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  • Workmen's Compensation Act, Payment of Wages Act and Payment of Gratuity Act
  • Section 30 of the Workmen's Compensation Act, 1923 ('Act' for short).
  • Central Excise Act and Customs Act
  • Workmen's Compensation Act,
  • MOTOR VEHICLES ACT
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Workmen's Compensation Act, Payment of Wages Act and Payment of Gratuity Act
  • Section 30 of the Workmen's Compensation Act, 1923 ('Act' for short).
  • Central Excise Act and Customs Act
  • Workmen's Compensation Act,
  • MOTOR VEHICLES ACT
Smart Summary

Structured Summary of the Opinion (Order by R.V. Raveendran, C.J.)

Factual and Procedural Background

Respondent Nos. 3 to 5 applied to the Commissioner for Workmen's Compensation claiming compensation for the death of Bishandayal Bandewar, alleging that the death occurred in the course of employment under the petitioner. By order dated 7-10-2004 the Commissioner allowed the claim and awarded compensation of Rs. 2,54,160/- along with interest.

The petitioner challenged the Commissioner's order on multiple grounds: (1) that Bishandayal Bandewar was not his employee; (2) that he was not given due opportunity to contest the claim; and (3) that the compensation awarded was excessive and contrary to evidence. The petitioner sought to appeal to this Court under Section 30 of the Workmen's Compensation Act, 1923, but claimed that the Third Proviso to Section 30(1) (which requires deposit of the entire amount payable under the order before filing an appeal) prevented him from filing an appeal because he lacked funds to make the deposit. The petitioner filed the present petition seeking a declaration that the Third Proviso to Section 30(1) is unconstitutional.

Legal Issues Presented

  1. Whether the Third Proviso to Section 30(1) of the Workmen's Compensation Act, 1923 (requiring that the memorandum of appeal be accompanied by a certificate that the appellant has deposited the amount payable under the order) is unconstitutional, including whether it violates Article 14 of the Constitution.
  2. Whether the Third Proviso renders the right of appeal ineffective or denies an effective remedy because an appellant may be unable to deposit the awarded amount before filing an appeal.
  3. Whether the Third Proviso applies in situations where the person against whom liability is fastened contests the very status of being an "employer" (the Court noted this issue but did not decide it in this petition).

Arguments of the Parties

Petitioner's Arguments

  • The petitioner asserted he was not the deceased's employer, raising a factual challenge to the Commissioner's finding of employer-employee relationship.
  • The petitioner alleged that he was not given a fair opportunity to contest the compensation claim before the Commissioner.
  • The petitioner contended that the compensation amount awarded was excessive and contrary to the evidence before the Commissioner.
  • On constitutional grounds, the petitioner argued that the Third Proviso to Section 30(1) is arbitrary and unreasonable, effectively denying him an effective remedy of appeal because he cannot realistically deposit the awarded amount before filing the appeal.
  • The petitioner's counsel sought to distinguish prior authorities by pointing out that in other statutes the condition for deposit is subject to a discretion to relax the requirement in cases of hardship, whereas Section 30 of the Workmen's Compensation Act does not contain such a provision.

The opinion does not contain a detailed account of the respondents' legal arguments in this petition.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of Andhra Pradesh v. McDowell & Co., AIR 1996 SC 1627 Principle that a law can be struck down only on grounds of lack of legislative competence or violation of fundamental rights (Part III) or other constitutional provisions; mere allegation of arbitrariness or unreasonableness is not sufficient to invalidate legislation. The Court invoked this standard to frame the threshold for declaring the Third Proviso unconstitutional and held that the petitioner needed to establish a constitutional infirmity; mere assertion of arbitrariness would not suffice.
Vijay Prakash D. Mehta v. Collector of Customs, AIR 1988 SC 2010 Right to appeal is a statutory right, not an absolute or inherent right; it can be circumscribed by conditions in the statute and becomes exercisable only upon fulfillment of those conditions. The Court relied on this authority to emphasise that the right to appeal under the Workmen's Compensation Act is statutory and may be subject to conditions such as deposit requirements.
Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad, AIR 1999 SC 1818 Reiteration that the right of appeal is a creature of statute and can be conditional or qualified; the existence of conditions for appeal is not per se violative of Article 14. The Court used this decision to support the proposition that statutes may validly impose conditions on appeals and that such conditions do not automatically offend Article 14.
Jyoti Basu v. Debi Ghosal, AIR 1982 SC 983 Illustration that certain rights (such as election rights) are statutory creations subject to statutory limitations; statutory proceedings are governed by the statute and not by common law or equity. The Court cited this to underline the broader principle that statutory rights and remedies are regulated by the statute itself, reinforcing that appeal rights are to be governed by the statute's provisions.
T. Narayanan Nair v. Union of India and Ors., 1990 ACJ 798 (Kerala HC) High Court reasoning upholding the Third Proviso to Section 30(1) as valid: emphasis on the summary and beneficial nature of the Workmen's Compensation scheme, need for prompt payment to dependants, and prevention of delay/manipulation by employers. The Court noted and relied on this High Court decision as a prior judicial instance that rejected constitutional challenge to the proviso and explained policy reasons supporting pre-deposit (quick relief to workmen, preventing delay/manipulation).
Nathamuni Gounder v. State of Tamil Nadu, 1986 (2) LLJ 423 (Madras HC) High Court view that the Third Proviso does not deny the right of appeal; appeal being statutory may be limited or conditioned by the statute. The Court referenced this decision as another authority supporting the validity of the proviso and the proposition that statutory conditions on appeal are permissible.

