'When Will A High & Mighty State Owned Insurance Company Realise Its Social Conscience?': SC Criticizes Challenge Against Compensation For Worker's Death

In a case where "a poor farming family is lost in a long drawn out battle to secure a paltry compensation of Rs 2,64,895 awarded by the Commissioner of Labour for the death of their son for an accident", the Supreme Court has criticised the State-owned New India Assurance Co. Ltd. for raising a challenge to the award./"When will a high and mighty state-owned insurance company realise its social conscience? Our conscience has been deeply disturbed by the manner in which a farmer and his spouse have been left to the mercies of legal procedure. Should the insurer have dragged the parents to the High Court over the award of Rs 2.64 lakhs for the death of their wage earning son? It is time that there is a fundamental rethink on this. Families of the victims of motor accidents cannot realize rights under law so long as litigation continues to be a stratagem and source of harassment and torture", the Court said.The Court directed the insurance company to pay within 1 month Rs. 2,62,164 along with an interest of 12% from the date of accident till it is realised. The Court held the appellants to be entitled to costs of Rs 1 lakh towards expenses of the proceedings which have been conducted in the courts below.The bench of Justices D. Y. Chandrachud and A. S. Bopanna was hearing appeals from the 2018 judgments of the Orissa High Court Single Judge and the 2019 decision in the Review Petition. The facts of the case are as follows: The deceased workman, who is the son of the appellants, was working as a helper in a truck belonging to the second respondent, who was his employer. The truck was insured with the first respondent- New India Assurance Co. Ltd. At 11 am on 30 October 2004, when the truck was carrying goods from Paradeep to Jadupurgoda, the driver negotiated with a person to carry back thirty bags of rice to Chandikhol on its return trip. The driver instructed the deceased helper to get down from the truck and make necessary arrangements for loading of the rice bags. The driver of the truck is alleged to have lost control of the truck and dashed into the helper who struck against a tree on the side of the road. The workman succumbed to his injuries on 1 November 2004.The appellants filed an application before the Court of Commissioner claiming a compensation of Rs. 3,00,000 under the provisions of the Workmen's Compensation Act 1923. The deceased was twenty-four years old at the time of the accident and was receiving a salary of Rs. 2400/- per month, and Rs. 25/- everyday towards food expenses. The amount was admitted by the employer. The claim for workman's compensation was disposed of on 29 February 2016. It was observed that any special expense paid to the employee by nature of his employment is covered within the meaning of 'wages' under Section 2(m) of the Act. Therefore, the total monthly wages at the time of the accident were calculated to be Rs.2425/month. According to Section 4 of the Act, where the death of a workman results from an injury, the total amount of compensation shall be an amount equal to fifty percent of the monthly wages of the deceased multiplied by the relevant factor. According to the IVth Schedule of the Act, the relevant factor for 24 years is 218.47. The total computation was calculated to be as follows: (50% of 2425) X 218.47 = Rs.2,64,898.87. The first respondent was directed to pay a compensation of Rs. 2,64,895/- along with interest at 12% p.a. from the date of accident till realisation.On appeal, the High Court by its judgment dated 30 November 2018, modified the award by reducing the compensation to Rs 1,98,807.70 and the interest from 12% to 8% from the date of the award till realization. The High Court has, while reducing the claim for compensation, proceeded on the basis that there was no material on the record to indicate that the salary of the deceased at the time of death was Rs 2,400 per month. The High Court consequently proceeded on the basis of a minimum wage of Rs 910, to which a multiplier of 218.47 was applied resulting in a recomputed compensation of Rs 1,98,807.70. On the point of interest, the Court held that there is no provision in the Act to grant interest on the compensation from the date of the accident. Subsequently, the payment of interest was reduced from 12% to 8% from the date of award till realization. The review filed against the judgment was dismissed by an order dated 1 February 2019.The bench of Justices Chandrachud and Bopanna stated, "The appeals before this Court indicate the manner in which the litigation process can drag on for years. In consequence, a poor farming family is lost in a long drawn out battle to secure a paltry compensation of Rs 2,64,895 awarded by the Commissioner of Labour under the Act for the death of their son for an accident which took place in 2004. After the Commissioner awarded compensation, the parents of the deceased workman had to initially defend the proceedings brought by the insurer before the High Court and...

'When Will A High & Mighty State Owned Insurance Company Realise Its Social Conscience?': SC Criticizes Challenge Against Compensation For Worker's Death

Mehal Jain

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