Jammu & Kashmir High Court
Oriental Insurance Co. Ltd vs Parveen Akhtar W/O Rashid Ahmad on 31 August, 2024
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on: 27.08.2024
Pronounced on: 31.08.2024
Case:- MA No. 434/2013
Oriental Insurance Co. Ltd., T.P. Hub, Jammu
through Shri Hari Ram, Manager Incharge, age 49 years
.....Appellant(s)/Petitioner(s)
Through: Mr. Vishnu Gupta, Advocate.
Vs
1. Parveen Akhtar W/O Rashid Ahmad
2. Baby Akhtar D/O Rashid Ahmad
3. Gulshan Khan S/O Rashid Ahmad
4. Aslam Khan (minor) S/O Rashid Ahmad
5. Tanvir Ahmad (minor) S/O Rashid Ahmad
6. Taniya Akhtar (minor) D/O Rashid Ahmad
(Respondents 3 to 6 minors through their mother Respondent No. 1)
All residents of Village Pallan, Tehsil Billwar, District Kathua.
7. Shashinder Shokeen S/O Jaswant Singh,
R/O H. No. 1, Mangolpur Khurd, Delhi
At/p C/O Hari Krishan Singh, P/O Mohalla Langar Khana,
Tehsil Sadar, Rampur (UP)
(Owner of Bus No. UP-22T/0010)
..... Respondent(s)
Through: Mr. Anil Khajuria, Advocate.
Coram: HON‟BLE MR. JUSTICE M A CHOWDHARY, JUDGE
JUDGMENT
01. One Rashid Ahmad S/O Fateh Din R/O Village Pallan Tehsil Billawar District Kathua (hereafter called 'deceased') while driving Bus No. UP-22T-0010 died on 02.05.2011 as a result of the accident having taken place on 22.04.2011 2 MA No. 434/2013 near Peepli, Haryana. His dependants i.e. Parveen Akhtar (wife) and children laid a claim for grant of compensation for his death under the Employees Compensation Act, 1923 with the Commissioner under Employees Compensation Act i.e. Assistant Labour Commissioner, Kathua (in short, „Commissioner‟) asserting therein that the deceased- Rashid Ahmad was employed as a driver of the offending Bus by the respondent No. 1 - Shashinder Shokeen, the owner of the offending Bus which was insured with the respondent No. 2 - Oriental Insurance Co. Ltd. It was claimed that the deceased was 48 years of age at the time of his death and was receiving monthly wages of Rs. 15,000/-.
02. Pursuant to issuance of a notice, the respondents - owner and insurer of the offending vehicle in question, appeared and filed objections, controverting the assertions made in the claim petition.
03. On the basis of the pleadings of the parties, the following issues were raised by the Commissioner for determination of the claim of the claimants:-
"i) Whether the deceased falls in the category of workman and was holding a valid driving license?
OPP
ii) Whether the accident arose during and in the course of employment with non-applicant No. 1? OPP
iii) What was the age and wages at the time of accident?
OPP
3 MA No. 434/2013
iv) Whether the non-applicants are liable to pay the
compensation to the dependents? OPP
v) Amount of compensation/Relief."
04. The claimants besides claimant-appellant No.1 herein-
Parveen Akhtar examined Vijay Kumar and Darshan Singh as their witnesses whereas the respondents-owner and insurer of the offending vehicle failed to lead any evidence, before the Commissioner.
05. The Commissioner, vide his award dated 31.08.2013, decided the claim petition granting an amount of Rs. 6,77,800/- in favour of the claimants and against the respondents with the direction to respondent No. 2 - the insurer of the vehicle, to deposit the awarded amount with the Commissioner within 30 days, failing which the same shall be recovered alongwith interest and penalty as per the law.
