Holding

The 2009 amendment deleting the Rs 4,000 wage cap is not retrospective; compensation must be calculated based on the wage ceiling applicable on the date of the accident, so the amendment does not apply to pre‑2010 accidents.

Summary

The appellants, parents and siblings of a deceased employee, claimed compensation under the Employee's Compensation Act, 1923 for a fatal accident that occurred on 31 January 2008. The High Court enhanced the compensation by applying the post‑amendment monthly wage ceiling of Rs 8,000, invoking the Workmen Compensation Amendment Act, 2009 which deleted the Rs 4,000 deeming cap. The Supreme Court examined whether the 2009 amendment could be applied retrospectively to accidents that pre‑dated its commencement and what date governs the computation of compensation. Relying on earlier judgments, the Court held that the relevant date is the date of the accident and that the amendment is not retrospective; therefore the Rs 4,000 cap applicable on the accident date governs. Consequently, the High Court's enhancement was erroneous, but the Court exercised its inherent jurisdiction under Article 142 to leave the award untouched. The appeal was dismissed.

Issues considered

The amendment deleting the deeming provision in Explanation II of Section 4 (Act 45 of 2009) applies retrospectively to accidents occurring before its commencement.
The appropriate date for determining compensation under the Employee's Compensation Act, 1923 – the date of the accident or the date of adjudication.
Whether the High Court erred in enhancing compensation by using the post‑amendment wage ceiling.

Legislation cited

Employee's Compensation Act, 1923s. 19, s. 4, s. 4A, s. 5
Railways Act, 1989
Workmen Compensation Amendment Act (No.45 of 2009)s. 4(1B)

Subjects

Employee compensationRetrospective legislationAmendment Act 45 of 2009Wage capCompensation calculationSocial welfare legislationArticle 142Interest

Judgment

480 [2020]REPORTS
SUPREME COURT 4 S.C.R. 480 [2020] 4 S.C.R.

A K SIVARAMAN & ORS.
v.
P SATHISHKUMAR & ANR.
(Civil Appeal No. 9046 of 2019)
B FEBRUARY 13, 2020
[DR. DHANANJAYA Y CHANDRACHUD AND
AJAY RASTOGI, JJ.]
Employee’s Compensation Act, 1923: s.4 – Whether the benefit
of Act 45 of 2009 deleting the deeming provision in Explanation II
C
which capped the monthly wages of an employee at Rs.4000 would
also apply to accidents which took place prior to the coming into
force of its provisions i.e. 18 January 2010 – Held: The objective
of the amendment by virtue of Act 45 of 2009 is to remove a deeming
cap on the monthly income of an employee and extend to them
D compensation on the basis of the actual monthly wages drawn by
them – However, there is nothing in Act 45 of 2009 either express or
implied 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 – The relevant date for the determination of
compensation payable is the date of the accident and the benefit of
E
Act 45 of 2009 does not apply to accidents that took place prior to
its coming into force – Workman Compensation Amendment Act
(No.45 of 2009).
Employee’s Compensation Act, 1923: Object of enactment –
The 1923 Act is a social beneficial legislation and its provisions
F
and amendments thereto must be interpreted in a manner so as to
not deprive the employees of the benefit of the legislation – The
object of enacting the Act of 1923 was to ameliorate the hardship
of economically poor employees who were exposed to risks in work,
or occupational hazards by providing a cheaper and quicker
G machinery for compensating them with pecuniary benefits –
Legislation – Social beneficial legislation.
Workman Compensation Amendment Act (No.45 of 2009):
Object of amendment – Held: Prior to Act 45 of 2009, by virtue of
the deeming provision in Explanation II to s.4, the monthly wages
H of an employee were capped at Rs 4000 even where an employee
480
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 481

was able to prove the payment of a monthly wage in excess of A
Rs 4,000 – The legislature, in its wisdom and keeping in mind the
purpose of the 1923 Act as a social welfare legislation deleted it
altogether – 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
B
them.
Dismissing the appeal, the Court
HELD: 1. The object of enacting the Employee’s
Compensation Act, 1923 was to ameliorate the hardship of
economically poor employees who were exposed to risks in work, C
or occupational hazards by providing a cheaper and quicker
machinery for compensating them with pecuniary benefits. 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, D
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. [Paras 25, 26][494-
C-F]
2. Though amendments enhancing the compensation E
payable under the 1923 Act confer a benefit upon employees, a
corresponding burden is imposed on employers to pay a higher
rate of compensation. 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 F
prior to its coming into force. The relevant date for the
determination of compensation payable is the date of the accident
and the benefit of Act 45 of 2009 does not apply to accidents that
took place prior to its coming into force. In the present case, the
accident occurred on 31 January 2008 i.e. prior to the coming
into force of Act 45 of 2009. Consequently, the High Court erred G
in extending the benefit of Act 45 of 2009 to the present case.
[Paras 28, 32, 33][496-B-C; 499-C-D]
3. The employer duly proved the monthly pay certificate
indicating that the deceased was drawing a monthly wage of
Rs. 32,000, including expenses towards food. Significantly, no H
482 SUPREME COURT REPORTS [2020] 4 S.C.R.

