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Nusrat Jahan v/s Managing Director, Kalaburagi Electrical Supply Co. Ltd., Kalaburagi


Company & Directors' Information:- S. R. ELECTRICAL PRIVATE LIMITED [Active] CIN = U74999WB2011PTC169619

Company & Directors' Information:- D D S ELECTRICAL INDIA PRIVATE LIMITED [Active] CIN = U50400DL2021PTC387397

Company & Directors' Information:- D D S ELECTRICAL INDIA PRIVATE LIMITED [Active] CIN = U50400DL2021PTC387397

Company & Directors' Information:- I M W ELECTRICAL PRIVATE LIMITED [Active] CIN = U31200DL1997PTC087183

Company & Directors' Information:- H AND G ELECTRICAL PRIVATE LIMITED [Active] CIN = U31909DL2003PTC119788

Company & Directors' Information:- P M ELECTRICAL PRIVATE LIMITED [Strike Off] CIN = U31200MH2004PTC148984

Company & Directors' Information:- M R ELECTRICAL PRIVATE LIMITED [Strike Off] CIN = U29301DL1999PTC102576

Company & Directors' Information:- M P ELECTRICAL PRIVATE LIMITED [Strike Off] CIN = U31908DL2007PTC169105

Company & Directors' Information:- A M R ELECTRICAL PRIVATE LIMITED [Active] CIN = U31909DL2005PTC137439

Company & Directors' Information:- J R B ELECTRICAL PRIVATE LIMITED [Strike Off] CIN = U30000DL1993PTC052294

    Miscellaneous First Appeal No. 200839 of 2017

    Decided On, 25 June 2020

    At, High Court of Karnataka Circuit Bench OF Kalaburagi

    By, THE HONOURABLE MR. JUSTICE P.N. DESAI

    For the Appellant: Ameet Kumar Deshpande, Advocate. For the Respondent: B.K. Patil, Advocate.



Judgment Text

1. The appellants - petitioners have preferred this appeal against the Judgment passed by the III Addl. Civil Judge (Sr.Dn.) & Commissioner for Employees Compensation, Kalaburagi dated: 09-01-2017 in ECA No.249/2014 whereby the Commissioner partly allowed the claim petition, thereby awarding compensation for Rs.5,19,950/- but deducted Rs.5,00,000/- as ex-gratia amount and awarded a sum of Rs.19,950/- with interest at the rate of 12% per annum.

2. The appellants filed claim petition before the III Addl. Senior Civil Judge & Commissioner for Employees Compensation, Kalaburagi contending that, deceased Pigamber Maheboobsab Mulla was engaged by the respondent No.1 as a lineman and he was deputed at Bilwar sub-section of Jewargi and on 18-09-2012 while discharging his duties, due to the electrical accident he died. So they claimed the compensation by filing this petition.

3. The respondent contested the claim petition before Commissioner for Employees by admitting the relationship of employee and employer and occurrence of accident in the written statement, but denied that the deceased was getting salary of Rs.12,000/- per month, but admit that, they used to pay Rs.5,000/- per month. Further contended that respondent was already paid compensation of Rs.5,00,000/-. With these contentions respondent has prayed to dismiss the petition. The respondent neither adduced any evidence, nor produced any document.

4. The appellant No.1 adduced the evidence and got marked nine documents.

5. After hearing the arguments, learned Commissioner for Employees Compensation awarded compensation of Rs.5,19,950/- but deducted Rs.5,00,000/- ex-gratia amount paid to the legal heirs and held that they are entitled only for remaining compensation of Rs.19,950/- with interest at 12% per annum.

6. Aggrieved by the same, the appellants have preferred this appeal.

The brief contention of the appellants is that, appellant No.1 is the wife, appellant No.2 is the daughter and appellant No.3 is the mother of deceased Paigambar Mulla. The appellants have contended that, deceased died due to electrical accident while he was discharging duties as probationary majdoor (lineman) under the respondent. It is contended that, the deceased was drawing a salary of Rs.12,000/- per month. The relationship between the employee and employer is not disputed. The only ground urged is that, the trial court has not considered the law regarding award of compensation, the age of the appellants is not properly considered. It is well-settled law, that ex-gratia amount cannot be deducted in the compensation awarded. The trial court has not appreciated the documents and not considered the petition in accordance with law. The interest granted is not proper. With these main contentions the appellants have prayed to allow the appeal by setting aside the impugned Judgment.