06. The respondent - insurer aggrieved of the award has filed the instant statutory appeal under section 30 of the Employees Compensation Act, 1923, on various grounds. This Court, vide an order dated 24.08.2018, admitted the appeal on the following substantial questions of law:-
B) Whether the Commissioner below before passing the award was under legal duty to have satisfied himself that the mandatory requirement u/s 10 of the Act had been complied with by the claimants? It is humbly submitted that Respondents neither pleaded the service of notice u/s 4 MA No. 434/2013 10 before filing the petition nor made any such statement before the Commissioner. Whether in the absence of compliance of Section 10 of the Employees Compensation Act being mandatory, the petition was not maintainable without prior compliance of the same?
C) Whether the Commissioner was required to decide each issue separately by discussing the evidence and giving his finding and reasons for such finding on each issue? And Whether Commissioner failed in its mandatory duty as provided under rule 32 to decide each issue after discussing the evidence by recording his finding on the same and giving reasons for the same?
I) Whether the Commissioner below could arbitrarily assume the wages of the deceased at Rs. 10,000/- p.m. when the Central Govt. as per notification dated 31.05.2010 issued by it under Sub Section (IB) of Section 4 of Employees Compensation Act after rechristening the Workmen Compensation Act as Employees Compensation Act had specifically provided that while working out the compensation the maximum wages can be taken at Rs.8,000/- p.m. only, even if the wages were claimed to be more than Rs.8000/- pm?
G) Whether the Commissioner below was competent to act as Employees Commissioner, Kathua as he lacked the requisite qualifications as provided in section 20 of the Act and specially when no notification has been issued by State Govt. appointing his as Employees Commissioner in District Kathua? It is humbly submitted that the Officer passing the award did not have the requisite qualifications to be appointed as Employees Commissioner. More so when the State Govt. has not issued any notification in official gazette appointing him as Employees Commissioner, Kathua which is mandatory requirement u/s 20 of Employees Compensation Act?
H) Whether the award impugned in the present appeal is without jurisdiction as the officer passing the award was 5 MA No. 434/2013 neither competent nor designated to act as Employees Commissioner, Kathua in the absence of notification issued by State Govt. Gazette appointing him as Employees Commissioner, Kathua?
07. Mr. Vishnu Gupta, learned counsel for the appellant while arguing the case, restricted his argument to the sole point that the Commissioner while calculating the amount of compensation had accepted and taken the income of the of the deceased at Rs. 10,000/- per month though the Commissioner was not competent to assume this income in view of the Central Government Notification dated 31.05.2010 issued under sub section (1B) of Section 4 of the Employees Compensation Act, 1923, whereby the compensation was directed to be worked out by assuming the maximum wages of Rs. 8,000/- per month.
08. He has further argued that the appellant - Insurance Company is aggrieved of the amount of compensation worked out on the basis of monthly income of the deceased which was fixed at Rs. 10,000/- instead of Rs. 8,000/- as was admissible under the notification. He has finally prayed that since the impugned award has been passed by the Commissioner arbitrarily without taking notice of the Notification dated 31.05.2010 issued by the Central Government and prayed that the impugned award be set- aside and modified by accepting the monthly income of the deceased at Rs. 8,000/- per month instead of Rs. 10,000/- per month as accepted by the Commissioner. 6 MA No. 434/2013
09. Learned counsel for the respondents has not specifically joined the issue on the afore-stated legal point raised by the learned counsel for the appellant and has argued that the claimants/respondents had suffered a lot due to the death of the deceased, namely, Rashid Ahmad who was the sole bread earner for the family, as such, the Commissioner had rightly decided the case granting compensation by accepting the income of Rs. 10,000/- per month though the deceased had a monthly income of about Rs. 15,000/-.
10. He further submitted that in view of the fact that an amount of compensation of just Rs. 6,77,800/- was granted by the Commissioner for the death of the deceased, no interference is required from this Court in the impugned award which is already on a lower side and prayed that the appeal be dismissed and impugned award be upheld. To buttress his argument, the learned counsel for the respondents relied upon the judgment of the Apex Court in the case of "K. Sivaraman vs P. Sathishkumar" reported as 2020 ACJ 1361 (SC).
