Karnataka High Court
United India Insurance Company ... vs Venkataraju And Another on 15 December, 1998
Equivalent citations: 2000ACJ984, ILR1999KAR729, 1999(2)KARLJ86, (1999)IILLJ272KANT
JUDGMENT
1. This appeal arises from the judgment under Section 30(1) of the Workmen's Compensation Act, for short, "the Act" from the judgment and award dated 29-7-1998 delivered by the Workmen's Compensation Commissioner (Sub-Division 1), Bangalore in WCA/CR/5/97 awarding compensation, to the injured claimant, of the sum of Rs. 2,54,148.00 with interest at the rate of 12% per annum.
2. The Tribunal accepted the claimant's case that he was getting monthly salary of Rs. 800/- and bhatta of Rs. 50/- per day, that is Rs. 1,500/- per month and thus in total he was getting wages to the tune of Rs. 2,300/-. It also found that the age of the claimant at the time of accident was 28 years. The Tribunal also found that the claimant was working as a workman under the owner of the vehicle, namely, respondent 2 before it, that is before the Workmen's Compensation Commissioner, who is respondent 1 in the memo of appeal. In other words Tribunal held that the present respondent 2 in the appeal was an employee of respondent 1, the owner of the vehicle. It had relied on the evidence given by the claimant including two documents filed and observed that no evidence has been led or produced by the owner of the vehicle to prove or show otherwise i.e. to the contrary.
3. The Commissioner found the claimant to be entitled to award of compensation. The Workmen's Compensation Commissioner has found that the income of the claimant comes to Rs. 2,300/-, it opined that for the purpose of Section 4 and calculation of compensation in view of Explanation II to Section 4 of Workmen's Compensation Act, the monthly wages of the claimant shall be deemed to be Rs. 2,000/- only, in view of substitution of the figure Rs. 2,000/- for figure Rs. 1,000/- in the 2nd explanation of Section 4 of the Workmen's Compensation Amendment Act, 1995, for short "the amending Act 30 of 1995". On that basis applying the multiplier, the Tribunal has assessed and awarded the amount of compensation to be Rs. 2,54,148/- with interest of 12% thereon vide the award dated 29-7-1998.
4. The Insurance Company has come up in appeal before this Court under Section 30 of the Workmen's Compensation Act.
5. I have heard Sri M.V. Poonacha, learned Counsel for the appellant and Sri K.T. Gurudeva Prasad, learned Counsel for the respondents.
6. On behalf of the appellant Sri Poonacha urged that figures of Rs. 2,000/- have been substituted in Explanation II to Section 4 of the Act by the amending Act, 1995. Learned Counsel for the appellant submitted that the amending Act, 1995 received the assent of the President and came in force, no doubt with effect from 19th August, 1995, but the relevant provisions came into effect from 15th September, 1995. Learned Counsel for the appellant submitted that on the date of occurrence, namely 22-2-1995 figure of Rs. 1,000/- was mentioned in Explanation II to Section 4 and not Rs. 2,000/-. He further submitted that the amendment is not retrospective and could not govern the case in question and the calculation of compensation could be made by deeming the salary of the claimant to be 1,000/- rupees only. Learned Counsel for the appellant submitted that, thus the Workmen's Compensation Commissioner committed a substantial error of law and jurisdiction in awarding compensation by deeming the income to be Rs. 2,000/-, as such the amount of compensation calculated and awarded by the Workmen's Compensation Commissioner is not according to law and the award suffers from the said error and the award needs interference and is to be set aside or modified.
7. On behalf of the 2nd respondent, Sri K.T. Gurudeva Prasad, learned Counsel firstly raised a preliminary point of objection and submitted that the case being one of Motor accident, the scope of defence of Insurance Company is limited and circumscribed by Section 149(2) of the Motor Vehicles Act, 1988, for short, "the M.V. Act of 1988" and no defence, which is available to the insured, is available to the Insurance Company, As such it is not open to the Insurance Company to raise the plea and challenge the quantum of compensation awarded by the Workmen's Compensation Commissioner, even if the appeal has been filed under Section 30 of the Act. Sri Gurudeva Prasad further submitted that Section 4 and the II Explanation thereto are provisions of procedural nature and they did not deal with substantive right. As such the Workmen's Compensation Commissioner did not commit any error of law in applying and assuming that the monthly wages in the case of 2nd respondent-claimant has to be deemed to be Rs. 2,000/-, even if the wages had ordinarily exceeded the figure of Rs. 2,000/-.
