The Employees' Compensation Act,

1923

 The Employees’ Compensation Act, 1923 is one of the most important social security
law.
 The act’s main aim is to provide financial protection and assistance to employees and
their dependents through compensation in case of any accidental injury occurs during
the course employment.
 It is generally applicable to the cases where such incidents lead to either death or
disablement of the worker. 
 Total 36 Sections, IV Chapters and Iv Schedules
Amendments to the Act:
The Act was amended firstly in 1933 ,1938, 1946, 1959, 1962 1984 ,1989 1995… 2017
Objects and Aims of the Act:
(1) To compensate a workman incapacitated by an injury from accident.
(2) To make efforts on prevention of accidents, giving workmen greater freedom from
anxiety and rendering industry more attractive.
(3) Protection of workmen, as far as possible, from hardship arising from accidents.
(4) The main object of the Act is to impose legal obligation on the employers to pay
compensation to workmen involved in accidents while working in the premises.

Chapter II- Employees’ Compensation

3. Employer's liability for compensation- VERY IMPORTANT

(1) If personal injury is caused to a employee by accident arising out of and in the course of
his employment, his employer shall be liable to pay compensation in accordance with the
provisions of this Chapter: Provided that the employer shall not be so liable –
(a) in respect of any injury which does not result in the total or partial disablement of the
employee for a period exceeding three days;
(b) in respect of any injury, not resulting in death or permanent total disablement caused by
an accident which is directly attributable to—
 (i) the employee having been at the time thereof under the influence of drink or drugs,
or
 (ii) the wilful disobedience of the employee to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of employees, or
 (iii) the wilful removal or disregard by the employee of any safety guard or other
device which he knew to have been provided for the purpose of securing the safety of
employee,
3(2) If an employee employed
 in any employment specified in Part A of Schedule III, contracts any disease specified
therein as an occupational disease peculiar to that employment, or if a employee
whilst in the service of one or more employers (no period)
 in any employment specified in Part B of Schedule III contracts any disease specified
therein as an occupational disease peculiar to that employment, or if a employee,
whilst in the service of an employer in whose service he has been employed for a
continuous period of not less than six months (which period shall not include a period
of service under any other employer in the same kind of employment)
 in any employment specified in Part C of Schedule III for such continuous period as
the Central Government may specify in respect of each such employment, contracts
any disease specified therein as an occupational disease peculiar to that employment,
the contracting of the disease shall be deemed to be an injury by accident within the
meaning of this section and, unless the contrary is proved, the accident shall be
deemed to have arisen out of, and in the course of, the employment: Provided that if it
is proved
3(2A) If a employee employed in any employment specified in Part C of Schedule III
contracts any occupational disease peculiar to that employment, the contracting whereof is
deemed to be an injury by accident within the meaning of this section, and such employment
was under more than one employer, all such employers shall be liable for the payment of the
compensation in such proportion as the Commissioner may, in the circumstances, deem just.
3(3) The Central Government or the State Government, after giving, by notification in the
Official Gazette, not less than three months' notice of its intention so to do, may, by a like
notification, add any description of employment to the employments specified in Schedule III
and shall specify in the case of employments so added the diseases which shall be deemed for
the purposes of this section to be occupational diseases peculiar to those employments
respectively, and thereupon the provisions of sub-section (2) shall apply, 4 in the case of a
notification by the Central Government, within the territories to which this Act extends or, in
case of a notification by the State Government, within the State as if such diseases had been
declared by this Act to be occupational diseases peculiar to those employments.
3(4) Save as provided by sub-sections (2), (2A)] and (3) no compensation shall be payable to
an employee in respect of any disease unless the disease is directly attributable to a specific
injury by accident arising out of and in the course of his employment.
3(5) Nothing herein contained shall be deemed to confer any right to compensation on an
employee in respect of any injury if he has instituted in a Civil Court a suit for damages in
respect of the injury against the employer or any other person; and no suit for damages shall
be maintainable by a employee in any Court of law in respect of any injury–
(a) if he has instituted a claim to compensation in respect of the injury before a
Commissioner; or
(b) if an agreement has been come to between the employee and his employer providing
for the payment of compensation in respect of the injury in accordance with the
provisions of this Act. 462
Important Cases
 Indian News Chronicle V. Mrs. Lazarus -444
 State of Rajasthan v. Ram Prasad-446
 R.B. Moondra and Co. Mst. Bhanwari- 446
 Trustee Port Bombay v. Yamunabai - 447
 Smt. Koduri v. Polangi Atchamma - 448
 National Iron and Steel Company Ltd. V. Manorama- 448
 New India Insurance Company Ltd. V. Krishna Rao and others- 454
Notional extension of employer’s premises
The period of going to and returning from place of employment may be regarded as course of
employment.
 S.S. Mfg Co. v. Bai Valu Raju – 458 SC
 J.F. Pareira v. Eastern Watch Co. Ltd. 458