7. Learned counsel for appellants vehemently argued that, the deceased was working as probationary majdoor under the respondent and admittedly he died due to electrical shock. This aspect is not disputed. The Commissioner for Employees Compensation has taken the salary of deceased at Rs.5,000/- per month. The respondent has also admitted the same. The main arguments of the appellants is that, deducting ex-gratia amount in the compensation amount is not in accordance with the provisions of Employees Compensation Act 1923, so the award of compensation is not proper.

8. Against this, learned counsel for the respondent argued that, the respondent has already paid compensation for the same. So, the same is deducted by the Commissioner, there is no evidence adduced by the appellants to prove that the deceased was getting higher salary. Therefore, there is no justification to interfere with the order of the Commissioner for Employees Compensation.

9. On hearing the learned counsel for both the parties, the substantial question of law that arises for consideration in this appeal is:

1) Whether the deduction of Ex-gratia amount by Commissioner for Employees compensation in the amount of compensation determined under the Employees Compensation Act is in accordance with the provisions of Employees Compensation Act 1923?

10. The Commissioner for Employees Compensation has recorded the evidence of petitioner No.1. It is evident from the evidence of PW.1 that, on 08-09-2012 at 7.30 a.m., while the deceased was discharging his duty under the respondent, died due to electrical shock. In fact after the incident, the respondent has paid Rs.5,00,000/- to the petitioners as ex-gratia. It is not disputed that, the petitioners are the legal heirs of the deceased. The trial court has taken salary of the deceased as Rs.5,000/- per month. The trial court has taken the age of the deceased as 30 years and the relevant factor is 207.98. As per Section 4 (1) (a) of the Employees Compensation Act, deducted 50% it comes to Rs.2,500/- X 207.98 and arrived the compensation at Rs.5,19,950/-. It is evident that, exgratia amount of Rs.5,00,000/- paid by the respondent to the appellants is deducted by the Commissioner for Employees Compensation and for remaining amount the compensation is paid.

11. In order to appreciate whether such a sum of Rs.5,00,000/- as ex-gratia amount sanctioned by the Commissioner to the dependants of the deceased is to be deducted in the compensation amount determined by the Commissioner under the Employees Compensation and to consider its legality it is necessary to refer to the objection statements of the said Employees Compensation Act and the relevant provisions under the said Act, which deals with the distribution of compensation. The Employees Compensation Act, 1923 is enacted for the purpose of growing complexity of industry in this country, with the increasing use of machinery and consequent danger to workmen, along with the comparative poverty of the workman themselves, rendered it advisable that they should be protected, as far as possible from hardship arising from accidents.

12. Further the statements of objects and reasons of the said Act, reads as under:

Statements of objects

An additional advantage of legislation of this type is that by increasing the importance for the employer of adequate safety devices, it reduces the number of accidents to workmen in a manner that cannot be achieved by official inspection. Further, the encouragement given to employers to provide adequate medical treatment for their workmen should mitigate the effects of such accidents as do occur. The benefits so conferred on the workman added to the increased sense of security which he will enjoy, should render industrial life more attractive and thus increase the available supply of labour. At the same time, a corresponding increase in the efficiently of the average workman may be expected. A system of insurance would prevent time burden from pressing too heavily on any particular employer.

13. Keeping this in mind let me refer to relevant Sections viz, Sections 8, 28 and 29 of Employees Compensation Act 1923 which reads as under:

Sec.8 Distribution of compensation.

(1) No payment of compensation in respect of workman whose injury has resulted in death, and no payment of a lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation :

Provided that, in the case of a deceased workman, an employer may make to any dependent advances on account of compensation not exceeding an aggregate of one hundred rupees, and so much of such aggregate as does not exceed the compensation payable to that dependent shall be deducted by the Commissioner from such compensation and repaid to the employer.