11. Para 26 of the judgment (supra) cited and relied by the learned counsel for the respondents is profitable to be extracted as under:-
"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 7 MA No. 434/2013 legislature, in its wisdom and keeping in mind the purpose of the 1923 Act as a social and 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 income of an employee and extend to him compensation on the basis of the actual monthly wages drawn by him. 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."
12. Section 4 of the Employees Compensation Act, 1923 deals with the subject of amount of compensation and provides that in the case of death resulting from the injury to a workman during his employment, an amount equal to 50% of the monthly wages of the deceased (employee) has to be multiplied by the relevant factor or an amount of Rs. 1,20,000/- (one lakh and twenty thousand rupees) whichever is more is to be granted. Sub-section (1B) of Section 4 of the Employees Compensation Act, 1923, however, provides that the Central Government may by Notification in the Official Gazettee specify, for the purposes of sub-section (1) of Section 4, such monthly wages in relation to an employee as it may consider necessary.
13. Government of India through Ministry of Labour and Employment issued a notification S.O. 1258(E) dated 31.05.2010 on the subject which reads as follows:- 8 MA No. 434/2013
"S.O. 1258(E).- In exercise of the powers conferred by sub-section (1B) of Section 4 of the Employee‟s Compensation Act, 1923 (8 of 1923), the Central Government hereby specifies, for the purpose of sub- section (1) of the said section, the following amount as monthly wages, with effect from the date of publication of this notification in the Official Gazettee, namely:-
"Eight thousand rupees""
14. Admittedly, the accident wherein the deceased driver was injured had taken place on 22.04.2011 at Peepli, Haryana while driving the offending Bus No. UP-22T-0010 owned by its owner, namely, Shashinder Shokeen respondent No. 7 herein, who had got the offending vehicle insured with the appellant herein covering the date of accident. Therefore, the Notification dated 31.05.2010 issued by the Central Government was applicable to the case of the claimants.
15. The point raised in this appeal came under consideration of the High Court of Andhra Pradesh in an appeal titled -
"D Nagarjuna vs DRN Infrastructure" reported as 2024 ACJ 395 wherein the claimant had claimed his wages as Rs. 20,000/- per month which was also admitted by the employer. However, the Commissioner awarded the compensation considering the Notification dated 31.05.2010 issued by the Central Government capping monthly wages at Rs. 8,000/- and the High Court in an appeal with the contention that the Commissioner having 9 MA No. 434/2013 believed the actual wages of Rs. 20,000/- per month erred in capping the wages at Rs. 8,000/- per month, held that the Commissioner had rightly decided the case by accepting the income as prescribed in the Notification.
16. At the cost of repetition, it is noticed that Section 4 of the Employees Compensation Act, 1923 provides the principle for computation of compensation. By virtue of Act 45 of 2009 several amendments were brought into for this Section 4. The said Amendment Act came into force for most part of it on 18.01.2010. Earlier to this amendment, there was Explanation II to Section 4, whereunder the monthly wages of an employee were capped at Rs. 4,000/-. Thus, earlier to this amendment in the year 2009 even if the employee was able to prove that his monthly wage was in excess of Rs. 4,000/-, by virtue of the cap fixed by the legislature, it was to be calculated only at Rs. 4,000/-. This Explanation II to Section 4 was omitted by the Amendment Act in the year 2009. The effect of that amendment is what the Hon'ble Supreme Court explained at para 26 of its judgment which is extracted earlier in this judgment. However, that is not the end of the matter. In the amendment that was made in the year 2009, the legislature brought in sub-section (1-B) in Section 4, which reads:
"(1-B) The Central Government may, by notification in the Official Gazettee, specify, for the purposes of 10 MA No. 434/2013 sub-section (1), such monthly wages in relation to an employee as it may consider necessary."
17. Exercising powers under the aforesaid provision, the Central Government issued the Notification on 31.05.2010 specifying the monthly income at Rs. 8,000/-. It has to be stated that in the judgment (supra) of the Apex Court, their Lordships were not concerned with the Central Government notification of the year 2010 and sub-section (1-B) of Section 4 of the Employees Compensation Act, 1923 as their Lordships at para 15 stated that the question that fell for consideration before their Lordships was as to whether the Amendment Act 45 of 2009 was prospective or retrospective in operation. In the case before their Lordships, the case related to the an accident having taken place on 31.01.2008 and by then by virtue of Explanation II cap of Rs. 4,000/- was there. By the time the matter came to be decided Amendment Act of the year 2009 had come into force.