4. Amount of compensation.-
(1) Subject to the provisions of this Act, the amount of compensation shall be as follows,
namely:--
(a) where death results from the injury : an amount equal to fifty per cent. of the monthly
wages of the deceased employee multiplied by the relevant factor; or an amount of one lakh
and twenty thousand rupees, whichever is more;
(b) where permanent total disablement results from the injury : an amount equal to sixty per
cent. of the monthly wages of the injured employee multiplied by the relevant factor; or one
lakh and twenty thousand rupees, whichever is more;
Provided that the Central Government may, by notification in the Official Gazette, from time
to time, enhance the amount of compensation mentioned in clauses (a) and (b).]
Explanation I.--For the purposes of clause (a) and clause (b), "relevant factor", in relation to a
employee means the factor specified in the second column of Schedule IV against the entry in
the first column of that Schedule specifying the number of years which are the same as the
completed years of the age of the employee on his last birthday immediately preceding the
date on which the compensation fell due.
(c) where permanent partial disablement result from the injury:

(i) in the case of an injury specified in Part II of Schedule I, such percentage of the
compensation which would have been payable in the case of permanent total disablement as
is specified therein as being the percentage of the loss of earning capacity caused by that
injury; and
(ii) in the case of an injury not specified in Schedule I, such percentage of the compensation
payable in the case of permanent total disablement as is proportionate to the loss of earning
capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;
Explanation I.--Where more injuries than one are caused by the same accident, the amount of
compensation payable under this head shall be aggregated but not so in any case as to exceed
the amount which would have been payable if permanent total disablement had resulted from
the injuries.
Explanation II.--In assessing the loss of earning capacity for the purpose of sub-clause (ii),
the qualified medical practitioner shall have due regard to the percentages of loss of earning
capacity in relation to different injuries specified in Schedule I;
(d) where temporary disablement, whether total or partial, results from the injury : a half
monthly payment of the sum equivalent to twenty-five per cent. of monthly wages of the
employee, to be paid in accordance with the provisions of sub-section (2).
(1A) Notwithstanding anything contained in sub-section (1), while fixing the amount of
compensation payable to a employee is respect of an accident occurred outside India, the
Commissioner shall take into account the amount of compensation, if any, awarded to such
employee in accordance with the law of the country in which the accident occurred and shall
reduce the amount fixed by him by the amount of compensation awarded to the employee in
accordance with the law of that country.
(1B) The Central Government may, by notification in the Official Gazette, specify, for the
purposes of sub-section (I), such monthly wages in relation to an employee as it may consider
necessary.

(2) The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on
the sixteenth day –
(i) from the date of disablement where such disablement lasts for a period of twenty-
eight days or more, or
(ii) after the expiry of a waiting period of three days from the date of disablement where
such disablement lasts for a period of less than twenty-eight days; and thereafter half-
monthly during the disablement or during a period of five years, whichever period is
shorter:
Provided that-- (a) there shall be deducted from any lump sum or half-monthly payments to
which the employee is entitled the amount of any payment or allowance which the employee
has received from the employer by way of compensation during the period of disablement
prior to the receipt of such lump sum or of the first half-monthly payment, as the case may
be; and
(b) no half-monthly payment shall in any case exceed the amount, if any, by which half the
amount of the monthly wages of the employee before the accident exceeds half the amount of
such wages which he is earning after the accident.
(2A) The employee shall be reimbursed the actual medical expenditure incurred by him for
treatment of injuries caused during course of employment.
(3) On the ceasing of the disablement before the date on which any half-monthly payment
falls due there shall be payable in respect of that half-month a sum proportionate to the
duration of the disablement in that half-month.
(4) If the injury of the employee results in his death, the employer shall, in addition to the
compensation under sub-section (1), deposit with the Commissioner a sum of not less than
five thousand rupees for payment of the same to the eldest surviving dependant of the
employee towards the expenditure of the funeral of such employee or where the employee did
not have a dependant or was not living with his dependant at the time of his death to the
person who actually incurred such expenditure.
Provided that the Central Government may, by notification in the Official Gazette, from time
to time, enhance the amount specified in this sub-section.