Court's Reasoning and Analysis

The Court proceeded by first identifying the legal standard for invalidating legislation: invoking State of Andhra Pradesh v. McDowell & Co., it held that a provision can be struck down only for lack of legislative competence or for violating a constitutional provision such as a fundamental right; mere assertions of arbitrariness or unreasonableness are not enough.

The Court then analysed the nature of the right to appeal. Relying on Vijay Prakash D. Mehta and Gujarat Agro Industries, the Court emphasised that the right to appeal is statutory, not inherent, and that statutes may impose conditions on the exercise of that right. Consequently, a condition prescribed by the statute (here, deposit of the amount awarded) must be judged as part of the statutory scheme rather than as an absolute constitutional entitlement.

The petitioner had attempted to distinguish precedents by noting that some enactments that require deposit allow discretion to relax the deposit condition in hardship cases, whereas Section 30 lacked such a proviso. The Court acknowledged this distinction but held that whether a statute provides relief from the rigours of a deposit condition or not is a legislative choice. The Court observed that different statutes adopt different approaches (examples were given in the opinion), and that beneficial enactments designed to protect workmen (such as the Workmen's Compensation Act) may consciously provide an absolute condition to secure prompt payment to victims or their dependants. The Court found that the imposition of an absolute deposit condition in such statutes cannot be deemed discriminatory or arbitrary merely because it is stringent.

The Court also noted that the Third Proviso had been considered and upheld by at least two High Courts (Kerala and Madras) for reasons tied to the summary and protective objectives of the Workmen's Compensation regime and the need to prevent delay and possible manipulation by employers. The Court relied on those judicial views as persuasive support for the validity of the proviso.

The Court expressly declined to decide, in this petition, the separate question whether the Third Proviso would apply in a case where the person against whom liability is fastened contends that he is not an employer; it held that that issue should be argued in the appeal from the Commissioner's order.

Holding and Implications

Holding: The petition challenging the constitutional validity of the Third Proviso to Section 30(1) of the Workmen's Compensation Act, 1923, is dismissed. DISMISSED.

Implications:

  • The Court found no constitutional invalidity in the Third Proviso requiring deposit of the amount payable under the order as a condition precedent to filing an appeal; therefore the statutory condition stands.
  • The petitioner's challenge under Article 14 (and general assertion of arbitrariness) failed because the Court treated the right to appeal as statutory and subject to conditions imposed by the Legislature, and because no constitutional infirmity was shown.
  • The Court did not decide whether the deposit condition applies where the appellant disputes being an "employer"; that factual and legal issue is left open for determination in the appellate proceedings.
  • No broader novel legal principle or new precedent was laid down beyond applying and reaffirming existing authorities holding that appeal rights are statutory and may be subject to conditions; the direct effect is that the petition is dismissed and the proviso remains operative.

This summary is based exclusively on the information contained in the provided opinion. No information has been inferred or added beyond the text of the opinion.

    Khemkaran v. Union Of India

    ORDER R.V. Raveendran, C.J.

