Point of Law: Section 5 of Act, which deals with method of calculating monthly wages.

JUDGMENT :

1. A substantial question of law was raised as to the permissibility of accepting the actual salary of the deceased as on the date of death, for fixation of compensation in a proceedings initiated under the Employee's Compensation Act, 1923. The Compensation Commissioner has awarded an amount of Rs.33,35,690.45 with interest, based on the last drawn salary of the deceased, which comes to Rs.47,950/-. The alleged incident happened on 23.01.2011 and the victim fell down in a mixing pit of sulfuric acid and had sustained 20% burn injury. During the course of treatment, he met with a sad death due to myocardial infraction. The trial court has applied 50% of the last drawn salary and arrived at a compensation of Rs.33,35,690.45 and passed an award accordingly.

2. It was submitted by the learned counsel for the appellant that it is Section 4(1) of the Employee's Compensation Act, 1923 which governs the area and the compensation has to be calculated by applying 50% of the 'monthly wages' of the deceased employee multiplied by the relevant factor. It is also brought to the notice of this court as per the proviso attached to Section 4(1)of the Act, the Central Government may, by notification in the official gazette, from time to time, enhance the amount of compensation mentioned in clauses (a) and (b). An amendment was effected by virtue of Act 45 of 2009 with effect from 18.01.2010, by which yet another provision was inserted as sub-section (1-B) to Section 4 of the Act and a notification was issued enhancing the “monthly wages” for the purpose of Section 4(1) to Rs.8,000/-from the earlier amount of Rs.4,000/-. Hence, it was submitted that the expression “monthly wages” made mentioned in Section 4(1)(a) has to be understood in relation to the amount notified by the Central Government in that behalf.

3. In fact, sub-section (1-B) was inserted in substitution of Explanation II attached to Section 4(1) of the Act, which was taken away under the very same Amendment Act 45 of 2009, by which the deeming provision under the said Explanation was also taken away. It is by virtue of the said provision, a notification was issued by the Central Government enhancing the monthly wages applicable to Section 4(1) to Rs.8,000/-from Rs.4,000/-. The alleged incident has happened subsequent to the said enhancement, hence, it was argued that Rs.8,000/-should be taken as the monthly wages for the purpose of Section 4(1) of the Act. While applying 50% of the said amount with the relevant factor – 139.13, the amount of compensation would come to only Rs.5,56,520/-, hence it was argued that the Compensation Commissioner is not justified in awarding a large sum of Rs.33,35,690.45/-with interest thereof. It was also submitted that the legal position is very much settled by the Apex Court in K.Sivaraman and Others v. P.Satheesh Kumar and Others (AIR 2020 SC 954 = (2020) 4 SCC 594].

4. There are two provisos attached to Section 4(1) and 4(1-B) of the Act. The proviso attached to Section 4(1) says that the Central Government may by notification in the Official Gazette from time to time enhance the amount of compensation mentioned in clauses (a) and (b). But clauses (a) and (b) has got two limbs, which are extracted below for reference:

“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 fifty per cent of the monthly wages of the deceased employee multiplied by the relevant factor;

or

an amount of one lakh and twenty thousand rupees, whichever is more;

(b) Where permanent total disablement results from the injury an amount equal to sixty percent of the monthly wages of the injured employee multiplied by the relevant factor,

or

an amount of one lakh and forty thousand rupees whichever is more:

Provided that the Central Government may, by notification in the Official Gazette from time to time, enhance the amount of compensation