Dismissed

New India Assurance Company Limited v. Rita Singh and 7 Others

Allahabad HC18 Jan 2021FAFO/21/2021

Case brief

AI extract

What is this about?

Appeal by insurer challenging an award where a deceased employee was not covered under the Employees Compensation Act due to alleged high salary and designation. The court held the deceased was an 'employee' under the Act, dismissing the appeal.

What did the court decide?

The first appeal filed by the appellant was dismissed, upholding the award dated 08.10.2020.

New India Assurance Company Limited Vs… — Pension and Retirement Benefits | Allahabad HC (2021)

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Court No. - 1

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Case :- FIRST APPEAL FROM ORDER No. - 21 of 2021

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Appellant :- New India Assurance Company Limited Respondent :- Rita Singh And 7 Others Counsel for Appellant :- Amaresh Sinha

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Hon'ble Vivek Agarwal,J.

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Heard Sri Anubhav Sinha, learned counsel for the appellant.

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Appellant has filed this petition being aggrieved of the award dated 08.10.2020 passed by learned Commissioner, Employee's Compensation Act and Assistant Labour Commissioner, Shahjahanpur in Case No. 10/E.C.A./2014, on the ground that deceased Arvind Narayan Singh was working as Assistant Manager and therefore, he will not be covered under the definition of employee. Another ground which has been taken is that under policy, issued by the insurance company, employees with monthly wages upto Rs. 8,000/- (eight thousand rupees) were covered and therefore, claimant, who was drawing salary to the tune of Rs. 32,738/- (thirty two thousand seven hundred thirty eight rupees) per month, was not covered under the Workmen's Compensation Act Policy. Third ground is that he was working as a contractual employee. Therefore, on this account also he will not be covered under the definition of an 'employee' as provided under the Employees Compensation Act, 1923 and therefore, tribunal erred in computing the award without dealing with the issue as to whether deceased will be covered within the definition of an 'employee'.

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Definition of an 'employee' is provided under Section 2(dd), wherein clause (iii) reads as under:-

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".........(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been injured shall, where the employee is dead, include a reference to his dependents or any of them."

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Schedule II deals with the list of persons, who, subject to the provisions of Section 2(1)(dd) are included in the definition of employees. It covers "employed otherwise than in a clerical capacity in any premises wherein or within the precincts whereof a manufacturing process as defined in clause (k) of

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section 2 of the Factories Act 1948 (63 of 1948) is being carried on or in any kind of work whatsoever incident to or connected with any such manufacturing process or with the article made whether or not employment in any such work is within such premises or precincts and steam water or other mechanical power or electrical power is used."

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It clearly reveals that issue no. 1 was properly framed in this regard to the effect that as to whether deceased Arvind Narain Singh was employed as a workman in the employment of defendant nos. 1 and 2 and on 01.09.2012, while in the employment of defendant nos. 1 and 2, he died due to the injuries sustained during the work. This issue has been answered in positive. Defendant 1-Roza Thermal Power, in its written statement, admitted that deceased was a contractual employee of defendant no. 2, who was authorized to work on contract for defendant no. 1. Defendant no. 2 had taken a plea that since salary of the deceased was to the tune of Rs. 32,738/(thirty two thousand seven hundred thirty eight rupees), therefore, he cannot be included in the definition of a workman/employee. However, it has come on record that deceased was appointed as a 'Supervisor' and for which purpose, an ID card was issued to him, which was valid from 30.07.2010 to 19.10.2010. On 14.07.2012, a letter of appointment was issued appointing deceased as a 'Senior Supervisor'.

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As per the pay slips, issued for the months of June and July, 2012, basic pay of the deceased was Rs. 8,000/- (eight thousand rupees) per month and he drew Rs. 22,702/- (twenty two thousand seven hundred two rupees), as total emoluments along with applicable allowances for the months of June. For the month of July, his basic pay was fixed at Rs. 10,800/- (ten thousand eight hundred rupees) and his total emoluments along with allowances were fixed at Rs. 25,847/- (twenty five thousand eight hundred forty seven rupees). It will not be out of place to mention that deceased died on 01.09.2012. Therefore, there is no material on record to show that wages of the deceased were to the tune of Rs. 32,738/- (thirty two thousand seven hundred thirty eight rupees). There is an appointment order dated 04.07.2012 on record to show that company had decided to confirm the services of the deceased on successful completion of probation with excellent, rating as 'Senior Supervisor'. He was appointed in A2 grade with designation as 'Assistant Manager' with effect from 01.04.2012. It is mentioned that cost to company (C.T.C.) basis, compensation will be Rs. 2,88,000/- (two lakhs eighty eight thousand rupees) per annum, which was further bifurcated in base pay of Rs. 1,51,386/- (one lakh fifty one thousand three hundred eighty six

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rupees) per annum, comprising of basic salary and retiral (provident funds and gratuity) and choice pay of Rs. 1,36,614/(one lakh thirty six thousand six hundred fourteen rupees) per annum. Therefore, contention of the appellant that salary of the deceased was to the tune of Rs. 32,738/- (thirty two thousand seven hundred thirty eight rupees) per month, is not made out. In fact, when C.T.C. is taken as it is, which is not refuted, then monthly emolument including all perks, gratuity and provident fund come out to Rs. 24,000/- (twenty four thousand rupees) per month.

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As has been discussed above, there is evidence to the effect that deceased was an employee covered under the definition of 'employee' under Section 2(1)(dd) of the Employees Compensation Act, 1923. It is further important to mention that Section 2(vi) of the Payment of Wages Act, 1936 defines 'wages', but provides that it does not include-

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"(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court;

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(2) the value of any house-accommodation or of the supply of light water medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;

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(3) any contribution paid by the employer to any pension or provident fund and the interest which may have accrued thereon;

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(4) any travelling allowance or the value of any travelling concession;

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(5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or

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(6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d)."

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Therefore, when these components are removed, then argument made by learned counsel for insurance company loses its steam. Even Section 2(m) of the Employees Compensation Act, 1923 defines 'wages' as under-

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"wages" includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to a workman to cover any special expenses

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entailed on him by the nature of his employment."

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9. Thus, when all these definitions are taken into consideration and the fact that in case of Mangala Ben vs. Dilip Motwani (1998) L.L.R. 656 , it has been held that two conditions are required to be proved for not treating a person as 'workman' that his employment is of a casual nature and he is not employed for the purpose of employer's trade or business and the onus is on the employer to prove these conditions, I am of the opinion that deceased, irrespective of his designation was admittedly confirmed as a 'Senior Supervisor', as is apparent from order dated 04.07.2012, issued by respondent no. 8 in the present appeal and therefore, on technicalities, it cannot be accepted that deceased was not an 'employee', covered by Employees Compensation Act, therefore, appeal fails and is dismissed .

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Order Date :- 18.1.2021 Vikram/-

New India Assurance Company Limited v. Rita Singh and 7 Others

Case brief

What is this about?

What did the court decide?

New India Assurance Company Limited v. Rita Singh and 7 Others

Case brief

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What did the court decide?

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