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N. Pochiah And Co. Hyderabad v. Mulle Nagabhushanam .
Factual and Procedural Background
These two civil miscellaneous appeals challenge a common order dated 28-12-1961 of the Commissioner for Workmen's Compensation, Andhra Pradesh (Hyderabad) in Workmen's Compensation Cases Nos. 305/60 and 110/61.
The workman, Mulls Nagabhushanam, filed two claims (both dated 16-12-1960) under the Workmen's Compensation Act, 1923 against N. Pochaiah and N. Lakshminarayana. The first petition sought compensation for the loss of the index finger of the right hand in an accident occurring in June 1957; the second petition sought compensation for loss of the left arm below the elbow in an accident on 9 June 1958. Both petitions were filed after the two-year limitation prescribed by Section 10(1) of the Act.
The Commissioner condoned the delay, found that the employer liable before him was N. Pochaiah and Co., held that both injuries arose out of and in the course of employment, assessed total loss of earning capacity at 56 2/3% under Section 4(1)(c)(i) of Schedule I, and awarded Rs. 1,428 plus Rs. 24 towards expenses.
Aggrieved, the employer appealed to the High Court. A procedural objection by the court office required two appeals because the Commissioner's order related to two injuries on different dates; the employer's advocate filed two appeals accordingly. The High Court considered the appellants' contentions and ultimately set aside the Commissioner's common order and remanded both petitions for fresh disposal.
Legal Issues Presented
- Whether the Commissioner was justified in condoning the delay in making the two claims under Section 10(1) of the Workmen's Compensation Act, 1923 (i.e., whether there was "sufficient cause").
- Whether the Commissioner ought to have passed two separate awards (one for each injury resulting from two different accidents) rather than a single lump-sum award.
- Whether the Commissioner's conclusion that N. Pochaiah & Co. were the proprietor(s) liable to pay compensation was erroneous.
Arguments of the Parties
Appellants' Arguments
- The Commissioner was not justified in condoning the delay in making the two claims (i.e., the findings did not amount to "sufficient cause").
- The Commissioner should have passed two separate awards in respect of each injury arising from two different accidents; a single lump-sum award is unsustainable.
- The Commissioner's conclusion that the first respondent, N. Pochaiah & Co., was the proprietor and liable to pay compensation is erroneous.
- The appellants' counsel relied on the decision in Halemabi v. Ardeshir, AIR 1933 Bom 197, to argue that whether facts found by the Commissioner constitute reasonable cause for delay is a question of law open to review by the High Court.
The opinion does not contain a detailed account of the respondent's (workman's) separate legal arguments beyond the facts as found by the Commissioner and the relief sought in the petitions.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Halemabi v. Ardeshir, AIR 1933 Bom 197 | Authority for the proposition that whether facts found by the Commissioner under the Workmen's Compensation Act constitute reasonable cause for failure to give notice or to claim within the statutory period is a question of law and therefore reviewable by the High Court. | The court accepted counsel's reliance on the case as authorizing review of the Commissioner's condonation decision, examined the reasons given by the Commissioner, found those reasons (particularly employer's promise to pay and the workman's continued employment and higher wages) plausible, and concluded that the Commissioner had not erred in condoning the delay. |
Court's Reasoning and Analysis
The court considered the appellants' contentions seriatim and applied the Act and the Andhra Pradesh rules together with the cited precedent.
1. On condonation of delay:
- The court set out the reasons given by the Commissioner for condoning the delay: (1) the employer promised to pay compensation but did not do so; (2) the workman was not aware of the situation of the Labour Office and hence could not make the application in time; and (3) the workman continued in employment and drew wages (even higher wages) and therefore did not think of commencing legal proceedings.
- Relying on Halemabi v. Ardeshir, the court recognized that the issue of whether facts constitute sufficient cause is reviewable by the High Court. The court examined the Commissioner's reasons and accepted their truth, observing that grounds (1) and (3) were very plausible in the social and factual context: an illiterate or less rights-conscious workman may rely on an employer's promise, and ongoing employment and payment may reasonably dissuade litigation.
- Applying Section 10(1) of the Act and the third proviso to that subsection, the court concluded that the Commissioner was justified in finding "sufficient cause" and in condoning the delay. The objection to condonation was therefore overruled.
