A Project report on case study of

“In the matter of deposit of compensation under section 8(1) of the Employees'
Compensation Act, 1923 and distribution thereof.”

Submitted to -

Department of Management Studies,

During the course of

Post Graduate Diploma Labour Law

By
Mr. Vikas D. Mane

Under the guidance of -

Prof. Mrs. Vidya Kadam

Introduction:
This study is based on a case study of Maharashtra State Electricity Distribution Co. Ltd. V/S
Parents of Late Mr. Digvijay Dilip Patil, Shri. Dilip Nemagonda Patil and Sou. Sangita Dilip
Patil, when the respondent, while on duty, due to accident member died. This research shall
cover the Employees Compensation Act 1923

Background (detail history behind the case):

In the matter of deposit of compensation under section 8(1) of the Employees' Compensation
Act, 1923 and distribution thereof. Appearance : None for the Depositor / Employer.
Advocate for the Applicants / Claimants :- Smt. S. K. Patil.

DISTRIBUTION ORDER (Delivered on 30th April, 2021) (Pronounced and dictated in open
court.)

1) The Depositor i.e. Maharashtra State Electricity Distribution Company Ltd, through its
Executive Engineer, Islampur Division, Takari Road, Islampur, Taluka Walava, District
Sangli 415 409, vide application (Exhibit C-2) dated 18th January, 2021, presented on
28.1.2021, presented cheque of Rs.6,12,531/- (Rupees Six Lakhs Twelve Thousand Five
Hundred and Thirty One) bearing No. 169700 dated 18.1.2021, drawn in favour of Labour
Court, Sangli towards compensation in respect of its deceased trainee employee Shri.
Digvijay Dilip Patil. However, Senior Clerk of this Court submitted note that the cheque
should be in the name of Commissioner for Employees' Compensation and Judge, Labour
Court Sangli. Therefore, after sanction, the Clerk of this Court vide letter Exhibit 0-1 dated
29.1.2021 bearing outward No. 134/2021 communicated the depositor to replace the said
cheque and further to submit the documents pertaining to names of the dependents of the
deceased, their addresses, age of the deceased employee and his wages. After service of this
letter as per Exhibit 0-2, the Depositor vide letter dated 5.2.2021

(Exhibit C-1) bearing outward no. 0650 submitted new cheque of Rs. 6,12,531/- bearing No.
185268, dated 4.2.2021 drawn in favour of Commissioner for Employees' Compensation and
Judge Labour Court Sangli and further communicated to return the earlier cheque and hand
over the same to its employee Shri. Pravin Prakash Balal. Accordingly, new cheque came to
be accepted and the earlier cheque came to be returned to the Depositor as per endorsement
made on this letter.

2) After realization of aforesaid cheque dated 4.2.2021, notice (Exhibit O-4) came to be
issued to the dependents namely Dilip Namgounda Patil and Sangita Dilip Patil and further to
the Depositor. The dependents were informed to file application for distribution and further
claims of any other dependents were called. Further Proclamation (Exhibit O-5) came to
issued and it was sent to the Sarpanch of Village Aitwade Budruk, Taluka Walava, District
Sangli and Talati of said Village with request to publish the said proclamation on their notice
board. Vide this proclamation claims of any other dependents were called. The proclamation,
also came to be published on the notice board of this Court. This proclamation came to be
served on the dependents vide acknowledgement receipts (Exhibit 0-6 and O-7 respectively)
and on Depositor vide Exhibit 0-8 and on the Sarpanch and Talati vide (Exhibit O-9 and O-10
respectively).
3) As per the proclamation-notice, the present applicants appeared and filed application
(Exhibit U-3) for distribution of the amount by recording that they are the parents of the
deceased employee. According to them the deceased employee was unmarried on the date of
death. He died on 8.2.2020. The amount of compensation comes to Rs.16,60,275/-. The
deposited amount is Rs.6,12,531/-. Therefore, they reserved their right to claim remaining
amount by approaching proper court and they submitted to disburse the deposited amount to
them. They have submitted that there is brother to the deceased. The said brother namely
Sudarshan Dilip Patil is 22 years old and is wage earner and therefore is not in need of any
amount from the deposited compensation. They have submitted that the Applicant No. 1 is
patient of diabetic and has heart disease. The Applicant No. 2 has unde gone heart cion.
Therefore, they need the deposited amount. They have prayed for Rs.3,00,000/- in cash and
remaining amount in fixed deposit.

4) After this application, notice (Exhibit O-11) came to be issued to the Depositor seeking
their say. This notice came to be served on the Depositor employer vide Exhibit O-12 and the
Depositor vide Exhibit C-3, through its Executive Engineer Shri. Santosh Baburao Karande,
filed through Pravin Prakash Balal, Senior Clerk, submitted Say to the application that their
employee Digvijay Dilip Patil, while working at Sagaon Sub Division, Shirala expired on
8.2.2020 and the deposited amount of Rs.6,12,531/- be paid to his dependent parents namely
Dilip Nemgounda Patil and Sangita Dlip Patil.

5) I have heard learned Advocate Smt. S. K. Patil for the Applicants.