A appeal was filed by the respondents against the judgment of the
High Court enhancing the compensation. In view of this, the award
of compensation ordered by the High Court is not interfered with
in exercise of the inherent jurisdiction under Article 142 of the
Constitution. [Para 34][499-E-F]
B Pratap Narain Singh Deo v. Srinivas Sabata (1976) 1
SCC 289 : [1976] 2 SCR 872; Kerala State Electricity
Board v. Valsala K (1999) 8 SCC 254 : [1999] 2 Suppl.
SCR 657 – followed.
New India Assurance Company Ltd. v. Neelakandan
C Civil Appeal Nos. 16904-09 of 1996; National
Insurance Co Ltd. v. Mubasir Ahmed (2007) 2 SCC
349 : [2007] 2 SCR 117; Oriental Insurance Company
v. Siby George (2012) 12 SCC 540 : [2012] 6 SCR
1079; Commissioner of Income Tax v. Vatika Township
Private Limited (2015) 1 SCC 1 : [2014] 12 SCR 1037;
D Rathi Menon v. Union of India (2001) 3 SCC 714 :
[2001] 2 SCR 365; Union of India v. Rina Devi (2019)
3 SCC 572 : [2018] 4 SCR 417; Kalandi Charan Sahoo
v. General Manager, South-East Central Railway,
Bilaspur (2019) 12 SCC 387; Thazhathe Purayil Sarabi
E v. Union of India (2009) 7 SCC 372 : [2009] 10 SCR
70; Kalandi and Mohamadi v. Union of India. (2019)
12 SCC 389; Union of India v Radha Yadav (2019) 3
SCC 410 : [2019] 1 SCR 741 – referred to.
Case Law Reference
F [1976] 2 SCR 872 followed Para 11
[1999] 2 Suppl. SCR 657 followed Para 11
[2007] 2 SCR 117 referred to Para 11
[2012] 6 SCR 1079 referred to Para 24
G [2014] 12 SCR 1037 referred to Para 27
[2001] 2 SCR 365 referred to Para 29
[2018] 4 SCR 417 referred to Para 30
(2019) 12 SCC 387 referred to Para 30
H
K SIVARAMAN & ORS. v. P SATHISHKUMAR & ANR. 483

[2009] 10 SCR 70 referred to Para 30 A
(2019) 12 SCC 389 referred to Para 30
[2019] 1 SCR 741 referred to Para 31
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9046
of 2019. B
From the Judgment and Order dated 01.06.2017 of the Madurai
Bench of Madras High Court in C.M.A. (MD) No. 1134 of 2016.
S. Mahendran, A.C., Adv. for the Appellants.
The Judgment of the Court was delivered by
C
DR. DHANANJAYA Y CHANDRACHUD, J.
1. This appeal arises from a judgment of a Division Bench of the
Madurai Bench of the Madras High Court dated 1 June 2017. In an
appeal arising from a decision of the Deputy Commissioner for
Employee’s Compensation, the High Court enhanced the compensation D
payable under the Employee’s Compensation Act 1923 1 from
Rs. 4,33,060 to Rs. 8,86,120. The High Court has awarded interest at
the rate of 12% per annum from the date of the accident.
2. In the present proceedings which have been instituted under
Article 136 of the Constitution, notice was issued on 26 July 2019. Since E
the appellants were represented by the first appellant in person, this
Court, by its order dated 26 July 2019, directed that an amicus curiae
be nominated by the Supreme Court Legal Services Committee.
Accordingly, Mr. S Mahendran, learned counsel, has been nominated as
the amicus curiae, whom we have heard in support of the appeal.
F
3. The appellants are the father, mother, sister and brother of
Dinesh Kumar, who died in the course of an accident on 31 January
2008. On the date of the incident, the deceased was 26 years of age and
was engaged as a driver of a trailor lorry. While the vehicle was being
driven on NH 12 in Kota, Rajasthan, a truck bearing registration No.
MH 19 Z 1696 came from the opposite direction and dashed against the G
trailor, resulting in the death of Dinesh Kumar. At the time of the accident,
the deceased was in the employment of the first respondent. A claim
under the 1923 Act was lodged before the Deputy Commissioner for
Employee’s Compensation, Madurai on 29 April 2013. On 26 March
2014, the claim was allowed by an award in the amount of Rs. 4,33,060. H
1
‘‘1923 Act’’
484 SUPREME COURT REPORTS [2020] 4 S.C.R.

