IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2019 BEFORE THE HON’BLE MR. JUSTICE B. VEERAPPA MISCELLANEOUS FIRST APPEAL NO.5074/2016(WC) BETWEEN:
D. YOGESH, S/O DONAPPAREDDY, AGED ABOUT 32 YEARS, R/O AIMANGALA HIRIYUR TQ. NOW R/AT JOGIMATTI MAIN ROAD, CHITRADURGA-577 501.
... APPELLANT (BY SRI SPOORTHY HEGDE N., ADVOCATE) AND:
1. ORIENTAL INSURANCE CO. LTD., BY ITS BRANCH MANAGER, SHARADA COMPLEX, CHITRADURGA-577 501.
2. K.V.DHANANJAYA, S/O K.S.VENKATESHREDDY, AGED ABOUT 55 YEARS, OWNER OF MAXIMO MINI VAN REG.NO. KA-16-B-4738, R/O G.R.HALLY POST, CHITRADURGA TQ & DIST-577 501 ... RESPONDENTS (BY SRI K. K. VASANTH, ADVOCATE FOR R1; VIDE ORDER DATED 07.10.2016 NOTICE TO R2 IS DISPENSED WITH) **** THIS MFA IS FILED UNDER SECTION 30(1) OF THE EMPLOYEE'S COMPENSATION ACT, AGAINST THE JUDGMENT AND AWARD DATED:20.05.2016 PASSED IN ECA NO.5/14 ON THE FILE OF THE 1ST ADDITIONAL SENIOR CIVIL JUDGE & COMMISSIONER, CHITRADURGA, PARTLY ALLOWING THE PETITION FILED UNDER SECTION 22 OF EMPLOYEE’S COMPENSATION ACT.
THIS MFA COMING UP FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING.
J U D G M E N T The appellant - claimant filed the present appeal for enhancement of compensation against the Judgment & Award dated 20.5.2016 made in ECA No.5/2014 on the file of the Commissioner for Employee’s Compensation, Chitradurga/Tribunal awarding total compensation of Rs.64,385/- with interest at the rate of 9% per annum from the 30th day of the accident till realization.
2. It is the case of the claimant that on 10.11.2013 at about 8.50 p.m. near Kelagate Basaveshwar hospital, NH-4 road, Chitradurga, he was discharging his duties as driver of Maximo minivan bearing Regn. No.KA-16-B-4738 under the 1st respondent. The said vehicle met with an accident, as a result, the claimant sustained serious injuries. Immediately he was admitted to Basaveshwar Hospital, Chitradurga and he was in-patient from 11.11.2013 to 28.11.2013. Due to the accident, the claimant sustained multiple lacerations and abrasion over temparo parietal region, tenderness swelling and restricted movements of the left shoulder, head injury, soft tissue injury at right shoulder and right forearm and X-ray confirmed the same. He underwent surgery and took treatment and spent Rs.60,000/- towards medical expenses. He further contended that the accident occurred arising out of and during the course of the employment under the Respondent No.1. Therefore, the claimant filed the claim petition seeking compensation.
3. Inspite of service of notice, the 1st respondent - owner failed to appear before the Court and he was placed exparte. The 2nd respondent - Insurance company filed objections and denied the averments made in the claim petition and contended that its liability is subject to the terms and conditions of the insurance policy. The respondent – Insurance company also contended that the petitioner has not possessed valid Driving Licence at the time of the alleged accident and further, the Respondent No.1 - owner has violated the terms of the insurance policy. It is also contended that the amount of compensation claimed is excessive and exorbitant and has no basis. Hence prays for dismissal of the claim petition.
4. Based on the aforesaid pleadings, the Commissioner/Tribunal framed the following issues:
“1. Whether petitioner proves that, he was engaged by respondent-1 as a driver of Maximo mini van bearing Reg. No.KA-16-B-4738 on 10-11-2013 at about 8.50 p.m. near Kelagote, Basaveshwara hospital, NH-4 road, Chitradurga, met with road traffic accident as a result petitioner sustained injuries and fractures all over his body ?