6) The following points arise for my consideration for decision on the application. I am
recording my findings against these points, with reasons, as under:- POINTS FINDINGS 1)
Whether the deposited amount is in In the "negative". In accordance with the provisions of
the provisions of the Employees' proceedings bearing view of order in Compensation Act,
1923 ? If not, Application (ECA) No. 22-A notice under section required to Depositor? is B-
5/2021, no separate to the notice is necessary in the present matter. be issued 2) Whether are
In the "affirmative", the entitled to the deposited amount? Dependents 3) What order? As per
final order.

-: REASONS :-

7) Reasons in respect of Point No. 1: It is seen from the documents attached to Exhibit C-1
that the deceased Digvijay Dilip Patil was appointed as an Apprentice as per the provisions of
Apprentices Act, 1961, vide common order dated 17.10.2019 issued by Executive Engineer
Islampur (Shri. Santosh Karande). It is seen that the deceased Dilp was issued specific order
of appointment dated 14.10,2019 with outward no. 008943. It was for the period of one year.
It is seen from Model Contract of Apprenticeship Training for Major / Minor Apprentices,
placed on record, that the deceased was Electrician and his date of birth is 5.1.1998. It is seen
that the Depositor has deposited amount of Rs.6,12,531/- towards compensation. The Central
Government in exercise of its powers under sub-section (1-B) of section 4 of the Employees'
Compensation Act, 1923, vide notification dated 3.1.2020, bearing No. S.O. 71(E) has
declared Rs.15000/- as monthly wages for the purpose of calculation of compensation. The
date of death of the deceased is 8.2.2020. Therefore, the completed age of the deceased
employee preceding the date of death is 22 years. Therefore, the relevant factor is 221.37.
Therefore, in terms of provisions of section 4(1)(a), the amount of compensation is worked
out as under:- an amount equal to 50% of x relevant factor specified in the second column of
Schedule IV the monthly wages 7500 X 221.37 Therefore, the amount of compensation
comes to Rs.16,60,275/-. In terms of provisions of section 4, the amount compensation shall
be as per the provisions of this section. Therefore, the deposited amount of compensation is
not in accordance with the provisions of the Employees' Compensation Act, 1923. It is
insufficient. The remaining amount of compensation is Rs.10,47,744/-.

8) Having held that the deposited amount of compensation is insufficient, it is necessary to

consider whether notice under section 22-A, is necessary or not. In this respect, Learned
Advocate Smt. Patil submitted that the deposited amount is insufficient and therefore, the
Applicants have filed a separate proceeding bearing Application (ECA) No. B-5/2021 in this
Court on 7.4.2021 with request to issue notice under section 22-A for remaining amount and
they have also claimed interest and penalty. Therefore, Learned Advocate submitted that in
view of this, no separate notice is necessary in the present matter. It is seen that the
Applicants have produced on record true copy of the said application vide list Exhibit U-8. It
is seen that notice under section 22-A has been ordered in the said proceedings. And further
notice in respect of interest and penalty has also been ordered. Therefore, in view of this, I am
of the opinion that as the Applicants are pursuing their claim for remaining amount of
compensation and further for penalty and interest, no separate notice under section 22-A is
necessary in the present matter. Accordingly, I am recording my findings against this point.

9) Reasons in respect of point No. 2: The Applicant No. 1 is the father of the deceased. The
Applicant No. 2 is the mother of the deceased. They have been identified by Advocate Smt.
S. K. Patil. The Applicants have filed documents as to their identity. The Aadhar Card
number of the Applicant No. 1 - Dilip Nemgounda Patil is 2943 0312 2225 (Exhibit U-6/1)
and Aadhar Card number of the Applicant No. 2 - Sangita Dilip Patil is 5443 0404 3819
(Exhibit U-6/2). These documents have been attested by the Applicants. They have also
produced xerox copy their bank passbook (Exhibit U-6/3) in respect of their account in Bank
of India in Chikurde Branch. Except the Applicants nobody has lodged any claim to the
deposited amount. The Applicants have produced copy of Aadhar Card (Exhibit U-6/4) of
Sudarshan Dilip Patil bearing No. 9950 4313 2192. It is seen from this document that the date
of birth of said Sudarshan is 5.10.1999. Therefore, it is seen that he was major on the date of
death of the deceased. The Applicants have also produced xerox copy of their ration card
(Exhibit U-6/6) bearing No. 1430284 issued by Tahasildar Walava (Islampur).The Depositor
has no objection to the status of the Applicants as dependents of the deceased. That
considering the status of the applicants as parents of the deceased, they are dependents of the
deceased. Therefore, the Applicants are entitled to the deposited amount of compensation.
Accordingly, I am recording my finding against Point No. 2.

10) Accordingly, in answer to Point No. 31 pass following order:-

ORDER

1) The Application (Exhibit C-1) stands disposed of.

2) The application for distribution (Exhibit U-3) stands allowed.