A The Deputy Commissioner had proceeded ex parte. The appellants filed
an appeal 2 before the Madras High Courtfor enhancement of the
compensation.
4. The High Court, by its judgment dated 23 November 2015,
remanded the proceedings to the Deputy Commissioner for determination
B afresh. While remanding the proceedings, the High Court noted that
though the appellants had filed a salary certificate as Exhibit P5 to establish
that the monthly income of the deceased was Rs. 32,000, no witness
was examined on behalf of the employer to prove the salary certificate.
However, acceding to the request of the appellants that they should be
furnished with an opportunity to examine the employer’s witness in
C support of Exhibit P5, the High Court considered it in the interests of
justice to remand the proceedings.
5. On remand, the Commissioner for Workmen’s Compensation,
Madurai, by an order dated 4 March 2016, maintained the award of
compensation in the amount of Rs. 4,33,060. Before the Commissioner,
D on remand, the appellants examined PW2, the owner of the vehicle which
was being driven by the deceased. During the course of his evidence, he
stated as follows:
“I am the 1 st respondent in this case under W.C. Case
No.74/2011 is under tail in this court is known to me. I
E received summons 3 times from the court. For the last two
summons, as my own lorries were working in the other
states and I also have to go there, I was unable to come
and adduce witness for the court summon. The accident
platform trailor lorry TN 28 AB 1933 belongs to Sathish
F kumar. The deceased Dinesh Kumar S/o Sivaraman worked
as a driver. In 2008, (31.1.2008) when going to Pandicheri
to Rajasthan Sironi before Kotta town the opposite coming
tarras lorry dashed face to face and caused accident. As
soon as the accident occurred in the same occurrence place
Dinesh Kumar died. Before accident he worked for about
G 3 years. He was having proper driving license. He was
having license for driving heavy vehicles. The Ex.P.5
monthly pay certificate was issued by me. In it, for deceased
Dinesh Kumar I was paying Rs. 32,000 per month (including
food expenses) but pay of Rs. 25,000. The vehicle involved
H in the accident has been properly insured with
2
CMA (MD) 344 of 2014
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 485
[DR. DHANANJAYA Y CHANDRACHUD, J.]

2nd respondent company of M/s Reliance General Insurance A
Company. At the time of accident, the insurance was in
current.”
6. The Commissioner, however, proceeded on the basis that in
terms of the notification issued under Section 4(1B) of the 1923 Act,
whatever be the monthly pay received by a person, the jurisdiction of B
the adjudicating authority was subject to a ceiling of Rs. 4,000 per month
in computing the monthly wages of the employee. Taking the monthly
salary at Rs. 4,000, the Commissioner applied a multiplicand of 215.28 in
terms of Schedule IV (the deceased being 26 years of age) and arrived
at a figure of Rs. 4,30,560 to which an additional amount of Rs 2,500
was added towards funeral expenses. A total award in the amount of C
Rs. 4,33,060 was decreed as the compensation payable to the appellants.
7. In an appeal filed before the High Court, the Division Bench
took note of the fact that in pursuance of the order of remand, the salary
of deceased employee had been proved to be Rs. 32,000 per month.
The High Court noticed that though the accident had taken place on 31 D
January 2008, the petition for compensation had been lodged on 28
January 2011 and was decided by the Commissioner on 4 March 2016.
8. In the meantime, a notification was issued by the Central
Government on 31 May 2010 in the following terms:
E
“S.O.1258(E) – In exercise of the powers conferred by sub-section
(1B) of Section 4 of the Employee’s Compensation Act, 1923, (g
of 1923), the Central Government hereby specified, for the purpose
of Sub-Section (1) of the said section, the following amount as
monthly wages, with effect from the date of publication of this
notification in the official gazette, namely – Eight thousand rupees.” F
9. The High Court was of the view that having due regard to the
fact that the legislation in question is a social welfare legislation, the
enhanced income of Rs 8,000 per month should form the basis of the
computation. Thus, applying the multiplicand in terms of Schedule IV,
the High Court enhanced the compensation to Rs. 8,86,120. G
10. In appeal before this Court, the learned amicus curiae urged
that both the Commissioner and the High Court have erred - the
Commissioner having adopted a figure of Rs. 4,000 per month and the
High Court, Rs. 8,000 per month. The learned amicus curiae submitted
that in terms of the provisions of Section 4(1)(a) of the 1923 Act, where H
486 SUPREME COURT REPORTS [2020] 4 S.C.R.

A death has resulted from injury, the compensation payable is an amount
equal to fifty per cent of the monthly wages of the deceased employee
multiplied by the relevant factor. The relevant factor is specified in
Schedule IV and for the deceased who was 26 years old on the date of
the accident, the multiplicand would be 215.28. The learned amicus
curiae submitted that under sub-section (1B) of Section 4, the Central
B
Government is empowered to issue a notification specifying, for the
purposes of sub-section (1), the monthly wages in relation to an employee
as it may consider necessary. However, it was submitted that the
notification does not impose a cap or ceiling on the monthly wages which
form the basis of calculating the compensation due and payable. Where
C the actual wages of an employee are proved to be in excess of the
amount which is specified in the notification, there is no bar in adopting
the monthly wages so proved in terms of Section 4(1)(a). The learned
counsel buttressed this submission by adverting to Act 45 of 2009, which
took effect from 18 January 2010 and deleted the deeming provision in
Explanation II to Section 43. Moreover, it was urged by the learned
D
amicus curiae that the method of calculating wages is specified in Section
5. It was urged that clause (a) of Section 5 will be attracted to the
present case where the employee was, during a continuous period of not
less than twelve months immediately preceding the accident, in the service
of the employer.
E 11. The learned amicus curiae, at a belated stage, sought to
distinguish the judgments of this Court in Pratap Narain Singh Deo v
Srinivas Sabata4(“Pratap Narain Singh”)and Kerala State Electricity
Board v Valsala K5(“Valsala”)in which it was held that the date relevant
for the determination of compensation payable under the 1923 Act is the
F date of the accident and that the benefit of an amendment enhancing the
amount of compensation shall not apply to accidents that take place
prior to its coming into force. To support this, the amicus curiae relied
on the judgments of this Court in New India Assurance Company

G

3
“Explanation II – Where the monthly wages of a workman exceed four thousand
rupees, his monthly wages for the purposes of clause(a) and clause(b) shall be deemed
to be four thousand rupees only.”
4
(1976) 1 SCC 289
5
H (1999) 8 SCC 254
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 487
[DR. DHANANJAYA Y CHANDRACHUD, J.]

