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2023 DIGILAW 890 (AP)

D. Nagarjuna v. DRN Infrastructure

2023-06-16

V.R.K.KRUPA SAGAR

body2023
JUDGMENT : An injured claimant filed this Civil Miscellaneous Appeal under Section 30 of the Employees Compensation Act, 1923(hereinafter referred to as act, 1923). In this appeal, he assails the order dated 02.01.2023 of the learned Commissioner for Employees Compensation and Deputy Commissioner of Labour, Kurnool in E.C.No.1 of 2019. 2. The appellant is Sri. D. Nagarjuna, while working as operator on stone crushing machine under the Employment of 1st respondent, in the course of employment met with an accident on 03.03.2014. As a result of which his right hand was amputated and he sustained 80% of permanent disability. The employees working under the 1st respondent unit was covered by the insurance policy issued by the 2nd respondent. As the respondents did not pay the compensation for injury sustained by the appellant he filed an application U/s.22 of E.C.Act, 1923 before the Commissioner for Employees compensation and Deputy Commissioner of Labour, Kurnool seeking compensation of Rs.15,00,000/- together with interest @18% per annum from the date of accident till date of realization against both respondents. The learned Commissioner conducted inquiry and allowed the petition in part by granting compensation to the appellant of Rs.8,20,109/- under section 4 of Employees compensation Act and further awarded 12% interest thereon till date of payment of compensation. But he omitted to grant interest on compensation amount from the date of incident till date of order. 3. Aggrieved by the impugned order passed by the learned Commissioner for awarding less compensation and restricting the interest @ 12% per annum from the date of Order/Award till the date of payment under the impugned order dated 02.01.2023 passed in E.C.No.1 of 2019 and consequently omitting to grant interest from the date of incident till date of award @ 12% per annum and also further for non quantification of the medical expenses, the appellant filed this Appeal under Section 30 of Employees Compensation Act,1923. 4. In terms of Section 30 of the Act, 1923 an appeal could be admitted only when it discloses substantial questions of law involved in the appeal. On 17.03.2023, this Court admitted this appeal on the following substantial questions of law : 1. Whether the ceiling limit of monthly wages fixed by the commissioner at Rs.8000/- under the guise of Central Govt. notification S.O 1258(E) Dt.31.05.2010 is erroneous, perverse and not in consonance with principles laid down by the Hon'ble Apex Court of India? 2. On 17.03.2023, this Court admitted this appeal on the following substantial questions of law : 1. Whether the ceiling limit of monthly wages fixed by the commissioner at Rs.8000/- under the guise of Central Govt. notification S.O 1258(E) Dt.31.05.2010 is erroneous, perverse and not in consonance with principles laid down by the Hon'ble Apex Court of India? 2. Whether the learned commissioner ought to have taken actual monthly wages of the employee for the purpose of multiplying wages with relevant factor U/Sec.4(1)(b) of E.C. Act,1923? 3. When does the payment of compensation U/Sec.4 of E.C Act, 1923 falls due and consequently what is the point in time from which interest would be payable on the amount of compensation as provided U/Sec.4A(3) of E.C Act,1923? 4. Whether the learned Commissioner committed serious error of law by denying interest on compensation amount from the date of accident till date of adjudication? 5. Whether the Appellant is entitled to compensation of Rs.25,62,840/- and interest thereon from the date of accident till realization U/Sec.4A(3)(a) of E.C Act, 1923? 6. Whether the Commissioner can grant medical expenditure incurred by the Appellant without determination of exact amount payable U/Sec.4A(3) (a) of E.C Act, 1923? 5. The prayer in this appeal is in the following terms : “For the reasons stated above, the appellant prays that this Hon'ble Court may be pleased to set aside the impugned order dt.02.01.2023 passed in E.C.No.1 of 2019 on the file of the Commissioner for Employees Compensation and Deputy Commissioner of Labour, Kurnool in restricting the interest on compensation granted from the date of Order/Award and may be pleased to Award compensation of Rs.25,62,840/- instead of Rs.8,20,109/- as fixed by the Commissioner for Employees Compensation and Deputy Commissioner of Labour, Kurnool with 12% P.A of simple interest thereon from the date of accident/incident till date of realization and may be pleased to award a sum of Rs.1,00,000/- towards medical expenses.” 6. Despite notices being served for respondent No.1, no appearance was made and for respondent No.2, learned Standing Counsel made appearance. Learned counsel on both sides submitted arguments. 7. A perusal of the record and the impugned Order would disclose that the subject matter accident occurred on 03.03.2014 and the claim was not preferred soon thereafter but it was filed about five years subsequent to it. Learned counsel on both sides submitted arguments. 