[Employee's Compensation Act] Relevant Date For The Determination Of Compensation Payable Is The Date Of The Accident: SC [Read Judgment]

The Supreme Court has observed that the relevant date for the determination of compensation payable under Employee's Compensation Act 1923 is the date of the accident.

The bench of Justice Dhananjaya Y. Chandrachud and Justice Ajay Rastogi observed that the benefit of 2009 amendment of the Act which had deleted the provision that capped the monthly wages of an employee at Rs 4,000 does not apply to accidents that took place prior to its coming into force.

The Apex Court was considering an appeal against a High Court judgment which applied the benefit of 2009 amendment to an case in which the accident occurred prior to the date of amendment.It rejected the contention which sought to distinguish a three judge bench decision in Pratap Narain Singh Deo v Srinivas Sabata. Dealing with the contention that amendments that confer a benefit upon individuals must be given retrospective application, the bench observed that the amendments enhancing the compensation payable under the 1923 Act confer a benefit upon employees; a corresponding burden is imposed on employers to pay a higher rate of compensation.

Further, the Court noted that, there is nothing in Act 45 of 2009, either express or implied, to denote an intention of the legislature to confer the benefit of the amendment to accidents that took place prior to its coming into force. While reversing the High Court view, the bench said:

"Prior to Act 45 of 2009, by virtue of the deeming provision in Explanation II to Section 4, the monthly wages of an employee were capped at Rs 4000 even where an employee was able to prove the payment of a monthly wage in excess of Rs 4,000. The legislature, in its wisdom and keeping in mind the purpose of the 1923 Act as a social welfare legislation did not enhance the quantum in the deeming provision, but deleted it altogether. The amendment is in furtherance of the salient purpose which underlies the 1923 Act of providing to all employees compensation for accidents which occur in the course of and arising out of employment. The objective of the amendment is to remove a deeming cap on the monthly income of an employee and extend to them compensation on the basis of the actual monthly wages drawn by them. However, there is nothing to indicate that the Legislature intended for the benefit to extend to accidents that took place prior to the coming into force of the amendment." 

However, invoking Article 142 of the Constitution, the bench declined to interfere with the award of compensation ordered by the High Court.

Case name: K Sivaraman vs.P Sathishkumar
Case no.: Civil Appeal No. 9046 of 2019
Coram: Justices Dhananjaya Y Chandrachud and Ajay Rastogi
Counsel:  Advocate S Mahendran (Amicus Curiae)

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