3) The deposited amount of compensation of Rs.6,12,531/- (Rupees Six Lakhs Twelve

Thousand Five Hundred and Thirty-One) is hereby distributed the Applicants as
under :-

(a) An amount of Rs. 3,00,000/- (Rupees Three Lakhs) is allotted to the share of the
Applicant No. 1 - Shri. Dilip Nemgounda Patil. Out of this amount, an amount of
Rs.1,50,000/- (Rupees One Lakh Fifty Thousand) be paid to him in cash by transferring
the same in his valid bank account and remaining amount of Rs.1,50,000/- (Rupees One
Lakh Fifty Thousand) be invested in his name in any nationalized bank of his choice,
for a period of three years.

(b) The amount of Rs.3,12,531/- (Rupees Three Lakhs Twelve Thousand Five Hundred
and Thirty-One) is allotted to the share of the Applicant No. 2 - Smt. Sangita Dilip Patil.
Out of this amount, an amount of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand) be
paid to her in cash by transferring the same in her valid bank account and remaining
amount of Lakh Sixty-Two (Rupees Thousand Five Hundred and Thirty-One) be
Rs.1,62,531/- One invested in her name in any nationalized bank of her choice, for a
period of three years.

(c) The transfer of amounts be by legal and valid mode.

4) The deposits be in fixed deposit scheme fetching maximum / higher interest rate.

5) The fixed deposits should not be withdrawn before maturity or without permission of
this court. The said fixed deposits should not be used as security and no loan should be
given on the basis of the above fixed deposits.

6) The amount of interest in respect of fixed deposit made by this court in respect of the
deposited compensation, be paid to the Applicant No. 2 by transferring the same in her
valid bank account. In view of proceeding bearing Application (ECA) No. B-5/2021, no
notice under section 22-A is necessary to the Depositor Employer.

7) The copy of this order be sent to the Depositor and further, intimation of this order
be given to the Applicants.

8) The copy of this order be sent to the Depositor and further, intimation of this order
be given to the Applicants.

Laws included with sections in the case :

EMPLOYEES COMPENSATION ACT 1923

Introduction
Every employee needs a secured job and wants to get compensation for the expenses he has
incurred. This is a requirement that needs to be fulfilled by the company whether it is small
scale or large scale. After all, a company’s success depends on its employees. Therefore, the
protection of employees’ and their safety is a top priority of a company. This article is all
about how much compensation is given, under what conditions, who is entitled to claim
compensation and a lot more.
Main features of the Act 
The “Employees Compensation Act, 1923” is an Act to provide payment in the form of
compensation by the employers to the employees for any injuries they have suffered during
an accident. Earlier this Act was known as the Workmen Compensation Act, 1923. When the
employer is not liable to pay compensation-

1. If the injury does not end in the entire or partial disablement of the employee for a
period exceeding three days.
2. If the injury, not leading in death or permanent total disablement, is caused by an
accident which is directly attributable to: 

 The employee having at the time of the accident is under the influence of drink or
drugs; 
 The willful disobedience of the employee to an order if the rule is expressly given
or expressly framed, for the purpose of securing the safety of employees; or
 The willful removal or disregard by the employee of any safety guard or other
device which has been provided for the purpose of securing the safety of
employees.

Principles Governing Compensation

Who will be receiving the compensation on behalf of the deceased?

 A widow or a minor who is a legitimate son or unmarried daughter or a widowed

mother is entitled to compensation;
 If the family of the deceased is wholly dependant on the earnings of the employee
at the time of his death or a son or daughter who has attained the age of eighteen
years;
 A widower;
 A parent other than a widowed mother; 
 A minor illegitimate son, an unmarried illegitimate daughter or a daughter
legitimate or illegitimate or adopted if married and a minor or if widowed and a
minor; 
 A minor brother or an unmarried sister or a widowed sister if a minor; 
 A widowed daughter-in-law;
 A minor child of a predeceased son;
 A minor child of a predeceased daughter where no parent of the child is alive, or; 
 A paternal grandparent if no parent of the employee is alive.

Nature of Liability
Imagine what will happen if an employee who is working putting in great benefits gets to
know that he/she will not be getting any benefits. After all, people tend to do something to
get something in return. When the principle of vicarious liability is applied, the employer is
liable to pay compensation irrespective of his/her negligence. Employer anticipates it as
damages payable to the employees but it is actually a relief for them. An Employer becomes
liable when employees have sustained injuries by any accident or unavoidable situations
during the course of employment. The question arises: Will an employee who is a part-time
worker would still be entitled to the benefits of the Act? Yes, the employer will still get the
benefits of the Act.
Who may get the compensation? To what extent the employers are liable?
To be eligible for the Employees’ Compensation Act’s benefits there are some requirements
which need to be fulfilled:

1. You must be an employee of the Company or Organisation.

2. You must have been injured at the workplace or the job was as such that you have
been injured. Adjudication of Compensation
The adjudication is done by the commissioner in calculation of the amount of compensation.
The quantum of compensation is calculated from the date of the accident.

Self-inflicted Injury
If a worker inflicts an injury to himself or herself it is a self-inflicted injury. The injury may
be intentional or accidental but the employer is not liable for such injuries. There are some
types of jobs that have a high risk for self-inflicted injuries which include-

 Law enforcement
 Medical employees
 Farmers
 Teachers
 Salespeople

Contributory negligence
Employees owe a duty to their employers to carry out their work with reasonable care so as to
avoid accidents and injury. Employers are vicariously liable for the negligence of their
employees but are entitled to claim a contribution or indemnity from their negligent
employee in appropriate circumstances. So if there is negligence on the part of both employee
and the employer then the employer will be liable to pay compensation to the extent of his
own negligence, not of the employee. Hence, the compensation amount may reduce as the
employer will not be liable for the negligence of the employee.