7. A perusal of the record and the impugned Order would disclose that the subject matter accident occurred on 03.03.2014 and the claim was not preferred soon thereafter but it was filed about five years subsequent to it. The question of limitation was considered by the learned Deputy Commissioner of Labour at page No.5 of his order and after giving appropriate reasons and by invoking powers under Section 10 of the Act, 1923 it condoned the delay. 8. The accident occurred at Sortur Village of the state of Karnataka. The injured employee is a permanent resident of Pandirlapalli Village, Dhone Mandal, Kurnool District. He chose to prefer this claim before learned Deputy Commissioner of Labour at Kurnool. Respondent No.2, New India Assurance company put an objection. In the impugned order after furnishing elaborate reasons and acting in terms of Section 21 of the Act, 1923, the jurisdiction issue was decided holding that the authority at Kurnool was competent to decide the dispute. 9. The assertion of the employee and the admission of it by the employer/respondent No.1 in his counter filed before the lower authority indicated that injured employee’s monthly wage was Rs.20,000/-. The contentions of respondent No.2 New India Assurance Company was about absence of proof of wages. On due consideration that was negatived by the learned Deputy Commissioner. 10. After considering the entire material on record and after considering the arguments advanced on both sides it assessed compensation in terms of Section 4(1)(C) of the Act, 1923. On noticing a notification issued by the Central Government which prescribed the ceiling limit of monthly wage at Rs.8,000/-, compensation was assessed by applying the relevant factor in schedule 4 of the Act, 1923 which was at 213.57. It calculated 60% of the monthly wage at 12,000/- and by virtue of Central Government notification ceiling limit of monthly wage was considered at Rs.8,000/- and it granted compensation 8000X60/100X213.57X80%=Rs.8,20,109/-. The following order was passed by the learned Deputy Commissioner, Kurnool. “Accordingly, a compensation amount of Rs.8,20,109/- is awarded to the applicant D.Nagarjuna, ex-operator of stone crushing machine, of DRN Infrastructure Hubli U/s 4 of the Employees Compensation Act as on date of accident and 12% interest thereon till the date of payment of compensation as per Section 4A of the said Act. “Accordingly, a compensation amount of Rs.8,20,109/- is awarded to the applicant D.Nagarjuna, ex-operator of stone crushing machine, of DRN Infrastructure Hubli U/s 4 of the Employees Compensation Act as on date of accident and 12% interest thereon till the date of payment of compensation as per Section 4A of the said Act. Further, the applicant I is also entitled the amount incurred towards medical expenditure for treatment of injuries caused during the course of employment U/s 4 (2) (A) of the EC Act. Hence, the OP1 & OP2 are directed to comply with above direction jointly and severally responsible for payment of above awarded compensation to the applicant. The opposite party No.2 is directed to deposit the awarded amount within 60 days from the date of this award before the Commission. With the above direction, the application is disposed off.” 11. Aggrieved of the above order, which failed to grant compensation that was prayed for, the injured employee preferred this Civil Miscellaneous Appeal. Learned Standing Counsel for respondent No.2 M/s New India Assurance Company submits that the amount that was awarded was deposited by it and in the case at hand, there was no relevant proof showing that the appellant was earning Rs.20,000/- and in such circumstances the lower authority appropriately considered the monthly wage at Rs.8,000/- and it accordingly granted compensation as well as interest and there is nothing to interfere with it. As against it, learned counsel for appellant submits that the Rs.8,000/- cap on the monthly wage adopted by the lower authority is incorrect and is against the law. Interest falls due from the date of accident but the lower authorities failed to grant it in accordance with law. Learned counsel submits that medical expenses should have been quantified and granted and the learned lower authority failed to do it. 12. Learned counsel for appellant in support of the contentions cited K. Sivaraman v. P. Satishkumar, (2020) 4 SCC 594 . specific attention of the Court is drawn through Para No.26 of this judgement which is extracted here : “Prior to Act 45 of 2009, by virtue of the deeming provision in Explanation II to Section 4, the monthly wages of an employee were capped at Rs.4,000/- even where an employee was able to prove the payment of a monthly wage in excess of Rs.4,000/-. The legislature, in its wisdom and keeping in mind the purpose of the 1923 Act as a social welfare legislation did not enhance the quantum in the deeming provision, but deleted it altogether. The amendment is in furtherance of the salient purpose which underlies the 1923 Act of providing to all employees compensation for accidents which occur in the course of and arising out of employment. The objective of the amendment is to remove a deeming cap on the monthly income of an employee and extend to them compensation on the basis of the actual monthly wages drawn by them. However, there is nothing to indicate that the Legislature intended for the benefit to extend to accidents that took place prior to the coming into force of the amendment.” It is on this principle, learned counsel urges that while the actual wage of Rs.20,000/- was believed by the learned Deputy Commissioner, he ought to have considered that Rs.20,000/- and ought not to have considered the cap of Rs.8,000/-. On considering the submissions made on both sides, it is to be stated that there is no force in the contention raised by the learned counsel for appellant for the following reasons. 