Ltd. v Neelakandan (“Neelakandan”),6 and National Insurance Co A
Ltd. v Mubasir Ahmed7(“Mubasir Ahmed”).
12. Section 4(1)(a) of the Act contains the following provision:
“4. Amount of compensation.—(1) Subject to the provisions of
this Act, the amount of compensation shall be as follows, namely:—
B
(a) where death results an amount equal to fifty per cent of the
from the injury monthly wages of the deceased
employee multiplied by the relevant
factor;
or C
an amount of one lakh and twenty
thousand rupees, whichever is more;”
13. The proviso to the above provision stipulates that the Central
Government may, by notification in the Official Gazette, from time to
D
time, enhance the amount of compensation mentioned in clauses (a) and
(b). Clause (b) deals with a case involving permanent total disablement
resulting from the injury. The expression “relevant factor” is defined in
Explanation I to be the factor specified in Schedule IV. Prior to Act 45
of 2009, Section 4 contained Explanation II, which was in the following
terms: E
“Explanation II – Where the monthly wages of a workman exceed
four thousand rupees, his monthly wages for the purposes of
clause(a) and clause(b) shall be deemed to be four thousand rupees
only.”
14. By Act 45 of 2009, which came into force on 18 January F
2010, Explanation II came to be deleted. Sub-section (1B) was introduced
in Section 4 to read as follows:
“(1-B) The Central Government may, by notification in the Official
Gazette, specify, for the purposes of sub-section (1), such monthly
wages in relation to an employee as it may consider necessary.” G

15. The question before this Court is whether the benefit of Act
45 of 2009 deleting the deeming provision in Explanation II which capped
6
Civil Appeal Nos. 16904-09 of 1996
7
(2007) 2 SCC 349 H
488 SUPREME COURT REPORTS [2020] 4 S.C.R.

A the monthly wages of an employee at Rs 4,000 would also apply to
accidents which took place prior to the coming into force of its provisions
i.e. 18 January 2010 and where final adjudication is pending. In assessing
whether the Act 45 of 2009 applies retrospectively, it is necessary to
analyze the relevant precedents of this Court. In Pratap Narain Singh,
the first respondent was in the employment of the appellant and suffered
B
injuries which arose out of and in the course of employment. It was
contended that the Commissioner committed an error of law in imposing
a penalty on the appellant under Section 4A(3) of the 1923 Act as the
compensation payable had not fallen due until it was ‘settled’ by the
Commissioner under Section 19 of the 1923 Act. Section 4A reads:
C “4A. Compensation to be paid when due and penalty for default.-
(1) Compensation under section 4 shall be paid as soon as it falls
due.
(2) In cases where the employer does not accept the liability for
D 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 shall be deposited with the
Commissioner or made to the employee, as the case may be,
without prejudice to the right of the employee to make any
further claim.
E
(3) Where any employer is in default in paying the compensation
due under the Act within one month from the date it fell due,
the Commissioner shall –
(a) Direct that the employer shall, in addition to the amount of
F the arrears, pay simple interest thereon at the rate of
twelve percent 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
G
(b) If, in his opinion, there is no justification for the delay,
direct that the employer shall, in addition to the amount of
arrears and interest thereon, pay a further sum not
exceeding fifty per cent of such amount by way of
penalty…”
H
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 489
[DR. DHANANJAYA Y CHANDRACHUD, J.]

16. In terms of Section 4A(1), compensation under Section 4 is A
payable “as soon as it falls due.” Section 4A(2) contemplates a situation
wherein the employer, though accepting the liability to pay compensation
to the injured employee, disputes the quantum of compensation payable.
In such cases, sub-section (2) enjoins the employer to make a provisional
payment based on the extent of accepted liability by depositing it with
B
the Commissioner or by paying it directly to the employee. Section 4A(3)
stipulates that where an employer defaults in paying compensation within
one month from the date on which it falls due, the Commissioner is
empowered to direct the payment of interest as well as an additional
amount as arrears for an unjustifiable delay in making payment. Section
19 of the Act reads: C
“19. Reference to Commissioners.- (1) If any question arises in
any proceedings under this Act as to the liability of any person to
pay compensation (including any question as to whether a person
injured is or is not an employee or as to the amount or duration of
compensation (including any question as to the nature or extent of D
disablement), the question shall, in default of agreement be settled
by a Commissioner…”
17. Section 19 stipulates that any question arising in any proceeding
under the Act shall, in the default of an agreement, be settled by the
Commissioner. A four judge Bench of this Court rejected the contention E
urged by the appellant and held that compensation “falls due” on the
date of the accident. Consequently, the Commissioner was empowered
to impose interest or penalty for the duration prior to the settling of the
claim or where there was unjustified delay in making good the payment
of compensation. The Court held:
F
“18…The employer therefore became liable to pay the
compensation as soon as the aforesaid personal injury was caused
to the workman by the accident which admittedly arose out of
and in the course of the employment. It is therefore futile to
contend that the compensation did not fall due with after the
Commissioner’s order dated May 6, 1969 under section 19. What G
the section provides is that if any question arises in any proceeding
under the Act as to the liability of any person to pay compensation
or as to the amount or duration of the compensation it shall, in
default of an agreement, be settled by the Commissioner. There
is therefore nothing to justify the argument that the employer’s H
490 SUPREME COURT REPORTS [2020] 4 S.C.R.