2. On the form of the award (single lump-sum vs. separate awards):
- The court analysed the statutory framework: the Act's object to provide compensation for injury by accident; definitions in Section 2(g) and 2(i) referencing reduction of earning capacity "in any employment in which he was engaged at the time of the accident"; Section 3(1) making the employer liable for personal injury caused by an accident arising out of and in the course of employment; and the limitation and procedure provisions in Section 10(1), Section 11 (referred to in the opinion as "Section 1.1"), and Section 22(2) requiring particulars including the date of the accident and date of service of notice.
- The court reasoned that each accident gives rise to a distinct cause of action: the cause of action accrues on the happening of each accident, and the two claims, although filed on the same date, arose from different accidents on different dates.
- The court examined Rule 40 of the Andhra Pradesh Rules framed under the Act, which permits simultaneous hearing only where two or more cases arise out of the same accident and a common issue is involved. The court emphasized that hearing separately is the rule and simultaneous hearing is an exception limited to cases arising from the same accident.
- Because the two claims in this matter arose out of different accidents, Rule 40 could not lawfully be invoked. Even if there were common issues (for example, identity of proprietor), that did not justify treating different-accident cases as the "same accident" for the purpose of consolidating evidence and issuing a single lump-sum award. The Commissioner ought to have recorded evidence separately and framed issues and findings for each petition individually.
- Therefore, the single lump-sum award based on the procedure actually followed by the Commissioner was unsustainable and had to be set aside.
3. On the identity of the proprietor liable:
- The court found that, given its ruling that the Commissioner's procedure and single award were improper, it was unnecessary to express any opinion on whether N. Pochaiah & Co. or N. Lakshminarayana was the proprietor at the material time.
- The court directed that the question of proprietorship should be gone into afresh by the Commissioner on whatever evidence the parties place before him.
4. Relief and procedural directions:
- The appeals were allowed; the Commissioner's common order was set aside; both petitions were remanded for fresh disposal in accordance with law.
- The Commissioner was ordered to hold separate enquiries for each petition, to record evidence separately, to frame issues for each petition, and to give findings in accordance with the Act and the Rules.
- Both parties were to be given opportunities to adduce oral and documentary evidence. The court noted that a third-party security had already been furnished and directed the Commissioner to consider whether that security should continue until final disposal.
- The court made no order as to costs.
Holding and Implications
APPEALS ALLOWED; THE COMMISSIONER'S COMMON ORDER SET ASIDE AND BOTH PETITIONS REMANDED FOR FRESH DISPOSAL.
Direct consequences for the parties:
- The Commissioner's award of a lump-sum for two injuries was set aside on procedural grounds (improper consolidation of claims arising from different accidents).
- Each petition must now be heard and decided separately: the Commissioner must record evidence separately, frame separate issues, and give separate findings for each accident/injury.
- The substantive question of which party was the proprietor liable to pay compensation was not decided and must be resolved by the Commissioner on fresh evidence.
- Both parties will have the opportunity to present oral and documentary evidence; the Commissioner should consider continuation of the previously furnished third-party security; no costs were ordered by the court.
The opinion did not elaborate any broader legal consequences or establish a new precedent beyond the application of existing principles (including the cited authority) to the facts and procedure in this case; its primary effect is to require separate proceedings and findings in respect of each accident.
1.These two civil miscellaneous appeals are against a common order dated 28-12-1961 of the Commissioner for Workmen's Compensation, Andhra Pradesh Hyderabad in W. C. Cases Nos. 305/60 and 110/61.
2. The short facts necessary for disposal of these appeals may be stated:--The petitioner, Mulls Nagabhushanam (hereinafter called the workman) made a claim for compensation under the Workmen's Compensation Act, 1923 (hereinafter called the Act) against N. Pochaiah and N. Lakshminarayana. In the first petition, he claimed compensation for the loss of the index finger of the right hand as a result of an accident, which took place in June 1957. In the second petition, he claimed compensation for the loss of the left arm below the elbow on 9th June, 1958 as a result of another accident, both the accidents having arisen out of and in the course of the employment with the respondents therein. Both the petitions were filed on 16-12-1960. Under Section 10(1) of the Act, an application claiming compensation must be made within two years of the occurrence of the accident, and as such both these applications were beyond time. The Commissioner for Workmen's Compensation, however, condoned the delay in making those applications, and disposed of the claims on their merits. He found that the employer of the Workman (Mr. Nagabhushanam) was the first respondent before him viz. N. Pochaiah and Co. He also found that the two injuries were sustained by the workman out of and in the course of his employment with the respondents. On those findings, he held that the total loss of the earning capacity sustained by the workman under Section 4(1)(c)(i) of Schedule I to the Act was 56-2/3 per cent of the total earning capacity and determined the amount of compensation at Rs. 1,428/- and passed an order directing the respondents to pay that amount and a further sum of Rs. 24 towards expenses.
