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2023 Supreme(Bom) 2083

IN THE HIGH COURT OF BOMBAY
M.S.Karnik, J.
Polynova Industries Ltd - Appellant
Versus
Prem Kumar Bari - Respondent
Appeal Under Workmens Compensation Act No. 1083 of 2023(F)
Decided On : 26-07-2023

Advocates appeared:
Prashant Agarwal, Advocate, Prasanna C.Chawdikar, Advocate

IMPORTANT POINT
An employee cannot be denied compensation under the Employees' Compensation Act if they were not covered under the Employees State Insurance Act at the time of the accident, and any attempt to contract out of statutory obligations under the Compensation Act is void.

Headnote:

EMPLOYEES' COMPENSATION - COMPENSATION CLAIM - Employees' Compensation Act, 1926; Employees State Insurance Act, 1948; Sec. 53 of the Insurance Act; Sec. 17 and 17A of the Compensation Act - The court discussed the provisions of the Employees' Compensation Act, 1926, and the Employees State Insurance Act, 1948, particularly focusing on Sec. 53 of the Insurance Act, which bars recovery of compensation under the Compensation Act if the employee is insured. The court interpreted the statutory obligations of the employer under Sec. 17 and 17A of the Compensation Act, emphasizing that any attempt to contract out of these obligations is void. The court found that the employee was not covered under the Insurance Act at the time of the accident, thus allowing the claim under the Compensation Act.

Fact of the Case:

The appellant-employer challenged the orders of the Commissioner for Employees Compensation regarding a compensation claim made by the respondent-employee, who suffered a severe injury leading to amputation while working in the employer's factory. The employer contended that the employee was covered under the Employees State Insurance Act, which would bar the claim under the Compensation Act.

Finding of the Court:

The court upheld the Commissioner's decision that the employee was entitled to compensation under the Compensation Act, finding that the employee was not covered under the Insurance Act at the time of the accident. The court noted attempts by the employer to circumvent legal obligations and emphasized the need for substantial justice.

Issues: Whether the employee was entitled to compensation under the Employees' Compensation Act despite the employer's claim of coverage under the Employees State Insurance Act, and whether the Commissioner erred in calculating compensation based on a subsequent minimum wage notification.

Ratio Decidendi: The court held that the provisions of the Employees' Compensation Act cannot be contracted out of, and that the employee's lack of coverage under the Insurance Act at the time of the accident entitled him to compensation under the Compensation Act. The court also found that the subsequent minimum wage notification could be used as a guide for calculating compensation.

Final Decision: The appeal was dismissed, affirming the Commissioner's order for compensation of Rs. 7,62,455 plus interest, allowing the employee to withdraw the amount deposited along with accrued interest.

JUDGMENT/ORDER

1. Heard Mr. Agarwal, learned counsel for the appellant and Mr. Chawdikar, learned counsel for the respondents.

2. The challenge in this appeal by the appellant-employer is to the orders dtd. 11/7/2022 and 20/3/2023 passed by the Commissioner for Employees Compensation, Government of Goa, under the provisions of Employees' Compensation Act, 1926.

3. The respondent no.1-employee was employed through the contractor-respondent no.2, to work in the factory of the petitioneremployer. On 23/1/2013, when the employee was working on machine in the factory of the employer, he met with an accident that took place at 3.30 p.m. The employee suffered crushed injury of his right hand and forearm. The right hand had to be amputated. The employee suffered permanent disablement. On the date of the accident, the employee was 16 years 7 months and 17 days old. The monthly wages payable were Rs.5590.00. The case of the employee before the Commissioner for workmen compensation was that he is entitled to compensation under the provisions of the Employees Compensation Act, 1923 ('Compensation Act', for short) for the injury suffered. The employer contested the employee's claim primarily on the plea that under Sec. 53 of the Employees State Insurance Act, 1948 ('Insurance Act' for short), there exists a bar against receiving or recovery of compensation or damages under any other law and, therefore, the claim of the employee under the provisions of 'Compensation Act' is not tenable.

4. By the impugned order dtd. 11/7/2022, the Commissioner held that the employee is entitled to compensation under the Compensation Act. The employer has also challenged the order dtd. 20/3/2023 on the basis that the Commissioner was not justified in calculating compensation on the basis of minimum wages notification dtd. 4/3/2013 published in the official gazette on 14/3/2013, which was otherwise not applicable as the accident took place on 23/1/2013 i.e. prior to the issuance of the notification.

5. Learned counsel for the employer stressed on Sec. 53 of the Insurance Act, also drawing support from the decision of this court in the case of Crecent Catalysts and Chemicals vs. Vithal Shankar Bhoir & Ors., (2007) 3 Mh.L.J. 869 to submit that even if the establishment is not covered by the Insurance Act and if by subsequent order the establishment is covered, it will cover the period within which the workman suffered injury and would be entitled to the benefits under the Insurance Act. In the submission of learned counsel, this court has clearly held that in such view of the matter, the authority under the 'Compensation Act', was not justified in entertaining the claim. Learned counsel further placed reliance on the decision in the case of Bharagath Engineering vs. R. Ranganayaki |& anr., to submit that it is the obligation of the employer to pay compensation from the date the Insurance Act applies to the factories or the establishments and that Sec. 38 of the Insurance Act casts a statutory obligation on the employer to insure its employees. According to learned counsel, that being a statutory obligation, the date of commencement has to be from the date of employment of the concerned employee. Learned counsel was at pains to urge that once it is the statutory obligation to cover the employee under the provisions of Insurance Act, the entire exercise of the Commissioner in arriving at a finding that "the employer who was a registered establishment under the Insurance Act had contracted out of his obligation to the employee under the provisions of the Compensation Act by registering the employee under the Insurance Act after the accident to avail the accident benefits", is completely an insignificant consideration for granting compensation under the Compensation Act. In the submission of learned counsel, the only question to be considered is whether the employee is entitled to the benefits under the Insurance Act, for once the employer and the employee are cover

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