Settlement under the Legal Services Authorities Act precludes further claims under the Employees' Compensation Act, emphasizing the doctrine of election of remedies and the need to protect vulnerable dependents.

JUDGMENT :

M.A. ABDUL HAKHIM, J.

1. Appellants in this appeal are the Applicants before the Employee’s Compensation Commissioner. They are the parents of Sri. Ambady, who died in an accident on 05.01.2015 while working as a hydraulic lift operator in the quarry belonging to the First Respondent/First Opposite Party. The hydraulic lift belonged to the First Opposite Party and was insured with the Second Respondent/Second Opposite Party - Insurance Company.

2. The Commissioner found that there is an employer – employee relationship between the deceased employee and the First Opposite Party and that Rs.8,61,120/- is the compensation payable for the death of the deceased employee. But the Applicants were non-suited, finding that the Applicants had filed P.L.P. No.4/2015 before the Lok Adalat held on 14.02.2015, conducted by the Muvattupuzha Taluk Legal Services Authority and settled the matter for Rs.10 lakhs as per Ext.X1 and that the Applicants admitted that they have received Rs.10 lakhs from the First Opposite Party in the proceedings conducted before the Lok Adalat. Hence, the Applicants have filed this Appeal challenging the Order of the Commissioner and claiming the compensation fixed by the Commissioner.

3. This Appeal was admitted on 03.09.2024 without formulating substantial questions of law. In view of the arguments addressed before me, I formulated the following substantial questions of law in this Appeal:

1. Whether a claim for compensation under the Employee’s Compensation Act, 1923 can be settled by filing Pre- Litigation Petition under Section 22C of the Legal Services Authorities Act, 1987 and the compensation can be received by the dependents of the deceased employee in view of the bar Section 8(1) of the Employees' Compensation Act, 1923?

2. Whether the dependents of the deceased employee could be non-suited from receiving the compensation awarded by the Employee’s Compensation Commissioner on the ground that they had approached the Lok Adalat and obtained Ext.X1 Award and received the compensation of Rs.10 lakhs mentioned therein?

4. Since both the Counsel consented to address arguments on the substantial questions of law formulated, the matter was heard.

5. I heard the learned Counsel for the Appellants, Sri. A.N. Santhosh and the learned Counsel for the Second Respondent, Sri. Dinesh Mathew J. Muricken.

6. The learned Counsel for the Appellants contended that the very purpose of Section 8(1) of the Employee’s Compensation Act, 1923 (for short the EC Act) would be defeated if the Applicants are non-suited on account of Ext.X1 Award of the Lok Adalat. This issue is covered in the Division Bench decisions of this Court in Shah v. Rajankutty, 2006 ACJ 793 and Varghese K.M. v. Thankamma @ Ponnamma and Others, 2012 (2) KHC 661, in which it is specifically held that no employer can discharge the liability to pay compensation without making deposit before the Commissioner and that the Statute inhibits any direct payments to the claimants. In view of Section 8(1) of the EC Act, the payment made by the employer could not be taken into account while considering the Application for compensation filed by the dependents of the deceased employee. Per Contra

7. Per Contra, the learned Counsel for the Second Respondent contended that the Applicants filed P.L.P. before instituting the present Application and the same was settled in the Lok Adalat.

Admittedly, the Applicants received Rs.10 lakhs from the First Opposite Party as per the award of the Lok Adalat, which is much more than the compensation found to be eligible by the Commissioner. Only if the Application is maintainable against the First Opposite Party, the liability of the Second Opposite Party as insurer arises for consideration. The learned Counsel cited the decisions of the Hon'ble Supreme Court in P.T. Thomas v. Thomas Job, (2005) 6 SCC 478, K.N. Govindan Kutty Menon v. C.D. Shaji, (2012) 2 SCC 51 and Madhya Pradesh State Legal Services Authority v. Prateek Jain and Anothe