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 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.
(3) Where any employer is in default in paying the compensation due under this 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 the arrears, pay simple interest
thereon at the rate of twelve per cent. 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
(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in
addition to the amount of the arrears and interest thereon, pay a further sum not exceeding
fifty per cent, of such amount by way of penalty:
Provided that an order for the payment of penalty shall not be passed under clause (b) without
giving a reasonable opportunity to the employer to show cause why it should not be passed.

5. Method of calculating wages.-

In this Act and for the purposes thereof the expression "monthly wages" means the amount of
wages deemed to be payable for a month's service (whether the wages are payable by the
month or by whatever other period or at piece rates), and calculated as follows, namely:--
where the employee has, during a continuous period of not less than twelve months
immediately preceding the accident, been in the service of the employer who is liable to pay
compensation, the monthly wages of the employee shall be one-twelfth of the total wages
which have fallen due for payment to him by the employer in the last twelve months of that
period;
in other cases including cases in which it is not possible for want of necessary information to
calculate the monthly wages, the monthly wages shall be thirty times the total wages earned
in respect of the last continuous period of service immediately preceding the accident from
the employer who is liable to pay compensation, divided by the number of days comprising
such period.
Explanation.--A period of service shall, for the purposes of this section be deemed to be
continuous which has not been interrupted by a period of absence from work exceeding
fourteen days.

6. Review.-
(1) Any half-monthly payment payable under this Act, either under an agreement between the
parties or under the order of a Commissioner, may be reviewed by the Commissioner, on the
application either of the employer or of the employee accompanied by the certificate of a
qualified medical practitioner that there has been a change in the condition of the workman
or, subject to rules made under this Act, on application made without such certificate.
(2) Any half-monthly payment may, on review under this section, subject to the provisions of
this Act, be continued, increased, decreased or ended, or if the accident is found to have
resulted in permanent disablement, be converted to the lump sum to which the workman is
entitled less any amount which he has already received by way of half-monthly payments.

7. Commutation of half-monthly payments.-

Any right to receive half-monthly payments may, by agreement between the parties or, if the
parties cannot agree and the payments have been continued for not less than six months, on
the application of either party to the Commissioner, be redeemed by the payment of a lump
sum of such amount as may be agreed to by the parties or determined by the Commissioner,
as the case may be.

8. Distribution of compensation.-
(1) No payment of compensation in respect of a employee whose injury has resulted in
death, and no payment of a lump sum as compensation to a woman or a person under
a legal disability, shall be made otherwise than by deposit with the Commissioner,
and no such payment made directly by an employer shall be deemed to be a payment
of compensation:
Provided that, in the case of a deceased employee, an employer may make to any dependant
advances on account of compensation of an amount equal to three months' wages of such
employee and so much of such amount as does not exceed the compensation payable to that
dependant shall be deducted by the Commissioner from such compensation and repaid to the
employer.
(1) Any other sum amounting to not less than ten rupees which is payable as
compensation may be deposited with the Commissioner on behalf of the person
entitled thereto.
(2) The receipt of the Commissioner shall be a sufficient discharge in respect of any
compensation deposited with him.
(3) (4) On the deposit of any money under sub-section (1), as compensation in respect of
a deceased employee the Commissioner shall, if he thinks necessary, cause notice to
be published or to be served on each dependant in such manner as he thinks fit,
calling upon the dependents to appear before him on such date as he may fix for
determining the distribution of the compensation. If the Commissioner is satisfied
after any inquiry which he may deem necessary, that no dependant exists, he shall
repay the balance of the money to the employer by whom it was paid. The
Commissioner shall, on application by the employer, furnish a statement showing in
detail all disbursements made.
(4) (5) Compensation deposited in respect of a deceased employee shall, subject to any
deduction made under sub-section (4), be apportioned among the dependents of the
deceased employee or any of them in such proportion as the Commissioner thinks fit,
or may, in the discretion of the Commissioner, be allotted to any one dependant.
(5) (6) Where any compensation deposited with the Commissioner is payable to any
person, the Commissioner shall, if the person to whom the compensation is payable is
not a woman or a person under a legal disability, and may, in other cases, pay the
money to the person entitled thereto.
(6) (7) Where any lump sum deposited with the Commissioner is payable to a woman or
a person under a legal disability, such sum may be invested, applied or otherwise dealt
with for the benefit of the woman, or of such person during his disability, in such
manner as the Commissioner may direct; and where a half monthly payment is
payable to any person under a legal disability, the Commissioner may, of his own
motion or on an application made to him in this behalf, order that the payment be
made during the disability to any dependant of the employee or to any other person,
whom the Commissioner thinks best fitted to provide for the welfare of the employee.
(7) (8) Where, on application made to him in this behalf or otherwise, the Commissioner
is satisfied that, on account of neglect of children on the part of a parent or on account
of the variation of the circumstances of any dependant or for any other sufficient
cause, an order of the Commissioner as to the distribution of any sum paid as
compensation or as to the manner in which any sum payable to any such dependant is
to be invested, applied or otherwise dealt with, ought to be varied, the Commissioner
may make such orders for the variation of the former order as he thinks just in the
circumstances of the case: Provided that no such order prejudicial to any person shall
be made unless such person has been given an opportunity of showing cause why the
order should not be made, or shall be made in any case in which it would involve the
repayment by a dependant of any sum already paid to him.
(8) (9) Where the Commissioner varies any order under sub-section (8) by reason of the
fact that payment of compensation to any person has been obtained by fraud,
 impersonation or other improper means, any amount so paid to or on behalf of such
person may be recovered in the manner hereinafter provided in section 31.
Bunnan A. Khan v. Mustaq Ahmad – 476- Nantional savings certificate for minor
dependant by commissioner
Samuben v. Patel Industries and others – 477 – direct payment is not deemed as a
payment of compensation