8. In the rejoinder, on the preliminary objection Sri Poonacha submitted that under Section 30, Insurance Company is entitled to raise all the pleas of law to show that compensation awarded is excessive and bad in law as the right of the appellant to challenge the award in appeal is not controlled by Section 149(2) of the Motor Vehicles Act and this it has to be taken note that Section 149(2) of the M.V. Act of 1988 is on same terms, as Section 96(2) of the Motor Vehicles Act of 1939, for short, "the M.V. Act of 1939". Under these two sections there is a statutory inhibition and prohibition against the insured to the effect that he can raise only those defences which are mentioned specifically or specified either in Section 96(2) and (6) of the Act of 1939 or those specified in Section 149(2) read with 149(7) of the M.V. Act of 1988 and other defences which are open to the insured are not available to him for being raised except the cases where the course prescribed under Section 170 of the Vehicles Act has already been followed. That it has to be taken that the right of appeal available to the insurer either under Section 173 of the M.V. Act of 1988 or under Section 30 of the Act is circumscribed by the mandate of Section 149(2) and (7) and Section 170 of the Act of 1988 and inhibition continues to operate and control the right of the insured, even at appellate stage, as such the insurer is also not entitled to raise pleas in the memo of appeal not covered by pleas specified nor he can challenge the quantum of compensation nor cause of accident.
9. That under Section 30 of the Act, with reference to workmen whose cases are covered under Motor Vehicles Act, and the Workmen's Compensation Commissioner has passed order, the appeal lies from the order of the Workmen's Compensation Commissioner to this Court, but the scope of the appeal of the insurer, i.e. Insurance Company cannot be widened nor can it be said that the Insurer can take even those defences which are not ordinarily available to him in view of Section 149(2) of the M.V. Act, 1988 namely the defence available to the insured. The reading of two Sections, 30 of the Act and 149(2) and (7) of the M.V. Act of 1988 together reveals the right of appeal available to insurer from the award of Workmen's Compensation Commissioner in matters of motor accidents claim is subject to two conditions first and primary condition is that it is limited by the scope of defences specified by Section 149(2) and (7) of M.V. Act of 1988 part materia to Section 96(2) and (6) of the Act of 1939. The second condition is that the ground challenging the award must involve the determination of substantial question of law having nexus and relation with those limited defence only. This is the effect of the combined reading and harmonious construction of the provisions of Section 149(2) and (6) of M.V. Act of 1988 and Section 30 of the Act.
10. When I so observe I find support from the view expressed by the Division Bench of the Allahabad High Court in New India Assurance Company Limited, Etawah v Smt. Shakuntala Devi. I also find support from the view expressed in Oriental Fire and General Insurance Company Limited v Hanumakka and Others , in which the Division Bench of this Court dealing with Sections 96(2), 110-C(2) after having read with Section 110-C(2-A) observed that, the word 'party aggrieved' used in Section 110-D(1) of the Act, means that the party should be legally aggrieved. The Insurance Company becomes legally aggrieved only when the findings are given against it only with reference to the grounds of defence mentioned in Section 96(2) of the M.V. Act of 1939, because they are the only grounds available to it for defence. It cannot be aggrieved on a finding of actionable negligence because the company has no right to contest in that behalf.
11. It may further be mentioned that with reference to motor accidents claims when once the defences have been specified whether the forum before which the claim has been made, is Motor Accidents Claim Tribunal or the Workmen's Compensation Commissioner the defences available to the Insurance Company cannot be increased or expanded at the Appellate Stage. The defences available will be only as provided under Section 96(2) and therefore grounds on which the award can be challenged in appeal are those defences which are available either under Section 96(2) of M.V. Act of 1939 or Section 149(2) of M.V. Act of 1988. Mere change of forum cannot have an effect of widening the scope of defences available, by way of attack or challenge to award in appeal therefrom. Therefore, it is not open to the Insurance Company to challenge the award of compensation, except the cases where it is or has been allowed to raise the defences other than those mentioned in Section 149(2) in terms of Section 170 of M.V. Act of 1988.