3. Aggrieved by the order of the Commissioner the employer, N. Pochiah and Co., filed one appeal to this Court. The office took the objection that, since the order of the Commissioner related to two injuries resulting from two accidents, which took place on two different dates, two appeals must be filed. The Advocate for the appellants was confronted with a problem, as the order of the Commr. was a comprehensive one and could not be read as two awards in a common order, and the Commissioner, had not even apportioned how much of the compensation is to be paid for the loss of the index finger of the right hand, and how much for the loss of left arm. However the advocate complied with the objection of the office, and filed two appeals, which are numbered as stated above.
4. The arguments of the learned counsel for the appellants are as follows;--
1. The Commissioner was not justified, in condoning the delay in making the two claims;
2. The Commissioner ought to have passed two separate awards in respect of each of the injuries; and
3. The conclusion of the Commissioner that the 1st respondent, N. Pochaiah and Co., was the proprietor and liable to pay compensation is erroneous.
5. I will consider them seriatim. Sri Shiv Shankar, the learned counsel for the appellants placed reliance on the decision in Halemabi v. Ardeshir, AIR 1933 Bom 197 and contended that the question whether the facts found by the Commissioner tinder the Workmen's Compensation Act constitute reasonable cause for failure of the injured workman to give notice of the accident, or to claim compensation within the statutory period is a question of law, and that the Commr.'s decision on the question is open to review by the High Court. He, therefore, invited me to consider whether, in the circumstances, the delay could be condoned. The reasons given by the Commissioner in his order dated 10-7-1961 for condoning the delay are stated as follows:--
1. That the employer was promising the workman to pay the compensation, and ultimately he did not pay;
2. That the workman was not aware of the situation of the Labour Office and hence, could not make the application in time; and
3. that the workman continued to be in the employment of the respondents and continued to draw wages even after the happening of the two accidents, arid he was paid more that what he was getting during the four years previously, and hence he could not think of starting legal proceedings against the employer.
6. The Commissioner accepted the truth of these grounds and condoned the delay. At any rate, grounds Nos. 1 and 3 are very plausible. A workman in our country is not so literate and conscious of his rights as to rush to the Labour Commissioner for enforcement of his lights, especially when the employer was promising to settle his claim. It may be remembered that the first injury was not a serious one. It was only a loss of the index finger of the right hand. There is also the further fact that he continued to be in service thereafter, till lie was the victim of the second accident, which resulted in the loss of the left arm. Even thereafter, he continued under the same employer and he was paid, in spite of his physical disabilities, more wages than what he was getting previously. In those circumstance, it is very probable that he would not have thought of starting legal proceedings, implicitly believing that his employer would also settle his claim. It is only when he was disillusioned that he filed his application under Section 10 of the Act.
7. According to Section 10(1), no claim for compensation shall be entertained by a Commissioner unless notice of the accident has been given in the manner provided, and unless the claim is preferred within two years of the occurrence of the accident. Under the third proviso to Sub-section (1) of Section 10, the Commissioner may, however, entertain and decide any claim for compensation in any case notwithstanding that the notice has not been given or fie claim has not been preferred in due time as provided in Sub-section (1) of Section 10, if he is satisfied that the failure so to give the notice or to prefer the claim, as the case may be, was due to sufficient cause. In this case, the workman, no doubt, gave notice of the two accidents, bat admittedly, had not preferred the claims within two years from the happening of the accidents. The Commissioner, on a consideration of all the circumstances, held that there was sufficient cause for the workman for not preferring the claims within two years. I am also of the same opinion and I cannot say that the Commissioner has committed any error in condoning the delay. This objection of the learned counsel for the appellant is, therefore, overruled and the claims in respect of both the injuries will be entertained as having been made in time.
8. The next submission on behalf of the appellants is that the claims were made by the workman in respect of two injuries resulting from two different accidents, and are the subject matter of two different applications, and that he should have, therefore, passed two awards and that a single award fixing a lumpsum of Rs. 1452 is unsustainable. Even granting that they are connected cases, he could not award a lumpsum for both the injuries. In order to appreciate this contention, it is necessary to refer to the relevant provisions of the Act.
