Bombay High Court
Duttatraya Laxman Kulkarni vs Aurangabad Paper Mills Ltd. on 6 July, 2000
Equivalent citations: [2000(87)FLR173], (2001)IIILLJ97BOM
Author: R.J. Kochar
Bench: R.J. Kochar
JUDGMENT R.J. Kochar, J.
1. The appellant was original applicant before the Commissioner for Workmen's Compensation where he had filed an application under Section 4-A read with Section 10 of the Workmen's Compensation Act, 1923. The appellant's case was that he was employed as a truck driver by the respondent company. According to him, he was on duty at Paithan on March 23, 1986 and he suffered an injury to his right foot-toe when a rusty piece of sheet metal had entered into his right foot while alighting from the truck, which he was driving, and which he parked on the premises of the company. He was admitted in the hospital and was treated there. It appears that initial wound got developed into a serious case of Gangrene '. and his right foot was required to be amputated from knee on August 28, 1986. From the date of the accident, he worked upto August 24, 1986. His last drawn wages were Rs. 750/-p.m. He filed the present application for compensation under the Act for total loss of his earning capacity on account of the employment injury. He prayed for compensation to the tune of Rs. 70,000/- and an amount of Rs. 35,000/-towards penalty and interest thereon. His application was opposed by the respondent company. The learned Commissioner, on the basis of the pleadings and evidence before him, framed an issue as to whether the injury arose out of and in the course of employment and answered the same in favour of the appellant by the impugned order dated December 14, 1993. The learned Commissioner has finally concluded that the injury caused to him was during the course of and arising out of his employment and he was, therefore, held to be entitled to get compensation. The learned Commissioner, however, did not accept the appellant's case for hundred per cent disability but he held the disability to be partial at 50 per cent in accordance with the medical certificate issued by the Doctor. The learned Commissioner, therefore, directed the respondent to pay compensation amount to the Appellant on the basis of 50 per cent partial disability i.e. Rs. 33,467/-.
2. The appellant is aggrieved by the aforesaid order as, according to him, as a driver, having lost his leg, from knee, he had become permanently and totally disabled to drive any vehicle. According to him, the Commissioner ought to have awarded hundred per cent compensation on the basis of permanent total disability.
3. The facts which were on record have not been seriously disputed by the respondent employer. The only question which was canvassed before the Commissioner on behalf of the respondent employer appears to be the percentage of the disability suffered by the appellant. The respondent-company had challenged the said judgment and order by filing an appeal before this Court but failed as its appeal was dismissed at the threshold.
4. I have heard both the learned advocates for the respective parties. I have also gone through the evidence and material on record. Shri Gangapurwala, the learned advocate for the respondent, has pointed out that it was not an accident in the sense in which we understand it. The appellant, as a driver, after parking the vehicle, was getting down from the vehicle and, at that time, a rusted piece of iron hit his right thumb on the premises of the company and he sustained a bleeding injury. Shri Gangapurwala further pointed out that he was treated at the cost of the company and he was also given medical aid necessary to treat the appellant. He further pointed out that after the accident he had worked for a period of about five months. In these circumstances, it was urged by the learned advocate that the respondent was not liable to pay any amount of compensation but, having failed in the challenge, he fairly accepted the claim granted by the learned Commissioner. He has also pointed out that the respondent company was closed four years back and the company's application is pending before the Board for Industrial and Financial Reconstruction (B.I.F.R.). He has submitted so under instructions of the management of the respondent company, received from Shri R.P. Sharma. It was also argued by him that under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act of 1985 ('SICA' for short), the present appeal should be stayed.
5. Shri Reddy has rightly argued that Section 22(1) will not apply in the present case as the legal dues of the workmen cannot be withheld. In the present case, the amount of compensation was determined and was held to be payable on December 14, 1993. There is no data on record about the application filed by the respondent company before the B.I.F.R. The question is whether the present appeal under the Workmen's Compensation Act can be suspended as contemplated under Section 22(1) of the SICA. The said provision reads as under:
"22. Suspension of legal proceedings, contracts, etc.-
(1) Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or: of any guarantee in respect of any loans, or advances granted to the industrial company) shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority".