9. Compensation not to be assigned, attached or charged.- Save as provided by this

Act no lump sum or half-monthly payment payable under this Act shall in any way be
capable of being assigned or charged or be liable to attachment or pass to any person
other than the employee by operation of law nor shall any claim be set off against the
same.
10. Notice and claim.-
(1) No claim for compensation shall be entertained by a Commissioner unless notice of
the accident has been given in the manner hereinafter provided as soon as practicable
after the happening thereof and unless the claim is preferred before him within two
years of the occurrence of the accident or in case of death within two years from the
date of death:
Provided that where the accident is the contracting of a disease in respect of which the
provisions of sub-section (2) of section 3 are applicable, the accident shall be deemed
to have occurred on the first of the days during which the employee was continuously
absent from work in consequence of the disablement caused by the disease:
Provided further that in case of partial disablement due to the contracting of any such
disease and which does not force the employee to absent himself from work, the
period of two years shall be counted from the day the employee gives notice of the
disablement to his employer:
Provided further that if a employee who, having been employed in an employment for
a continuous period, specified under sub-section (2) of section 3 in respect of that
employment, ceases to be so employed and develops symptoms of an occupational
disease peculiar to that employment within two years of the cessation of employment,
the accident shall be deemed to have occurred on the day on which the symptoms
were first detected:
Provided further that in case of partial disablement due to the contracting of any such
disease and which does not force the employee to absent himself from work, the
period of two years shall be counted from the day the employee gives notice of the
disablement to his employer:
Provided further that if a employee who, having been employed in an employment for
a continuous period, specified under sub-section (2) of section 3 in respect of that
employment, ceases to be so employed and develops symptoms of an occupational
disease peculiar to that employment within two years of the cessation of employment,
the accident shall be deemed to have occurred on the day on which the symptoms
were first detected:

Provided further that the want of or any defect or irregularity in a notice shall not be a
bar to the entertainment of a claim—
(a) if the claim is preferred in respect of the death of a employee resulting from an
accident which occurred on the premises of the employer, or at any place where the
employee at the time of the accident was working under the control of the employer
or of any person employed by him, and the employee died on such premises or at such
place, or on any premises belonging to the employer, or died without having left the
vicinity of the premises or place where the accident occurred, or
(b) if the employer or any one of several employers or any person responsible to the
employer for the management of any branch of the trade or business in which the
injured employee was employed had knowledge of the accident from any other source
at or about the time when it occurred:
Provided further that the Commissioner may entertain and decide any claim to
compensation in any case notwithstanding that the notice has not been given, or the
claim has not been preferred, in due time as provided in this subsection, if he is
satisfied that the failure so to give the notice or prefer the claim, as the case may be,
was due to sufficient cause.