18. In D Nagarjuna‟s judgment (supra), it was observed that it was under those circumstances that the Hon'ble Division Bench of the Madurai Bench of Madras High Court thought it fit to apply the Amendment Act, 2009 retrospectively and thereby cap of Rs. 4,000/- was not considered and the actual wage was taken into consideration. However, the Hon'ble Supreme Court found that the approach of the High Court was erroneous and it ought to have decided the 11 MA No. 434/2013 compensation considering Rs. 4,000/- cap and that the Amending Act, 2009 had no retrospective effect. It was never in the consideration of their Lordships of the Hon'ble Supreme Court as to whether under section 4(1-B) Central Government was empowered to notify monthly wages or not.
19. Having regard to the scheme of the Employees Compensation Act, 1923 and the statutory provisions particularly of sub-section (1-B) of Section 4 in the year 2009 and having regard to the Apex Court Judgment (supra) and in the facts and circumstances of the case on hand, it is held that the Commissioner was bound by the notification issued under the legal mandate in section 4(1- B) who was under the obligation to assume the monthly income of the deceased capped at Rs. 8,000/- and not beyond that even if the actual income by evidence led by the claimants was more than that.
20. Viewed thus, the impugned Award is ordered to be modified holding that the maximum monthly income of the deceased is to be accepted at Rs. 8,000/- per month and the compensation has to be worked out with Rs. 8,000/- monthly income as baseline, alongwith statutory interest @12% per annum from the date of accident, till date of realization.
12 MA No. 434/2013
21. Having regard to the afore-stated reasons and discussions made hereinabove, the substantial questions of law raised in this appeal are, accordingly, answered and decided as under:-
Since, the substantial questions of law styled as (B), (C), (G) and (H) were not argued by the learned counsel for the appellant, therefore, all these points are left open as they are not to be gone into especially when the learned counsel for the appellant has restricted his argument only with regard to the substantial question of law as framed (I). In view of the assigned reasons in the preceding paras, the substantial questions of law (I) is decided that the Commissioner while accepting the monthly income of the deceased at Rs. 10,000/- had arbitrarily ignored the Notification dated 31.05.2010 issued by the Ministry of Labour and Employment, Government of India, in terms of sub-section (1-B) of Section 4 of the Employees Compensation Act, 1923, wherein the monthly income had been ordered to be capped at Rs. 8,000/-. The Commissioner has, thus, fallen in error by accepting the income against the notified cap of Rs. 8,000/- and accepting the income of Rs. 10,000/- of the deceased for the calculation of the amount of compensation to which the legal heirs of the deceased as claimants are entitled to. This question of law is, accordingly, answered in affirmative. 13 MA No. 434/2013
22. As a result, based on the finding recorded on substantial question of law (I), the appeal is, thus, allowed and the learned Commissioner is directed to workout the compensation payable to the claimants afresh, accepting the monthly income of the deceased at Rs. 8,000/- to calculate the total compensation having regard to the date of birth as 25.03.1956 of the deceased as per his driving license, which has not even disputed before the Commissioner or during the course of this appeal and after applying the appropriate factor, in terms of section 4[1(a)] read with schedule IV of the Employees Compensation Act, 1923.
23. The parties shall appear before the learned Commissioner for calculation of the compensation on 20 September 2024.
24. A copy of this judgment shall be forwarded, well in time to the learned Commissioner (Assistant Labour Commissioner), Kathua for compliance.
25. Disposed of as allowed.
(M A CHOWDHARY) JUDGE JAMMU 31.08.2024 Bunty Whether the order is speaking: Yes Whether the order is reportable: Yes Bunty Kumar 2024.08.31 16:30 I attest to the accuracy and integrity of this document