This provision of the SICA has been a subject matter in a large number of decisions of the Supreme Court as well as different High Courts. It is very often being misused by the so-called sick employers to deny their debts payable to their creditors. In a number of cases, even the legitimate dues of the workmen were also tried to be denied by the sick undertakings on a pretext that their applications were pending before the B.I.F.R. A learned single Judge of our High Court (B.N. sriKRISHNA, J.) however, defeated all such attempts of the employers in his judgment in the case of Baburao P. Tawade and Ors. v. Hes Ltd. Bombay and Ors. 1997- III-LLJ (Suppl)-265 (Bom). The learned Judge has dissected Section 22 and analysed the case law and finally concluded as follows at 273, 274, 275:
"11. An interesting case decided by a learned single Judge of the Allahabad High Court in Modi Industries Ltd. v. Additional Labour Commissioner, Ghaziabad and Ors. 1994-I-LLJ- 482 (All) was also brought to my notice by Shri Bukhari, learned advocate appearing for the petitioner. In this case, a sum exceeding Rs. 50,000/- was due and payable to the workmen towards their wages which were not paid by an industrial company in respect of which proceedings had started before the BIFR. The Additional Labour Commissioner, Ghaziabad, was moved for exercising his power under Section 3 of the U.P. Industrial Peace (Timely Payment of Wages) Act, 1978. After hearing parties, the Additional Labour Commissioner, Ghaziabad, issued a certificate for recovery of Rs. 13 lacs as arrears of land revenue in respect of wages of the workmen of the industrial company for a particular month. This certificate was challenged before the Allahabad High Court, inter alia, on the ground that the proceedings before the Additional Labour Commissioner were barred by Section 22(1) of SICA. The learned Judge, after considering several provisions of law, which were brought to his notice observed in paragraph 14:
"14. In my opinion, the purpose and object of Section 22 cannot be to cover those proceedings or actions which are necessary for running the industry irrespective of the fact whether it is sick or non-sick, if the industry cannot run without workers the workers also cannot be expected to work without payment of their wages. The timely payment of the wages for which the provisions of the Act of 1978 have been enacted would thus be a step helping rehabilitation and it cannot be said that it creates any obstacle in fulfilling the object for which the Act of 1985 has been enacted. Both the Acts are thus complimentary to each other. Section 22 cannot thus affect the proceedings taken under Section 3 of the Act of 1978 for compelling petitioner to make payment of the wages already accrued to the workers....."
The learned Judge relied on the observations of the Supreme Court in Shri Chamundi Moped's case for coming to this conclusion and further observed in paragraph 15 :
".....The Parliament while putting Section 22 of the Act, 1985, could never have intended that the industrial unit under the garb of sickness or for any like difficulty may be allowed to shirk its liability to pay the wages to its workers for the work they have done. It was pointed out that, if such a position were allowed to prevail, then every sick industrial company, in respect of which proceedings were pending before the BIFR, could easily defeat the legitimate claims of the workman for their wages and other dues by not paying them in the first instance, forcing the workers to resort to their remedies under any of the applicable labour statutes and then pleading the bar in Section 22(1). In other words, the workmen would be compelled to work as bonded labour or "Begar" during the period when the proceedings before the BIFR or the implementation of the Scheme sanctioned by the BIFR continues. Surely, this was bonded labour, repugnant to Article 23 of the Constitution, as pointed out by the learned Judge in Modi Industries' case (supra). I am in respectful agreement with the views expressed by the learned single Judge in Modi Industries' case (supra). No construction can be put upon the provisions of Section 22, which could result in a situation of exploitation of human beings, contrary to the provisions of our constitutional directives. I am, therefore, unable to accept the contention that the payment of earned wages to the workmen (it cannot be disputed that payment under settlement would be 'wages' within the meaning of Section 2(rr) of the Industrial Disputes Act) was intended to be defeated by invoking the bar under Section 22(1) or to drive the workmen to run to New Delhi for seeking the consent of the BIFR, every time their monthly wages were required to be paid. That, surely, was not the Parliament's intention, in my view. The reconciliation suggested by the learned Judge in Modi Industries case (supra) appeals to me and, therefore, the bar in Section 22(1) of SICA must be held to apply only to such proceedings which are not required for the day-to- day running of the sick industrial company, even under a sanctioned scheme or otherwise. Any other interpretation would lead to a ludicrous and unintended result".
