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1979 DIGILAW 347 (MP)

Madhosingh, In re: v. .

1979-12-15

G.P.SINGH, R.C.SHRIVASTAVA

body1979
JUDGMENT G.P. Singh, C.J. 1. This is a reference made by the Commissioner for workmen's compensation under section 27 of the workmen's Compensation Act, 1923. The facts, briefly stated, are that one Amar Singh was employed as a temporary Mate in the Central Railways. Amar Singh died on 16th April 1971 as he was knocked down by a railway engine while on duty. The Divisional Accounts Officer, Central Railway, deposited Rs.6,000 as compensation on the death of \mar Singh. The only dependent as defined under section 2 (d) of the Act left by the deceased was his widowed mother who also died before she could file any claim application. The widowed mother left behind as her heir Madho Singh, Madho Singh is a brother or the deceased Amar Singh but be is not a dependent as defined in the Act. Madho Singh applied to the Commissioner for payment of compensation. On these facts the Commissioner has referred the following questions of law for our answer:- (1) Whether the heir of a deceased dependent can claim the amount deposited as compensation under the W.C. Act 1923 even though dependant dies before he or she could file a claim before Commissioner for workmen's compensation and before compensation is awarded to the dependent by the Commissioner. (2) Whether the amount of compensation becomes the property of dependents and vests in them as soon as it is deposited even before the Commissioner for Workmen's Compensation passes an order of disbursement? 2. The Workmen's Compensation Act, 1923, is an Act to provide for the payment by certain classes of employers to their workmen of compensation for injuries by accidents. Section 2 (1) (n) of the Act defines “wordman". The concluding portion of this definition says that “any reference to work man who has been injured shall, where the workman is dead, includes a reference to his dependents or any of them.” The word 'dependent' is defined in section 2 (1) (d) to mean relatives of a deceased workman enumerated therein. Section 3 of the Act provides that if a personal injury is caused to a workman by accident arising out of and in the course of his employment his employer shall be liable to pay compensation in accordance with the provisions of Chapter II. Section 4 of the Act fixed the amount of compensation payable under section 3. Section 3 of the Act provides that if a personal injury is caused to a workman by accident arising out of and in the course of his employment his employer shall be liable to pay compensation in accordance with the provisions of Chapter II. Section 4 of the Act fixed the amount of compensation payable under section 3. Where death results from the injury the amount of compensation payable is as given in Schedule IV. Neither section 3 nor section 4 indicates as to whom the compensation is payable, but a look at section 8, which deals with distribution of compensation in respect of a workman whose injury has resulted in death, goes to show that the compensation is payable to the dependents as defined in the Act. Sub-section (1) of section & provides that no payment of compensation in respect of a workman whose injury has resulted in death shall be made otherwise than by deposit with the Commissioner. On deposit of compensation under sub-section (1) the Commissioner proceeds under sub-section (4) to deduct from the amount deposited the actual amount of the workman's funeral expenses not exceeding Rs. 50 for payment to the person by whom such expenses were incurred. The Commissioner then causes a notice to be published or served on each of the dependents calling upon the dependents to appear before him for determining the distribution of compensation. If the Commissioner is satisfied after inquiry that no dependent exists, he repays the balance of money to the employer by whom it was deposited. Sub-section (5) then provides that compensation deposited is apportioned amongst the dependents of the deceased workman in such proportion as the Commissioner thinks fit. The Commissioner may in his discretion allot the entire amount of compensation to one of the dependents. Section 9 of the Act which bears the heading "Compensation not to be assigned, attached or charged" reads as follows:- "Save as provided by this Act, no lump sum or half monthly payment payable under this Act shall in any way be capable of being assigned or charged or be liable to attachment or pass to any person other than the workman by operation of law, nor shall any claim be set-off against the same." 3. The question whether their right to compensation vests in the deceased workman's dependent existing at the time of his death and passes on to his heirs if the dependent dies before receipt of the amount of compensation, was first considered by a Division Bench of the Calcutta High Court in Pasupati Dutt v. Kalvin Jute Mills AIR 1937 Cal 495. In that case it was held that though section 3 which imposes a liability on the employer to pay compensation does not specify the person or persons to whom it is payable, section 8 makes it clear that nobody has any right to it except the dependents. It was pointed out that though the Commissioner has got a discretion in the matter of appoitiontment of compensation and he can allot the entire amount to one of the dependents, even so it can be said that the right accrues to the dependents