Employees’ Compensation

Section 3: Employer’s liability for Compensation

Employer’s liability in case of occupational diseases

There are certain occupations which expose employees to particular diseases that are
inherent-

 Infra-red radiations;
  Skin diseases due to chemical or leather processing units;
 Hearing impairment caused by noise;
 Lung cancer caused by asbestos dust and Diseases due to effect of extreme
climatic

Provided that the employer shall not be liable:

(a) if any injury does not result in the total or partial disablement of the employee for a period
exceeding three days; 
(b) if any injury does not result in death or permanent total disablement caused by an accident
which is directly attributable to- 

 if the employee is under the influence of drink or drugs at that time, 

 the willful disobedience of the employee to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of employees, 
 the wilful removal by the employee of any safety guard or other devices which he
knew to have been provided for the purpose of securing the safety of employees.

Part A of Schedule III

If an employee contracts any disease that is mentioned in occupational diseases or the
employee is employed for a continuous period of six months (this does not include the
service period) and not less than that, the employer shall not be liable to pay the
compensation as the disease will be deemed to be injury and it shall be considered as out of
course of employment.

Part B of Schedule III

1. Diseases caused by phosphorus or the toxic substance present, all include exposure
to risk concerned.
2. Diseases caused by mercury or toxic substances found exposure to the risk
concerned.
3. Diseases caused by benzene or the toxic substances found which pose risk to the
concerned.
4. Diseases caused by nitro and amino toxic substances of benzene involve risk to the
concerned.
These diseases are considered occupational diseases, and they are deemed to be out of the
course of employment and therefore the employer will not be liable to pay the compensation.

Part C of Schedule III

If an employee contracts a disease that is mentioned as an occupational disease which is
specific to that employment, during a continuous period that is less than the period mentioned
under this part of Schedule 3 is known as occupational diseases. It will be deemed that the
disease has arisen out of and in the course of the employment, the contracting of such disease
will be deemed to be an injury by accident within the meaning of this Section: 
Pneumoconiosis is a disease caused by sclerogenic mineral dust (silicosis, anthracosilicosis,
asbestosis) and silico-tuberculosis if silicosis is an essential factor in causing the resultant
incapacity or death, such diseases are considered as occupational diseases.
Section 3(3)
The Central Government or the State Government gives a notification in the Official Gazette
which species the diseases which will be deemed to be occupational diseases under the
provisions of sub-section(2) and in the case of notification by the state government, these
diseases are declared by the Act.
Section 3(4)
No compensation will be payable to an employee unless the disease is directly attributable to
a specific injury that arises out of or in the course of employment.

Employment
Underemployment, an employee is one who works under the employer and has to work as per
the terms of the company or the employer. 

Personal injury
A personal injury can be compensated only in some circumstances. Injury sustained by the
employee must be a physical injury. Example- If a person is discriminated on the basis of:

 Age
 Sex
 Sexual Orientation
 Transsexual person
 If a person is having a disability
 Religion and belief
 Colour, Nationality 
 Pregnancy and Maternity leave
 Marriage or Civil Partnership

Accident 
The Act provides that compensation is provided to employees and their dependants only if
the injuries from the accident includes occupational diseases. The accident must occur in the
course of employment the Act also applies to railway servants and persons employed in any
such capacity as specified in Schedule 2 of the Employees Compensation Act. The people
employed in factories, mines, plantations, vehicles, construction works, and certain other
hazardous occupations come under Schedule 2.
A fatal accident is one where there is death or a high risk of loss of life of the employee. In
the case of a fatal accident, the employee might die or suffer severe disablements and
injuries. On the other hand, non-fatal accidents are those accidents that do not have a high
probability of death. In the case of non-fatal accidents, the employee or the workman might
suffer disabilities or any type of personal injury.
Both fatal and non-fatal accidents are covered by the Employees Compensation Policy,
provided such accidents result in the mentioned contingencies in the act. Fatal accidents are
taken as those which result in death, or permanent total disablement, permanent partial
disablement or fatal injuries. If any of these contingencies occur, the employees’
compensation policy would pay the claim faced by the company. In the case of non-fatal
accidents though, the covered contingencies might not occur. The employee or worker might
not face any type of disablement or injury from such accidents. If the employee or workman
suffers from a type of disablement and the disablement does not last for more than 3 days, the
claim would not be paid. As a result, in several employees’ compensation policies, non-fatal
accidents are usually not covered unless they cause a disablement which lasts for more than 3
days. 

Arising out of and in the course of employment

Three factors determine whether the act is arising out of or in the course of employment :

When the injury occurred, the employee must have been engaged in the business of the
employer. Also, he must not be doing something for his personal benefit. The accident must
occur where the employer was performing his duties.

 The injuries occurred because of the risk incidental to the duties of the work or
services or if the nature or condition of employment is inherent.

