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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3324 of 2009
(Arising out of SLP(C) No. 5989 of 2003)
National Insurance Co. Ltd. ....Appellant
Versus
Hamida Khatoon and Ors. ....Respondents
JUDGMENT
Dr. ARIJTI PASAYAT, J.
1. Leave granted.
2. Challenge in this appeal is to the judgment of the Division Bench of
the Allahabad High Court dismissing the appeal filed by the present
appellant (hereinafter referred to as the `insurer').
3. Factual position which is almost undisputed is essentially as follows:
An appeal was filed questioning the correctness of the Award made
by the Motor Accident Claims Tribunal, Saharanpur (hereinafter referred to
as the `MACT') wherein a sum of Rs.1,20,000/- was awarded as
compensation.
The claim petition was filed on the basis that on 1.5.1991 while Abdul
Hamid (hereinafter referred to as the `deceased') was traveling by Matador
No. URF-9761 from Saharanpur to Sarsawa, a truck bearing registration
No.PIJ-5166 belonging to Border Security Force (in short the `BSF') dashed
against the said vehicle resulting in serious injuries on the body of the
deceased. He succumbed to the injuries at the SDB Hospital Saharanpur.
The appellant-insurer contested the claim petition inter alia taking the stand
that the compensation as claimed was high and exorbitant. The MACT held
that the accident occurred due to rash and negligent driving of the driver of
the truck and awarded Rs.1,20,000/- as compensation.
In appeal the stand of the appellant was that the application filed by
the claimant- respondent under Section 173 of the Motor Vehicles Act, 1988
(in short the `Act') was not maintainable in view of Section 53 of the
Employees State Insurance Act, 1948 (in short the `ESI Act'). The High
Court did not accept the stand primarily on the ground that no such plea was
2
taken specifically in the written statement. It was also held that as regards
applicability of Section 53 of the Act certain factual aspects were to be
considered. The appeal was accordingly dismissed.
4. Learned counsel for the appellant submitted that true scope and ambit
of Section 53 of the ESI Act has not been kept in view.
5. Learned counsel for the respondent on the other hand supported the
judgment.
6. It is to be noticed that in Regional Director, ESI Corporation & Anr.
v. Francis De Costa and Anr. [1993 Suppl.(4) SCC 100] at para 44 it was
observed as follows:
44. The next contention that the Motor Vehicles Act
provides the remedy for damages for an accident resulting in
death of an injured person and that, therefore, the remedy under
the Act cannot be availed of lacks force or substance. The
general law of tort or special law in Motor Vehicles Act or
Workmen's Compensation Act may provide a remedy for
damages. The coverage of insurance under the Act in an insured
employment is in addition to but not in substitution of the above
remedies and cannot on that account be denied to the employee.
In K. Bharathi Dev v. G.I.C.I [AIR 1988 AP 361] the
contention that the deceased contracted life insurance and due
to death in air accident the appellant received compensation and
the same would be set off and no double advantage of damages
under carriage by Air Act be given was negatived.
3
7. In A Trehan v. Associated Electrical Agencies [1996(4) SCC 255] it
was observed as follows:
"The ESI Act was enacted with an object of introducing a
scheme of health insurance for industrial workers. The scheme
envisaged by it is one of compulsory State insurance providing
for certain benefits in the event of sickness, maternity and
employment injury to workmen employed in or in connection
with the work in factories other than seasonal factories. The ESI
Act which has replaced the Workmen's Compensation Act,
1923 in the fields where it is made applicable is far more wider
than the Workmen's Compensation Act and enlarges the scope
of compensation. Section 38 provides that all employees in
factories or establishments to which the ESI Act applies shall
be insured in the manner provided in it. Under Section 39 the
employer is also made liable to pay contribution. Section 42
provides for circumstances under which the employee need not
pay his contribution. Section 46 provides for the benefits which
the insured persons, their dependants and the persons
mentioned therein shall be entitled to get on happening of the
events mentioned therein. Sections 51-A to 51-D create certain
fictions in favour of the employee so as to have wider coverage
for him. In case of an employment injury Section 46 provides
periodical payments to him or to his dependants in case of his
death. Employment injury is defined by Section 2(8) to mean a
personal injury to an employee caused by accident or an
occupational disease arising out of and in the course of his
employment, being an insurable employment, whether the
accident occurs or the occupational disease is contracted within
or outside the territorial limits of India. Section 2(9) defines
employee to mean any person employed for wages in or in
connection with the work of a factory or establishment to which
the ESI Act applies. It includes other persons but it is not
necessary to refer to that part of the definition. Insured person is
defined by Section 2(14) to mean a person who is or was an
employee in respect of whom contributions are or were payable
under the Act and who is by reason thereof, entitled to any of
the benefits provided by the ESI Act. The Second Schedule to
the ESI Act specifies the injuries deemed to result in permanent
total disablement or permanent partial disablement. Rule 54 of
the Employees' State Insurance (Central) Rules, 1950 provides
4
the daily rate of benefit which the employee would get if an
employment injury is suffered by him. Rule 57 provides for
disablement benefits. Rule 58 provides for dependant's benefits
in case the injured person dies as a result of an employment
injury. Rule 60 provides for the medical benefits to an insured
person who ceases to be in an insured employment on account
of permanent disablement. Other benefits are also conferred by
the ESI Act and the Rules but it is not necessary to refer to
them for deciding the point which arises in this case. Two other
provisions in the ESI Act to which it is necessary to refer are
Sections 53 and 61. The present Section 53 was substituted by
Act No. 44 of 1966 with effect from 28-1-1968. Section 61 has
been there in the Act since it came into force. It provides that
when a person is entitled to any of the benefits provided by the
ESI Act he shall not be entitled to receive any similar benefits
admissible under the provisions of any other enactment. Thus,
by enacting Section 61 the legislature has created a bar against
receiving similar benefits under other enactments. Section 53
before its amendment read as under:
"53. Disablement and dependant's benefits.--When
an insured person is or his dependants are entitled to
receive or recover, whether from the employer of the
insured person or from any other person, any
compensation or damages under the Workmen's
Compensation Act, 1923, or otherwise, in respect of an
employment injury sustained by the insured person
as an employee under this Act, then the following
provisions shall apply, namely--
(i) The insured person shall, in lieu of such
compensation or damages, receive the disablement
benefit provided by this Act, (but subject otherwise to
the conditions specified in the Workmen's
Compensation Act, 1923) from the Corporation and
not from any employer or other person.
