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Report No. 134

Chapter III

'Which' Provisions of the Workmen's Compensation Act, 1923 Require to be Amended and 'Why'?

3.1.1. Undesirability of leaving the matter of selection of the beneficiary and also the extent of compensation in respect of a victim of a fatal accident entirely to the unguided discretion of the Commissioner.-Under the Workmen's Compensation Act, an obligation is imposed on the employer to deposit with the Commissioner compensation as prescribed by the relevant provisions, inter alia in respect of an injury caused by accident to a workman "in the course of and arising out of employment" which injury results in his death.

The compensation so deposited has to be paid to the dependants (as defined in the Act) of the deceased or any of them in such proportion as the Commissioner thinks fit or may, in the discretion of the Commissioner, be allotted to any one dependant as provided by section 8(5) of the Acts The Legislature has thus invested the Commissioner with very wide and unguided discretion. The resultant position is that the Commissioner in his sole discretion-

(1) may select any one or some of the dependants to the exclusion of all others,

(2) may apportion the compensation in such proportion as he may determine amongst such of the dependants whom he chooses to select as beneficiaries.

The Legislature has not armed the Commissioner with any guidelines as to when and in what circumstances he may select only one or some of the dependants to the exclusion of the others. Nor have any guidelines been provided as to in what proportion apportionment should be made. Such being the position the Commissioner has uncontrolled and arbitrary powers to make selection of the beneficiaries out of the defined dependants and to make apportionment as he deems fit. The unfortunate consequence is that the dependants are at the total mercy of the wisdom of the Commissioner as regards 'who' should share the compensation amount and, if so, 'to what extent'. This gives rise to a number of anomalies, problems and complications, such as:-

(1) The same Commissioner may adopt different yardsticks from case to case. His successor in office may evolve his own criteria, again, from case to case.

(2) There would be a number of Commissioners in every State and the norms or criteria applied by each Commissioner from case to case would again differ.

(3) No dependant would know whether he or she has any right and, if so, what is his or her right.

(4) The proceedings may drag on for a very long time and the dependants would be totally in the dark as regards their rights till the ultimate conclusion of the proceedings.

(5) Even if, having regard to the circumstances, one or more dependants have a better claim, they would have to resort to further litigation by way of an appeal, the cost of which they can ill afford, if they are not satisfied by the determination made by the Commissioner.

It would, therefore, appear to be extremely unjust and unfair to drive the dependants of a workman who has met with a fatal accident to such desperation, particularly when they would be feeling under the tragedy of the loss of the bread-winner. Under the circumstances, we are of the opinion that instead of leaving the entire matter to the absolute, uncontrolled, and unguided discretion of the Commissioner, it would be more conducive to justice to identify the beneficiaries and define their share in the compensation payable to them.

3.1.2. The Law Commission of India, in its Sixty-second Report on Workmen's Compensation Act, 1923 presented in October 1974, had an occasion to deal with this aspect. The recommendation of the Commission is contained in paragraph 4.7 which is reproduced below-

4.7. It is plain that distribution of the compensation amongst the dependants is a matter entirely for the determination of the Commissioner and sub-section (5) furnishes no guidelines to him.

In our view, it is desirable to insert some guidelines in this regard. Without attempting to be exhaustive we may state that the Commissioner should take into account-

(i) nearness of relationship - e.g., the dependant being the widow, child or parent of the deceased;

(ii) the means of the dependant and the extent of his dependence on the workman;

(iii) the desirability of not distributing compensation amongst a very large number of persons, - which may lead to its being frittered away.

We, therefore, recommend that the following proviso should be inserted below section 8(5):

"Provided that in exercising his discretion under this sub-section, the Commissioner shall have due regard to-

(i) the nearness of relationship of the dependant to the deceased;

(ii) the means of the dependant and the extent to his dependence on the deceased;

(iii) the desirability of ensuring that the amount of compensation is not distributed amongst an excessively large number of persons so as to lead to its being frittered away; and

(iv) other relevant considerations."

[Emphasis added]

3.1.3. The recommendation in the aforesaid terms made nearly 15 years back has remained unimplemented till now. We have accorded anxious consideration to this problem. It appears that enacting guidelines in the aforesaid terms will not adequately solve the problem. Notwithstanding the guidelines which are in general terms, the criticise levelled in the course of the earlier discussion will survive inasmuch as the Commissioner will have wide discretion in the matter of choosing or excluding one or more beneficiaries and in the matter of apportionment. To 'whom' to pay and 'how much' will remain within the sphere of the discretion of the Commissioner. A more fair and just solution would be to identify the beneficiaries and define their share in the compensation. That task must be addressed immediately.



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