Bombay HC Revises Compensation Under Employee Compensation Act 1923 After 19 Years

A single judge bench of Justice S.G.Dige, of the Bombay High Court (Aurangabad Bench) enhanced the compensation awarded by the Labour Court of Latur to the kins of the man who died due to an accident while driving a truck.

Since the accident occurred during the course of employment, the dependants of the deceased filed a petition before the commissioner of the Labour Court, Latur (Trial Court). The trial court considered the monthly salary of the deceased as Rs. 2000 and awarded compensation at 9% from the date of the accident.

Being aggrieved from the order, the appellant approached the Bombay High Court in 2004 stating that the monthly salary of the deceased was not Rs. 2000 but Rs. 4000, and the interest according to the provisions of the act should have been 12%. It was also stated that the trial court did not take into consideration the correct monthly salary along with bhatta (side income).

The advocate for the respondent stated that no evidence was put forth before the trial court which proved that the salary of the deceased was Rs. 4000. He also argued that the interest awarded and order passed by the trial court was valid and legal.

During the matter was being heard the wife of the deceased deposed before the court that the deceased was receiving a monthly salary of Rs. 4000 along with Bhatta (side income). The court noted that there was no question of salary certificate since the deceased was a private employee of the truck owner. The court in its order stated that:

“Generally, the wife knows the salary of the husband. It has come in the evidence of appellant no.1 that her husband was getting Rs.4,000/- per month including Bhatta; it does not mean that she was speaking false. The trial court should have considered this fact”

The court considered the monthly salary of the deceased as Rs. 3000 after the oral deposition of the wife of the deceased.

The court also referred to Section 4-A of the Employees’ Compensation Act, 1923 wherein the provision states that:

“Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall, -

(a)direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve percent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due”

The court while allowing the appeal also increased the interest from 9% to 12% and stated that the trial court had erred while considering the rate of interest.

Case Title: Sunita and Ors. Versus Sandipan Dyanoba Tathapare and Anr.