12. When I so observe I find support from the decision of Division Bench of this Court in New India Assurance Company Limited, Davanagere v Raja Naika and Another . In that decision the Division Bench of this Court interpreted Section 30 of the Act in context with Section 96(2) and (6) of the Act of 1939 as well as Section 149(2) and (7) of the M.V. Act of 1988. After making reference to these provisions the Division Bench of this Court observed as under:
"Hence, when the insurer in a proceeding under the Workmen's Compensation Act cannot defend an action for fixation of the liability of an employer for payment of compensation to his employee for his death or bodily injury on grounds other than those permitted by statute under sub-section (2) of Section 149 of the Motor Vehicles Act, it must follow as a necessary corollary that no appeal by an insurer under Section 30(1) of the Workmen's Compensation Act against an award made by the Commissioner could lie on grounds other than those specified under sub-section (2) of Section 149 of the Motor Vehicles Act, subject to further condition that such grounds involve substantial questions of law required to be considered in appeal".
13. Thus considered in the appeal from the award made by the Workmen's Compensation Commissioner, particularly those coming within the purview of defence controlled by Section 149, the insurer is not entitled to raise those grounds of defences or attack which are available to the insured and so the question relating to compensation or its correctness or otherwise are not open to challenge and I uphold the preliminary objection. Even otherwise as regards the merits of the case it has no merits as hereinafter.
14. As regards the second contention raised by the learned Counsel for the appellant, it will be appropriate at this juncture to refer to material portion of Section 4 of the Act earlier to its amendment by Act 30 of 1995. Section 4(1), clauses (a) and (b) with Explanations I and II reads as under:
"4. Amount of compensation.--(1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:--
(a) Where death results from the injury an amount equal to forty per cent of the monthly wages of the deceased workman multiplied by the relevant factor;
or an amount of twenty thousand rupees, whichever is more;
(b) Where permanent total disablement results from the injury an amount equal to fifty per cent of the monthly wages of the injured workman multiplied by the relevant factor;
or an amount of twenty-four thousand rupees, whichever is more;
Explanation I.--For the purposes of clauses (a) and (b), "relevant factor", in relation to a workman means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the workman on his last birthday immediately preceding the date on which the compensation fell due;
Explanation II.--Where the monthly wages of a workman exceed one thousand rupees, his monthly wages for the purposes of clause (a) and clause (b) shall be deemed to be one thousand rupees only;
(c)....".
15. Where 'one thousand rupees' had been written, it must be made as Rs. 2,000/- as per amendment under Act 30 of 1995. It may be mentioned here that by virtue of Section 4 of the amending Act 30 of 1995, Central Government appointed 15th September, 1997, as the date on which the provisions of Sections 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, 15 and 16 of this Act 30 of 1995 came into force vide Notification No. S.O. 778(E), dated 12th September, 1995 issued under Section 1(2) of the amending Act of 1995. In Explanation II for the word and expression 'one thousand rupees, at both the places where they did occur it has been provided the words 'Two Thousand rupees' shall be substituted.
16. The question posed before this Court is:
Whether the benefit of the expressions that have been substituted, namely two thousand rupees for one thousand rupees in Explanation II i.e. in the deeming clause.-
Whereunder the wages of the worker has to be deemed to be Rs. 2,000/- only, even where his wages are more than Rs. 2,000/- was given legally to the 1st respondent by Commissioner when he deemed the wages of the respondent 1 to be Rs. 2,000/- for the purpose of calculation of compensation or did the Commissioner act illegally and against law.
17. Section 3 of the Workmen's Compensation Act is the section which fastens the liability initially for compensation on the employer and provides that if personal injury is caused to a workman by accident arising out of and in the course of employment, his employer is liable to pay compensation "in accordance with the provisions of this chapter" i.e. Chapter II of the Act. So far as Insurance Company is concerned the liability arises in case employees injured or having died in the motor accidents, by virtue of insurance contract and specific provisions of Section 147 of the M.V. Act, 1988 which deals with the requirement of policy and limits of liability, particularly the proviso to Section 147 of Motor Vehicles Act reads as under:
Provided that a policy shall not be required:
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 in respect of the death of, or bodily injury to, any such employee-
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
18. A reading of this proviso per se reveals that the liability of the Insurance Company with reference to employees dying in accident or suffering bodily injuries in the circumstances indicated in clause (a), (b) or (c) is fastened to the limited extent namely, to the extent of liability arising under the Workmen's Compensation Act, 1923.