    1. Respondent Nos. 3 to 5 made an application before the Commissioner for Workmen's Compensation claiming compensation for the death of one Bishandayal Bandewar, alleging that he died in the course of employment under the petitioner. The Commissioner of Workmen's Compensation by order dated 7-10-2004, allowed the claim and awarded compensation of Rs. 2,54,160/-alongwith interest.

    2. The petitioner is aggrieved by the said order of the Commissioner on several grounds. The first ground is that Bishandayal Bandewar was not his employee. The second ground is that he was not given due opportunity to contest the claim. The third ground is that the compensation awarded is excessive and contrary to evidence. He, therefore, wants to challenge the order of the Commissioner of Workmen's Compensation by filing an appeal in this Court under Section 30 of the Workmen's Compensation Act, 1923 ('Act' for short). He states that the Third Proviso to Sub-section (1) of Section 30 of the Act (inserted by Act No. 15 of 1933) requiring that the entire amount due under the order should be deposited before filing an appeal is coming in his way, as he has no funds to comply with the said condition. The petitioner contends that the said provision is wholly arbitrary and unreasonable and denies him an effective remedy of appeal, as it is impossible for him to find the amount for the deposit. He has therefore, filed this petition seeking a declaration that the said third Proviso to Section 30(1) of the Act as unconstitutional. The said Proviso reads as under :--

    "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."

    3. In State of Andhra Pradesh v. McDowell & Co. (AIR 1996 SC 1627), the Supreme Court pointed out that a law can be struck down by Courts only on the ground of lack of legislative competence or violation of any fundamental rights guaranteed in Part III of the Constitution or any other Constitutional provision. It was observed that no enactment can be struck down just by saying that it is arbitrary or unreasonable, and some or the other Constitutional infirmity has to be found before invalidating an Act. It was further observed that merely because a Court considers a provision to be unjustified, it can not be struck down.

    4. The nature of a right to appeal was explained by the Supreme Court in Vijay Prakash D. Mehta v. Collector of Customs (AIR 1988 SC 2010), thus:--

    "Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant...... It is not the law that adjudication by itself following the rules of natural justice would be violative of any right-.-- Constitutional or statutory--without any right of appeal, as such. If the statute gives a right to appeal upon certain conditions, it is upon fulfillment of those conditions that the right becomes vested and exercisable to the appellant."

    The principle was reiterated in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad, AIR 1999 SC 1818, thus :--

    "This Court said that right of appeal is the creature of a statute and it is for the legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is a statutory right can be conditional or qualified. It can not be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute, however, in regard to an appeal, the position is quite opposite. The right to appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. When such a law authorises filing of appeal, it can impose conditions as well."

    5. The scope of a statutory right, as against a fundamental right or equitable right, is described thus by the Supreme Court, though in a different context, in Jyoti Basu v. Debi Ghosal (AIR 1982 SC 983):

    "Outside of statute, there is no right to elect, no right to be elected and no right to dispute an election. Statutory creations they are, and therefore, subject to statutory limitations... It is a statutory proceeding to which neither the common law, nor the principles of equity apply but only those rules which the statute makes and applies."

    6. Therefore, if the petitioner wants to exercise the right to appeal, it can be done only subject to the conditions stipulated for exercise of such right and not otherwise. The contention of the petitioner that the condition by the Third Proviso requiring deposit of the entire amount, is violative of Article 14 is therefore liable to be rejected. The learned Counsel for the petitioner, however, tried to distinguish the said two decisions. He pointed out that the provisions regarding appeals in the cases of Vijay Prakash D. Mehta and Gujarat Agro Industries contained an inbuilt provision to relieve the appellant from the rigours of the condition relating to deposit of full amount, in case such Authority was of the opinion that it would cause undue hardship to the appellant. He contended that Section 30 of the Act did not contain such a provision for dispensation of the condition.

    7. While some enactments contain a provision for pre- deposit of the entire amount as a condition for filing the appeal, some other enactments while incorporating such a condition also give the discretion to the Appellate Authority to relax the condition in cases of hardship. But what should be the nature of the conditions to be imposed in regard to the right of appeal, that is whether it should be absolute or limited or with exceptions is a matter for the Legislature to decide. Once it is recognised that a right of appeal is purely a statutory right to be governed wholly by the provisions of the Statute granting such right, it follows that it is for the Legislature to stipulate suitable or appropriate conditions relating to appeal. For example, Motor Vehicles Act provides for deposit of a fixed sum of Rs. 25,000/- as a condition for filing the appeal. Enactments like Central Excise Act and Customs Act require deposit of the entire amount as a condition for appeal, but also enable the Appellate Authority to relax the condition. On the other hand, the provision for appeal in enactments like Workmen's Compensation Act, Payment of Wages Act and Payment of Gratuity Act contain an absolute condition relating to deposit without any power to relax. The rigour of the condition and the nature of the condition depend upon the object and purpose sought to be achieved by the Legislature. The Workmen's Compensation Act, Payment of Wages Act and Payment of Gratuity Act are beneficial legislations intended to protect the interests of the workmen/employees. Therefore, Legislature has consciously imposed an absolute condition. That by itself can not be considered as a discriminatory or arbitrary.