(2) Every such notice shall give the name and address of the person injured and shall
state in ordinary language the cause of the injury and the date on which the accident
happened, and shall be served on the employer or upon any one of several employers,
or upon any person responsible to the employer for the management of any branch of
the trade or business in which the injured employee was employed.
(3) The State Government may require that any prescribed class of employers shall
maintain at their premises at which employees are employed a notice book, in the
prescribed form, which shall be readily accessible at all reasonable times to any
injured employee employed on the premises and to any person acting bona fide on his
behalf.
(4) A notice under this section may be served by delivering it at, or sending it by
registered post addressed to, the residence or any office or place of business of the
person on whom it is to be served, or, where a notice-book is maintained, by entry in
the notice-book.
 10A. Power to require from employers statements regarding fatal accidents.-
(1) Where a Commissioner receives information from any source that a employee has
died as a result of an accident arising out of and in the course of his employment, he
may send by registered post a notice to the employee’s employer requiring him to
submit, within thirty days of the service of the notice, a statement, in the prescribed
form, giving the circumstances attending the death of the employee, and indicating
whether, in the opinion of the employer, he is or is not liable to deposit compensation
on account of the death.
(2) If the employer is of opinion that he is liable to deposit compensation, he shall
make the deposit within thirty days of the service of the notice.
(3) If the employer is of opinion that he is not liable to deposit compensation, he shall
in his statement indicate the grounds on which he disclaims liability.
(4) Where the employer has so disclaimed liability, the Commissioner, after such
inquiry as he may think fit, may inform any of the dependants of the deceased
employee that it is open to the dependants to prefer a claim for compensation, and
may give them such other further information as he may think fit.

10B. Reports of fatal accidents and serious bodily injuries.-

(1) Where, by any law for the time being in force, notice is required to be given to any
authority, by or on behalf of an employer, of any accident occurring on his premises
which results in death or serious bodily injury, the person required to give the notice
shall, within seven days of the death or serious bodily injury, send a report to the
Commissioner giving the circumstances attending the death or serious bodily injury:
Provided that where the State Government has so prescribed the person required to
give the notice may instead of sending such report to the Commissioner send it to the
authority to whom he is required to give the notice.
(2) The State Government may, by notification in the Official Gazette, extend the
provisions of subsection (1) to any class of premises other than those coming within
the scope of that sub-section, and may, by such notification, specify the persons who
shall send the report to the Commissioner.
(3) Nothing in this section shall apply to factories to which the Employees' State
Insurance Act, 1948 (34 of 1948), applies.

11. Medical examination.-

(1) Where a employee has given notice of an accident, he shall, if the employer, before
the expiry of three days from the time at which service of the notice has been effected
offers to have him examined free of charge by a qualified medical practitioner, submit
himself for such examination, and any employees who is in receipt of a half-monthly
payment under this Act shall, if so required, submit himself for such examination
from time to time: Provided that a employee shall not be required to submit himself
for examination by a medical practitioner otherwise than in accordance with rules
made under this Act, or at more frequent intervals than may be prescribed.
(2) If a employee, on being required to do so by the employer under subsection (1) or
by the Commissioner at any time, refuses to submit himself for examination by a
qualified medical practitioner or in any way obstructs the same, his right to
compensation shall be suspended during the continuance of such refusal or
obstruction unless, in the case of refusal, he was prevented by any sufficient cause
from so submitting himself.
(3) If a employee, before the expiry of the period within which he is liable under sub-
section (1) to be required to submit himself for medical examination, voluntarily
leaves without having been so examined the vicinity of the place in which he was
employed, his right to compensation shall be suspended until he returns and offers
himself for such examination.
(4) Where a employee, whose right to compensation has been suspended under sub-
section (2) or subsection (3), dies without having submitted himself for medical
examination as required by either of those sub-sections, the Commissioner may, if he
thinks fit, direct the payment of compensation to the dependants of the deceased
employee.
(5) Where under sub-section (2) or sub-section (3) a right to compensation is
suspended, no compensation shall be payable in respect of the period of suspension,
and, if the period of suspension commences before the expiry of the waiting period
referred to in clause (d) of sub-section (1) of section 4, the waiting period shall be
increased by the period during which the suspension continues.

12. Contracting.-
(1) Where any person (hereinafter in this section referred to as the principal) in the
course of or for the purposes of his trade or business contracts with any other person
(hereinafter in this section referred to as the contractor) for the execution by or under
the contractor of the whole or any part of any work which is ordinarily part of the
trade or business of the principal, the principal shall be liable to pay to any employee
employed in the execution of the work any compensation which he would have been
liable to pay if that employee had been immediately employed by him; and where
compensation is claimed from the principal, this Act shall apply as if references to the
principal were substituted for references to the employer except that the amount of
 compensation shall be calculated with reference to the wages of the employee under
the employer by whom he is immediately employed.
(2) Where the principal is liable to pay compensation under this section, he shall be
entitled to be indemnified by the contractor, or any other person from whom the
employee could have recovered compensation and where a contractor who is himself
a principal is liable to pay compensation or to indemnify a principal under this section
he shall be entitled to be indemnified by any person standing to him in the relation of
a contractor from whom the employee could have recovered compensation and all
questions as to the right to and the amount of any such indemnity shall, in default of
agreement, be settled by the Commissioner.
(3) Nothing in this section shall be construed as preventing a employee from
recovering compensation from the contractor instead of the principal.
(4) This section shall not apply in any case where the accident occurred elsewhere that
on, in or about the premises on which the principal has undertaken or usually
undertakes, as the case may be, to execute the work or which are otherwise under his
control or management.

