Malkiat Kaur vs Star Autos and Engineers and others

V.K. Bali, J.—The appellant, mother of Davinder Singh claimed compensation to the tune of Rs. 2,00,000/- in respect of death of her son, who died in an accident, stated to be then in the employment of Star Autos and Engineers on December 17, 1982. Senior Sub-Judge, Ropar, exercising the powers of Commissioner under the Workmen''s Compensation Act, 1923 (hereinafter referred to as ''the Act''), consigned the file to records on September 16, 1986 when a cheque of Rs. 21,000/- was deposited by the respondents by mentioning in the order that the claim stood fully satisfied. This order was challenged by the appellant in F.A.O. No. 89 of 1987 alongwith an application for condonation of delay u/s 5 of the Limitation Act, as there was delay of 19 days in filing the first appeal. The first appeal and the application came up for hearing before the learned single Judge on April 16, 1987 and were dismissed. It is this order dated April 16, 1987 dismissing the first appeal and application for condonation of delay that has been challenged in this appeal filed by the appellant under Clause X of the Letters Patent.

The sole contention of Mr. Ghai, learned counsel representing the appellant is that the compensation had to be assessed u/s 4 of the Act read with Schedule IV, according to which the amount payable to the appellant comes to Rs. 44,274/-. Inasmuch as the appellant has been paid a sum of Rs. 21,000/- only, i.e. less than the compensation admissible under the provisions of Section 4 read with Schedule IV of the Act, even if the Commissioner under the Act had allowed the application to the tune of Rs. 21,000/- by way of compromise, the same needs to be modified so as to grant the minimum amount of compensation admissible under the Statute, further contends the learned counsel. For his aforesaid Contention, learned counsel relies upon a Single Bench decision of this Court in Mohinder Singh v. Dial Singh 1972 74 PLR 484. Learned counsel representing the respondents, on the other hand, contends that the parties having arrived at a compromise, it was not necessary to adhere to the schedule provided in the Act and that because of compromise arrived at between the parties, respondents had given up their defence on merits and, if the parties were to go to trial, sans compromise arrived at between the parties, it was possible that claim petition was dismissed and that being so, appellant cannot be permitted to wriggle out of the terms of compromise arrived at between the parties.

Before we might examine the contentions of the learned counsel, as noted above, it would be appropriate to mention that the claim of the appellant to the tune of Rs. two lacs was contested by respondent No. 3 and in the written statement filed on behalf of the said respondents, various preliminary objections were raised. The relief sought for by the appellant was contested on the grounds that driver of the tractor was not holding any valid licence at the time of alleged accident and the deceased did not fall under the definition of "Workman" as defined in the Act. It was further averred that no notice was required u/s 10 of the Act was served by the appellant upon respondent No. 2 and that the application was not maintainable in the present form as no contractual liability existed between the deceased and respondent No. 2. It was further stated that the deceased was not acting in the employment of respondent No. 1 at the time of alleged occurrence and as such respondent No. 2 was not liable to pay any compensation.

It requires to be mentioned that respondent No. 2 National Insurance Company had ultimately made over a payment of Rs. 21,000/- to the appellant before the Commissioner under the Act. Records of the trial Court would demonstrate that on the basis of the pleadings of the parties, issues were framed on June 3, 1985. The matter was, however, adjourned thereafter from time to time and when it came up before the Court on August 20, 1986, following order was passed.

"Counsel for the respondent has received a letter from the Company who are willing to issue cheque for the amount in accordance with the rules. Both the parties agree that a sum of Rs. 21,000/- is to be paid under the Act to which the respondent Company is agreeable. Therefore, for the payment of the cheque by the respondent, to come up on September 2, 1986"

The matter, however, came up for hearing on September 16, 1986 when following order was passed :-

"Rs. 21,000/- cheque has been deposited by the respondent. Claim stands fully satisfied. Amount be paid to the claimant accordingly and file be consigned."

It would be further appropriate to mention at this stage that on the basis of Section 4 read with Schedule IV of the Act, the appellant was indeed entitled to be compensated to the tune of Rs. 44,274/- and on that count, even learned counsel for the parties are ad-idem.

The time is now ripe to examine the questions that have been mooted before us. Whereas, as mentioned above, the counsel for the appellant contends that nothing short of as envisaged u/s 4 read with Schedule IV of the Act could be given to the appellant by way of compensation, the counsel appearing for the respondent, with equal vehemence, contends that the parties having arrived at a compromise, it was not necessary to adhere to the Schedule for compensation given under the Act. The answer to the question, in our view, depends upon the purpose of enacting the Workmen''s Compensation Act, 1923, scheme of the Act and true meaning and scope of Sections 17, 18 and 28 thereof. The Workmen''s Compensation Act, 1923, although a pre-constitution law is a beneficent piece of legislation reflecting the Constitutional goal of socio-economic justice and the mandate contained in Articles 41, 42 and 43 of the Constitution of India. As per provisions of Article 39-A of the Constitution, the State has to secure that operation of legal system promotes justice on the basis of equal opportunity. The provisions contained in the Act were, thus, enacted to provide solace to the workmen or their dependents for the injury or death, as the case may be, caused by accident arising out of and in the course of employment.

