23. Since neither of the parties produced any document on record to prove the exact amount of wages being earned by the deceased at the time of the accident, to arrive at the amount of wages, the learned Commissioner took into consideration the fact that the deceased was a highly skilled workman and would often be required to Page 22 23 undertake long journeys outside the state in the line of duty, especially considering the fact that the

Rs.4,000/- per month + daily bhatta of Rs.6,000/- per month, which amounts to a total of Rs.10,000/-. The High Court did not give any reason on which basis it interfered with the finding recorded by the Commissioner on the aspect of monthly wages earned by the deceased. The impugned judgment does not even mention what according to the High Court, the wages of the deceased were at the time of the accident. Such an unnecessary interference on part of the High Court was JUDGMENT absolutely uncalled for, especially in light of the fact that the appellant Nos.1 and 2 are old and have lost their elder son and they have become destitutes. Further, under the Payment of Wages Act, 1936, the onus is on the employer to maintain the register and records of wages, Section 13A of which reads as under: “13-A. Maintenance of registers and records - Page 23 24

From a perusal of the aforementioned section it becomes clear that the onus to maintain the wage roll was on the employer, i.e. Respondent No.2. Since in the instant case, the employer has failed in his duty to maintain the proper records of wages of the deceased, the appellants cannot be made to suffer for it. JUDGMENT 24. In view of the foregoing, the judgment and order of the High Court suffers from gross infirmity as it has been passed not only in ignorance of the decisions of this Court referred to supra, but also the provisions of the E.C. Act and therefore, the same is liable to be set aside and accordingly set aside. Page 24 25 25. The monthly wage of the deceased arrived at by the learned Commissioner was Rs.10,000/-. The date of birth

the deceased is 19.07.2011. Thus, according to Schedule IV of the E.C. Act, the ‘completed years of age on the last birthday of the employee immediately preceding the date on which the compensation fell due’, is 27 years, the factor for which is 213.57. Hence, the amount of compensation payable to the appellants is calculated as under: Rs.10,000/- x 50% x Rs.213.57 = Rs.10,67,850/-. Funeral expenses to the tune of Rs.25,000/- are also JUDGMENT awarded. The total amount of compensation payable thus comes to Rs.10,92,850/-. 26. Further, an interest at the rate of 12% per annum from the date of accident, that is 19.07.2011, is also payable to the appellants over the above awarded amount. In light of the unnecessary litigation and the Page 25 26 hardship of the appellants in spending litigation to get the compensation which was rightly due to them

27. Appeal is accordingly allowed. The respondent- Insurance Company is directed to deposit the amount within six weeks from today with the Employees Compensation Commissioner. On such deposit, he shall disperse the same to the appellants. …………………………………………………………J. [V. GOPALA GOWDA] …………………………………………………………J. [UDAY UMESH LALIT] New Delhi, February 4, 2016 JUDGMENT Page 26 27 ITEM NO.1A-For Judgment COURT NO.9 SECTION XV S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

VERSUS BRANCH MANAGER, IFFCO TOKIO GENERAL INSURANCE COMPANY LTD. & ANR. Respondent(s) Date : 04/02/2016 This appeal was called on for pronouncement of JUDGMENT today. For Appellant(s) Mr. Kedar Nath Tripathy,Adv. For Respondent(s) Mr. Ranjan Kumar Pandey,Adv. Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice Uday Umesh Lalit. JUDGMENT Leave granted. The amount of compensation payable to the appellants is calculated as under: Rs.10,000/- x 50% x Rs.213.57 = Rs.10,67,850/-. Funeral expenses to the tune of Rs.25,000/- are also awarded. The total amount of compensation payable thus comes to Rs.10,92,850/-. Page 27 28 Further, an interest at the rate of 12% per annum from the date of accident, that is 19.07.2011, is also payable to the appellants over

appellants in spending litigation to get the compensation which was rightly due to them under the Act, we deem it fit to award the appellants costs as Rs. 25,000/-. The respondent-Insurance Company is directed to deposit the amount within six weeks from today with the Employees Compensation Commissioner. On such deposit, he shall disperse the same to the appellants. The appeal is allowed in terms of the signed JUDGMENT Reportable Judgment. (VINOD KUMAR) (CHANDER BALA) COURT MASTER COURT MASTER (Signed Reportable judgment is placed on the file) Page 28