(2) Any other sum amounting to not less than ten rupees which is payable as compensation may be deposited with the Commissioner on behalf of the person entitled thereto.

(3)....

(4)....

(5) .....

(6)...

(7).....

(8) ....

(9).....

Section 28. Registration of agreements (1) Where the amount of any lump sum payable as compensation has been settled by agreement, whether by way of redemption of a half monthly payment or otherwise, or where any compensation has been so settled as being payabale to a woman, or a person under a legal disability] a memorandum thereof shall be sent by the employer to the Commissioner, who shall, on being satisfied as to its genuineness, record the memorandum in a register in the prescribed manner; Provided that: -

(a) no such memorandum shall be recorded before seven days after communication by the Commissioner of notice to the parties concerned'

3[***]

( c) the Commissioner may at any time rectify the register;

(d) where it appears to the Commissioner that an agreement as to the payment of a lump sum whether by way of redemption of a half monthly payment or otherwise, or an agreement as to the amount of compensation payable to a woman or a person under a legal disability] ought not to be registered by reason of the inadequacy of the sum or amount, or by reason of the agreement having been obtained by fraud or undue influence or other improper means, he may refuse to record the memorandum of the agreement and may make such order] including an order as to any sum already paid under the agreement, as he thinks just in the circumstances.

(2) An agreement for the payment of compensation which has been registered under sub section (1) shall be enforceable under this Act notwithstanding anything contained in the Indian Contract Act, 1872 (9 of 1872), or in any other law for the time being in force.

Section 29. Effect of failure to register agreement,-

Where a memorandum of any agreement the registration of which is required by section 28, is not sent to the Commissioner as required by that section, the employer shall be liable to pay the full amount of compensation which he is liable to pay under the provisions of this Act, and notwithstanding anything contained in the proviso to subsection (1) of section 4 shall not, unless the Commissioner otherwise directs, be entitled to deduct more than half or any amount paid to the workmen by way of compensation whether under the agreement or otherwise". {{

So, in view of these sections it is evident that no direct payment in nature made to the deceased workman/ dependents including any payment in nature of ex-gratia compensation can be deducted except in accordance with procedure stated in the above referred sections.

14. Therefore keeping in mind statement of objects and reasons, the intention of the legislature in enacting this legislation and incorporating these provisions if sections 8, 28 & 29 of the Employees Compensation Act 1923 are considered then it is evident that said sections of the Act are designed to protect heirs and legal representatives of the deceased workman against any kind of exploitation or fraud likely to be practiced on them by or on behalf of employer or any third party. Section 8 lays down distribution of compensation payable by the employer when an employer meets with an accident. Its object is that unscrupulous employer should not take advantage of ignorance of the employee in making payment a paltry sum. Therefore the act safeguards the interest of the workman and any private payment will not discharge the statutory obligation. So with these beneficial objects Sections 8, 28 & 29 are enacted. Any payment made dehors these sections cannot be deducted in compensation determined and payable by the Commissioner of Employees Compensation under this Act.

15. Recently Himachal Pradesh High Court has considered legality of deduction of ex-gratia amount in the compensation amount and held that same is not legal. The said decision is in FAO No.201/2009 dated: 06-08-2019 in case of State of Himachal Pradesh and another V/s Guddi Devi and others.,2019 SCC online HP 1209 The point for consideration in that case is "Whether the ex-gratia amount paid by the department is to be deducted in the compensation apart from other benefits". The Himachal Pradesh High Court referred to Sec.8 of the Employees Compensation Act and also to the various decisions of different High Courts such as Calcutta High Court, Gujarat High Court, earlier decisions of Himachal Pradesh High Court, Madhya Pradesh High Court wherein it is uniformly held that, ex-gratia payment made to the claimant soon after the incident had no nexus what-so16 ever to the compensation which is payable under the provisions of the Act. Because ex-gratia payment would have been made even if the deceased would not have met with the incident.