13. Section 4 of act 1963 provides the principle for computation of compensation. By virtue of act 45 of 2009, several amendments were brought into for this Section 4. The said amending Act came into force for most part of it on 18.01.2010. Earlier to this amendment, there was explanation II to Section 4 whereunder the monthly wages of an employee were capped at Rs.4,000/-. Thus, earlier to this amendment in the year 2009 even if the employee was able to prove his monthly wage was in excess of Rs.4,000/-, by virtue of the cap fixed by the Legislature, it was to be calculated only at Rs.4,000/-. This explanation II to Section 4 was omitted by the amendment Act in the year 2009. The effect of that amendment is what the Hon’ble Supreme Court explained at Para No.26 of their lordships’ judgment which was extracted earlier in this judgment. However, that is not the end of the matter. This explanation II to Section 4 was omitted by the amendment Act in the year 2009. The effect of that amendment is what the Hon’ble Supreme Court explained at Para No.26 of their lordships’ judgment which was extracted earlier in this judgment. However, that is not the end of the matter. In the amendment that was made in the year 2009, the legislature brought in (1B) in Sub-section (1) of Section 4, it reads : Section 4(1)(1B) “The Central Government may, by notification in the official gazette, specify, for the purpose of sub-section 1, such monthly wages in relation to an employee as it may consider necessary.” 14. Exercising powers under that provision Central Government issued the following notification on 31.05.2010. The same is extracted here : “S.O.1258(E) – In exercise of the powers conferred by sub-section (1B) of Section 4 of the Employee’s Compensation Act, 1923, (g of 1923), the Central Government hereby specified, for the purpose of Sub-Section (1) of the said section, the following amount as monthly wages, with effect from the date of publication of this notification in the official gazette, namely – Eight thousand rupees.” 15. These aspects could be noticed at Para No.8 and Para No.14 of the judgement of the Hon’ble Supreme Court of India referred above. Thus, the cap of Rs.8,000/- for the purpose of considering monthly wages while computing compensation under Section 4 as notified by the Central Government was followed by the learned Deputy Commissioner of Labour in his impugned order here. It is that aspect which is questioned by the learned counsel for appellant based on what their lordships of the Hon’ble Supreme Court of India explained at Para No.26 of the judgment. It has to be stated that in the said ruling, their lordships were not concerned with Central Government notification of the year 2010 and Sub-Section (1B) of act, 1923. At Para No.15 their lordships stated that the question that fell for consideration before their lordships was as to whether the amending Act 45 of 2009 was prospective in operation or retrospective in operation. In the case before their lordships, accident occurred on 31.01.2008. By then by virtue of explanation II cap of Rs.4,000/- was there. By the time the matter came to be decided amending Act of the year 2009 came into force. In the case before their lordships, accident occurred on 31.01.2008. By then by virtue of explanation II cap of Rs.4,000/- was there. By the time the matter came to be decided amending Act of the year 2009 came into force. It was in those circumstances, Hon’ble Division Bench of the Madurai Bench of Madras High Court thought it fit to apply the amending Act, 2009 retrospectively and thereby cap of Rs.4,000/- was not considered and the actual wage was taken into consideration. After giving various reasons and citing various precedent at Para No.33 of its judgment, Hon’ble Supreme Court of India found that the approach of the High Court was erroneous and it ought to have decided the compensation considering Rs.4,000/- cap and that the amending Act, 2009 has no retrospective affect. It was never in the consideration of their lordships as to whether under Sub-Section (1B), Central Government was empowered to notify monthly wages are not. For the complete picture of the legal provisions, their lordships were pleased to mention those provisions. However, those provisions did not fall for consideration before their lordships. In that context of the matter only the removal of the cap and its purport was laid down by the lordships’ at Para No.26 of the judgment. In the case at hand, the subject matter accident occurred on 03.03.2014. By then amending Act, 2009 already came into existence and by the time the case fell for consideration before the Deputy Commissioner of Labour, Kurnool notification of the year 2010 from the Central Government under Sub-Section (1B) came into existence. Bound by that notification and bound by the legal mandate in Sub-Section (1B), Learned Deputy Commissioner of Labour appropriately acted in accordance with law. In the cited ruling, their lordships did not set aside Central Government notification dated 31.05.2010. In the cited ruling, the vires of Sub-Section (1B) was neither questioned nor considered. Therefore, learned Deputy Commissioner, Kurnool in terms of Central Government notification dated 31.05.2010 acted. Therefore it is to be upheld as it is in accordance with law. Therefore, the contention of the appellant in challenge to the cap of Rs.8,000/- applied by the learned Deputy Commissioner of Labour is incorrect and is not in accordance with law and therefore this contention is negatived. 