All HC | Employee’s Compensation Act is a social welfare legislation, principles of liberal construction to be applied while interpretation thereof

Allahabad High Court: Dr Yogendra Kumar Srivastava, J. dismissed a writ petition challenging the order passed by the Employees Compensation Commissioner/Assistant Labour Commissioner, U.P. Gorakhpur, and the Bench highlighted a very significant point that,

“Employees Compensation Act, 1923 is a piece of social security and welfare legislation with its dominant purpose to protect the employees, the provisions of the Act have to be interpreted so as to subserve the object of the legislation which is to make the employer responsible for the loss caused to the employee by injuries or death arising out of and in the course of employment.”

The present petition was filed to challenge the order passed by the Employees Compensation Commissioner.

Counsel for the petitioner submitted that the orders passed in proceedings which were ex parte the same ought to have been recalled by the Employees Compensation Commissioner and rejection of recall application in the said circumstances is erroneous.

Standing Counsel for the State respondents submitted that upon registration of the claim petition a registered notice was duly sent to the petitioner and it was only thereafter that an order was passed for proceeding ex parte. Prior to the filing of the claim petition the claimant had duly served a registered notice upon the petitioner under Section 10 of the Employee’s Compensation Act, 1923.

Further, it has been submitted that the petitioner was fully aware of the proceedings and despite due notice it deliberately allowed the case to proceed ex parte and as such there was no sufficient reason made out for the orders to be recalled.

Relevant statutory provisions of the EC Act were noted,

“Section 3 provides for the employer’s liability for compensation in a case if personal injury is caused to an employee by accident arising out of and in the course of his employment. The amount of compensation is to be assessed as per the terms of Section 4. Furthermore, in terms of Section 4-A it has been provided that compensation under Section 4 is to be paid as soon as it falls due and even in cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts and such payment is to be deposited with the Commissioner or made to the employee.

Sub-section (3) of Section 4-A mandates 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 direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent 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 and if in his opinion there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty.”

Applying the rule of beneficent construction, the provisions of the E.C. Act, 1923 are to be interpreted so as to give them a wide meaning rather than a restrictive meaning which may negate the very object of the enactment.

Mode of interpretation of a social welfare legislation, in the context of the provisions of the Industrial Employment (Standing Orders) Act, 1946, came up for consideration in the case of B.D. Shetty v. CEAT Ltd., (2002) 1 SCC 193, wherein it was held that,

“…a beneficial piece of legislation has to be understood and construed in its proper and correct perspective so as to advance the legislative intention underlying its enactment rather than abolish it. Assuming two views are possible, the one, which is in tune with the legislative intention and furthers the same, should be preferred to the one which would frustrate it.”

Principle of applying a liberal construction to beneficial legislation having a social welfare purpose was reiterated in the context of the Payment of Gratuity Act, 1972 in the case of Allahabad Bank v. All India Allahabad Bank Retired Employees Association, (2010) 2 SCC 44.

Further reference was made to the case of Bharat Singh v. Management of New Delhi Tuberculosis Centre, (1986) 2 SCC 614 wherein it was held that “purposive interpretation safeguarding the rights of have-nots was preferred to a literal construction in interpreting welfare legislation.”

Thus, in the instant matter, the Employees Compensation Commissioner had duly taken note that before filing of the claim petition the requisite notice of claim under Section 10 had duly been served upon the petitioner-employer and upon registration of the claim also a registered notice has been sent to the petitioner and only thereafter the order was passed directing the case to proceed ex parte.

Employees Compensation Commissioner upon taking into consideration the facts of the case and the evidence on record had proceeded to allow the claim petition of the claimant respondent.

Employees Compensation Commissioner has accordingly drawn an inference that the petitioner deliberately wanted to linger the proceedings and in the facts of the case where the claimant had suffered 100% disability and was not in a position to contest the proceedings further, taking into considering the larger interest of justice the recall application has been rejected.

Therefore, the order passed by the Employees Compensation Commissioner cannot be faulted with for the reason that EC Act, 1923 is a piece of social security legislation providing for speedy and efficient machinery for determination and payment of compensation to the employees.

Hence the Counsel appearing for the petitioner failed to point out any material error or irregularity in the order passed by the Employees Commissioner/Assistant Labour Commissioner U.P. Gorakhpur. [Vasu Infrastructure Private Ltd. v. State of U.P., 2019 SCC OnLine All 3535, decided on 23-09-2019]

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