19. How the compensation amount is to be assessed, in case of death or permanent injury has been provided in Section 4, so also the yardsticks and mode to be applied is provided. Thereunder the formula prescribed is that to 40% of the monthly wages of deceased or to the 50% of monthly wages of injured workman, is to be multiplied by relevant factor. It means that firstly monthly wages of a deceased or injured worker is to be determined or found, i.e. to be ascertained on the basis of evidence oral or documentary and where evidence reveals monthly wages to be exceeding the figure prescribed then monthly wages are to be deemed, i.e. presumed to be not more than the specified figure as in Explanation II to Section 4 and where is less than the figure specified in explanation the deeming clause is not to apply instead it will be same as evidence discloses. Here the deeming clause really provides for the thing to be deemed by way of legal fictions or as rule of presumption which is part of law of evidence.
20. In the case of Gajraj Singh v State Transport Appellate Tribunal and Others, their Lordships of Supreme Court laid it down:
"Legal fiction is one which is not an actual reality and which the law recognises and the Court accepts as a reality. Therefore in case of legal fiction the Court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such legal fiction is that a position which otherwise would not obtain is deemed under the circumstances".
21. Section 4(1) and Explanation II thereto appears to be a procedural provision including in itself the principle of law of evidence relating to presumption, may be of rebuttable or irrebuttable. Explanation II to Section 4 is a deeming clause which provides that where the monthly wages of the workman exceed the limit mentioned therein, that is Rs. 1,000/-, but as a result of amendment in place of which, Rs. 2,000/- has been substituted at both the places. That under amended explanation, the monthly wages shall be deemed, for the purposes of clauses '(a)' and '(b)' of Section 4(1) to be Rs. 2,000/- where the wages exceed rupees two thousands.
22. This provision per se appears to be a part of procedural law and evidence. It does not also determine the substantive rights. It is one of the well-settled principle of law that the effect of amendment in the procedural law is no doubt taken to be retrospective in the sense that the change in procedural law during the pendency of the cases instituted, earlier to the change, will govern or control the trial of cases then pending as well as those arising or filed later by the changed procedural law unless and until it is otherwise provided by the Act itself. No person has got a vested right with reference to the course of procedure or as to mode or procedure of trial. It may be no doubt said that if the cases have closed and have been decided under old procedure prior to the amendment the decision will not be affected thereby unless otherwise provided. But no doubt where the case is pending a change has been introduced in procedural law with reference to determination or decision that changed procedure has to be followed in respect of the pending cases.
23. In the case of Blyth v Blyth, with reference to Section 1 of the Matrimonial Cases Act, 1963 which enabled the rebuttal by evidence of presumption of condonation arising from marital intercourse has been held to be procedural and applicable to pending divorce proceeding irrespective of that date of events to which the evidence might be directed. Lord Denning in Blyth v Blyth, above referred case observes:
"The rule that an Act of Parliament is not to be given retrospective effect only applies to statutes which affect vested rights. It does not apply to statutes which alter the form of procedure or admissibility of evidence or the effect which the Court give to evidence.
The II Explanation to Section 4 of the Act is to the effect that if evidence led reveals more or higher wages than the one specified in Explanation II then Court shall not act on that evidence nor shall give effect to that evidence instead the wages in such a case or cases shall be deemed to be the one specified in the explanation be it one thousand as per explanation unamended by Act of 1995 or Rupees two thousand as amended. Thus it relates to mode and manner of assessment of compensatory assessment of evidence only which may be said to be part of procedural law".
24. It is thus well-settled that where new Act or amendment of the Act effects changes in matters of procedure only, then amended Act prime facie applies to all actions pending as well as no person has a vested right in the matter of course of procedure to be followed, as has been laid down in the case of Anant Gopal Sheorey v State of Bombay.