13. Remedies of employer against stranger.-

Where an employee has recovered compensation in respect of any injury caused under
circumstances creating a legal liability of some person other than the person by whom
the compensation was paid to pay damages in respect thereof, the person by whom the
compensation was paid and any person who has been called on to pay an indemnity
under section 12 shall be entitled to be indemnified by the person so liable to pay
damages as aforesaid.
The Stranger is neither an employer nor an employee.. So not liable for tortious act..
Civil Law is applicable.

14. Insolvency of employer.-

 Where any employer has entered into a contract with any insurers in respect of any
liability under this Act to any employee,
 the same liabilities as if they were the employer, so, however, that the insurers shall
not be under any greater liability to the employee than they would have been under
the employer.
 16. Returns as to compensation.-
The State Government may, by notification in the Official Gazette, direct that every
person employing employees, or that any specified class of such persons, shall send at
such time and in such form and to such authority, as may be specified in the
notification, a correct return specifying the number of injuries in respect of which
compensation has been paid by the employer during the previous year and the amount
of such compensation together with such other particulars as to the compensation as
the State Government may direct.

17. Contracting out.- Any contract or agreement whether made before or after the
commencement of this Act, whereby a employee relinquishes any right of
compensation from the employer for personal injury arising out of or in the course of
the employment, shall be null and void in so far as it purports to remove or reduce the
liability of any person to pay compensation under this Act.
17A. Every employer shall immediately at the time of employment of an employee,
inform the employee of his rights to compensation under this Act, in writing as well
as through electronic means, in English or Hindi or in the official language of the area
of employment, as may be understood by the employee.

18A. Penalties.-
(1) Whoever–
(a) fails to maintain a notice-book which he is required to maintain under sub-section (3)
of section 10, or
(b) fails to send to the Commissioner a statement which he is required to send under sub-
section (1) of section 10A, or
(c) fails to send a report which he is required to send under section 10B, or
(d) fails to make a return which he is required to make under section 16 or
(e) fails to inform the employee of his rights to compensation as required under section
17A, shall be punishable with fine which shall not be less than fifty thousand rupees
but which may extend to one lakh rupees.
(2) No prosecution under this section shall be instituted except by or with the previous
sanction of a Commissioner, and no Court shall take cognizance of any offence under
this section, unless complaint thereof is made within six months of the date on which
the alleged commission of the offence came to the knowledge of the Commissioner.
 CHAPTER III – Commissioners

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 a employee) or as to the amount or duration of compensation (including any
question as to the nature or extent of disablement), the question shall, in default of
agreement, be settled by a Commissioner.
(2) No Civil Court shall have jurisdiction to settle, decide or deal with any question
which is by or under this Act required to be settled, decided or dealt with by a
Commissioner or to enforce any liability incurred under this Act.

20. Appointment of Commissioners.-

(1) The State Government may, by notification in the Official Gazette, appoint any
person who is or has been a member of a State Judicial Service for a period of not less
than five years or is or has been for not less than five years an advocate or a pleader or
is or has been a Gazetted officer for not less than five years having educational
qualifications and experience in personnel management, human resource development
and industrial relations] to be a Commissioner for employees' Compensation for such
area as may be specified in the notification.
(2) Where more than one Commissioner has been appointed for any area, the State
Government may, by general or special order, regulate the distribution of business
between them.
(3) Any Commissioner may, for the purpose of deciding any matter referred to him for
decision under this Act, choose one or more persons possessing special knowledge of
any matter relevant to the matter under inquiry to assist him in holding the inquiry.
(4) Every Commissioner shall be deemed to be a public servant within the meaning of the
Indian Penal Code (45 of 1860).

