Case Note & Summary
This appeal arose out of an industrial accident involving an employee of a plywood factory. The appellant employer, Western India Plywood Ltd., owned and operated a plywood factory, and the respondent, P. Ashokan, worked there. In April 1980, while the respondent was feeding DAP compound into a roller mill by pushing it with his hand, he met with an accident resulting in the amputation of one of his hands. The Employees' State Insurance Act, 1948 applied to the appellant's employees, and after the accident, the respondent received disablement benefit of Rs. 260 per month for permanent/partial disablement from the Employees' State Insurance Corporation. The appellant also continued the respondent in service without reduction in remuneration and claimed to have provided medical treatment. Despite this, the respondent, while still in service, filed O.P. No. 108 of 1981 before the Subordinate Judge, Tellicherry under Order 33 Rule 1 of the Code of Civil Procedure, 1908, seeking permission to sue the appellant for Rs. 1,50,000 as compensation for the injuries. The appellant opposed the application, relying on Section 53 of the ESI Act, which bars an insured person from receiving or recovering compensation or damages under any law other than the ESI Act, and on Order 33 Rule 5(d) and (f) CPC. The Subordinate Judge dismissed the application, but on appeal, a Division Bench of the Kerala High Court referred the matter to a Full Bench, which held that Sections 53 and 61 of the ESI Act did not bar a tort action and directed the trial court to decide the application on merits. The appellant then appealed to the Supreme Court by special leave. The sole question before the Supreme Court was whether an employee who had received benefits under the ESI Act for an employment injury could claim damages from the employer under tort law. The appellant argued that the ESI Act is a self-contained code and that Section 53 expressly prohibits any claim under other laws. The respondent contended that Section 53 should be construed to allow adequate compensation and that the Act should not prevent a tort action; alternatively, the Court should not interfere under Article 136. The Supreme Court examined Sections 2(8), 53, and 61 of the ESI Act and the prior decisions. It noted that Section 53 uses clear and unequivocal language: 'shall not be entitled to receive or recover... any compensation or damages under the Workmen's Compensation Act, 1923... or any other law for the time being in force or otherwise.' The expression 'or otherwise' was held to include claims in tort, so the bar was absolute. The Court followed its recent decision in A. Trehan v. Associated Electrical Agencies, which had held that Section 53 bars claims under the Workmen's Compensation Act and had disapproved the Kerala High Court Full Bench's reasoning in the present case. The Court reiterated that the object of Section 53 is to save the employer from facing more than one claim in relation to the same accident and that the ESI Act, though beneficial legislation, is meant to govern claims by employees against employers for employment injuries exclusively. Accordingly, the Supreme Court allowed the appeal, set aside the Full Bench judgment of the Kerala High Court, and upheld the trial court's dismissal of the respondent's application under Order 33 Rule 1 CPC. The respondent was barred from pursuing a tort claim for damages.
Headnote
A) Labour Law - Employees' State Insurance - Bar on Compensation Claims Under Other Laws - Employees' State Insurance Act, 1948, Sections 53 and 61 - The respondent employee, who suffered an employment injury and received disablement benefit under the ESI Act, filed an application under Order 33 Rule 1 CPC seeking leave to sue the appellant employer in tort for damages. The Supreme Court held that Section 53 of the ESI Act imposes an absolute bar on receiving or recovering any compensation or damages under the Workmen's Compensation Act, 1923 or any other law including tort, for an employment injury; the expression 'or otherwise' covered claims in tort. The object of Section 53 is to save the employer from facing more than one claim in relation to the same accident. Held that the trial court was right in dismissing the application and the High Court's contrary Full Bench decision was set aside. B) Constitutional Law - Supreme Court Jurisdiction Under Article 136 - Interference with Erroneous High Court Decision - Constitution of India, Article 136 - The High Court Full Bench had allowed the appeal and directed the application to be decided on merits, but its view conflicted with clear statutory language and the Supreme Court's earlier decision in A. Trehan v. Associated Electrical Agencies. The Supreme Court held that the incorrect decision on a point of law had to be corrected and there was no justification for not exercising its jurisdiction under Article 136. Held that the appeal was allowed and the High Court's judgment was set aside.
Issue of Consideration
Whether an employee who has suffered an employment injury and received benefits under the Employees' State Insurance Act, 1948 is barred by Section 53 of that Act from claiming compensation or damages from the employer under the Workmen's Compensation Act, 1923 or any other law including tort
Final Decision
The Supreme Court allowed the appeal, set aside the Full Bench judgment of the Kerala High Court, and upheld the trial court's dismissal of the respondent's application under Order 33 Rule 1 CPC. Section 53 of the Employees' State Insurance Act, 1948 was held to be an absolute bar against receiving or recovering compensation or damages under the Workmen's Compensation Act, 1923 or any other law, including tort, for an employment injury.
Law Points
- Section 53 of Employees' State Insurance Act
- 1948 creates an absolute bar on receiving or recovering compensation or damages under any other law
- expression 'or otherwise' includes tort claims
- ESI Act is a self-contained code
- object is to save employer from multiple claims
- beneficial legislation does not override clear statutory bar
- employee who received disablement benefit cannot maintain tort action against employer for employment injury