A liability to pay compensation under section 3, in respect of the
injury, was suspended until after the settlement contemplated by
section…
19. The appellant was thus liable to pay compensation as soon as
the aforesaid personal injury was caused to the appellant, and
B there is no justification for the argument to the contrary. It was
the duty of the appellant, under section 4A(1) of the Act, to pay
the compensation at the rate provided by section 4 as soon as the
personal injury was caused to the respondent. He failed to do so.
What is worse, he did not even make a provisional payment under
sub-section (2) of section 4 for, as has been stated, he went to the
C extent of taking the false pleas that the respondent was a casual
contractor and that the accident occurred solely because of his
negligence. Then there is the further fact that he paid no heed to
the respondent’s personal approach for obtaining the compensation.
It will be recalled that the respondent was driven to the necessity
D of making and application to the Commissioner for settling the
claim, and even there the appellant raised a frivolous objection as
to the jurisdiction of the Commissioner and prevailed on the
respondent to file a memorandum of agreement setting the claim
for a sum which was so grossly inadequate that it was rejected by
the Commissioner. In these facts and circumstances, we have no
E doubt that the Commissioner was fully justified in making an order
for the payment of interest and the penalty.”
18. The Court held that though Section 19 empowered the
Commissioner to decide claims or objections under the Act, the obligation
to pay compensation to an injured employee was not suspended until the
F Commissioner settled the amount payable in the case of a dispute
between the employer and the employee. Section 4A deals with when
the obligation for the payment of compensation as required under the
1923 Act arises. For the purposes of Section 4A of the 1923 Act, the
obligation to pay compensation arises on the date of the accident. Where
G an employer disputes the quantum of compensation payable, it is enjoined
to make a provisional payment to the Commissioner or the employee
pending the settlement of the claim. This is in order to ensure that an
employer does not escape its obligation to make good the payment of
compensation or unduly delay its payment on frivolous grounds.

H 19. In Neelakandan, the accident had taken place prior to the
coming into force of an amendment to the 1923 Act whereunder the
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 491
[DR. DHANANJAYA Y CHANDRACHUD, J.]

deemed income had been increased from Rs. 1000 to Rs. 2000. The A
question before the Court was whether the benefit of the amendment
would extend to accidents which took place prior to its coming into force
and where the final adjudication of the amount payable was pending. A
two judge Bench of this Court held that though the accident in question
took place in 1981, the benefit of the amendment would apply to accidents
B
that took place prior to the coming into force of the amendment in the
following terms:
“It is not disputed that Section 4 of the Act was amended in 1995
by Amendment Act 30 whereunder the deemed income has been
increased from Rs. 1000 to Rs. 2000. Learned counsel for the
Insurance Company has vehemently contended that since the C
accident took place in the year 1981, the law operating on that
date is applicable and as such the workmen are not entitled to the
benefit of the amendment. We do not agree with the learned
counsel. We are finally determining the right of workmen
today. The Act is a special legislation for the benefit of the D
labour. Keeping in view the scheme of the Act we are of
the view that the only interpretation which can be given to
the amendment is that is any benefit is conferred on the
workmen and the said benefit is available on the date when
the case is finally adjudicated, the said benefit should be
extended to the workmen. We, therefore, hold that the E
compensation to be paid to the heirs of the workmen has to be
calculated on the basis of the actual wages – Rs 1800 – drawn by
them…”
(Emphasis supplied)
F
20. The Court noted that the 1923 Act is a social welfare legislation
for the benefit of employees. Consequently, taking into account the scheme
of the Act, the court must adopt an interpretation which extends a benefit
to the employee on the date of the final adjudication of the claim. Where
a case is pending final adjudication and an amendment is enacted
increasing the amount of compensation payable, the enhanced amount G
would be applicable in the determination of the quantum of compensation
payable. Conspicuous in its absence in the submission advanced by the
learned amicus curiae is how a subsequent Bench of this Court dealt
with the position of law laid down in Neelakandan.
21. In Valsala, the question before a three judge Bench of this H
Court was whether an amendment to Section 4 and 4A of the 1923 Act
492 SUPREME COURT REPORTS [2020] 4 S.C.R.

