Employees State Insurance Act 1948

WESTERN INDIA PLYWOOD LIMITED Vs. P. ASHOKAN

The respondent could not make a claim for damages. Section 53 disentitles an employee who has suffered an employment injury from receiving or recovering compensation or damages under the Workmen’s Compensation Act or any other law for the time being in force or otherwise. The use of the expression “or otherwise” would clearly indicate that this section is not limited to ousting the relief claimed only under any statute but the wordings of the section are such that an insured person would not be entitled to make a claim in Torts which has the force of law under the Employees Insurance Act. Even though the Employees Insurance Act is a beneficial legislation the Legislature Had thought it fit to prohibit an insured person from receiving or recovering compensation or damages under any other law, including Torts, in cases where the injury had been sustained by him is an employment injury.

SUPREME COURT OF INDIA

DIVISION BENCH

( Before : S. B. Majmudar, J; B. N. Kirpal, J )

WESTERN INDIA PLYWOOD LIMITED — Appellant

Vs.

P. ASHOKAN — Respondent

Civil Appeal No. 1404 of 1988

Decided on : 19-09-1997

Employees State Insurance Act, 1948 – Section 53

Cases Referred

Mangalamma and Others Vs. Express Newspapers Ltd. and Another, AIR 1982 Mad 223 : (1982) ILR (Mad) 245 : (1982) 95 LW 51 : (1982) 1 MLJ 149
A. Trehan Vs. M/s. Associated Electrical Agencies and another, (1996) 2 ACC 53 : (1996) ACJ 853 : (1996) 5 AD 6 : AIR 1996 SC 1990 : (1996) 74 FLR 1886 : (1996) 5 JT 648 : (1996) LabIC 1723 : (1996) 2 LLJ 721 : (1996) 114 PLR 633 : (1996) 4 SCALE 469 : (1996) 4 SCC 255 : (1996) 2 SCR 728 Supp : (1996) 2 UJ 362

ORDER

B.N. Kirpal, J.—The Sole question which arises for consideration in this appeal is whether the respondent, who is an employee of the appellant, can claim damages from the appellant on account of the injury suffered by him during the course of employment when he has already received the benefit under the provisions of the Employees State Insurance Act 1948 (hereinafter referred to as the ‘ESI Act”).

2. Briefly stated the facts are that the appellant is a company owning and operating a plywood factory. The respondent, who was working with the company, met with an accident when he was feeding the DAP compound into the roller mill by pushing it with his own hand. As a result of this accident one of his hands was amputated. Notwithstanding this accident, the appellant allowed the respondent to continue in its service without any reduction in remuneration.

3. The Employees Insurance Act was applicable to the employees of the appellant company, including the respondent. After the aforesaid accident a claim was made thereunder and as a result thereof the disability benefit of Rs. 260 per month on account of permanent/partial disablement was ordered to be paid to the respondent. This decision of the Employees State Insurance Corporation to pay the said amount was not challenged. It is the case of the appellant that besides this benefit under the Employees Insurance Act, the medical expenses for the treatment of the respondent were also borne by it and in fact the said respondent received the best medical treatment available in that area.

4. While still in service the respondent filed OP No. 108 of 1981 in the Court of Subordinate Judge, Tellichery, under Order 33 Rule 1 of the CPC, seeking permission of the Court to allow him to file a suit against the appellant herein for Rs. 1,50,000 as compensation for the injuries sustained by him on account of the aforesaid accident which had taken place in April, 1980, This application was opposed by the appellant herein, inter alia, on the ground that it was liable to be dismissed under Order 33 Rule 5(d) and (f) of the CPC, in view of the provisions of Section 53 of the Employees Insurance Act, which barred the receiving or recovery of any compensation or damages by an employee under any law other than the Employees State Insurance Act. This contention of the appellant was upheld and the Subordinate Court dismissed the said application of the respondent.

5. The respondent thereafter filed an appeal before the High Court of Kerala. A Division Bench of the High Court doubted the correctness of an earlier Bench decision on the same question and, consequently, the case was referred to a Full Bench. The Full Bench consisting of three learned judges held that the provisions of Section 53 and 61 of the Employees Insurance Act did not bar an action by an injured employee under tort for compensation against the employer. It accordingly allowed the appeal and directed the application of the respondent under Order 33 Rule 1 to be decided by the trial court on merits and in accordance with law. Hence this appeal by special leave.

