Smt. Surekha & Ors. v/s The Branch Manager, National Insurance Co. Ltd. (03 August, 2017)

CaseSmt. Surekha & Ors. v/s The Branch Manager, National Insurance Co. Ltd.
Case Number CIVIL APPEAL NO. 10018 OF 2017
CourtBefore the Supreme Court of India
BenchJustice R.K. Agrawal, Justice Mohan M. Shantanagoudar
Author of the judgementJustice MOHAN M. SHANTANAGOUDAR
Decided On 03 August, 2017
Author of the briefAditya Gor

Brief facts and procedural history:

Mr Anand (the deceased) met with an accident while driving Mahindra Temp Trax during the course of his duty and sustained severe injuries. He died during the course of treatment leaving behind his wife, child and aged parents. The appellants (wife, child and parents) claimed compensation before the Commissioner for Workmen’s Compensation and Labour Officer, DN-II, Bijapur. (Para 2)

The Commissioner while assessing the compensation held that the income of the deceased was at Rs.4,000/- per month, took 50% of the same, and by adding Rs.5,000/- for funeral expenses quantified the compensation at Rs.3,94,120/- with interest @ 12% per annum from the date of expiry of one month of the award. (Para 3)

Aggrieved by the Award of compensation of the Commissioner, the appellants filed an appeal before the High Court. The High Court assessed the income of the deceased at Rs.5,500/-. With 50% of the wages at Rs.2,750/- and by applying a relevant factor of 197.06, the compensation payable was determined at Rs.5,41,915/-. Under the Provisions of Section 4(4) of the Act, the appellants are entitled to a maximum of Rs.5,000/- incurred towards funeral expenses. Therefore, the High Court awarded Rs.5,46,915/- in toto with interest @ 12% per annum from the date of expiry of one month from the date when the amount was due. (Para 3)

Arguments of the appellants/ Reasons behind the appeal:

  • The Commissioner, as well as the High Court, is not justified in deducting 50% of the wages while quantifying compensation. (Para 4)
  • Further, the income of the deceased should have been assessed at Rs.6,000/- per month. (Para 4)

Ratio as given by the author of the judgment:

It is mandatory as per Section 4 of the Employee’s Compensation Act, 1923 that the amount of compensation should be based on an amount equal to 50% of the monthly wages of the deceased multiplied by a relevant factor. (Para 4)

The Commissioner, as well as the High Court, had found that the deceased was aged about 35 years at the time of his death. He had to look after his wife, child and aged parents. Though the evidence on record clarifies that the deceased was getting Rs.6,000/- per month and Rs. 100/- as daily Bhatta, the High Court without any reason assessed the income of the deceased at Rs.5,500/- per month. The daily Bhatta earned by the deceased usually would have been spent for his personal purposes. Consequently, the entire wages of Rs.6,000/- could have been utilized by him for the maintenance of his big family. (Para 5)

Decision Held:

Having regard to the totality of factors, it was held that the deceased was earning Rs.6,000/- per month. In the matter on hand, the Commissioner, as well as the High Court, had rightly assessed the compensation by multiplying relevant factor of 197.06 with 50% of wages as mentioned supra. So also the appellants are entitled to a maximum of Rs.5,000/- towards funeral expenses as per Section 4(4) of the Act. (Para 6)

Since the income of the deceased was at Rs.6,000/- per month, with 50% of the wages at Rs.3,000 by multiplying relevant factor of 197.06, and by adding Rs.5000/- towards funeral expenses, the net compensation payable would be Rs.5,96,180/- with interest @ 12% per annum from the date of expiry of one month from the date of death of the deceased.  Out of the enhanced compensation, a sum of Rs.1,00,000/- shall be deposited in the name of appellant No. 2 Varsha, the daughter of the deceased till she attains the age of majority and the excess amount shall be shared amongst the other appellants. The judgment of the High Court has modified accordingly. The appeal was allowed in part to the above extent. (Para 7)

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