2. Whether petitioner is entitled for compensation ? If so, at what quantum and from whom ?
3. What order or decree ?”
5. The claimant in order to prove his case, has examined himself as PW.1 and Dr. Ambrish as PW.2 and got marked Ex.P1 to Ex.P21. The respondent - Insurance Company has examined RTO Superintendent as RW.1 and its Manager as RW.2 and marked Ex.R1 to Ex.R3.
6. The Commissioner for Employee’s Compensation/Tribunal considering both the oral and documentary evidence, has recorded a finding that the claimant proved that he was engaged by Respondent No.1 as a driver of Maximo Minivan bearing Registration No.KA- 16-B-4738 and on 10.11.2013 at about 8.50 p.m. near Kelagate Basaveshwar Hospital, NH-4 road, Chitradurga, he met with a road traffic accident and as a result of which, he sustained injuries and fractures all over the body. Accordingly, the Tribunal proceeded to award compensation of Rs.64,385/- with interest at the rate of 9% per annum from 30th day of accident till realization. Therefore, the present appeal is filed by the appellant - claimant for enhancement of compensation.
7. The Insurance company has not filed any appeal against the impugned Judgment and Award passed by the Tribunal.
8. I have heard the learned counsel for the parties to the lis.
9. Sri Spoorthy Hegde .N, learned counsel for the appellant - claimant contended that the Tribunal erred in taking the wages of the appellant – claimant at Rs.6,500/- ignoring the daily batta paid by the employer, while awarding the compensation. He would further contend that the Tribunal while assessing the compensation has taken 30% of wages into consideration instead of 60% as contemplated under Section 4(1)(b) of the Employee’s Compensation Act, 1923 (‘the Act’ for short). He would further contend that the Tribunal was not justified in awarding interest at the rate of 9% per annum instead of 12% as contemplated under Section 4A(3)(a) of the Act. Therefore, he sought to allow the appeal.
10. Per contra, Sri K.K. Vasanth, learned counsel for the respondent No.1 – Insurance Company sought to justify the impugned Judgment & Award passed by the Tribunal. He would further contend that in the absence of any material documents produced, the Tribunal was justified in taking the monthly wages of the claimant at Rs.6,500/- and further batta alleged to have been paid by the employer cannot be included as monthly wages. He further contended that the Tribunal was justified in taking 30% of wages into consideration for assessment of compensation and rightly awarded 9% interest from the 30th day of the accident. Therefore, he sought to dismiss the appeal.
11. This Court while admitting the appeal framed the following substantial questions of law:
1) Whether the Commissioner for employee’s Compensation Tribunal is justified in taking the monthly wages of the claimant at Rs.6,500/-, when the accident has occurred on 10.11.2013 after the amendment to Section 4(1B) of the Employee’s Compensation Act in the year 2010 whereby the Central Government has specified Rs.8,000/- as monthly wages?
2) Whether the Tribunal is justified in taking 30% into consideration for assessment of compensation, when provisions of Section 4(1)(b) of the Employee’s Compensation specifies 60%?
3) Whether the Tribunal is justified in awarding interest at 9% p.a. on the compensation amount in view of the provisions of Section 4A(3)(a) of the Employee’s Compensation Act?
4) Whether the Tribunal is justified in taking monthly wages of the claimant at Rs.6,500/- ignoring batta as stated by the claimant, in view of the Division Bench dictum of this Court in the case of NEW INDIA ASSURANCE COMPANY LIMITED, GULBARGA VS. SUBHAS – AIR 2005 KAR 972 ?