(ii)-(iv) * * *
(v) Save as modified by this Act the obligations
and liabilities imposed on an employer by the
Workmen's Compensation Act, 1923, shall continue
to apply to him."
9. Experience of the administration of the ESI Act had
disclosed certain difficulties in its working. It was, therefore,
further amended in 1966. Along with other amendments made
5
in the ESI Act the legislature substituted present Section 53
which read as under:
"53. Bar against receiving or recovery of compensation
or damages under any other law.--An insured person or
his dependants shall not be entitled to receive or recover,
whether from the employer of the insured person or from
any other person, any compensation or damages under
the Workmen's Compensation Act, 1923 (8 of 1923) or
any other law for the time being in force or otherwise, in
respect of an employment injury sustained by the insured
person as an employee under this Act."
10. The Workmen's Compensation Act was enacted by the
legislature in 1923 with a view to provide for the payment by
certain classes of employers to their workmen compensation for
injury by accident. Section 3(1) of the Act provides that if
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
contained in that Act. Under Section 2(1)(c) the word
compensation is defined to mean compensation as provided for
by the Act. The definition of the workman under the Act is as
under:
"2. (1)(n) `workman' means any person (other than a
person whose employment is of a casual nature and who
is employed otherwise than for the purposes of the
employer's trade or business) who is--
(i) * * *
(ii) employed in any such capacity as is specified in
Schedule II,
whether the contract of employment was made before or after
the passing of this Act and whether such contract is expressed
or implied, oral or in writing; but does not include any person
working in the capacity of a member of the Armed Forces of
the Union; and any reference to a workman who has been
injured shall, where the workman is dead includes a reference
to his dependants or any of them."
11. A comparison of the relevant provisions of the two Acts
makes it clear that both the Acts provide for compensation to a
workman/employee for personal injury caused to him by
accident arising out of and in the course of his employment.
The ESI is a later Act and has a wider coverage. It is more
comprehensive. It also provides for more compensation than
what a workman would get under the Workmen's
Compensation Act. The benefits which an employee can get
6
under the ESI Act are more substantial than the benefits which
he can get under the Workmen's Compensation Act. The only
disadvantage, if at all it can be called a disadvantage, is that he
will get compensation under the ESI Act by way of periodical
payments and not in a lump sum as under the Workmen's
Compensation Act. If the legislature in its wisdom thought it
better to provide for periodical payments rather than lump sum
compensation its wisdom cannot be doubted. Even if it is
assumed that the workman had a better right under the
Workmen's Compensation Act in this behalf it was open to the
legislature to take away or modify that right. While enacting the
ESI Act the intention of the legislature could not have been to
create another remedy and a forum for claiming compensation
for an injury received by the employee by accident arising out
of and in the course of his employment.
12. In this background and context we have to consider the
effect of the bar created by Section 53 of the ESI Act. Bar is
against receiving or recovering any compensation or damages
under the Workmen's Compensation Act or any other law for
the time being in force or otherwise in respect of an
employment injury. The bar is absolute as can be seen from the
use of the words shall not be entitled to receive or recover,
"whether from the employer of the insured person or from any
other person", "any compensation or damages" and "under the
Workmen's Compensation Act, 1923 (8 of 1923), or any other
law for the time being in force or otherwise". The words
"employed by the legislature" are clear and unequivocal. When
such a bar is created in clear and express terms it would neither
be permissible nor proper to infer a different intention by
referring to the previous history of the legislation. That would
amount to bypassing the bar and defeating the object of the
provision. In view of the clear language of the section we find
no justification in interpreting or construing it as not taking
away the right of the workman who is an insured person and an
employee under the ESI Act to claim compensation under the
Workmen's Compensation Act. We are of the opinion that the
High Court was right in holding that in view of the bar created
by Section 53 the application for compensation filed by the
appellant under the Workmen's Compensation Act was not
maintainable.