A enhancing the amount of compensation and the rate of interest would be
applicable to cases where the accident took place prior to the coming
into force of the amendment. This Court noted that various High Courts
in the country had taken the uniform position that the relevant date for
determining the rights and liabilities of the parties is the date of the
accident. Relying on the judgment of this Court in Pratap Narain Singh,
B
the Court overruled the judgment in Neelakandan and held thatthe benefit
of an amendment whereunder the compensation payable was increased,
would not apply to accidents that took place prior to its coming into
force. The Court held:
“4. A two-judge Bench of this Court in New India Assurance Co
C Ltd. v. V.K. Neelakandan however, took the view that the
Workmen’s Compensation Act being a special legislation for the
benefit of the workmen, the benefit as available on the date of
adjudication should be extended to the workmen and not the
compensation which was payable on the date of the accident.
D The two-judge Bench in Neelakandan case however, did not take
notice of the judgment in Pratap Narain Singh Deo case as it
presumably was not brought to the notice of their Lordships. Be
that as it may, in view of the categorial law laid down by the
larger Bench in Pratap Singh Deo case the view expressed by
the two-judge Bench in Neelakandan case is not correct.”
E
22. In the course of the judgment in Valsala, the three judge Bench
also affirmed the full judge Bench judgment of the Kerala High Court in
Alavi” to the extent it is in accord with the judgment of the larger bench”
in Pratap Narain Singh. The Court held:

F “5. Our attention has also been drawn to a judgment of the Full
Bench of the Kerala High Court in United India Insurance Co.
Ltd v. Alavi wherein the Full Bench precisely considered the same
question and examined both the above-noted jugdments. It took
the view that the injured workman becomes entitled to get
compensation the moment he suffers personal injuries of the types
G contemplated by the provisions of the Workmen’s Compensation
Act and it is the amount of compensation payable on the date of
the accident and not the amount of compensation payable on
account of the amendment made in 1995, which is relevant.
The decision of the Full Bench of the Kerala High Court, to the
H extent it is on accord with the judgment of the larger Bench of
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 493
[DR. DHANANJAYA Y CHANDRACHUD, J.]

this Court in Pratap Narain Singh Deo v Srinivas Sabata lays A
down the correct law and we approve it.”
23. In Alavi, a full judge Bench of the Kerala High Court was
required to adjudicate whether Sections 4 and 4A of the 1923 Act as
amended in 1995 enhancing the amount of compensation and rate of
interest would be applicable to claims in respect of death and permanent B
disablement resulting from accidents which occurred prior to 15
September 1995 i.e. the date on which the amended provisions came
into force. In all the appeals before the Court, the accident as well as
settling of the claims by the Commissioner took place prior to the coming
into force of the amending provisions enhancing the quantum of
compensation payable. The Court relied on the decision of this Court in C
Pratap Narain Singh and held that the Amending act enhancing
compensation would apply only to accidents that took place after the
coming into force of the amendment. The Court held:
“17. Right to claim compensation as well as the obligation to pay
the same are created by the statute itself. It is well-settled rule of D
interpretation that if the law is procedural, there is, no doubt, a
presumption that it applies to pending proceedings. If the law is
substantive in nature, the normal presumption against retrospectivity
still holds good, subject to the principle that the Court must look to
the question whether the rights of the parties at the E
commencements of the proceedings were intended to be modified
either expressly or by necessary implication: Neeli v. Narayana
Pilla[(1992) 2 K.L.J. 937, 950]. If the amended provisions are
given effect to in the matter of awarding enhanced compensation
even with regard to the accident which occurred prior to 15
September 1995, and the claim was decided prior to the same F
date, the law applicable is the unamended provisions of the
Workmen’s Compensation Act, 1923. But if the claim could not
be settled prior to 15 September 1995 going by the Division Bench
decision in Asokan case (vide supra), those claimants would get
the benefit of the Amendment Act. In other words, the benefit G
would depend on when the case is decided either prior to 15
September 1995 or subsequent. This was never the intention of
the Legislature…”
24. The question before the Bench in Valsala was clearly whether
an amendment to Section 4 and 4A of the 1923 Act enhancing the amount H
494 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of compensation and the rate of interest would be applicable to cases
where the accident took place prior to the coming into force of the
amendment.The Bench held that the benefit of an Amending act
enhancing the quantum of compensation would not apply to accidents
that took place prior to the coming into force of the amendment.Though
the learned amicus curiae sought to rely on the two judge Bench
B
judgment of this Court in Mubasir Ahmed, it is sufficient at this stage
to note that the subsequent judgment of this Court in Oriental Insurance
Company v Siby George8 noted that the judgment in Mubasir Ahmed
is contrary to the judgments of this Court in Pratap Narain Singh and
Valsala and hence not a binding precedent.
C 25. The 1923 Act is a social beneficial legislation and its provisions
and amendments thereto must be interpreted in a manner so as to not
deprive the employees of the benefit of the legislation. The object of
enacting the Act was to ameliorate the hardship of economically poor
employees who were exposed to risks in work, or occupational hazards
D by providing a cheaper and quicker machinery for compensating them
with pecuniary benefits. The amendments to the 1923 Act have been
enacted to further this salient purpose by either streamlining the
compensation process or enhancing the amount of compensation payable
to the employee.
E 26. 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,
F but deleted it altogether. The amendment is in furtherance of the salient
purpose which underlies the 1923Act 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
G 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.

8
(2012) 12 SCC 540
H
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 495
[DR. DHANANJAYA Y CHANDRACHUD, J.]