• 21. Venue of proceeding and transfer.-

(1) Where any matter under this Act is to be done by or before a Commissioner, the same
shall, subject to the provisions of this Act and to any rules made hereunder, be done
by or before the Commissioner for the area in which–
(a) the accident took place which resulted in the injury; or
(b) the employee or in case of his death, the dependant claiming the compensation
ordinarily resides; or
(c) the employer has his registered office: Provided that no matter shall be processed
before or by a Commissioner, other than the Commissioner having jurisdiction over
the area in which the accident took place, without his giving notice in the manner 15
prescribed by the Central Government to the Commissioner having jurisdiction over
the area and the State Government concerned:
Provided further that, where the employee, being the master of a ship or a seaman or
the captain or a member of the crew of an aircraft or a employee in a motor vehicle or
a company, meets with the accident outside India any such matter may be done by or
before a Commissioner for the area in which the owner or agent of the ship, aircraft or
motor vehicle resides or carries on business or the registered office of the company is
situate, as the case may be.
• (1A) If a Commissioner, other than the Commissioner with whom any money has
been deposited under section 8, proceeds with a matter under this Act, the former may
for the proper disposal of the matter call for transfer of any records or moneys
remaining with the latter and on receipt of such a request, he shall comply with the
same.
• (2) If a Commissioner is satisfied that any matter arising out of any proceedings
pending before him can be more conveniently dealt with by any other Commissioner,
whether in the same State or not, he may, subject to rules made under this Act, order
such matter to be transferred to such other Commissioner either for report or for
disposal, and, if he does so, shall forthwith transmit to such other Commissioner all
documents relevant for the decision of such matter and, where the matter is
transferred for disposal, shall also transmit in the prescribed manner any money
remaining in his hands or invested by him for the benefit of any party to the
proceedings: Provided that the Commissioner shall not, where any party to the
proceedings has appeared before him, make any order of transfer relating to the
distribution among dependants of a lump sum without giving such party an
opportunity of being heard:
• (3) The Commissioner to whom any matter is so transferred shall, subject to rules
made under this Act, inquire there into and, if the matter was transferred for report,
return his report thereon or, if the matter was transferred for disposal, continue the
proceedings as if they had originally commenced before him.
• (4) On receipt of a report from a Commissioner to whom any matter has been
transferred for report under sub-section (2), the Commissioner by whom it was
referred shall decide the matter referred in conformity with such report.
• (5) The State Government may transfer any matter from any Commissioner appointed
by it to any other Commissioner appointed by it.

• 22. Form of application.-

• (1) Where an accident occurs in respect of which liability to pay compensation under
this Act arises, a claim for such compensation may, subject to the provisions of this
Act, be made before the Commissioner.
• (1A) Subject to the provisions of sub-section (1), no application for the settlement of
any matter by Commissioner, other than an application by a dependant or dependants
for compensation, shall be made unless and until some question has arisen between
the parties in connection therewith which they have been unable to settle by
agreement.
• (2) An application to a Commissioner may be made in such form and shall be
accompanied by such fee, if any, as may be prescribed, and shall contain, in addition
to any particulars which may be prescribed, the following particulars namely:--
• (a) a concise statement of the circumstances in which the application is made and the
relief or order which the applicant claims;
• (b) in the case of a claim for compensation against an employer, the date of service of
notice of the accident on the employer and, if such notice has not been served or has
not been served in due time, the reason for such omission;
• (c) the names and addresses of the parties; and (d) except in the case of an application
by dependants for compensation a concise statement of the matters on which
agreement has and of those on which agreement has not been come to.
• (3) If the applicant is illiterate or for any other reason is unable to furnish the required
information in writing, the application shall, if the applicant so desires, be prepared
under the direction of the Commissioner.

• 22A. Power of Commissioner to require further deposit in cases of fatal accident.- (1)
Where any sum has been deposited by an employer as compensation payable in
respect of a employee whose injury has resulted in death, and in the opinion of the
Commissioner such sum is insufficient, the Commissioner may, by notice in writing
stating his reasons, call upon the employer to show cause why he should not make a
further deposit within such time as may be stated in the notice.
• (2) If the employer fails to show cause to the satisfaction of the Commissioner, the
Commissioner may make an award determining the total amount payable, and
requiring the employer to deposit the deficiency.
• 23. Powers and procedure of Commissioners.- The Commissioner shall have all the
powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the
purpose of taking evidence on oath (which such Commissioner is hereby empowered
to impose) and of enforcing the attendance of witnesses and compelling the
production of documents and material objects, and the Commissioner shall be deemed
to be a Civil Court for all the purposes of section 195 and of Chapter XXVI of the
Code of Criminal Procedure, 1973 (2 of 1974).