Compensation under Agreement 

A compensation agreement ensures that an individual will get paid for the services he or she
has provided to a company as an employee. A compensation agreement ensures that an
individual will get paid for the services he or she provides to a company as an employee.

The question of compensation and negligence of employee

The question of compensation and negligence of employees is explained above in
contributory negligence. When there is negligence on the part of the employer and employee,
the employer is liable to pay compensation only to the extent of his negligence. He will not
be liable to pay the full amount of compensation. So in the case of negligence of the
employee, he will get only a part of compensation.

Alternative Remedy under Section 3(5)

Any right to compensation cannot be conferred by an employee in respect of injuries, if he
has instituted a suit for damages in a civil court, in respect of any injury against any
employer. No suit for damages shall be maintainable by an employee in any court of law.

Section 4: Amount of compensation

Where death results from the injury-
In case the employee dies, an amount equal to fifty percent of the monthly wages multiplied
by a factor as per given in the Schedule 4 of the act or rupees eighty thousand is given
whichever is more.
Where permanent total disablement results from the injury-
In case the employee has total disablement the amount given is sixty percent or rupees ninety
thousand whichever is more. 
Where permanent partial disablement results from injury-
In the case of permanent partial disablement, the compensation provided is equal to disability
as sixty percent or rupees ninety thousand.

Liability of Insurer
The liability of the insurer is determined on the basis of the wages of the employee. The
amount of wages is covered under the insurance policy. The company will be liable to
indemnify only that portion of the amount which is under wages.
Causal connection between disease and occupation
The amount of compensation is paid when the insurer certifies that the injury is the result of
an occupational disease.

Application of law of pleadings

An application for pleadings can be filed by the employee under the amount of compensation
when he/she thinks that the amount that is decided is not appropriate with respect to the
injury incurred.

Section 4-A: Compensation to be paid when due and penalty for default

 When the employer does not accept liability for compensation to the extent
claimed, he shall be bound to make a payment may be provisional and such
payment shall be deposited to the employee or the commissioner. 
 The commissioner can direct the employer to pay interest in addition to the amount
at the rate of twelve percent per annum. The rate of interest can also increase
which may be specified by the Central Government.

Section 5: Method of calculating Wages

When the employer has been giving service to the employer during a continuous period of
not less than twelve months preceding the accident, and when the employer is liable to pay
compensation, the employee will be liable one-twelfth of the total wages. The employer is
required to pay the compensation which is due for payment to employees in the last twelve
months of that period.

Section 6: Review

1. Any half monthly payment can be reviewed by the commissioner under this act if
there is an agreement between the parties or if there is an order given by the
commissioner. A certificate of a qualified medical practitioner will be
accompanied that there is a change in the condition of the employee subject to the
rules and regulations under the Act.
2. Any half monthly payment may be reviewed, can be continued, increased,
decreased or ended under the act or if the accident is found which resulted in
permanent disablement. Such an employee may get less amount because he had
already received by way of half monthly payments.

Section 7: Communication of Payments

Commutation of half- monthly payments- Any right to receive half- monthly payment
agreement between the parties is commutation of payments. If the parties do not agree and
the payment continues for not less than six months then on the application of either party, the
Commissioner will redeem the payment of a lump sum amount which was agreed by the
parties.

Section 8: Distribution of Compensation

Rights of heirs of dependents

1. Compensation will not be provided to the employee whose injury has resulted in
death and lump sum payment will also be not provided who is under a legal
disability. The compensation may be deposited to the commissioner and a direct
payment will not be allowed by the employer to the employee.
 2. In the case of a deceased employee, an employer can make payment to any
dependant advances. The compensation will amount to equal to three months’
wages of the employee and the amount shall not exceed the compensation payable
to the dependant. If the amount exceeds, it may be deducted by the commissioner
from the compensation and repaid to the employer.
3. An amount not less than ten rupees which is payable may be deposited with the
commissioner on behalf of that person.
4. The receipt of the commissioner will be sufficient discharge of the amount if any
compensation is deposited with him.
5. When any compensation is deposited with the commissioner and he is payable to
any person, he may if the person to whom the compensation is to be payable is not
a woman or a person with a legal disability then he may pay the money to the
person who is entitled to get the compensation.
6. When any lump sum amount is deposited with the commissioner and he is payable
to a woman or a person who is legally disabled, such amount can be invested for
the benefit of any other woman or a person with a disability. The commissioner
may direct the amount in such cases.

Section 9: Compensation not to be assigned, attached or charged

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 workman
by operation of law, nor shall any claim be set off against the same.

Section 10: Notice and claims of the accident

A claim for compensation cannot be entertained by a commissioner unless the notice of the
accident is given in a certain manner.

Condonation of delay 
It means that if the employee has delayed in claiming for the compensation it is said to be
condoned. 

Section 10A: Power to acquire statements from employers regarding fatal accidents 
When a commissioner receives information about the death of an employee, because of an
accident that is arising out of or in the course of employment, he can send a registered post or
a notice to the employer of the employee, to submit a notice within thirty days of service. The
statement or notice shall be in a prescribed form mentioning the circumstances under which
the death took place. Also stating that whether the employer is liable or not to deposit
compensation on the death of the employee.

