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2021 Supreme(Mad) 3361

IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
P. Ramesh - Appellant
Versus
Ravi – Respondent
C.M.A.No.897 of 2018
Decided on : 27-01-2021

Advocates:
Advocate Appeared:
For the Appellant : Ms.A.Subadra, Ms.M.Malar
For the Respondent: Mr.S.Vadivel

Headnote:

Employees Compensation Act - Fixation of Monthly Income - Section 4(1B) - G.O. 2D No.91, Labour and Employment Department, dated 12.12.2013 - [ACCIDENT, COMPENSATION, EMPLOYEES COMPENSATION ACT] - [Section 4(1B), G.O. 2D No.91, Labour and Employment Department, dated 12.12.2013] - The court discussed the interpretation of the provisions of the Employees Compensation Act and the fixation of monthly income. It highlighted the removal of the deeming cap on the monthly income of the employee and the extension of compensation based on the actual monthly wages drawn by the employee. The court emphasized the principles of 'just compensation' and the need to protect the livelihood of the workmen. It also addressed the adoption of minimum wages fixed by the State Government for calculating compensation, especially when it is higher than the minimum wages fixed by the Central Government. The court modified the award and allowed the appeal in part, directing the Insurance Company to deposit the difference amount of compensation along with accrued interest.

Fact of the Case:

The claimant sustained injuries in an accident during the course of employment and filed for compensation under the Workmen Compensation Act. The Deputy Commissioner of Labour fixed the monthly income at Rs.8000, but the appellant contended that it was erroneous and should be revised based on the Minimum Wages Act. The second respondent Insurance Company opposed the contentions, citing Section 4 of the Employees Compensation Act. The court considered the purpose and object of the Act, along with the judgment of the Supreme Court, and concluded that the monthly income should be revised to Rs.9808, modifying the award and allowing the appeal in part.

Finding of the Court:

The court found that the fixation of monthly income at Rs.8000 was erroneous and should be revised to Rs.9808 based on the Minimum Wages Act, ensuring 'just compensation' for the claimant. The court also directed the Insurance Company to deposit the difference amount of compensation along with accrued interest.

Issues: The main issue was the correctness of the fixation of deeming cap with respect to monthly income under the provisions of the Employees Compensation Act. The appellant contended that the fixation of Rs.8000 as the monthly salary was erroneous and should be revised based on the Minimum Wages Act. The second respondent Insurance Company opposed these contentions, citing Section 4 of the Employees Compensation Act.

Ratio Decidendi: The court's decision was based on the interpretation of the provisions of the Employees Compensation Act and the need to ensure 'just compensation' for the claimant. It emphasized the removal of the deeming cap on the monthly income of the employee and the extension of compensation based on the actual monthly wages drawn by the employee. The court also highlighted the adoption of minimum wages fixed by the State Government for calculating compensation, especially when it is higher than the minimum wages fixed by the Central Government.

Final Decision: The court modified the award and allowed the appeal in part, directing the Insurance Company to deposit the difference amount of compensation along with accrued interest.

JUDGMENT :

1. The award dated 30.11.2017 passed in W.C.No.68 of 2016 is under challenge in the present civil miscellaneous appeal.

2. The question of law mainly raised in the present appeal is whether the fixation of deeming cap with respect of monthly income under the provisions of the Employees Compensation Act, is correct or not.

3. The fact in nutshell to be considered are that on 17.01.2016 at about 3.30 a.m. while the claimant was travelling as a cleaner in a lorry belongs to the first respondent bearing Registration No. TN-21-AL-5728 proceeding at NH-4 Road near Kyadigere Gate, Chitra Durga, Karnataka, the accident occurred and the claimant sustained both bone fracture and toes are amputated and he sustained multiple grievous injuries all over the body. An application was filed seeking compensation under the Workmen Compensation Act.

4. The Deputy Commissioner of Labour considered the documents and evidence produced by the respective parties and arrived at the conclusion that the accident occurred during the course of the employment and accordingly, fixed the liability on the second respondent Insurance Company. The compensation of Rs.4,39,188/- was granted along with an interest at the rate of 12% per annum.

5. The learned counsel for the appellant is of the view that the monthly salary fixed by the Deputy Commissioner of Labour as Rs.8000/- as per the Central Government notification, is erroneous. The first contention is that a sum of Rs.8000/- fixed under the Act by the notification is the minimum wages which is to be adopted for calculating the compensation and not the ceiling. The deeming cap which in prevalence prior to 18.01.2010, was taken away by way of an amendment on 18.01.2010 and notification in this regard was published in the Government of India Gazette on 31.05.2010. Therefore, fixing a deeming cap of Rs.8000/- as per the Central Government notification is perverse and not in consonance with the principles laid down by the Hon'ble Apex Court of India.

6. It is contended that the Government of Tamil Nadu under the provisions of the Minimum Wages Act, issued a Government Order in G.O. 2D No.91, Labour and Employment Department, dated 12.12.2013, stating that Rs.9808/- would be the minimum wages for the purpose of considering the cases for grant of compensation and for payment of wages. Once the Government of Tamil Nadu issued a revised minimum wages under the provisions of the Minimum Wages Act, such amount is to be atleast granted for the purpose of compensation and therefore, the fixation of Rs.8000/- is not in accordance with law.

7. The learned counsel for the second respondent opposed to the said contentions by stating that Section 4 of the Employees Compensation Act stipulates the amount of compensation. In the said provision, there is a consistent mention regarding the monthly wages to be fixed for grant of compensation. When there is a consistent mentioning about the monthly wages, it is to be taken into account for the purpose of granting compensation. Thus, it is implied that the monthly wages fixed by the Central Government under Section 4(1B) is to be adopted. In other words, the intention of the Act is to fix monthly wages in consonance with the Central Government notification issued under Section 4(1B). Therefore, the Deputy Commissioner of Labour has no option, but to fix a sum of Rs.8000/- which is the deeming cap under Section 4 (1B) of the Act.

8. Though it is contended that the word deeming cap has been removed in the amendment dated 18.01.2010, the learned counsel is of the opinion that Section 4 repeatedly contemplates “monthly wages” and therefore, the monthly wages stipulated in the provision is in consonance with the Central Government notification issued. Therefore, for all purposes, the ceiling fixed by the Central Government is taken into account for calculation of compensation and the higher amount cannot be fixed.

9. It is further contended that when the Employees Compensation Act which

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