A perusal of the Act would reveal that the same has been divided into four different Chapters. Chapter-I deals only with the short title, extend and commencement of the Act. Chapter II deals with employer''s liability for compensation. Sections 3 to 18 have been dealt with in Chapter-II. Whereas Section 3 deals with compensation for personal injuries to be paid by the employer in accordance with the provisions of Chapter-II, Section 4 specifies the amount of compensation in various eventualities like death and permanent disability. Section 4-A deals with penalties in default of payment of compensation. Section 5 prescribes method of calculating wages. The other sections that have been dealt in Chapter-II do no need a necessary mention here, but for Section 17 which prohibits agreements or contracts that may remove or reduce the liability of any person to pay compensation under the Act. It quite clearly spells out from the scheme of the Act and in particular Chapter-II as to how a workman, who suffers injuries, permanent or otherwise, or dies has to be compensated, directly or otherwise. A minimum compensation in all eventualities has been provided under various sections dealt with in Chapter-II of the Act. Section 17, in terms, prohibits a contract of agreement whereby a workman may relinquish any right of compensation from the employer. It declares such a contract or agreement to be null and void insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act.

Chapter III deals with proceedings under the Act before the Commissioner, Section 19 of the Act talks of questions arising in any proceedings under the Act as to liability of any person to pay compensation, which have to be decided in default of an agreement i.e., where no agreement has been arrived at between the parties. The decision on quantum of compensation by agreement is, no doubt, covered under the Act, but such an agreement or compromise by virtue of Section 28 of the Act, has to be registered in the manner as provided in that Section. The Commissioner by virtue of clause (d) of Section 28 of the Act has necessarily to refuse to register an agreement if besides other things it is of an inadequate amount. Adequacy or otherwise of an amount would surely attract Section 4 read with Schedule IV of the Act. Before ending with Chapter III we may only refer to proviso to Section 30, which deals with appeals. As per second proviso to Section 30 of the Act, no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement arrived at between the parties. Insofar as Chapter IV of the Act, dealing with Rules that have been framed by the State Government is concerned the same needs no elaboration in the present case.

Sections 17, 19, 28 and second proviso to Section 30, reference whereof has been made above and which have a direct bearing upon the questions mooted before us, reads thus :-

"17. Contracting out - Any contract or agreement whether made before or after the commencement of this Act, whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of employment, shall be null and void insofar as purports to remove or reduce the liability of any person to pay compensation under this Act."

"19. Reference to Commissioner - (1) If any question arises in any proceedings under this Act as to the liability of any person to pay compensation (including any question as to whether a person injured is or is not a workman) or as to amount or duration of compensation (including any question as to the nature or extent of disablement), the question shall, in default of agreement, be settled by a Commissioner.

(2) No Civil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by a Commissioner or to enforce any liability incurred under this Act."

Registration of agreement - (1) Where the amount of any lump sum payable as compensation has been settled by agreement, whether by way of redemption of a half-monthly payment or otherwise, or where any compensation has been so settled as being payable to a woman or a person under a legal disability a memorandum, thereof shall be sent by the employer to the Commissioner, who shall, on being satisfied as to its genuineness, record the memorandum in a register in the prescribed manner :

Provided that -

(a) no such memorandum shall be recorded before seven days after communication by the Commissioner of notice to the parties concerned.

(b) * * * (c) the Commissioner may at any time rectify the register.

(d) where it appears to the Commissioner that an agreement as to the payment of lump sum whether by way of redemption of a half-monthly payment or otherwise or an agreement as to the amount of compensation payable to a woman or a person under a legal disability ought not to be registered by reason of the inadequacy of the sum or amount, or by reason of the agreement having been obtained by fraud or undue influence or other improper means, he may refuse to record the memorandum of the agreement and may make such order including an order as to any sum already paid under the agreement, as he thinks just in the circumstances."

From perusal of various sections, and in particular Section 4 read with Schedule IV, and Sections 17, 19 and 28, this Court is of the firm view that even though the parties might arrive at an agreement with regard to quantum of compensation, but if the same does not reflect the minimum quantum of compensation as mentioned in Schedule to the Act, such an agreement or a compromise has to be necessarily rejected. There is a complete bar to arrive at an agreement or a compromise whereby a workman may relinquish his right of compensation from the employer. Such an agreement is null and void in so far as it purports to remove or reduce the liability of any person to pay compensation. Non-enforceability of an agreement or compromise, which is void for the reasons mentioned in Section 17, is further reflected in Sections 19 and 28 provided in Chapters II and III.