    8. In fact, the very provision came up for consideration before the Kerala High Court and Madras High Court and they have upheld the validity thereof.

    8.1. In T. Narayanan Nair v. Union of India and Ors., 1990 ACJ 798, a learned Single Judge of Kerala High Court rejected the challenge to the third proviso to Section 30(1) on the following reasoning :--

    "Under the Scheme of the Workmen's Compensation Act, any serious injury to him has to be compensated, and quickly too. Time was when even an illness for a small spell of time could shut out the flame of life in workman's family. With the main candle shut out, the family itself will be in gloom and left in the cold. A summary procedure is therefore provided under a benign enactment, so that the workman or his family in dire distress could get some support or solace from the employer or his contractor......

    Employers get attracted to a brisk business or other organised commercial activity, by the possibility of getting attractive profits. Generally the employers would be persons who by their intrinsic work or institutional arrangements, are in a position to provide various contingencies including accidents in relation to their establishment or the workmen. An appeal can pend for long. This period could be used for dishonest manipulation by an unscrupulous employer. The contingency has to be avoided. One sure way of avoiding such a situation where the workman will only have a victory was to insist on the compensation payable, as sooner as the finding of liability is entered by the Commissioner. In a sense, it protects the competing interest of the employer of the workman. The workman can feel secure about the compensation payable to him, by this statutory insistence. It may not be altogether unjust if in such a situation, actual payment is postponed by a short period. The appeal then could be processed, heard and disposed of without undue hustling or unnecessary strain.

    Viewed from the point of view of the employer, it is not difficult for him to secure in these days necessary financial aid from the authority or institutions handling money. Even if it be a bit inconvenient, an ordinary employer would have the wherewithal to meet payments of that nature. The inconvenience caused in the process is no reason to strike down the statutory provision 8.2. The question whether the requirement relating to deposit of entire compensation awarded as condition precedent for preferring appeal, rendering the right to appeal nugatory, came up for consideration before a learned Single Judge of Madras High Court in Nathamuni Gounder v. State of Tamil Nadu, 1986 (2) LLJ 423. He observed :--

    "...... However, Mr. R. Gandhi, learned Counsel for the petitioner, would contend that the Third Proviso to Sub-section (1) of Section 30 of the Act enjoins upon the employer to deposit the amount payable under the award before an appeal is entertained. The learned Counsel would submit that the said proviso practically denies the right of appeal. I am not able to spell out that the said proviso denies the right of appeal as such. By enjoining the appellant to deposit the amount, the subject matter of the appeal, it can not be stated that the appeal remedy is taken away. It is an age-old principle of law that the right of appeal is not a natural or an inherent right attaching to any litigation. A right of appeal as such does not exist and can not be assumed unless expressly given by statute or by rules having the force of statute. An appeal being a creature of statute, the right of appeal can always be limited by the law which gives that right and the provisions of the statute settling the conditions for preferring an appeal can not be held to be bad in law. Even if a statute denies a right of appeal, that statute can not be held to be a bad legislation. If a legislation thinks, in a particular case, that no appeal should be provided, or the right of appeal which it provided should be exercised in a particular manner and subject to certain conditions, that legislation has always been countenanced to be a proper legislation. The reason behind the said proposition is, the right of appeal is a creature of statute and its exercise, its scope and its results shall always be controlled by the provisions of the statute which creates that right....."

    9. No Constitutional invalidity is made out. It is not however, necessary to give a finding on' the question whether the Third Proviso (relating to deposit of compensation) would apply when the person who is fastened with the liability as 'employer' contends that he is not employer. That is a matter to be argued in the appeal. The petition is dismissed, as having no merit.

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    Khemkaran v. Union Of India
    (Feb 4, 2005)