• 24. Appearance of parties.- Any appearance, application or act required to be made or

done by any person before or to a Commissioner (other than an appearance of a party
which is required for the purpose of his examination as a witness) may be made or
done on behalf of such person by a legal practitioner or by an official of an Insurance
Company or a registered Trade Union or by an Inspector appointed under sub-section
(1) of section 8 of the Factories Act, 1948 (63 of 1948), or under sub-section (1) of
section 5 of the Mines Act, 1952 (35 of 1952), or by any other officer specified by the
State Government in this behalf, authorised in writing by such person, or, with the
permission of the Commissioner, by any other person so authorised.

• 25. Method of recording evidence.- The Commissioner shall make a brief

memorandum of the substance of the evidence of every witness as the examination of
the witness proceeds, and such memorandum shall be written and signed by the
Commissioner with his own hand and shall form part of the record: Provided that, if
the Commissioner is prevented from making such memorandum, he shall record the
reason of his inability to do so and shall cause such memorandum to be made in
writing from his dictation and shall sign the same, and such memorandum shall form
part of the record: Provided further that the evidence of any medical witness shall be
taken down as nearly as may be word for word.
• 25A. Time limit for disposal of cases relating to compensation.- The Commissioner
shall dispose of the matter relating to compensation under this Act within a period of
three months from the date of reference and intimate the decision in respect thereof
within the said period to the employee.

26. Costs.- All costs, incidental to any proceedings before a Commissioner, shall,
subject to rules made under this Act, be in the discretion of the Commissioner.
 27. Power to submit cases.- A Commissioner may, if he thinks fit, submit any
question of law for the decision of the High Court and, if he does so, shall decide the
question in conformity with such decision.

28. Registration of agreements.-

(1) Where the amount of any lamp sum payable as compensation has been settled by
agreement whether by way of redemption of a half-monthly payment or otherwise, or
where any compensation has been so settled as being payable to a woman, or a person
under a legal 17 disability a memorandum thereof shall be sent by the employer to the
Commissioner, who shall, on being satisfied as to its genuineness, record the
memorandum in a register in the prescribed manner:
Provided that–
(a) no such memorandum shall be recorded before seven days after communication by
the Commissioner of notice to the parties concerned;
(b) Omitted by Act 5 of 1929;
(c) the Commissioner may at any time rectify the register;
(d) where it appears to the Commissioner that an agreement as to the payment of a lump
sum whether by way of redemption of a half-monthly payment or otherwise, or an
agreement as to the amount of compensation payable, to a woman or a person under a
legal disability ought not to be registered by reason of the inadequacy of the sum or
amount, or by reason of the agreement having been obtained by fraud or undue
influence or other improper means, he may refuse to record the memorandum of the
agreement and may make such order, including an order as to any sum already paid
under the agreement, as he thinks just in the circumstances.
(2) An agreement for the payment of compensation which has been registered under
sub-section (1) shall be enforceable under this Act notwithstanding anything
contained in the Indian Contract Act, 1872 (9 of 1872), or in any other law for the
time being in force.

29. Effect of failure to register agreement.-

Where a memorandum of any agreement the registration of which is required by
section 28, is not sent to the Commissioner as required by that section, the employer
shall be liable to pay the full amount of compensation which he is liable to pay under
the provisions of this Act, and notwithstanding anything contained in the proviso to
sub-section (1) of section 4, shall not, unless the Commissioner otherwise directs, be
entitled to deduct more than half of any amount paid to the *[employee] by way of
compensation whether under the agreement or otherwise.
 30. Appeals.-
(1) An appeal shall lie to the High Court from the following orders of a Commissioner,
namely:--
(a) an order awarding as compensation a lump sum whether by way of redemption of a
half-monthly payment or otherwise or disallowing a claim in full or in part for a lump
sum;
(aa) an order awarding interest or penalty under section 4A;
(b) an order refusing to allow redemption of a half-monthly payment;
(c) an order providing for the distribution of compensation among the dependants of a
deceased employee, or disallowing any claim of a person alleging himself to be such
dependant;
(d) an order allowing or disallowing any claim for the amount of an indemnity under
the provisions of sub-section (2) of section 12; or
(e) an order refusing to register a memorandum of agreement or registering the same
or providing for the registration of the same subject to conditions

31. Recovery.-
The Commissioner may recover as an arrear of land-revenue any amount payable by
any person under this Act, whether under an agreement for the payment of
compensation or otherwise, and the Commissioner shall be deemed to be a public
officer within the meaning of section 5 of the Revenue Recovery Act, 1890 (1 of
1890).