No doubt, as mentioned above, Section 19 does, in terms, talk of an agreement but the same by virtue of Section 17 and proviso to Section 28 of the Act has to be in consonance with the provisions of the Act. A compromise arrived at before the Commissioner, as referred to above, needs registration, but if the same is of an amount less than as prescribed under the provisions of Chapter II, then the Commissioner has to reject the same. A compromise or an agreement between the parties as mentioned in Sections 19, 28 and 30 means only a lawful agreement and not the one which is null and void. Any agreement which removes or reduces the liability of the employer to pay compensation is null and void. That being the situation, we are of the view that the agreement arrived at between the parties, reference of which is made in the earlier part of the judgment, had necessarily to be rejected by the Commissioner while deciding the case in hand.

The contention of the learned counsel representing the respondents that the appellant cannot be permitted to wriggle out of the contract arrived at between the parties before the Commissioner, needs to be rejected being against the statute; there being prohibition for arriving at such a compromise, which concededly, in the present case has reduced the liability of the employer to pay proper compensation. The matter does rest there, as the terms of compromise reflected in the interim orders passed by the Commissioner would further reveal that the parties agreed that the respondents, as per letter from the Company, were willing to give cheque for the amount in accordance with the Rules. No doubt, it is then stated in the interim order that both the parties agreed that a sum of Rs. 21,000/- is to be paid under the Act. If compensation was to be paid under the provisions of the Act and the Rules, surely mention of an amount of Rs. 21,000/- was a common mistake of the parties, as concededly the minimum amount payable in the present case was Rs. 44,274/-.

We may now deal with the last contention of the counsel representing the respondents that on the dint of compromise arrived at between the parties, the respondents had given up their defence on merits, and if the parties were to go to trial sans compromise arrived at between the parties, it is possible that the claim petition was rejected as a whole. We find no merit in this contention as well. The interim orders passed by the Commissioner, reproduced above, do not reflect any such arrangement. These orders even do not reflect unilateral expression of opinion or decision by in the respondent-Insurance Company. It has not been the case of the respondents nor is reflected from the interim orders passed by the Commissioner that amount was to be reduced to Rs. 21,000/- from Rs. 44,274/- in consequence of the respondents giving up their plea on merits of the case. Quite to the contrary, the respondents had received letter from the company that it was willing to issue the cheque for the amount in accordance with the Rules. It is, however, true that both the parties agreed that a sum of Rs. 21,000/- be paid under the Act, but, as mentioned above, same was a common mistake of fact. The minimum amount of compensation, payable under the Act, was concededly Rs. 44,274/-. It is, thus, not a case where the respondents might have given up their defence in lieu of the appellant agreeing to receive compensation less than what has been envisaged under the provisions of the Act.

The view that we have taken in this case is based both upon constitution provisions mentioned above as also the provisions contained in the Act itself. While doing so, we concur with the view reflected in Mohinder Singh''s case (supra), which held that minimum compensation as envisaged u/s 4 read with Schedule IV despite a compromise to the contrary has to be granted. We may now only mention that learned counsel representing the parties have relied upon a Single Bench decision of the Himachal Pradesh High Court in Gian Chand Vs. Mani Karan and Another, ; a Division Bench Judgment of Bombay High Court in Chhipa Allarakha Isakji v. Bai Sona AIR 1929 Bom 68 and Single Bench Judgment of Gujarat High Court in Amarshi Jeram Vs. Hazrat and Co. and Another, . The facts of these cases are distinguishable and, therefore, we have not referred to these Judgments in all their minute details.

For the reasons recorded above, this appeal is allowed. The application for condonation of delay that was filed before the learned single Judge and that was also dismissed along with the appeal is also allowed. It may be reiterated that delay in filing the appeal before the learned single Judge was only of 19 days. It was pleaded in the application that the appeal was filed under a bona fide belief that the limitation for filing the same was 90 days as the other first appeals against orders like in Motor Accident Claims cases the period of limitation for filing the appeal was 90 days and that was a mistake of a counsel, for which the party concerned should not suffer. We are of the view that there was sufficient cause for condoning the delay of 19 days. Further, nothing at all has been urged on behalf of the respondents with regard to the sufficiency of cause pleaded in the application.

As an up-shot to the above discussion, the orders passed by the Commissioner under the Act dated September 16, 1986 and the one passed by the learned single Judge of this Court are set aside. The claim petition filed by the appellant succeeds to the tune of Rs. 44,274/- with 6 per cent interest per annum. It may be clarified here that the respondents shall pay 6 per cent interest per annum on the amount of Rs. 44,274/- from the date of accident till such time Rs. 21,000/- were paid in the Court. The respondents shall also pay 6 per cent interest per annum on the balance amount of Rs. 23,274/- from the date Rs. 21,000/- were paid in the Court till such time the remaining amount is paid. On account of fluctuating fate of the parties, they are, however, left to bear their own costs.