12. Having heard the learned counsel for the parties, it is the specific case of the claimant that he was working as driver under the present Respondent No.2 and met with an accident on 10.11.2013 arising out of and in the course of employment and thereby sustained certain fractures and injuries. The same is evidenced by the material documents Ex.P1 to Ex.P8. The relationship between the present Respondent No.2 and the claimant as employer and employee is not in dispute. The doctor who was examined as PW.2 has assessed the disability at 21% and the Commissioner for Employee’s Compensation assessed the loss of earning capacity at 6.3%. It is the case of the claimant that the respondent – owner was paying Rs.6,000/- as monthly wages plus daily batta of Rs.200/-, in all Rs.12,000/- per month. The Tribunal proceeded to take monthly wages of the claimant at Rs.6,500/-.
13. At this stage, it is relevant to extract the provisions of Section 2(1)(m) of the Act, which defines ‘wages’ as under:
“ ‘Wages’, includes any privilege or benefit which is capable of being estimated in money, other than a traveling allowance or the value of any traveling concession or a contribution paid by the employer of an employee towards any pension or provident fund or a sum paid to an employee to cover any special expenses entailed on him by the nature of his employment.”
14. A careful perusal of the said provisions clearly indicates that the definition of ‘wages’ is an inclusive definition which includes any privilege or benefit which is capable of being estimated in money except those enumerated in the definition itself. Any allowance paid to a workman can be excluded from ‘wages’ for purposes of the Act, it if is established that such payment was (a) traveling allowance; or (b) value of traveling concession; or (c) contribution towards pension or provident fund; or (d) amount paid to a workman to cover any special expenses entailed on him by the nature of his employment. As daily batta paid to a driver does not fall under any of those exceptions, it will necessarily be a part of ‘monthly wages’ for purposes of the Act. My view is fortified by the Judgment of the Division Bench of this Court in the case of New India Assurance Company Limited, Gulbarga and another v. Subhas reported in (2004)5 Kant LJ 7, wherein the Division Bench of this Court held at paragraphs 18, 19, 20 and 21 as under:
“18. If any allowance is paid in consideration of the work done by the workman, even if it is paid daily to facilitate the employee to meet his daily needs, it will be a part of the ‘wages’. Similarly, if any allowance is paid to an employee by the employer to meet any special needs or circumstances (relating to his employment) that will also be part of the ‘wages’. This is because definition of ‘wages’ is an inclusive definition which includes any privilege or benefit which is capable of being estimated in money except those enumerated in the definition itself. It is also significant to note that the term ‘benefit’ is included in the definition of wages under the WC Act, while it is not included in the definition of “wages” under the Payment of Wages Act. However any allowance paid to a workman can be excluded from “wages” for purposes of the Act, if it is established that such payment was:
(a) travelling allowance; or (b) value of travelling concession; or (c) contribution towards pension or provident fund; or (d) amount paid to a workman to cover any special expenses entailed on him by the nature of his employment.
As daily batta paid to a driver does not fall under any of those exceptions, it will necessarily be a part of “monthly wages” for purposes of the Act.
19. It is contended by the appellants, that insofar as drivers and cleaners/conductors are concerned, daily batta is paid only when they go on line, i.e., when they travel in the lorry/bus from the headquarters to any destination and back and therefore, it should be considered as travelling allowance.
Normally when an employee with a fixed place of work is sent out, an allowance paid to him may relate to two distinct matters:
(i) cost of traveling; and (ii) expenses incurred for boarding, lodging and incidentals outside the workplace.
Drivers and cleaners/conductors employed in a lorry or bus do not work in any “fixed place” but are always travelling. In the case of a driver or cleaner/conductor of a lorry/bus, the question of paying any cost of travelling by way travelling allowance does not arise because the driver is driving the lorry/bus and cleaner/conductor is travelling free in the vehicle in connection with his employment and they do not incur any expenditure nor spend money for actual travelling. Therefore, any allowance paid to a driver or cleaner of the lorry when they go out, is an outstation allowance or an allowance paid to meet the expenses for food or lodging or other incidental expenses. Therefore, any batta paid to a driver and cleaner is not travelling allowance, but an allowance given as a “benefit” which will necessarily fall within the definition of “wage”.