as a class subject to the Commissioner's right of destribution in such a way as he thinks proper, and in case of sale dependent it vests absolutely, and as it is a right which has been given to the dependents because of the workman's death, it must be deemed to accrue at the time of his death, there being no ground of postponing it to a further date. It was further pointed out that the duty of the Commissioner to refund the compensation arises only when there is no dependent "in existence" and this must mean in existence at the time of the workman's death. In holding that any other construction would be frustrating the object of she Act and place the right to compensation on an uncertain contingency, B.K. Mukherjee, J. (as he then was), made the following observations: "The enquiry before the Commissioner may be delayed for vari ous reasons and people who really depended upon the earnings of the deceased workman might die before or pending the enquiry and even just before the Commissioner makes the award. To say that the Commissioner is bound to refund the money to the employer under such circumstances would be to put an extremely narrow and unjust construction upon the section, which is not borne out by the purpose of the Act or the actual words used. To say that the Commissioner is bound to refund the money to the employer under such circumstances would be to put an extremely narrow and unjust construction upon the section, which is not borne out by the purpose of the Act or the actual words used. As my Lord the Chief justice pointed out in his judgment, the House of Lords in England took a similar view in United Collieries Ltd v. Simpson (or Handry), 1909 AC 383 upon construction of the English Workmen's Compensation Act of 1906. The English Act also provided for payment of the compensation into the County Court, which could deal with it in its discretion and divide it in such manner as it thought best among the dependents of the deceased workmen. It is true that there was no provision for refund of the money to the employer in the English Act of 1906, but that is really not very important as on total absence of any dependent the money could not really be retained by the County Court, and would have to be returned to the employer in exercise of its inherent powers. Mr. Banerjee for the respondent Jays stress on the fact that in the English Act of 1925 an express provision was inserted in S.2, Cl. (3) under which the legal representative of a dependent had no right to the compensation payable to the latter, but here again it is significant to note that the Indian Act was amended on various occasions even after 1925, but the Indian Legislature did not think it proper to introduce any provision like the one mentioned above. It may be said indeed that to hold that the dependent's right to compensation is a vested right which passes to his legal representative would be to put an additional burden upon the employer, the effect of which might be to enrich the strangers and persons totally outside the scope of the Act, but the result would be exactly the same if the dependent dies the very day after receiving the compensation." The same view of section 8 was taken by a Division Bench of the Madras High Court in Abdurahiman v. Beeran Koya, AIR 1938 Mad 402 . Section 9 of the Act, it seems, was not referred to before the Calcutta High Court in Pasupadti Dutt's case. Section 9 of the Act, it seems, was not referred to before the Calcutta High Court in Pasupadti Dutt's case. This section was, however, referred to by the Madras High Court in Abdurahiman's case. The argument on the basis of section 9 was that the amount of compensation cannot pass by operation of law i.e. succesion in view of section 9. Negativing this argument, the learned Judges of the Madras High Court observed as follows:- "The other part of the section in S. 9 is that no lump sum or half yearly payment shall pass to any person other than the workman. This contemplates that the compensation is payable to a workman and cannot be claimed by any person by operation of law. Therefore before that clause can come into operation there must be an existing workman to whom it is payable and it has no application to a case where the workman died before the award of compensation. In the case of a workman who is alive and to whom the compensation is payable the Act says that it must be paid to him and it should Dot go to any other person, for example, if he becomes an insolvent, his trustee in bankruptcy cannot claim the sum for the benefit of his creditors." The question whether compensation can be claimed by heirs of the dependent of a deceased workman who was not paid the compensation before his death was also considered by the Andhra Pradesh High Court in Radhakrishna Rice Mill v. Appalalcharyulu (1958) 1 APWR 316. The Andhra Pradesh High Court followed the Calcutta and Madras decisions referred to above. The case mentioned above had established the law that the right to compensation vests in a dependent and passes on to his heirs in case of the dependents death before receipt of compensation. It is also noteworthy that before 1976 the Act was amended on 10 occasions after 1937, yet no amendement was made to displace the law established as above by judicial decisions which impliedly shows that the decisions had correctly interpreted the Act. 4. A Full Bench of the Madras High Court, however, in B.M. Habeebullah v. Pariaswomi AIR 1977 Mad 330 , overuled its earlier decision in Abdurahiman's case. 4. A Full Bench of the Madras High Court, however, in B.M. Habeebullah v. Pariaswomi AIR 1977 Mad 330 , overuled its earlier decision in Abdurahiman's case. It was held in this case that Abdurahiman's case had not correctly interpreted S. 9 of the Act in the light of the definition of workman and the correct interpretation is that there is no passage of right of compensation from a dependent to his heirs if the dependent dies before receipt of the compensation under section 8. With great respect, we are unable to agree with the view taken by the Full Bench of the Madras High Court. The relevant portion of section 9 of the Act reads as follows: "No lump sum or half monthly payment payable under this Act shall pass to any person other than the workman by operation of law." Reading the word 'workman' in the light of the definition given in section 2 (1) (n) the above quoted portion of section 9 will read as under: "No lump sum or half monthly payment payable under this Act shall pass to any person other than the workman and where the workman is dead, his dependents, by operation of law." Now the section quoted as above deals with prohibition of passing of compensation by operation of law. Ordinarily devolution by success on is also a mode of passing of property by operation of law, but in such a case there can be no question of passing of any property to the deceased. Had the intention under section 9 been to prohibit passing of' property by devolution, the words " other than the workman' would not have been there. The section would have been simply worded as below: "Save as provided by this Act, no lump sum or half monthly payment payable under this Act shall-pass to any person by operation of law." The words 'other than the workman' signify that the workman or his dependent is in existence when the question of passing of property by operation of law arises. In our opinion, the earlier decision of the Madras High Court was correct that passing of property by operation of law which is prohibited or restrained by S. 9, does not include passing of property by devolution or succession, but refers to other eases of passing of property by operation of law such as insolvancy where the person whose property passes by operation of law is in existence. For example, even if the workman or in case of his death his dependent is adjudicated insolvent the amount payable to him under the Act will Dot pass by operation of law and vest in the Court or receiver and win be payable in accordance with the Act to the workman or the dependent, as the case may be. It is true, as observed by the Full Bench of the Madras High Court that the earlier Division Bench decision of that Court did not expressly refer to the definition of workman which includes a dependent in case of death of the workman while construing S. 9, but in our opinion, the criticism is not correct that if the definition is noticed and the section is read in the light of that definition it will cover a prohibiton for passing of compensation by devolution. As earlier shown by us, reading section 9 along with the definition of workman makes no difference. The point made out by the earlier case is that the words 'other than the workman' show that the passing of property by operation of law contemplated by section 9 is of that type which recognises the presence of the workman. Reading section 9 with the aid or the definition as contained in section 2 (1) (n) only shows that the passing of property by operation of law prohibited therein recognises the presence of the workman or in case of the death of his dependents The section has absolutely no application for deciding the question of right to compensation on the death of the dependents. For these reasons, we are in respectful agreement with the view expressed by the earlier Division Bench case of the Madras High Court. For these reasons, we are in respectful agreement with the view expressed by the earlier Division Bench case of the Madras High Court. Even assuming that the view expressed by the Full Bench is also a possible view of section 9, we do not think that there is justification for departing from the view taken as early as 1938 when the Legislature did not intervene to overule that view which had prevailed for nearly forty years. If the view taken in the earlier Madras case or that taken by the Calcutta High Court was not correct, the Legislature would have intervened and made suitable amendments in the Act as was made in the corresponding English Act of 1906 in 1925. As earlier pointed out by us, the Act was amended on 10 occasions between 1937 and 1977 without displacing the interpretation adopted by the Calcutta, earlier Madras and Andhra Pradesh decisions which is a very strong indication to show that these decisions were in line with the intention of the Legislature. No. reference is made to this aspect of the matter by the Full Bench decision of the Madras High Court. 5. Our answers to the questions referred are as follows:- (1) The heir of a deceased dependent can claim the amount deposited as compensation even though the dependent died before he could file a claim before the Commissioner and before compensation could be awarded to him. (2) The amount of compensation becomes the property of dependents and vests in them even before the Commissioner passes an order of disbursemeat. There shall be no order as to costs of this reference.