27. The learned amicus curiae relied on the judgment of this A
Court in Commissioner of Income Tax v Vatika Township Private
Limited 9 to contend that amendments that confer a benefit upon
individuals must be given retrospective application. In that case, the
question before a Constitution Bench of this Court concerned whether
the proviso to Section 113 which was inserted by the Finance Act 2002
B
applied retrospectively. The scheme for block assessment was introduced
in Chapter XIV-B to the Finance Act (w.e.f 1 July 1995) to curb tax
evasion and expedite as well as simplify the assessments in such search
cases. By virtue of the proviso, a date was specified with reference to
which the rate of surcharge is payable upon block assessments. This
Court noted that the chapter for block assessment was a self-contained C
code and that the effect of the proviso was to impose an additional
burden on the assessee. Consequently, it was held that the proviso did
not operate retrospectively. In the course of the judgment, this Court
held:
“30. We would also like to point out, for the sake of completeness, D
that where a benefit is conferred by a legislation, the rule against
a retrospective construction is different. If a legislation confers a
benefit on some persons but without inflicting a corresponding
detriment on some other person or on the public generally, and
where to confer such benefit appears to have been the legislators’
object, then the presumption would be that such a legislation, giving E
it a purposive construction, would warrant it to be given a
retrospective effect. This exactly is the justification to treat
procedural provisions as retrospective. In Govt. of India v. Indian
Tobacco Assn. [(2005) 7 SCC 396], the doctrine of fairness was
held to be relevant factor to construe a statute conferring a benefit, F
in the context of it to be given a retrospective operation. The
same doctrine of fairness, to hold that a statute was retrospective
in nature, was applied in Vijay v. State of Maharashtra [(2006) 6
SCC 289]. It was held that where a law is enacted for the benefit
of community as a whole, even in the absence of a provision the
statute may be held to be retrospective in nature. However, we G
are (sic not) confronted with any such situation here.”
28. This Court held, in line with settled precedent of this Court,
that where (i) a legislation confers a benefit on some persons, (ii) without
9
(2015) 1 SCC 1 H
496 SUPREME COURT REPORTS [2020] 4 S.C.R.

A inflicting a corresponding detriment on some other persons or the public
generally and (iii) where the conferral of such benefit appears to be the
intention of the legislature, the presumption of prospective application
may stand displaced. Though 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
B
compensation. It is presumably for this reason that the three judge Bench
of this Court in Valsala and the Kerala High Court in Alavi held that the
benefit of an amendment enhancing the rate of compensation does not
have retrospective application to accidents that took place prior to the
coming into force of the amendment. Further, as we have already noted,
C 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.
29. We also briefly note the position of law regarding the date
relevant for the determination of compensation payable under the
D Railways Act 198910. Chapter XIII of the 1989 Act titled ‘Liability of
Railway Administration for Death and Injury to Passengers due to
accidents’ stipulates an obligation on the railway administration to pay
compensation to such extent “as may be prescribed” on the account of
untoward accidents. In Rathi Menon v Union of India11, the question
before a two judge Bench of this Court was whether the benefit of an
E amendment enhancing the rate of compensation can be extended to
accidents that took place prior to the coming into force of the amendment.
The Court assessed the scheme of the 1989 Act and held that the date
relevant for the determination of compensation payable shall be the date
of adjudication. Consequently, the benefit of an amendment enhancing
F compensation would be extended to accidents that took place prior to
the coming into force of the amendment. In the course of the judgment,
this Court differentiated between the scheme of the 1923 Act and the
1989 Act and addressed the contention raised on the basis of the
judgments of this Court in Pratap Narain Singh and Valsala in the
following terms:
G
“…The scheme of the provision under the W.C. Act is materially
different from the scheme indicated in Chapter XIII of the Railways
Act. In the former, compensation payable is fixed in the Act itself

10
1989 Act
H 11
(2001) 3 SCC 714
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 497
[DR. DHANANJAYA Y CHANDRACHUD, J.]

through the schedule incorporated thereto. Section 4 of the W.C. A
Act shows that such compensation is to be linked with the monthly
wages of the workman concerned. It also provides that the liability
to pay compensation on the employer would arise not when the
Commissioner passes the order but on the date of sustaining the
injury itself. A provision is made in Section 4A of W.C. Act that
B
where any employer is in default of paying the compensation due
within one month the Commissioner shall direct the employer to
pay not only interest but in appropriate cases a penalty ranging up
to 50% of the amount payable. The said scheme cannot be equated
with the scheme in Chapter XIII of the Railways Act, as the
principles involved have differences…” C
Having distinguished the scheme of the 1923 Act and the 1989
Act, the Court held that the judgments in Pratap Narain Singh and
Valsala have no bearing on claims under the 1989 Act.
30. Recently, a two judge Bench of this Court in Union of India
v Rina Devi12,considered an apparent conflict between the judgments D
in Rathi Menon and Kalandi Charan Sahoo v General Manager,
South-East Central Railway, Bilaspur13(“Kalandi”) regarding the
date relevant for the determination of compensation under the 1989 Act.It
was contended that the judgment in Rathi Menon was premised on the
basis that there was no provision forthe payment of interest under the E
1989 Act and that there would be injustice if compensation is paid at
money value prevalent at the time of the accident. It was on this basis
that the judgment in Pratap Narain Singh was distinguished. This Court
noted that in Thazhathe Purayil Sarabi v Union of India 14
(“Thazhathe”), it was held that under the 1989 Act, a claimant is also
entitled to the payment of interest which accrues from the date of the F
incident. The decision in Thazhathe was subsequently followed by this
Court in Kalandi and Mohamadi v Union of India.15 Consequently,
this Court held that since interest is now payable under the 1989 Act, the
basis of the judgment in Rathi Menon has changed. The Court held:
“15.3…We are of the view that law in the present context should G
be taken to be that the liability will accrue on the date of the
12
(2019) 3 SCC 572
13
(2019) 12 SCC 387
14
(2009) 7 SCC 372
15
(2019) 12 SCC 389 H
498 SUPREME COURT REPORTS [2020] 4 S.C.R.