16. 12% interest was granted by the learned Deputy Commissioner of Labour. Therefore, the contention of the appellant in challenge to the cap of Rs.8,000/- applied by the learned Deputy Commissioner of Labour is incorrect and is not in accordance with law and therefore this contention is negatived. 16. 12% interest was granted by the learned Deputy Commissioner of Labour. The operative portion of the order of the learned Deputy Commissioner of Labour is in a way not appropriately worded and because of that the date from which 12% interest was to be calculated could not be easily understood. Compensation falls due from the date of accident. Interest has to be calculated on the quantified compensation payable from the date of accident. That has been the law which could be seen in Shobha v. The Chairman, Vithalrao Shinde Sahakari Sakhar Karkhana Ltd, 2022 Livelaw (SC) 271. Appellant understood that the compensation was awarded only from the date of order but not from the date of accident. On a keen reading of the impugned order the operative portion shows that the order used the words “As on date of accident and 12% interest there on till the date of payment of compensation”. It is from these words one could say that the compensation was awarded on the day when it fell due and interest was awarded from the date of accident itself. However, if the intendment of the order is otherwise, with a view to set it right, this Court holds that 12% interest that was awarded by the learned Deputy Commissioner of Labour shall be paid by the respondents on the compensation awarded from the date of accident i.e., 03.03.2014 till the date of payment. To this extent, the ground urged in this appeal by the appellant holds merit and is decided accordingly. 17. In the paper book presented, there is copy of the application filed by this appellant before the lower authority. There is absolutely no whisper as to how much amount was spent by this injured employee towards his medical expenses. Documents attached to it do not indicate any bills showing expending of money for medicines and treatment. Throughout the body of the petition there is no reference to a particular amount being claimed towards medical expenses and treatment. However, reading of the impugned order also shows that there is absolutely no evidence produced about the money spent towards medical expenses. Documents attached to it do not indicate any bills showing expending of money for medicines and treatment. Throughout the body of the petition there is no reference to a particular amount being claimed towards medical expenses and treatment. However, reading of the impugned order also shows that there is absolutely no evidence produced about the money spent towards medical expenses. It is in those circumstances, learned Deputy Commissioner could not quantify the medical expenses. However, he was sensible enough when it ordered that the respondents shall pay actual amounts incurred by the injured employee towards medical expenditure. In this appeal substantial question raised is whether commissioner granting medical expenditure without determination of exact amount is correct or not. Thus, appellant is questioning his own failure. He seeks awarding of Rs.1,00,000/- towards medical expenses. Actual expense is a matter of fact to be pleaded and proved and not a matter for any surmise. Since no material was produced and no claim was made before the lower authority to determine what exactly was the medical expenditure, the approach of the learned Deputy Commissioner of Labour cannot be found fault with. Therefore, the prayer for awarding of Rs.1,00,000/- towards medical expenses cannot be granted for want of pleadings and evidence. The injured employee in his petition sought for compensation of Rs.15,00,000/-. Lower authority granted Rs.8,20,109/-. In this appeal, the appellant seeks for Rs.25,62,840/-. This excess amount came to be claimed by calculating Rs.20,000/- as monthly wage. That cannot be granted by virtue of 2010 notification of the Central Government fixing a cap of Rs.8,000/-. Therefore, the claim for additional compensation has no merit. 18. In the result, this appeal is allowed in part. Entire order of the learned Deputy Commissioner of Labour dated 02.01.2023 in E.C.No.1 of 2019 is upheld with a modification that 12% interest per annum is to be calculated on compensation amount of Rs.8,20,109/- and that shall be payable from the date of accident i.e., 03.03.2014 till the date of payment of compensation. The liability is joint and several between the respondents. The amount deposited by respondent No.2 shall be given due credit and the balance amount shall be remitted by respondent No.2 within three months from the date of this order. There shall be no order as to costs. As a sequel, miscellaneous applications pending, if any, shall stand closed.