Full Judgment Text
CA 7657-7658/2021
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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos 7657-7658 of 2021
(Arising out of SLP (C) Nos 16316-16317 of 2019)
Shantilata Sethy and Another Appellants
Versus
M/s Divisional Manager, The New India Respondents
India Assurance Company Limited and Anr.
J U D G M E N T
Dr Dhananjaya Y Chandrachud J
1 Leave granted.
2 These appeals arise from the judgments of a Single Judge of the High Court
of Odisha in FAO No 305 of 2016 dated 30 November 2018 and in Review
Petition No 261 of 2018 dated 1 February 2019.
3 The facts of the case are as follows: The deceased workman, who is the son
Signature Not Verified
of the appellants, was working as a helper in a truck bearing registration No
Digitally signed by
Chetan Kumar
Date: 2021.12.16
16:29:47 IST
Reason:
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OR – 04 A 1225 belonging to the second respondent, who was his employer.
The truck was insured with the first respondent. At 11 am on 30 October
2004, when the truck was carrying goods from Paradeep to Jadupurgoda, the
driver negotiated with a person to carry back thirty bags of rice to
Chandikhol on its return trip. The driver instructed the deceased helper to
get down from the truck and make necessary arrangements for loading of
the rice bags. The driver of the truck is alleged to have lost control of the
truck and dashed into the helper who struck against a tree on the side of the
road. The workman succumbed to his injuries on 1 November 2004.
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4 The appellants filed an application before the Court of Commissioner
claiming a compensation of Rs. 3,00,000 under the provisions of the
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Workmen’s Compensation Act 1923 . The deceased was twenty-four years
old at the time of the accident and was receiving a salary of Rs. 2400/- per
month, and Rs. 25/- everyday towards food expenses. The amount was
admitted by the employer. The claim for workman’s compensation was
disposed of on 29 February 2016. It was observed that any special expense
paid to the employee by nature of his employment is covered within the
meaning of ‘wages’ under Section 2(m) of the Act. Therefore, the total
monthly wages at the time of the accident were calculated to be
Rs.2425/month. According to Section 4 of the Act, where the death of a
workman results from an injury, the total amount of compensation shall be
an amount equal to fifty percent of the monthly wages of the deceased
1 Case No. 273-D/2004
2 “The Act”
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multiplied by the relevant factor. According to the IVth Schedule of the Act,
the relevant factor for 24 years is 218.47. The total computation was
calculated to be as follows: (50% of 2425) X 218.47 = Rs.2,64,898.87. The
first respondent was directed to pay a compensation of Rs. 2,64,895/- along
with interest at 12% p.a. from the date of accident till realization.
5 On appeal, the High Court by its judgment dated 30 November 2018,
modified the award by reducing the compensation to Rs 1,98,807.70 and the
interest from 12% to 8% from the date of the award till realization. The High
Court has, while reducing the claim for compensation, proceeded on the
basis that there was no material on the record to indicate that the salary of
the deceased at the time of death was Rs 2,400 per month. The High Court
consequently proceeded on the basis of a minimum wage of Rs 910, to which
a multiplier of 218.47 was applied resulting in a recomputed compensation of
Rs 1,98,807.70. On the point of interest, the Court held that there is no
provision in the Act to grant interest on the compensation from the date of
the accident. Subsequently, the payment of interest was reduced from 12%
to 8% from the date of award till realization. The review filed against the
judgment was dismissed by an order dated 1 February 2019.
6 On behalf of the appellant, it has been submitted that the High Court has
completely failed to consider that the award of interest is governed by
Section 4(A) of the Act. Moreover, it has been submitted that the issue has
been considered by this Court in North East Karnataka Road Transport
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Corporation vs Sujatha , where it has been held:
“20. …...The question as to when does the payment of
compensation under the Act "becomes due" and consequently
what is the point of time from which interest on such amount is
payable as provided Under Section 4-A (3) of the Act remains
no more res integra and is settled by the two decisions of this
Court.
21. As early as in 1975, a four Judge Bench of this Court in
Pratap Narain Singh Dea v. Srinivas Sabata and Anr.
MANU/SC/0021/1975: (1976) 1 SCC 289 : AIR 1976 SC 222
speaking through Singhal, J. has held that an employer
becomes/liable to pay compensation as soon as the personal
injury is caused to the workman in the accident which arose
out of and in the course of employment. It was accordingly held
that it is the date of the accident and not the date of
adjudication of the claim, which is material."
