Wages Under the Employees Compensation Act, 1923 Includes Privileges That Can Be Measured Monetarily: Jharkhand High Court

The Jharkhand High Court has held that wages under the Employees Compensation Act, 1923 include privileges or benefits that can be measured in terms of money, such as food allowance, etc. Justice Gautam Choudhary noted,

"From the above definition of wages, it is manifest wages includes any privilege or benefits which is capable of being estimated in money. It has come in evidence that Rs.80/ per-month was paid to the employee apart from monthly salary of Rs.3,500/-."

The claimants filed an appeal under Section 30(1) of the Workmen's Compensation Act, 1923 for enhancement of compensation amount awarded in a 2008 case. 

Reeta Devi, the deceased's wife, along with others, filed the case for compensation under the Employees Compensation Act for Ramesh Prasad's death during his employment as the driver of Commander Jeep. As per the claimants, the deceased, 24 years of age when he died, had a monthly salary of Rs. 3,500/- and paid Rs. 80/- per day as food allowance. He died in an accident owned by Seema Devi and insured by Union of India Insurance Co. Ltd.

The Labour Commissioner awarded a compensation of Rs. 4,39,900/- with simple interest @ 7% per annum against the vehicle owner on the ground that it was under insurance cover for a private car and not a commercial vehicle. The Court below has stated that it had been argued on behalf of the Insurance Company that the claimant filed neither charge-sheet nor OD claim, goods were being carried in a private vehicle which constituted a breach of the insurance policy.

The counsel appearing on behalf of the owner argued that no evidence has been led on behalf of the Insurance Company that the vehicle was being used for commercial purposes and is only a bald assertion. She argued that the liability had been saddled on her despite the vehicles being under insurance.

The counsel appearing on behalf of the insurance company argued that the owner of the vehicle has neither preferred an appeal nor a cross-objection to the instant appeal against the lower Court's finding for an award of compensation against the owner of the vehicle.

The Court concurred with the arguments of the counsel appearing on behalf of the owner. It noted that there is nothing on record to suggest that the vehicle was being used for commercial purposes in breach of the insurance policy terms. Rejecting the argument of the insurance company it observed,

"Arguments of a party can be accepted only if it has a foundation of assertion and is duly proved. In the absence of evidence on this point, finding of the learned lower Court that the vehicle was being plied for commercial purpose being in violation of the terms of insurance policy, renders the Judgment perverse on this point and is accordingly set aside. In view of the fact that the vehicle was under insurance cover, therefore, the insurer shall be liable to pay the compensation."

The Court noted that the scope of adjudication of the appeal filed under Section 30 of the Employee Compensation Act, 1923 is limited one which provides that no appeal shall lie against any order unless the substantial question of law is involved in the appeal.

The emerging question of law in this matter is as follows:

i. Is the interest at the rate of 7% awarded by the Workmen Commisser tenable in law in view of Section 4-A (3)(a) of the EC Act?

ii. Will food allowance come within the definition of wages under Section 2(m) of the EC Act?

On the said question, the Court noted that as per the definition of wages given under Section 2(m) of the EC Act, the contention of the Insurance Company that food allowance of Rs. 80 per day shall not constitute part of wages is not tenable.

Therefore, the Court decided to compute the compensation based on monthly wages of Rs. 3,500 +Rs. 80/- per month was paid to the employee apart from the monthly salary of Rs. 3,500/- calculating up to Rs. 6,13,660/-.

Case Title: Rita Devi & Ors v. Ms. Sima Devi & Anr

Citation: 2022 LiveLaw (Jha) 11

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