6. It was submitted by Mr. A.S. Nambiar, learned senior counsel for the appellant, that the Employees State Insurance Act is a self contained code and the insured employees, like the respondent, are entitled to the benefit in case of injury suffered under the provisions of the Employees Insurance Act and such employees in the case of an employment injury are debarred from making any claim under any other act or law. In this connection our attention was drawn to the relevant provisions of the Employees Insurance Act. Mr. Manoj Swarup, learned Counsel for the respondent, on the other hand, submitted that Section 53 should be construed in such a way that an aggrieved employee is able to receive adequate compensation on account of the injury which is sustained by him. It was contended that the amount which was paid under the Employees Insurance Act could not be regarded as an adequate measure of damages suffered by the respondent and, therefore, Section 53 should not be construed in such a way as to prevent an employee from bringing about an action in tort. In the alternative it was submitted that this Court, in exercise of its jurisdiction under Article 136 of the Constitution, should not interfere in the present case.

7. There are only three provisions of the Employees Insurance Act which are relevant for the present case. Section 2(8) defines the term ’employment injury’ and reads as follows :

’employment injury’ means a perennial injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment, being an insurable employment whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India.

The two other sections with which we are concerned in this case are Sections 53 and 61 which are as follows :

53. Bar against receiving or recovery of compensation on damages under any other law:- An insured person or his dependents shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen’s Compensation Act, 1923 (8 of 1923) or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act.

61. Bar of benefits under other enactments:- When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment.

8. The aforesaid provisions have been construed by different Court including this Court. Mr. Nambiar first relied upon the decision of the Karnataka High Court in K.S. Vasantha and Ors. v. Karnataka State Road Transport Corporation (1982) 60 FJR 118, wherein it was held, while construing Section 53 of the Employees Insurance Act, that where workmen travelling to work on a transport provided by the employer had suffered injury by an accident caused to the vehicle, it amounted to employment injury and that Section 53 was a bar to any claim by the insured under any other law or the Workmen’s Compensation Act, 1923. Their remedy, it was held, was only to claim compensation or damages from the Employees State Insurance Corporation. To the same effect is the judgment of the Madras High Court in the case of Mangalamma and Others Vs. Express Newspapers Ltd. and Another, . While construing Section 53 the Madras High Court held that the object of Section 53 of the Act was to save the employer from facing more than one claim in relation to the same accident. In Annapurna and Ors. v. General Manager, Karnataka State Road Transport Corporation, Bangalore and Ors. (1984) L.C. Jou 1355, a Division Bench of the Karnataka High Court followed its earlier judgments and reiterated that Section 53 created a bar to the recovery of compensation under any other law in cases where the insured person had received an employment injury.

9. Mr. Swarup, however, relied on the decision in the case of Hindustan Aeronautics Ltd. v. P. Venn Perumal and Anr. AIR (1972) Mys 255. It was held by the Mysore High Court that the right to sue under the Motor Vehicles Act originates from the substantive law, namely, the law of tort. This law was not an enactment and, consequently, the provisions of Section 61 of the Employees Insurance Act could not prohibit an employee from making a claim u/s 110 of the Motor Vehicles Act claiming damages on account of injuries suffered in an accident. Though the observations in the said judgment do support the submission of Mr. Swarup but the High Court did not consider in that case the applicability and effect of Section 53, with which we are concerned here.

10. The position with regard to the claim of an employee against his employer on his suffering an employment injury now stands settled with the decision of this Court in A. Trehan Vs. M/s. Associated Electrical Agencies and another, . In that case Trehan, who was an employee of the respondent, received injuries on his face while he was carrying out repairs of a television in the course of his employment as a result of which he lost vision in the left eye. After receiving the benefit from the Employees’ State Insurance Corporation under the Employees Insurance Act he served a notice on the respondent demanding Rs. 7. lacs as compensation. Thereafter he filed an application under the Workmen’s Compensation Act claiming compensation of Rs. 1,06,785. The employer objected to the maintainability of the same and relied upon Section 53 of the Employees Insurance Act. The Commissioner overruled the employer’s objection and followed the judgment of the Full Bench of the Kerala High Court in the present case and observed that ESI being a welfare legislation, the Parliament could not have intended to create a bar against the workmen claiming more advantageous benefit under the Workmen’s Compensation Act. The single judge of the High Court dismissed the writ petition filed by the employer but the Division Bench, in appeal, held that in view of the bar created by Section 53, the application for compensation filed by Trehan was not maintainable. This Court analysed the provisions of Section 53 of the Employees Insurance Act and observed at page 260 as follows:

In this background and context we have to consider the effect of the bar created by Section 53 of the Employees Insurance Act. Bar is against receiving or recovering any compensation or damages under the Workmen’s Compensation Act or any other law for the time being in force or otherwise in respect of an employment injury. The bar is absolute as can be seen from the use of the words shall not be entitled to receive or recover, “whether from the employer of the insured person or from any other person”, “any compensation or damages” and “under the Workmen’s Compensation Act, 1923 (8 of 1923), or any other law for the time being in force or otherwise”. The words “employed by the legislature” are clear and unequivocal. When such a bar is created in clear and express terms it would neither be permissible nor proper to infer a different intention by referring to the previous history of the legislation. That would amount to bypassing the bar and defeating the object of the provision. In view of the clear language of the section we find no justification in interpreting or construing it as not taking away the right of the workmen who is an insured person and an employee under the Employees Insurance Act to claim compensation under the Workmen’s Compensation Act. We are of the opinion that the High Court was right in holding that in view of the bar created by Section 53 the application for compensation filed by the appellant under the Workmen’s Compensation Act was not maintainable.

11. The judgment under appeal in the present case of the Full Bench of the Kerala High Court was considered and it was observed that “we cannot agree with some of the assumptions and observations made by the Kerala High Court. Moreover, the Kerala High Court has taken that view without referring to and considering the effect of the clear and express words used in that section.”

12. In view of the aforesaid observations in Trehan’s case, with which we respectfully agree, it is clear that the respondent could not make a claim for damages. Section 53 disentitles an employee who has suffered an employment injury from receiving or recovering compensation or damages under the Workmen’s Compensation Act or any other law for the time being in force or otherwise. The use of the expression “or otherwise” would clearly indicate that this section is not limited to ousting the relief claimed only under any statute but the wordings of the section are such that an insured person would not be entitled to make a claim in Torts which has the force of law under the Employees Insurance Act. Even though the Employees Insurance Act is a beneficial legislation the Legislature Had thought it fit to prohibit an insured person from receiving or recovering compensation or damages under any other law, including Torts, in cases where the injury had been sustained by him is an employment injury.

13. The Employees Insurance Act has been enacted to provide certain benefits to the employees in case of sickness, maternity and employment injury and make provisions in respect thereof. Under this Act contribution is made not only by the employee but also by the employer. The claims by the employees against the employer where the relationship of the employer and employee exists were meant to be governed by the Employees Insurance Act alone. It is precisely for this reason that the Madras High Court in Mangalamma’s case (supra) had observed that the object of Section 53 of the Employees Insurance Act was to save the employer from facing more than one claim in relation to the same accident. This, in our opinion, is the correct reading of the said provision. This being so the claim of the respondent for damages being barred u/s 53 of the Employees Insurance Act, the trial court was right in dismissing the application under Order 33 Rule 1 of the CPC.

14. The position in law being clear and concluded by the decision of this Court in Trehan’s case (supra) we see no justification for the Court not exercising its jurisdiction under Article 136, as was contended by the respondent’s counsel. The incorrect decision on a point of law of the High Court has to be corrected.

15. During the course of hearing it had been argued that Section 53 should not be construed in such a way that an insured person cannot raise a claim against a third party in the event of his suffering an employment injury. It was submitted that though qua the employer only one remedy may be available, namely, under the Employees Insurance Act but as far as third persons are concerned Section 53 cannot be taken up as a defence to an action in tort in a claim being made for damages because the Employees Insurance Act creates certain rights as a result of the employment qua the employer and has no application as far as third parties are concerned. In this connection it was submitted that the use of the words ’employment injury’ in Section 53 relates to a claim which is relatable to the employment of the insured person with his employer.

16. In our opinion, though there is considerable force in the said submission but it is not necessary for the decision of the present case to decide this issue finally because in the instant case the claim which was sought to be made was not against the third party but against the employer itself. Perhaps this question may require consideration in an appropriate case.

17. For the aforesaid reasons this appeal is allowed. The judgment of the High Court is set aside and that of the trial court dismissing the respondent’s application under Order 33 Rule 1 of the CPC is restored. There will be no order as to costs.


(1997) 6 SCALE 169 : (1997) 7 SCC 638 : (1998) SCC(L&S) 376 : (1997) SCR 180 : (1997) 4 SCT 407 : (1997) 5 SLR 654 : (1997) 8 Supreme 260

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