7 The appeals before this Court indicate the manner in which the litigation
process can drag on for years. In consequence, a poor farming family is lost
in a long drawn out battle to secure a paltry compensation of Rs 2,64,895
awarded by the Commissioner of Labour under the Act for the death of their
son for an accident which took place in 2004. After the Commissioner
awarded compensation, the parents of the deceased workman had to initially
defend the proceedings brought by the insurer before the High Court and
thereafter pursue their own challenge to the judgment of the High Court
before this Court. When will a high and mighty state owned insurance
company realize its social conscience? Our conscience has been deeply
disturbed by the manner in which a farmer and his spouse have been left to
the mercies of legal procedure. Should the insurer have dragged the parents
3 (2019) 11 SCC 514
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to the High Court over the award of Rs 2.64 lakhs for the death of their wage
earning son? It is time that there is a fundamental rethink on this. Families of
the victims of motor accidents cannot realize rights under law so long as
litigation continues to be a stratagem and source of harassment and torture.
8 In the present case, the claim was on the basis that the deceased was
earning an amount of Rs 2,400 per month. The claim was not disputed by the
employer. There was absolutely no basis for the High Court to reduce the
award on the ground that there was no material to establish the salary that
the deceased was earning at the time of the accident. There was no ground
to proceed on the basis of the minimum wage, particularly when there was
nothing untoward or exaggerated in the claim for compensation based on the
salary which was earned by the deceased. The second respondent has in his
written statement and affidavit, stated that the deceased helper was
receiving a salary of Rs 2400/month. This statement has not been
discredited. The deceased was an informal worker, who was working as a
helper in a transport business under the second respondent, earning a
meagre wage of Rs. 2400 at the time of the accident. Such employees are
not provided receipts on the payment of wages, nor can it be reasonably
assumed that the employer would maintain receipts for the payment of
wages to his employees. There was no reason for the High Court to observe
that there was no material to establish the wages paid.
9 As a matter of fact, we are clearly of the view that there was no justification
for the insurer to take a matter involving such a paltry sum of compensation
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based on the facts of the case to the High Court and to allow a poor farmer
and his wife who have already lost the solace of an earning member of the
family into a long drawn out litigation. Thus, and for the reasons that we
have indicated, we are of the view that the judgment and order of the High
Court would have to be set aside. Section 2(m) of the Act defines ‘wages’ to
include “any privilege or benefit which is capable of being estimated in
money, other than a travelling allowance or the value of any travelling
concession or a contribution paid by the employer of a *[employee] towards
any pension or provident fund or a sum paid to a *[employee] to cover any
special expenses entailed on him by the nature of his employment”.
Therefore, Rs 25 that was paid by as food expense by the employer would
fall within the ‘special expenses that he is entitled to by the nature of his
employment’ which is specifically excluded by the provision. Therefore, the
total compensation to be paid is as follows: (50% of 2400) x 218.47= Rs.
2,62,164. The first respondent is directed to pay Rs. 2,62,164 along with an
interest of 12% from the date of accident till it is realised.
10 In the event that the insurer has paid any part of the compensation that has
fallen due in pursuance of the order of the Commissioner of Labour, that
shall be given due credit for in computing the balance which is due and
payable. The balance shall be paid over to the appellants within a period of
one month from the date of this order. The Commissioner shall personally
ensure that the amount is paid over to the appellants. In addition, the
appellants shall be entitled to costs quantified at Rs 1 lakh towards for
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meeting their costs and expenses of the proceedings which have been
conducted in the courts below.
11 The appeals are allowed in the above terms.
12 Pending applications, if any, stand disposed of.
….....…...….......………………........J.
[Dr Dhananjaya Y Chandrachud]
..…....…........……………….…........J.
[A S Bopanna]
New Delhi;
December 11, 2021
CKB
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ITEM NO.17 Court 4 (Video Conferencing) SECTION XI-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) Nos.16316-16317/2019
(Arising out of impugned final judgment and order dated 30-11-2018
in FAO No.305/2016 and 01-02-2019 in RVWPET No.261/2018 passed by
the High Court of Orissa at Cuttack)
SHANTILATA SETHY & ANR. Appellants
VERSUS
M/S DIVISIONAL MANAGER THE NEW INDIA Respondents
ASSURANCE COMPANY LTD & ANR.
Date : 11-12-2021 These petitions were called on for hearing today.
CORAM :
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE A.S. BOPANNA
For Appellant(s)
Mr. Anirudh Sanganeria, AOR
For Respondent(s) Mr. Abhishek Gola, Adv.
Mr. Viresh B. Saharya, AOR
Mr. Akshat Agrawal, Adv.
Mr. Anshul Mehral, Adv.
UPON hearing the counsel the Court made the following
O R D E R
1 Leave granted.
2 The appeals are allowed in terms of the signed reportable judgment.
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3 Pending applications, if any, stand disposed of.
(CHETAN KUMAR) (SAROJ KUMARI GAUR)
A.R.-cum-P.S. Court Master
(Signed Reportable Judgment is placed on the file)