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Compensation under the Railways Act 1989 would be calculated with reference to the date of the accid

K Sivaraman & Ors  v.  P Sathishkumar & Anr, Civil Appeal No. 9046 of 2019 (Arising out of SLP (C) No 18110 of 2019) – February 13, 2020.

 CORAM: A two judge bench comprising of Justice Dr Dhananjaya Y Chandrachud and Justice Dr Dhananjaya Y Chandrachud.

The appellants in this case filed case before the Deputy Commissioner for Employee’s Compensation. The facts of the case being that the deceased a lorry driver was dashed by a truck when the former was engaged in driving the lorry of the respondent. A claim was lodged before the Deputy Commissioner for Employee’s Compensation. The claim was allowed by an award by proceeding ex-parte. The appellants filed an appeal before the Madras High Court for enhancement of compensation. The High Court by its judgment remanded the proceedings to the Deputy Commissioner for determining it afresh and enhanced the compensation with interest. This case was thus appealed before this court.

The learned amicus curiae urged that both the commissioner and High Court have erred in determining the compensation. Also according to the provisions of Section 4(1)(a) of the 1923 Act, the compensation is an amount equal to 50% of monthly wages multiplied by the relevant factor where the death has resulted from injury. Also it was submitted that under sub-section (1B) of Section 4, the Central 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. Also it is urged that the method of calculating wages is specified in Section 5. In the case Pratap Narain Singh Deo v Srinivas Sabata and Kerala State Electricity Board v Valsala it was held that the accident date is the date relevant for determining compensation payable under the 1923 Act. Also reference was made to New India Assurance Company Ltd. v Neelakandan and National Insurance Co Ltd. v Mubasir Ahmed. Reliance was also made on Commissioner of Income Tax v Vatika Township Private Limited to state that the amendments that confer a benefit upon individuals must be given retrospective application.

The court observed that, “In terms of Section 4A(1), compensation under Section 4 is 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 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 stipulated that any question arising in the proceedings shall be settled by the commissioner in the default of an agreement. Oriental Insurance Company v Siby George 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. Reference was made to Rathi Menon v Union of India

“This Court held, in line with settled precedent of this Court, that where (i) a legislation confers a benefit on some persons, (ii) without 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 compensation”.“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”.

From the above observations the court held that they are not going to interfere with the award of compensation order of the High Court in exercise of the inherent jurisdiction of this court to do complete justice under Article 142 of the Constitution. Thus this court decided to dismiss this appeal. Also the liability to pay compensation shall be joint and several. There is no order as to cost.




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