20. The appellants next contended that as the driver travels from place to place, having regard to the nature of his employment, batta paid to a driver “is a sum paid to the workman to cover any special expenses entailed on him by the nature of his employment”. Batta is nothing but a subsistence allowance when staying away from his home or headquarters. It is paid not only to drivers, cleaners and conductors but to other employees also, who travel outside the headquarters, either as batta or as outstation allowance. Batta charges is not a payment made to the drivers to cover any special expenses entailed on him by the nature of his employment.
21. In view of the above, subject to evidence to the contrary in any given case, any allowance paid as “batta” to a driver or cleaner of a lorry/vehicle will have to be treated as benefit forming part of “wages” under the Act.”
15. It is the specific case of the claimant that the present 2nd respondent – owner was paying Rs.6,000/- as monthly wages. If the daily batta is included, the actual monthly wages would be Rs.12,000/-. The Tribunal proceeded to take the monthly wages of the claimant at Rs.6,500/- and it is contrary to the provisions of Section 4(1B) of the Act, wherein the Central Government in exercise of the powers under the said provisions by notification dated 31.5.2010 has specified the monthly wages at Rs.8,000/-. Accordingly, the monthly wages of the claimant has to be taken at Rs.8,000/- for assessment of compensation.
16. As per the provisions of Section 4(1)(b) of the Act, 60% of the monthly wages has to be taken for assessment of compensation in an injury case. Unfortunately, the Tribunal has taken only 30% of wages contrary to the provisions of Section 4(1)(b) of the Act. Therefore, 60% of the monthly wages has to be taken for assessment of compensation.
17. Taking into consideration the age of the claimant, the relevant factor applicable would be 207.98.
18. The Tribunal erred in assessing loss of earning capacity at 6.3%, whereas, the doctor assessed the disability at 21%. The same has to be taken into consideration in view of the provisions of Section 4(1)(c)(ii) of the Act. Accordingly, the loss of earning capacity has to be taken at 21%.
19. Taking into account all the above factors, the actual loss of earning capacity would be Rs.2,09,643/- (Rs.4,800 x 207.98 x 21%). In addition, the claimant is entitled to medical expenses of Rs.38,834/- as awarded by the Tribunal. Thus, the appellant – claimant is entitled to a total compensation of Rs.2,48,477/-.
20. It is also not in dispute that the Tribunal while awarding compensation has proceeded to award interest at 9% per annum. The same is contrary to the provisions of Section 4A(3)(a) of the Act. Therefore, the appellant – claimant is entitled to interest at 12% per annum, after one month from the date of accident.
21. In view of the aforesaid reasons, the 1st substantial questions of law framed by this Court has to be answered in the negative holding that the Tribunal is not justified in taking the monthly wages of the claimant at Rs.6,500/- in view of the provisions of Section 4(1B) of the Act and monthly wages has to be taken at Rs.8,000/- as stated supra. The 2nd substantial question of law has to be answered in the negative holding that the Tribunal is not justified in taking 30% of wages for assessment of compensation and it has to be taken at 60% in view of the provisions of Section 4(1)(b) of the Act. The 3rd substantial question of law has to be answered in the negative holding that the Tribunal is not justified in awarding interest at 9% per annum and the appellant – claimant is entitled to interest at 12% per annum as per the provisions of Section 4A(3)(a) of the Act. The 4th substantial question of law is answered in the negative holding that the Tribunal is not justified in taking the monthly wages at Rs.6,500/- ignoring the batta and the monthly wages has to be fixed at Rs.8,000/-.
22. For the reasons stated above, the present Miscellaneous First Appeal filed by the appellant - claimant is allowed in part. The impugned Judgment & Award passed by the Commissioner for Employee’s Compensation/Tribunal is hereby modified. The appellant - claimant is entitled to total compensation of Rs.2,48,477/- (Rupees two lakhs forty-eight thousand four hundred and seventy-seven only) as against Rs.64,385/- awarded by the Tribunal, together with interest at 12% per annum after one month from the date of the accident.
Sd/- JUDGE Gss/-