16. Further it is observed in that Judgment at paragraph No.13 as under:

The Act is a legislative enactment conformable to the Directive Principles of State policy enshrined in Articles 39(a), 41, 42, 43 and 46 of the Constitution. Its provisions, which are based on public agreement between her/them and the respondents, which has the effect of defeating those provisions, must be regarded as void being opposed to public policy. Apart from this general principle of law, which is well established, there is in Section 17 of the Act a clear prohibition against contracting out and, accordingly, any contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the csourse of the employment is to be treated as null and void insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act.

17. The High Court referring to Sections 8, 28 & 29 of the Workmen's Compensation Act and relying on the Judgments of different courts at paragraph Nos.17 and 18 it is held as under: -

17. Thus, we can be deduced from the aforesaid exposition of law is that, neither the Workmen's Compensation Commissioner nor this Court, in appeal, has any jurisdiction to give any credit for any 'direct' payment of any nature made to deceased workman's dependents, including any payment in the nature of ex-gratia compensation, whether made under any statutory provision or under any contract. Further, if an employer pays dependents ex-gratia, under an agreement, which is not registered, even then the same is not liable to be deducted from actual amount of compensation. The provisions of section 8(1) read with Section 28 and 29 of the Act prevent the Workmen's Compensation Commissioner for making any adjustment of such payment.

18. Accordingly, substantial question of law is answered against the appellants.

18. Similarly the Madhya Pradesh High Court (Gwalior Bench) in Divisional Engineer MP Electricity Board and another Vs Mantobai, (1990) 1 LLJ 25 , at para No.14 it was observed as under:

14. We would, therefore, answer in the negative, the question referred to us. We hold that neither the Workman's Compensation Commissioner nor this court, in appeal, has any jurisdiction to give any credit for any 'direct' payment of any nature made to deceased workman's dependants, including any payment in the nature of ex-gratia compensation, whether made under any other statutory provision or under contract. We further hold that the compensation which is determined payable to the workman under the Act is not reducible on account of such payment though 'deduction' or 'repayment' contemplated statutorily under Section 8 only, can be made. We also hold, therefore, that law was not correctly stated in Usha Bai's case, wherein a contrary view was taken.

Again relying on Section 8 affirmed the same position.

19. In Naseera Nazir Vs Executive Engineer, 1999, 3 LLJ 1122 , Jammur & Kashmir High Court has taken similar view.

20. The Kerala High Court in Shan Vs Rajanakutty, (2005) 3 KerLT 1014 wherein the similar issue came, held that the ex-gratia amount which is not registered under section 28 is not entitled to be deducted in the actual amount of compensation.

21. Similarly Gujarat High Court in Jamnagar Municipal Corporation Vs Rajesh Laljibhai Kabira, (2010) 125 FLR 997 and in the Judgment Division Bench of Kerala High Court in Secretary, Kerala State Electricity Board, Vs Neeli W/o Thekkeppat Velayudhan, (2014) Lawsuit(Ker) 1790 has taken similar view.

22. Further High Court of Andhra Pradesh in a decision in case of Andhra Pradesh State Road Transport Corporation and Bhupender Singh Alak,2004 2 LLN 517( Appeal No.699 of 1989 decided on 15-10-2003) after referring to various decisions has held as under:

'Workmen's Compensation Act, 1923, S.13 - Workmen's compensation -' Exgratia compensation paid by employer otherwise than in accordance with provisions of Act will not fall under "compensation' within the meaning of the Act so as to attract benefits specified under S.13.

23. Apart from Sections 8, 28 & 29 of the Employees Compensation Act, 1923 and the principles stated in the above referred decisions there is no more aspect in this case which is not disputed by the respondent wherein the respondent-corporation after referring to its regulations in respect of the gangman passed the resolution for sanction of compensation of Rs.5,00,000/- as ex-gratia as one time financial benefit to the dependents of probation mazdoor who died due to electrical incident and it is stated in the said order that compensation is in addition to the compensation paid to the dependents of the deceased under the Employees Compensation Act, 1923.