Section 10B: Reports of fatal accidents and serious bodily injuries 

A notice is required to be given to any authority when any law is in force for the time being,
if any accident occurs on the premises of the employer which results in the death of employee
or serious bodily injury the person on behalf of employer is required to give a notice within
seven days of the death. This person shall send a report to the commissioner giving details of
the death or serious bodily injury. It will be done only when it is provided by the state
government that instead of sending the report to the commissioner it is sent to another
authority to whom a notice can be given. “Serious bodily injury” means injury to a limb or
permanent loss of sight or hearing or fracture of limbs or the insured person is absent from
work for more than twenty days.

Section 11: Medical Examination

When an employee brings to the notice that he has met with an accident, before the expiry of
three days he will be examined free of charge by a qualified medical practitioner.
If the employee refuses to submit himself or herself for examination or in any way obstructs
the same, his right to compensation shall be suspended.
If the employer voluntarily leaves without having been examined in the place where he is
employed, his right to compensation shall be suspended until he returns and offers himself for
examination.

Section 12: Contracting

Trade or business of the principal

When a person(principal) is in the course of some business or trade, with any other
person(contractor) for the execution of any work, the principal will be liable to pay the
amount to the employee who has been employed in the business. The principal is liable
because compensation has to be claimed from the principal and the amount of wages will be
calculated by the employer.
When the principal will be liable to pay he will be indemnified by the contractor or any other
person from whom the employee can claim compensation. The agreement between the
principal and the contractor about the right amount and indemnity will be settled by the
commissioner.

On, in or about the premises

If the accident occurred at a different place that is either on the premises of the workplace or
any other place, the employee will not be able to recover compensation from the employer.
Other than this no other constraint is there and employees can recover compensation from the
contractor instead of principal. 

Section 13: Remedies of employer against a stranger

When an employee recovers compensation as he suffered any injury and creates a legal
liability of some other person other than the person by whom the compensation was paid, the
other person will be entitled to be indemnified by the person who is liable to pay damages.

Section 14: Insolvency of employer

1. When an employer enters into a contract with any insurer in respect of any liability
to an employee, and if the employer becomes insolvent or makes a composition or
scheme or arrangement with his creditors in this event the company is insolvent.
The employee can recover the amount of compensation if the company is winding
up and it is the case of insolvency.
2. If in any case in the case of insolvency, the contract of the employer with the
insurer is void or voidable due to any reason such as non compliance on the part of
the employer, if the contract is not void or voidable the insurer may be entitled to
prove in the proceeding or at the time of liquidation for the amount to be paid to
the employee.
 3. In case the liability of the insurer to the employee is less than the liability of the
employer to the employee, the employee may prove for the balance amount of the
compensation in the insolvency proceedings or at the time of liquidation.
4. When the compensation is a half monthly payment, the amount due for the said
purpose will be taken in a lump sum amount. The amount payable will be half
monthly payment, if it be could be redeemable it will be proof.
5. The insolvency of the employer shall not be applied where a company has wound
up voluntarily merely for purposes of reconstruction of the company or
amalgamation with another company.

Section 14-A: Compensation to be first charge on assets transferred by Employer

When an employer transfers his assets or property before any amount is due to him in respect
of any compensation, and the liability accrued is now before the date in law it is the first
charge on that part of the assets or property so transferred as it consists of immovable
property.

Section 15: Special provisions relating to Masters and Seamen

When the person injured in the aircraft is the master of the ship and he is the employer, but
the accident happened and commenced on the ship, it is not necessary for the seaman to give
any notice of the accident for compensation for the injuries suffered.
In such cases the death of the seaman or the master, the claim for compensation may be made
within one year without the notice after the news of death is received by the claimant. Also if
the ship is deemed to have been lost, within eighteen months of the date on which the ship
was or is deemed to have been lost.

Section 15-A: Special provisions relating to captains and other members of the crew of
aircrafts
If the captain of the aircraft is serving and he is the employer but an accident occurs, any
crew member or the captain it is not necessary for any crew member to give notice of the
accident.
In such cases the death of the seaman or the master, the claim for compensation may be made
within one year without the notice after the news of death is received by the claimant.Also if
the ship is deemed to have been lost, within eighteen months of the date on which the ship
was or is deemed to have been lost.
When an injured captain or any other crew member of the aircraft or the ship is discharged
from any depositions or testimony of a witness is taken by a judge or magistrate the central
government or any state government may enforce any proceedings on the basis that the
evidence is admissible:

 if the deposition or testimony of witness is authenticated by the signature of the

Judge, Magistrate, or consular officer before it is made.
 if the person who is accused or he/she is the defendant is having the opportunity by
himself or his agent to cross-examine the witness.
 if the deposition or the testimony of the witness is or was made in the course of a
criminal proceeding and the proceeding was made in the presence of the person
who is accused. 

Section 15-B: Special provisions relating to employees abroad of companies and motor
vehicles
The special provision related to employees abroad and motor vehicles will be applied to the
persons or employees who are recruited by the companies registered in India and under the
Motor Vehicles Act, 1998.