"14. Having considered the position in law as canvassed at the Bar, on the strength of the judgments referred to me, I am of the view that, even if the application had been made by the workmen under Section 33-C(2) of the Industrial Disputes Act for recovery of the monies due to them, after the reference fund SICA made to the BIFR, such application could not have attracted the bar under Section 22(1) of SICA; much less can the Writ Petition under Articles 226 and 227 of the Constitution of India pending before this Court to challenge the adverse order in the application under Section 33-C(2) of the Industrial Disputes Act, be held to attract the bar under Section 22(1) of SICA. In my view, the bar under Section 22(1) of SICA would not apply to the present Writ Petition, which cannot be dismissed on the ground that no consent had been obtained from the BIFR for the continuation of the proceedings".
6. It is significant to note that even the Supreme Court has given restrictive interpretation to Section 22(1) of the Act to exclude from the provision the criminal proceedings -under Section 138 of the Negotiable Instruments Act, 1881, for recovery of debt arising from the event of dishonour of the cheques issued by the Sick Company (in the case of BSI Ltd. and Anr. v. Gift Holdings Pvt. Ltd. ). Had the Supreme Court intended to place a wider construction, the prosecution under Section 138 and Section 14 of the Negotiable Instruments Act also could be covered under the clause, "Proceedings for execution, distress or the likes against any of the properties of the Company". The Supreme Court has refused to construe the word "suit" in Section 22(1) to include the criminal proceedings for recovery of any debt. It has observed as under in para 19 of the Judgment:
"19. The said contention is also devoid of merits. The word "suit" envisaged in Section 22(1) cannot be stretched to criminal prosecutions. The suit mentioned therein is restricted to "recovery of money or for enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company. As the suit is clearly delineated in the provision itself the context would not admit of any other stretching process".
7. In our case, the Workmen's Compensation Commissioner had held the Respondent company liable for the amount of compensation by its judgment dated December 14, 1993 and since the present appeal filed by the employee appellant is pending for enhancement of the compensation to the extent of 100% total permanent disability. This Appeal has seen the light of the day in the wake of the 21st century and fortunately, the Appellant is still alive. He is not to be blamed or penalised for this much delay. To confer the benefit of the bar of Section 22(1) of the Act would be to virtually penalise him for no fault of his. The Supreme Court has observed, "As the suit is clearly delineated in the provisions itself, the context would not admit of any other stretching process". (emphasis given by me). It would be, therefore, stretching too far to include an appeal under the word "suit" in Section 22(1) of the SICA.
8. As far as merits of the appeal are concerned, I am not able to agree with the conclusions of the learned Commissioner that, because the appellant was negligent in treating himself, the disease of gangrene had developed, warranting surgery on his right leg, which resulted finally in amputation of the, right leg. The appellant, as a layman cannot be blamed for what he suffered finally. It is not disputed that he was under the medical treatment. It is an admitted fact that the appellant was being treated in the hospital. He cannot be held responsible for what finally had taken place. It was not that he was negligent and he did not take any treatment for the injury which he suffered. The root cause of the amputation of his right leg was the original initial injury, howsoever, small it might be but, in spite of the treatment it enlarged into the disease of gangrene which warranted the amputation of his right leg. He was a driver by occupation and a driver, obviously, needs both the legs for driving a vehicle. In the present case, the appellant lost his right leg and, therefore, he cannot carry on his occupation of a driver. I, therefore, hold that the employment injury which he sustained was the main and root cause of the amputation of the right leg and, therefore, I hold that the appellant had suffered total permanent disability, entitling him to get hundred per cent compensation under the Act. The learned Commissioner ought to have granted the appellant hundred per cent compensation on the basis of total permanent disability. He failed to appreciate the distinction between medical disability of 50% for loss of one leg below the knee and 100% economic disability for loss of earning capacity as a driver. The injury sustained by him arose out of and during the course of his employment entitling him to get 100% compensation under the Act.
9. I, therefore, modify the order of the learned Commissioner and direct the respondent to pay compensation amount to the appellant to the extent of hundred per cent total permanent disability which he has claimed to be an amount of Rs. 70,000/-. In the facts and circumstances of this case, I am not inclined to impose any penalty on the respondents. However, they would be liable to pay interest at the rate of six per cent on the amount of Rs. 35,000/- the additional compensation from the date of the order of the Commissioner i.e., December 14, 1993 till the payment is made. The respondent company is directed to deposit the aforesaid amount of Rs.35,000/- with interest within eight weeks from today. The appeal is partly allowed with no order as to cost. The respondent-company shall act on an ordinary copy of this order duly authenticated by the Sheristedar of this Court.
10. Nothing survives in the Civil Application and it is disposed of.
11. Issuance of certified copy of this judgment and order is expedited.