24. Learned counsel for the appellants has brought to the notice of this court Order of the KPTCL, which is available at page No.23 of the case file which is also admitted by respondent side which reads as under:

KARNTAKA POWER TRANSMISSION CORPORATION

LIMITED:

READ:

1) Notification Nmo.KEB /B16/517/97-98 dated: 28-11-1997 framing the KEB (Recruitment & Service Conditions of Probationary Mazdoor) Regulations 1997.

2) Amendments to Probationary Mazdoor Regulations, 1997 vide Notification No.KEB /B16/4313/97-98 dated: 28-03- 2006 & 07-12-2006.

3) Board Order No.KPTCL/ED/L& IR/B14/5506/01-02 dated: 06-11-2004 for conversion of Gangmen who were working in KPTCL/ESCOM's continuously for six years as on 01-04-2003 as Probationary Mazdoor.

4) Letter of the General Secretary, KPTC Employees Union (Reg.No.659) dated: 16-06-2010 & 11-08-2010.

5) Board Resolution No.76/21 dated: 27-09-2010.

ORDER No.KPTCL/B 5C/721/Vol II/2010-11,

BANGALORE DATED: 06-DEC.2010.

Corporation is pleased to accord approval for sanction of compensation of a lump-sum amount of Rs.5.00 lakhs (Rupees Five Lakhs) as Ex-gratia as one time financial benefit to the dependent of the Probationary Mazdoor who dies due to electrical accident while on duty so as to take care of the immediate needs of the family.

This is in addition to the compensation being paid dependents of the deceased Probationary Mazdoor under the Workmen's Compensation Act, 1923 and Family Benefit Fund Scheme.

The Ex-gratia amount sanctioned is to be deposited in the name of the dependent in a Fixed Deposit Account by the disbursing authority in a Nationalized Bank for a period of 15 years so that, the interest earned on such deposit should be used for the benefit of the family of the deceased Probationary Mazdoor.

The scheme shall come into force w.e.f 01-04-2010.

25. So, this order of respondent clearly indicates that, the ex-gratia amount of Rs.5,00,000/- is paid to the appellants, on account of death of deceased /probationary mazdoor who died in a electrical accident, so as to take care of the immediate needs of the family, it is only an additional compensation in addition to the compensation that deceased dependents gets under Workmen's Compensation Act

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1923 (now Employees Compensation Act ) and family benefits fund scheme. This order is not disputed by respondent. 26. Therefore, deduction of the said sum of Rs.5,00,000/- ex-gratia in the compensation awarded by the Commissioner for Employees Compensation is not legal and liable to be set aside. 27. In view of clear provisions of Sections 8, 28 & 29 of Employees Compensation Act and the principles stated in the above referred decisions of various High courts coupled with the order issued by the respondent- KPTCL on 06-12-2010, the deduction of ex-gratia compensation of Rs.5,00,000/- by the Commissioner for Employees Compensation is not in accordance with the provisions of Employees Compensation Act 2003 and to that extent, the Judgment passed by the trial court requires modification and needs to be interfered. 28. The learned counsel for the respondent contended that, the interest cannot be awarded on the amount of Rs.5,00,000/- which was already paid as exgratia, but such contention is not tenable in view of order of respondent dated: 06-12-2010 which clearly states that Rs.5,00,000/- in addition to compensation determined by the Commissioner under Employees Compensation Act. In the absence of any provision of law or authorities such contention cannot be accepted. Accordingly, the substantial question of law is answered in the negative. 29. In view of the aforesaid discussion, I pass the following: ORDER The appeal is partly allowed. The impugned Judgment and order dated: 09-01- 2017 passed in ECA No.249/2014 by the Commissioner for Employees Compensation Kalaburagi is hereby modified. The deduction of amount of Rs.5,00,000/- ex-gratia in the compensation of Rs.5,19,950/- and award of Rs.19,950/- by the Commissioner is set aside. The appellants are entitled to full compensation of Rs.5,19,950/-. Appellants/claimants are entitled to interest at 12% per annum on the said amount from one month from the date of incident till realization. The other reliefs sought are rejected as there is no evidence. The amount deposited if any, is directed to be transferred to the concerned Court for disbursement.
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