25. In the case of Gurbachan Singh v Satpal Singh, dealing with Section 113A of the Evidence Act inserted in the Evidence Act by Act No. 46 of 1983 providing for the presumption as to abatement of suicide by a married woman in certain conditions as mentioned therein to be the procedural provision and their Lordships laid it down that the said presumption did apply to trial of offences committed earlier to the insertion of the section.
26. In Maxwell's Interpretation of Statutes, 11th Edition, Page 216, the observations are:
"No person has a vested right in course of procedure. He has only the right of prosecution or defence in the manner prescribed for the time being by or for Court in which the case is pending and if by the Act of parliament the mode of procedure is altered, he has no other right than to proceed according to the altered mode".
27. Here Explanation II to Section 4(1) is a deeming clause and stands on same footing as "presumptions under law" whereunder it is provided that if a person's wages are more than the one prescribed, then they shall be deemed to be the one as per the prescribed figure. In my opinion this provision being one relating to procedure the amendment introduced on 15th September, 1995 would have applied and governed will apply to the case in the matter of determination of the amount of compensation in case pending or for decision before Workmen's Compensation Commissioner on the date of coming into effect or operation of amending Act 30 of 1995 irrespective of the date of occurrence or accident causing death or injury. It may not apply to cases closed, i.e. determined finally, before the date of commencement or enforcement of amending Act of 1995, i.e. prior to the coming into force of the amending Act or prior to substitution cannot be reopened on the ground that the amending Act is retrospective, or substitution of figure is retrospective. Presumption or deeming clause being matters of law of evidence to be raised or followed in the course of trial or determination of the compensation.
28. Further the amendment has been introduced in social and beneficial enactment with object to benefit the poor low paid workman that if a workman proves or shows or is established to be getting wages more than one thousand but less than two thousands his evidence will have to be given effect and his monthly wages even if more than one thousand will form basis for computation of compensation if the said wages do not exceed the limit of two thousands. A socially beneficial enactment has to be given purposeful interpretation as well and amendment in question is beneficial to both and its application to pending cases and their trial will be beneficial to both employer and employee.
29. Thus considered, in my opinion the Workmen's Compensation Commissioner when proceeded to determine the compensation taking in view the amended Explanation II to Section 4 it did not commit the error. The provision being beneficial to the employee as well as to the employer, and being special legislation, the benefit thereof was to be made available by application of Explanation II to the cases pending for final adjudication. On the date of enforcement thereof, i.e., 15-9-1995, irrespective of the date of accident. Further the Workmen's Compensation Commissioner has really followed the law laid down by the Hon'ble Supreme Court in the case of New India Assurance Company Limited v V.K. Neelakandan and Others, wherein their Lordships observed:
"It is not disputed that Section 4 of the Act was amended in 1995 by the amendment Act 30 whereunder the deemed income has been increased from Rs. 1,000/- to Rs. 2,000/-. Learned Counsel for the Assurance Company has vehemently contended that since the accident took place in the year 1981, the law operating on that date is applicable and as such the heirs of the workmen are not entitled to the benefit of the amendment. We do not agree with the learned Counsel. We are finally determining the rights of the workmen today. The Act is a special legislation for the benefit of the labour. Keeping in view the scheme of the Act we are of the view that the only interpretation which can be given to the amendment is that if any benefit is conferred on the workmen and the said benefit is available on the date when the case is finally adjudicated, the said benefit should be extended to the workmen".
30. The Kerala High Court has also expressed the same view as well. The cases that have been referred by the learned Counsel for the appellant do not relate to amendment of procedural law, as such those cases are not applicable and finally further, no doubt the learned Counsel for the appellant made reference to a Single Judge decision of this Court in the case of D.P. Divakar v Chairman and Personnel Managing Director, Kudremukh Iron and Ore Company Limited, is not on the point involved in this case, and further in view of the latest decision of the Supreme Court referred above, it has to be taken that the law declared by the Supreme Court is also binding on him, and may be said to have the effect of rendering nugatory the decision of learned Single Judge of this Court referred to above even if it touches point herein involved.
31. Thus considered on both the grounds the appeal can be said to have got no merits, is liable to be dismissed and it is hereby dismissed with costs to respondent. Let the amount deposited be sent to Workmen's Compensation Commissioner for being paid to claimant.