A accident and the amount applicable as on that date will be the
amount recoverable but the claimant will get interest from the
date of accident till the payment at such rate as may be considered
just and fair from time to time. In this context, rate of interest
applicable in motor accident claim cases can be held to be
reasonable and fair. Once concept of interest has been
B
introduced, principles of Workmen Compensation Act can
certainly be applied and judgment of 4- Judge Bench in
Pratap Narain Singh Deo (supra) will fully apply. Wherever it
is found that the revised amount of applicable compensation as on
the date of award of the Tribunal is less than the prescribed amount
C of compensation as on the date of accident with interest, higher
of the two amounts ought to be awarded on the principle of
beneficial legislation…
15.4 Accordingly, we conclude that compensation will be payable
as applicable on the date of the accident with interest as may be
D considered reasonable from time to time on the same pattern as
in accident claim cases. If the amount so calculated is less than
the amount prescribed as on the date of the award of the Tribunal,
the claimant will be entitled to higher of the two amounts…The
4-Judge Bench judgment in Pratap Narain Singh Deo
(supra) holds the field on the subject and squarely applies
E to the present situation.”
(Emphasis supplied)
This Court held that compensation under the 1989 Act would be
calculated with reference to the date of the accident along with interest
F payable. However, if the amount calculated is less than the amount
prescribed as on the date of the award of the Tribunal under the 1989
Act, the claimant will be entitled to higher of the two amounts.
31. The judgment in Rathi Menon and Rina Devi were both
rendered by a Bench of two judges of this Court. In Rina Devi, this
G Court resolved the apparent conflict between Rathi Menon and Kalandi
by taking into account the judgment in Rathi Menon as well as the
change in the position of law following the judgment. The position of law
under the 1989 Act has thus been brought closer to the judgment of this
Court in Pratap Narain Singh which held that the date relevant for the
determination of compensation would be the date of the accident. The
H
K SIVARAMAN & ORS v. P SATHISHKUMAR & ANR 499
[DR. DHANANJAYA Y CHANDRACHUD, J.]

judgment in Rina Devi was recently followed by this Court in Union of A
India v Radha Yadav16.
32. It is pertinent to note that no similar position of law for the
determination of the higher amount of compensation payable was adopted
under the 1923 Act by this Court in Pratap Narain Singh and Valsala.
This Court, being a Bench of two judges, is bound by the categorical B
position of law laid down in Pratap Narain Singh and Valsala, both
being judgments rendered by larger Benches of this Court.
Consequently,we hold that the relevant date for the determination of
compensation payable is the date of the accident and the benefit of Act
45 of 2009 does not apply to accidents that took place prior to its coming
into force. C

33. In the present case, the accident occurred on 31 January 2008
i.e. prior to the coming into force of Act 45 of 2009. Consequently, the
High Court erred in extending the benefit of Act 45 of 2009 which deleted
Explanation II to Section 4 to the present case. The High Court was
required to determine the compensation payable on the date of the accident D
on which date, the deemed cap of Rs 4000 as monthly wages was
applicable.
34. Though the accident took place in 2008, the appeal is being
decided over 12 years later. We take note of the fact that following the
order of remand by the High Court, the employer deposed as PW2 and E
stated that the deceased had worked in his establishment for about three
years. The employer duly proved Exhibit P5 in the course of his evidence
which was the monthly pay certificate indicating that the deceased was
drawing a monthly wage of Rs. 32,000, including expenses towards food.
Significantly, no appeal was filed by the respondents against the judgment F
of the High Court enhancing the compensation. In this view of the matter,
we are not inclined to interfere with the award of compensation ordered
by the High Court in exercise of the inherent jurisdiction of this Court to
do complete justice under Article 142 of the Constitution. Having clarified
the law as noted above, the appeal shall stand dismissed.
G
35. Before concluding the judgment, it would be necessary to
note that in the office report dated 14 October 2019 and 18 November
2019, it has been stated that service is complete on the respondents.

16
(2019) 3 SCC 410 H
500 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 36. The total compensation payable to the appellant shall stand
quantified at Rs 8,86,120 on which interest shall be payable at 12% per
annum from the date of the accident. The liability for the payment of
compensation shall be joint and several. The compensation shall be
payable to the first and the second appellants jointly and severally by the
respondents. The compensation shall be paid over within a period of two
B
months from the receipt of a certified copy of the order. There shall be
no order as to costs.

Devika Gujral Appeal dismissed.
C

D

E

F

G

H