13. The observations made in Francis De Costa2 by K.
Ramaswamy, J. were made in a different context. In that case
the question which had arisen for consideration was whether the
injury caused by an accident on a public road while an
employee was on his way to join duty can be held as arising out
7
of or in the course of his employment within the meaning of
Section 2(8) of the ESI Act. Moreover, in that case the Court
was not examining the bar created by Section 53 of the ESI
Act."
8. In Bharagath Engg. v. R. Rangamayaki [2003(2) SCC 138] it was
held as follows:
8. Section 2(14) of the Act, which is the pivotal provision, reads
as follows:
"`Insured person' means a person who is or was an
employee in respect of whom contributions are or were
payable under this Act and who is, by reason thereof,
entitled to any of the benefits provided by this Act."
9. It is to be noted that the crucial expression in Section 2(14)
of the Act is "are or were payable". It is the obligation of the
employer to pay the contribution from the date the Act applies
to the factory or the establishment. In ESI Corpn. v. Harrison
Malayalam (P) Ltd. [1993(4) SCC 361] the stand of the
employer that employees are not traceable or that there is
dispute about their whereabouts does not do away with the
employer's obligation to pay the contribution. In ESI Corpn. v.
Hotel Kalpaka International [1993 (2) SCC 9] it was held that
the employer cannot be heard to contend that since he had not
deducted the employee's contribution on the wages of the
employees or that the business had been closed, he could not be
made liable. The said view was reiterated in ESI Corpn. v.
Harrisons Malayalam Ltd [1998(9) SCC 74] That being the
position, the date of payment of contribution is really not very
material. In fact, Section 38 of the Act casts a statutory
obligation on the employer to insure its employees. That being
a statutory obligation, the date of commencement has to be
from the date of employment of the employee concerned.
10. The scheme of the Act, the Rules and the Regulations
clearly spell out that the insurance covered under the Act is
8
distinct and different from the contract of insurance in general.
Under the Act, the contributions go into a fund under Section
26 for disbursal of benefits in case of accident, disablement,
sickness, maternity etc. The contribution required to be made is
not paid back even if an employee does not avail any benefit. It
is to be noted that under Regulation 17-A, if medical care is
needed before the issuance of temporary identification
certificate, the employer is required to issue a certificate of
employment so that the employee can avail the facilities
available. "Wage period", "benefit period" and "contribution
period" are defined in Section 2(23) of the Act, Rule 2(1-C) and
Rule 2(2-A) of the Rules. Rule 58(2)(b) is a very significant
provision. For a person who becomes an employee for the first
time within the meaning of the Act, the contribution period
under Regulation 4 commences from the date of such
employment from the contribution period current on that day
and the corresponding benefit period shall commence on the
expiry of the period of nine months from the date of such
employment. In cases where employment injuries result in
death before the commencement of the first benefit period, Rule
58(2)(b)(ii) provides the method of computation of dependant's
benefits. It provides for computation of dependant's benefits in
the case of an employee dying as a result of employment
injuries sustained before the first benefit period and before the
expiry of the first wage period.
11. Rule 58(2)(b)(ii), insofar as it is relevant, reads as follows:
"58. Dependant's benefits.--
(1) * * *
2(b) Where an employment injury occurs before the
commencement of the first benefit period in respect of a
person, the daily rate of dependant's benefit shall be--
(i) * * *
9
(ii) where a person sustains employment injury before the
expiry of the first wage period in the contribution period
in which the injury occurs, the rate, forty per cent more
than the standard benefit rate, rounded to the next higher
multiple of five paise corresponding to the group in
which wages actually earned or which would have been
earned had he worked for a full day on the date of
accident fall."
12. When considered in the background of statutory provisions,
noted above, the payment or non-payment of contributions and
action or non-action prior to or subsequent to the date of
accident is really inconsequential. The deceased employee was
clearly an "insured person", as defined in the Act. As the
deceased employee has suffered an employment injury as
defined under Section 2(8) of the Act and there is no dispute
that he was in employment of the employer, by operation of
Section 53 of the Act, proceedings under the Compensation Act
were excluded statutorily. The High Court was not justified in
holding otherwise. We find that the Corporation has filed an
affidavit indicating that the benefits under the Act shall be
extended to the persons entitled under the Act. The benefits
shall be worked out by the Corporation and shall be extended to
the eligible persons."
9. Above being the position in law, the appeal deserves to be allowed.
The entitlement shall be worked out by the concerned MACT by taking note
of Section 53 of the Act.
..............................................J.
(Dr. ARIJIT PASAYAT)
10
...............................................J.
(ASOK KUMAR GANGULY)
New Delhi,
May 06, 2009 11
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