Supreme Court Upholds Compensation for Truck Driver’s Family in Workmen’s Compensation Case

Date of the Judgment: May 19, 2023

Citation: (2023) INSC 483

Judges: J.K. Maheshwari and Aravind Kumar, JJ.

Can a claim for compensation under the Workmen’s Compensation Act, 1923 be dismissed merely because the insurance company filed a written statement, even if they did not actively contest the claim? The Supreme Court of India addressed this question in a recent judgment, clarifying the scope of “contested cases” and ensuring fair compensation for the family of a deceased truck driver. The court emphasized that a mere filing of a written statement does not automatically make a case “contested” if no further evidence or cross-examination is pursued. The bench consisted of Justices J.K. Maheshwari and Aravind Kumar, with the judgment authored by Justice Aravind Kumar.

Case Background

The case revolves around the death of Sri Vakil Choudhary, a truck driver who died in a road accident on April 21, 2011, at 10:30 PM. He was employed by the second respondent. His wife, son, and parents (the appellants) filed a claim petition before the Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation, seeking compensation for his death, asserting that he earned Rs. 6,000 per month. The insurance company, Reliance General Insurance Company Limited (first respondent), filed a written statement but did not pursue the matter further. The Deputy Labour Commissioner awarded Rs. 4,31,671 as compensation, calculating the deceased’s income at Rs. 150 per day, or Rs. 3,900 per month.

Timeline

Course of Proceedings

The Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation awarded Rs. 4,31,671 as compensation. The claimants challenged this award as being too low. The High Court of Judicature at Patna set aside the award, holding that the Deputy Labour Commissioner lacked jurisdiction because the case was “contested” due to the insurer filing a written statement. The High Court stated that under Section 20(1) and (2) of the W.C. Act, contested cases should be adjudicated by the Labour Court, not the Deputy Labour Commissioner. The claimants then appealed to the Supreme Court.

Legal Framework

The case primarily concerns the interpretation of Section 20 of the Workmen’s Compensation Act, 1923, which deals with the appointment of Commissioners and their jurisdiction. Specifically, the relevant portions are:

“Section 20(1) The State Government may, by notification in the Official Gazette, appoint any person to be a Commissioner for Workmen’s Compensation for such area as may be specified in the notification.”

“Section 20(2) Where more than one Commissioner has been appointed for any area, the State Government may, by general or special order, regulate the distribution of business between them.”

The notification issued under this section by the appropriate Government stipulated that presiding officers of the Labour Court were to adjudicate all contested cases arising under the Act. The High Court interpreted this to mean that any case where a written statement was filed was a contested case. The Supreme Court disagreed, stating that a written statement alone does not make a case contested if there is no further contest.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court erred in holding that the Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation lacked jurisdiction.
• They contended that the mere filing of a written statement by the insurer does not make a case “contested” if there is no further contest.
• They argued that the employer admitted the averments made in the claim petition, and the insurer did not cross-examine the claimants or their witnesses.
• They also argued that the compensation awarded was too low, as the Deputy Labour Commissioner had incorrectly assessed the deceased’s income.
• The wife of the deceased stated that her husband was earning Rs. 6,000/- per month, which should be accepted as the correct income.

Respondent’s Arguments:

• The respondent (insurer) had filed a written statement, which, according to the High Court, made the case a contested one.
• The respondent did not actively contest the claim but relied on the High Court’s interpretation of the notification under Section 20 of the W.C. Act.
• The respondent had deposited the amount awarded by the Deputy Labour Commissioner, indicating acceptance of liability.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether the High Court was correct in holding that the Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation lacked jurisdiction to adjudicate the claim petition on the premise that it was a contested matter.

The Supreme Court also considered the sub-issue of whether the compensation awarded by the Deputy Labour Commissioner was adequate.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not cite any case laws or books in this judgment. However, the court did consider the following legal provisions:

• Section 20 of the Workmen’s Compensation Act, 1923: This section deals with the appointment of Commissioners and their jurisdiction. The court interpreted the notification issued under this section to determine whether the Deputy Labour Commissioner had the jurisdiction to decide the case.

Authorities Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court interpreted Section 20 of the Workmen’s Compensation Act, 1923 to mean that the Deputy Labour Commissioner had the jurisdiction to decide the case, as the case was not genuinely contested.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the following factors:

• The fact that the employer admitted the averments made in the claim petition.
• The fact that the insurer did not cross-examine the claimants or their witnesses.
• The need to provide social justice to the claimants, who were the wife, son, and parents of the deceased.
• The unchallenged statement of the wife of the deceased that her husband was earning Rs. 6,000/- per month.
• The object of the Act which envisages dispensation of social justice.

Sentiment Analysis Table

Fact:Law Ratio Table

Logical Reasoning

The Supreme Court disagreed with the High Court’s interpretation. The Court noted that the employer had admitted the claim, and the insurer did not cross-examine the claimants or their witnesses. Thus, the case was not genuinely “contested.” The Court also found that the Deputy Labour Commissioner had erred in calculating the deceased’s income. The Court accepted the wife’s statement that her husband earned Rs. 6,000 per month. The Court stated:

“The records on hand would disclose that there was no further contest of the claim petition by them. On the other hand, the employer had clearly admitted the averments made in the claim petition filed by the claimants. In other words, there was no contest.”

“Thus, the irresistible conclusion which we have to draw is, the unchallenged statement of the wife of the deceased who had deposed that her husband was earning Rs.6,000/- per month deserves to be accepted as gospel truth. We see no reason for disbelieving her statement.”

“Having regard to the object of the Act which envisages dispensation of social justice, we are of the considered view that the Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation fell in error in arriving at a conclusion that claimants’ income is to be construed at Rs.3,900/- p.m.”

The Court re-calculated the compensation based on an income of Rs. 6,000 per month, deducting 50% for personal expenses, and applying the appropriate multiplier. The court also increased the interest rate to 12% per annum from one month after the accident until the date of payment.

Key Takeaways

• A mere filing of a written statement by the insurer does not make a case “contested” under the Workmen’s Compensation Act if there is no further contest.
• The Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation has jurisdiction to adjudicate cases where the employer admits the claim and the insurer does not cross-examine the claimants.
• The court will consider the unchallenged statement of the wife of the deceased regarding the income of the deceased.
• The purpose of the Workmen’s Compensation Act is to provide social justice to the dependents of deceased workers.
• The compensation amount should reflect the actual income of the deceased and the loss of income to the claimants.

Directions

The Supreme Court directed the first respondent-insurer to deposit the balance amount of Rs.6,64,110/- with interest @ 12% p.a. before the Deputy Labour Commissioner-cum-Commissioner for Workmen Compensation, Magadh Division, Gaya, within six weeks from the date of receipt of the copy of the order.

Development of Law

The ratio decidendi of this case is that the mere filing of a written statement does not make a case “contested” under the Workmen’s Compensation Act if there is no further contest. This clarifies the scope of “contested cases” under the Act and ensures that families of deceased workers receive fair compensation even if the insurance company files a written statement but does not actively contest the claim. This judgment also reinforces the principle that the court should consider the unchallenged statement of the wife of the deceased regarding the income of the deceased.

Conclusion

The Supreme Court allowed the appeal in part, setting aside the High Court’s judgment. The Court held that the Deputy Labour Commissioner had jurisdiction to decide the case and re-determined the compensation amount, awarding Rs. 6,64,110 with interest @ 12% p.a. to the claimants. This judgment ensures that the family of the deceased truck driver receives fair compensation and clarifies the interpretation of “contested cases” under the Workmen’s Compensation Act.