 The notice of the accident and the compensation claimed may be served on the
agent of the company. Or the notice may be served on the local agent or the owner
of the motor vehicle in the country of the accident.
 In case the employee dies, the provisions made in this section 15-B shall apply.
The claim for compensation may be made within one year after the news of the
death of the claimant has been received. 
 Therefore, in case of any compensation claimed, the commissioner shall entertain
the claim. Although as provided in the section is not much preferred in due time.

Section 16: Returns as to Compensation

The state government can direct any person who is employing an employee at a specified
class, specified time and authority that is specified in the notification of official gazette. The
state government may also direct to specify the number of injuries in respect of compensation
and the amount that has been paid by the employer during the previous year as compensation.

Section 17: Contracting out

If an employee has made a contract or agreement before or after the commencement of the
act, and if he voluntary ceases the right to compensation from the employer it shall be
considered null and void. The employee cannot seek compensation for any personal injury
arising out of or in the course of employment and the liability will be reduced of any person
who is entitled to pay compensation under this Act.

Section 18-A: Penalties

Penalties Arise when whoever-

 Fails in maintaining a book that is required to maintain under sub Section

3 of Section 10.
 The person fails to make a report that is needed to send under section 10B.
 Fails to inform the employee of his rights to claim compensation needed
under Section 17A. He or she will be punished with fine which is not less than
fifty thousand rupees that can be extended to one lakh rupees.
 No prosecution can take place under this section.

Commissioners

Section 19: Reference to Commissioner

The question arises about the liability of any person under the act, who will pay the
compensation. A question arises about the person who is injured or not or how much amount
is to be given or the duration of the compensation. Also about the extent of the disability the
person who is suffering and will get compensation. All such issues are to be resolved by the
commissioner. 

Jurisdiction of Civil Court

The Jurisdiction of the civil court does not have the authority to settle, decide or deal with
questions that are not required to be dealt with under the act if it dealt by the commissioner.

Section 20: Appointment of Commissioner

Commissioner means a commissioner for employee compensation appointed under Section
20. The state government or the central government may appoint any person to be
commissioner for workmen’s or employees’ compensation act in some specified areas. Every
commissioner is identified as a public servant in the Indian Penal Code.

1. If the state government appoints more than one commissioner for any area, a
specific order may regulate the business.
2. Any commissioner may choose a person or more persons who possess knowledge
and assist him in holding the inquiry.

Section 21: Venue of proceedings and transfer

The provisions under the act will be subject to the commissioner as well if there is a matter
related to rules and regulations. The rules made under the act before the commissioner for the
area where-

 The accident happened that resulted in the injury.

 If the employee dies and if the dependent claims compensation it will reside.
 Employer’s office is registered.
No matter should be processed before a commissioner other than the commissioner who has
jurisdiction in the area where the accident happened. It shall not happen without giving notice
in the manner prescribed.
If the employee is the mater of the ship or seaman or a captain or crew member of the aircraft
or employee in a motor vehicle, meets with an accident outside India, then such matter shall
be done by the commissioner.

Section 22: Form of Application

No other application for any matter of the commissioner for dependants should be made for
compensation. Until and unless some question arises between the parties there is no
settlement as per agreement.

Liability of insurer 
The insurance company and the insurer are the same and it provides the insurance policies to
the employer. The employer takes the insurance for the employee for the risks associated
with their work. So when there is an accident and injury occurs the employer claims the
insurance for the employee. In this case, the employer is the insured.

Defective application 
An application to a commissioner can be made and it will be accompanied by a fee as
prescribed. If the applicant is illiterate or because of any other reason is not able to furnish
information in written form then the application shall be in the direction of the commissioner.

Section 22-A 
The power of commissioner is required to further deposit in the cases which talks about fatal
accidents-
When any amount is deposited by an employer as compensation payable in respect of an
employee whose injuries resulted in his death, and the commissioner thinks that amount or
sum was not sufficient, he may state a notice in writing giving reasons, he may call upon the
employer to show why he could not make a further deposit within such time as stated in the
notice.
If the employer fails to satisfy the Commissioner, the Commissioner may make an award
determining the total amount to be paid, and requires the employer to deposit the deficient
amount.

Section 23: Powers and Procedure of Commissioners

He has the power to award compensation more than what is claimed by the employee if the
facts warrant the award..

Section 24: Appearance of Parties

A person may appear or become a witness for the purpose of examination, an application or
act is required to be made by a person to a commission. It may be done on behalf of a legal
practitioner or an official of the insurance company or registered trade union or an inspector
appointed under Section 8 of the Factories Act, 1948, or any other officer which is specified
by the state government with the permission of the commissioner or a person who is
authorised to do so.

Section 25: Method of Recording Evidence

The commissioner makes a brief written message(memorandum) of the evidence of every
witness as the examination process proceeds. The memorandum should be in written form
and duly signed by the commissioner. The form so signed by the commissioner must be in his
own handwriting and it will be a part of the record.

Section 25A: Time limit for disposal of cases relating to compensation

The Commissioner can 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.

Section 26: Cost

All costs, incidental to any proceedings before a Commissioner, shall, subject to rules made
under this Act, be in the discretion of the Commissioner.

Section 27: Power to submit cases

A commissioner can submit a Question related to law so that the High Court can decide the
compliance with the standards or rules if the High Court wants to do so.

