Case Note & Summary
The appellants, being the widow, minor daughter, and mother of the deceased Paigambar Mulla, filed a claim petition under the Employees Compensation Act, 1923, before the III Addl. Civil Judge (Sr.Dn.) & Commissioner for Employees Compensation, Kalaburagi, in ECA No.249/2014. They contended that the deceased was employed as a lineman by the respondent, Kalaburagi Electrical Supply Co. Ltd., and died in an accident arising out of and in the course of employment. The Commissioner partly allowed the claim petition, computing compensation at Rs.5,19,950, but deducted Rs.5,00,000 as ex-gratia amount already paid by the employer, awarding only Rs.19,950 with interest at 12% per annum. Aggrieved by the deduction, the appellants filed this appeal under Section 30(1) of the Act seeking enhancement of compensation to Rs.14,80,050 with interest at 18% per annum. The High Court framed the issue whether the ex-gratia payment could be deducted from the statutory compensation. The appellants argued that the ex-gratia was a voluntary payment not under the Act and could not be set off against the compensation. The respondent supported the Commissioner's order. The High Court, relying on the principle that compensation under the Act is statutory and cannot be reduced by voluntary payments, held that the deduction of Rs.5,00,000 was illegal. The court allowed the appeal, set aside the deduction, and awarded the full compensation of Rs.5,19,950 with interest at 12% per annum from the date of accident. The court also directed that the ex-gratia amount, if any, would be in addition to the compensation.
Headnote
A) Employees Compensation - Deduction of Ex-Gratia - Section 4, Employees Compensation Act, 1923 - The Commissioner deducted Rs.5,00,000 as ex-gratia from the computed compensation of Rs.5,19,950, awarding only Rs.19,950. The High Court held that ex-gratia payment not made under the Act cannot be deducted from the statutory compensation. The appeal was allowed, and the compensation was enhanced to Rs.5,19,950 with interest at 12% per annum from the date of accident. (Paras 1-6) B) Employees Compensation - Interest - Section 4A, Employees Compensation Act, 1923 - The Commissioner awarded interest at 12% per annum from the date of accident. The High Court upheld the interest rate as statutory and directed payment of interest on the entire compensation amount from the date of accident. (Para 6)
Issue of Consideration
Whether the Commissioner for Employees Compensation was justified in deducting the ex-gratia amount of Rs.5,00,000 from the compensation awarded under the Employees Compensation Act, 1923?
Final Decision
The appeal is allowed. The judgment and award dated 09-01-2017 passed by the III Addl. Civil Judge (Sr.Dn.) & Commissioner for Employees Compensation, Kalaburagi, in ECA No.249/2014 is modified. The respondent is directed to pay compensation of Rs.5,19,950 with interest at 12% per annum from the date of accident till the date of payment, within eight weeks from the date of receipt of the order. The ex-gratia amount, if any, shall be in addition to the compensation.
Law Points
- Ex-gratia payment not under the Act cannot be deducted from compensation
- Compensation under Section 4 of Employees Compensation Act
- 1923 is statutory and cannot be reduced by voluntary payments
- Interest rate of 12% per annum is statutory under Section 4A of the Act