9. The preamble itself says that the object of the Act is to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident. Section 2(g) defines "partial disablement" and Section 2(i) "total disablement" and both of them refer to the reduction of the earning capacity of a workman in any employment in which he was engaged at the time of the accident. Section 3(1) creates the liability of the employer to pay compensation and reads thus:
"31(1) If personal injury is caused to a workman 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."
The section makes it manifest that the liability of an employer is to pay compensation for an injury caused to him by an accident arising out of and in the course of his employment. Section 10(1) also lays down that a claim for compensation shall not be determined by the Commissioner unless notice of the accident has been given in the prescribed manner and unless the claim is preferred within two years of the occurrence of the accident. The third proviso to Sub-section (1) of Section 10 has already been referred to Section 10(2) indicates that the notice shall give the name and address of the person injured, the cause of the injury and the date on which the accident happened. Section 1.1 lays down that, where a workman has given notice of an accident, he shall, if the employer, before the expiry of three days from the time at which service of notice has been effected, offers to have him examined free of charge by a qualified medical practitioner, submit himself for such examination. Section 22(2) lays down that an application to the Commissioner may be made in such form and shall be accompanied by such fee, if any, as may be prescribed and shall contain, among other particulars, 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.
10. A combined reading of the above provisions makes it clear that the basis of liability of an employer to pay compensation is for every injury sustained by a workman, arising out of and in the course of his employment. The provisions of the Act require the date of the accident and the intimation of the date of the accident to be stated in the application, and the period of limitation is fixed as two years from the time of the accident. All these provisions make it abundantly clear that the cause of action to claim compensation accrues to a workman on the happening of an accident, and the fact that the two claims for compensation were made by the same workman on the same date would not alter the position.
11. The Commissioner observed that the petitions were heard simultaneously because they pertained to the injuries sustained by the workman in accidents arising out of and in the course of his employment. Rule 40 of the Rules framed by the Andhra Pradesh Government under this Act lays down the procedure to be followed in connected cases thus:--
"40. Procedure in connected cases:--
(1) Where two or more cases pending before a Commissioner arise out of the same accident, and any issue involved is common to two or more such cases, such cases may, so far as the evidence bearing on such issues is concerned he heard simultaneously.
(2) Where action is taken under sub-rule (1) the evidence bearing on the common issue or issues shall be recorded on the record, of one case, and the Commissioner shall certify under his hand on the records of any such other case, the extent to which the evidence so recorded applies to such other case, and the fact that the parties to such other case had the opportunity of being present, and, if they were present, of cross-examining the witnesses."
12. The, object of this rule is obvious viz., that each case must be heard separately and hearing the petitions separately is the rule and hearing them simultaneously an exception, which is permitted subject only to the conditions mentioned in that Rule. One important conditions is referred to therein is: --
"Where two or more cases pending before a Commissioner arise nut of the same accident". The two claims in the instant case cannot he said to arise out of the same accident and, therefore, the Commissioner is not justified in hearing them simultaneously. It may, no doubt, be true that the question whether N. Pochaiah & Co., are the proprietors of the Saw Mill or N. Lakshminarayana is the proprietor of the Saw Mill, may be common to born the claims, but that does not warrant his invoking Rule 40. Though the evidence may be same, the Commissioner cannot help recording it in each ease separately, it follows that a single award based upon the illegal procedure followed by the Commissioner, and awarding a lumpsum compensation for both the injuries is unsustainable, and has to be set aside.
13. This objection of the appellants is therefore, upheld and the order of the Commissioner is hereby set aside.
14 In view of my finding on point No 2, it is unnecessary for me to express any opinion on the question whether N. Pochiah and Co., are the proprietors of the Saw Mill or Lakshminarayana is the proprietor of the Saw Mill at the time of the accident. That is a question which will have to be gone into by the Commissioner afresh on the evidence, which will be placed before him by both the parties.
15. In the result, the appeals are allowed and the common order of the Commissioner for Workmen's Compensation in W. 6. Case Nos. 305/60 and 110/61 is set aside, and both the petitions are remanded to the Commissioner for fresh disposal in accordance with law. The Commissioner would hold a separate enquiry in respect of each of the petitions, record the evidence separately, frame the issues and give his findings on each of them in accordance with the Act and the rules.
16. It is needless to add that both the parties will be given opportunity to adduce evidence, oral and documentary in each of the petitions. It is represented that the workman had already furnished a third party security when the compensation amount was withdrawn. The Commissioner will, I have no doubt, consider why the same security should not continue till the disposal of the petitions by him. No order as to costs.
C. M. P. Nos. 1497/1962 and 8823/1964 No orders are necessary.
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