Section 28: Registration of agreements

A memorandum should be sent by the employer to the commissioner when a lump sum
amount is payable as compensation due by the agreement either half monthly payment or
payment being payable to a woman or a person with a legal disability. The memorandum
must be genuine and should be registered in the prescribed manner.
However, a memorandum cannot be recorded before seven days after the communication has
taken place between the commissioner and the concerned parties.

Section 29: Effect of failure to register agreement

The employer will be liable to pay the full amount of compensation if the registration of the
agreement of memorandum is not sent to the commissioner as required under the section. The
employer will pay the compensation as he is liable to pay under the provisions of the Act
(Section 4). Until the commissioner directs to deduct more than half of the amount to be paid
to the employee as compensation.

Section 30: Appeals

An appeal may lie to the High Court by following the orders of the commissioner.

 A lump sum amount as compensation is awarded as an order, and redemption of

half the monthly payment is away.
 An order may refuse to allow gain of a half monthly compensation.
 Distribution of compensation by order among the family members of the deceased,
or disallowing of any claim of a person.

Substantial Question of Law

If there is difficulty in applying the facts to the law it will not amount to a substantial
question of law.
The period of limitation under section 30 is sixty days if a person makes an appeal. An appeal
lies against the order of commissioner who will compensate only when a substantial question
of law. The scope in section 30 of the Act for appealing against the order that is passed by the
commissioner is very limited. An appeal shall not lie against any order unless a substantial
question of law.

When does an appeal lies?

An appeal lies when there is a judgment passed by the court but the employee or his
dependants are not satisfied and then they appeal.

Effect of death of claimant 

If the injury of the employee results in his death, the employer shall give compensation in
addition to the compensation that is deposited with the commissioner. A sum of five thousand
rupees and not less than that will be given to the eldest surviving dependant of the employee. 

Third provison to Section 30(1)

Provided further that no appeal by an employer under clause (a) shall lie unless the
memorandum of appeal is accompanied by a certificate by the Commissioner to the effect
that the appellant has deposited with him the amount payable under the order appealed
against.

Review, Revision, Remand, and Write

If an employee is not satisfied with the decision of the court regarding the compensation, he
can appeal for review by the court. Review can be made only after the decree is passed by the
court or an order is made. If there is an error in the decision by the court appeal can be made
for revision which can be done only by the High Court. An employee can writ if he has been
wrongly remanded. Remand means In custody of the court.

Appeal not accompanied with certificate by the Commissioner under Provision (3)
If the appeal is not accompanied by a certificate by the commissioner that is payable and
deposited with him then no appeal by the employer under clause (a) shall lie against the law.
The period of limitation under the section for the appeal will be sixty days.

Condonation of delay 
If the appeal by the employee is delayed it is known as condonation of delay. An appeal is
filed when the employee is not satisfied by the decision of the court and want to appeal again
for the decision. So when the employee gets delayed in appealing the suit it will be condoned.

Section 30-A: Withholding of certain payments pending decisions of appeal

The commissioner may withhold the payment of any amount which is deposited with him
when an employer appeals under section 30 and it is directed by the High Court.

Section 31: Recovery

The commissioner can recover any amount payable by any person as arrears of land revenue.
The commissioner will be deemed to be a public officer if there is an agreement for the
payment of the compensation under the meaning of section 5 of the Revenue Act, 1890.
Rules

Section 32: Power of the State Government to make rules

The state government has the power to make rules and regulations for the purpose of this act.
These rules provide all the matters without prejudice namely:

 The state government prescribes certain intervals where an application may be

made under Section 6 is subject to conditions when not accompanied by a medical
certificate by a qualified practitioner.
 The state government prescribes some intervals where an employee is required to
submit himself to undergo certain medical examination of section 11.
 The state government prescribes a procedure that needs to be followed by the
commissioners. It is required when there is disposal of cases under the act and by
the parties.
 The state government regulates the transfer of matters. It also regulates cases from
one commissioner to another and also transfer of money in some cases.

Section 34: Publication of rules

The power to make rules in Section 32 will be subject to the conditions of the rules which are
made after previous publication. Rules so published in the Official Gazette will have an effect
in the Act.
Section 35: Rules to give effect to arrangements with other countries for the transfer of
money paid as compensation
The Central Government may make rules for transfer money to any foreign country which is
deposited with a commissioner under the act by a notification. A person who resides in a
foreign country or is about to reside may be awarded the money deposited under the law
relating to employees. The amount related to fatal accidents shall not be transferred without
the consent of the employer under the commissioner.

Section 36: Rules made by the Central Government to be laid before Parliament 
Every rule made under the act by the Central government is laid before each house of
parliament while it is in session for thirty days. It may be done in one session or in two
sessions before the expiry of the session. The houses may make any modifications in the rule
or the houses may agree that the rule should not be made.

Conclusion 
The Act is basically made for the employees so that when they incur expenses for the injury
suffered during an accident, they can get compensation from the employers. The basic rule of
Vicarious liability applies in the act. The employer is the master and the employee is the
servant. The employee gets compensation only when the injury takes place in the course of
employment and in the workplace.