Report No. 134

3.1.4. 'Who' should get the compensation and in 'what proportion'?- This is a vexed question which calls for close and careful consideration. Before approaching the question as regards the most desirable solution, it would be appropriate to broadly outline the present scheme embodied in section 8(5) [relating to apportionment amongst the dependants at the discretion of the Commissioner] read with section 2(1)(d) [which defines the term "dependant"]. The emergent position is as under:-

The "dependants" have been classified into three groups:

The first group consists of widow, minor legitimate son and unmarried legitimate daughter or a widowed mother. A person falling under this group is entitled to receive the share of compensation irrespective of the fact whether he or she was actually dependent on the workman at the time of his death or not. In other words, a widowed mother, a widow, a minor legitimate son and an unmarried legitimate daughter would be entitled to the compensation merely by virtue of such relationship with the deceased workman. In their case, actual dependency is not the criteria.

In respect of the persons falling in the second group, namely, a major son or daughter who is infirm, he/she must be proved to be wholly dependent on the deceased workman at the time of death before he or she can be paid any share in the compensation of the deceased. The third group consists of persons related to the deceased workman who, before they are held entitled to a share in the compensation amount, must be shown to be either wholly or in part dependent on the earnings of the workman at the time of his death. And in case no such dependant exists, the deposited amount has to be returned to the employer as provided by section 8(4) of the Act.

The definition of the term "dependant", it may be mentioned, does not operate to benefit all the legal heirs of a deceased workman. It embraces only those relations who, to some extent, depend upon him for their daily necessities. So much so that even some of his dearest and nearest ones, e.g., sons who have attained majority, married daughters and illegitimate daughter, whether married or unmarried, are excluded if they are not dependents on the worker's earnings, wholly or in part. Kinship coupled with dependency; is thus made the sole criterion for a person to fall within the ambit of the definition of "dependant".1

1. B.M. Habeebullah v. Periaswamy, AIR 1977 Mad 330.

3.1.5. It has to be realised that the Workmen's Compensation Act is a legislation enacted substantially by way of a social insurance measure in order to insulate from economic distress the dependant members of the family of the workman who meets with a fatal accident in the course of and arising out or hip employment. The basic idea is to prevent sudden economic dislocation in the wake of the loss of the bread-whiner and to ensure continued protection of the economic umbrella which would have been extended had the workman not lost his life whilst serving his employer.

It is not a payment by way of compensation on account of a tortious act. It is a "fault or no fault" liability created by the statute in order to prevent the domesticship of the workman from being scuttled on the sudden demise of the captain. The point which needs to be emphasised is that the compensation amount does not constitute a part of the estate of the deceased. The economic assistance which was hitherto being extended by the deceased workman to his dependants would now be extended to them in the form of lump sum compensation to be deposited by the employer.

It is apparently for this reason that not all the heirs of the deceased workman are treated as dependants eligible for payment of compensation under the present scheme. Those who were not dependant on the deceased workman or who were in a position to earn for themselves have, therefore, been excluded from the scheme of compensation.

The scheme as at present is rather complex and complicated as has been noticed by the Law Commission in its 62nd Report in paragraph 2.3. Besides, the scheme does not define the proportion in which the compensation should be apportioned. Under the circumstances, there is good justification for recasting the scheme, albeit adhering to the basic idea of extending the economic umbrella to those of the nearest kin of the deceased workman who were dependant on the deceased workman, in preference to those who could be considered to be capable of earning for themselves (such as major sons) and those who are not dependant on the deceased by the nature of things (such as married daughters).

3.1.6. Fortunately, such a scheme, which takes care of the afore-mentioned basic idea, has been enacted by the Legislature in the Employees' Provident Funds and Miscellaneous Provisions Act read with the Employees' Provident Funds Scheme of 1952. The scheme is comprised in para. 2(g) pertaining to the definition of "family" read with para. 70 as regards the payment of accumulations of a deceased member. It may be profitably reproduced:-

'2.(g)"family" means-

(i) in the case of a male member, his wife, his children whether married or unmarried, his dependent parents and his deceased son's widow and children:

Provided that if a member proves that his wife has ceased, under the personal law governing him or the customary law of the community to which the spouses belong; to be entitled to maintenance, she shall no longer be deemed to be a part of the member's family for the purpose of this scheme, unless the member subsequently intimates by express notice in writing to the Commissioner that she shall continue to be so regarded; and

(ii) in the case of a female member, her husband, her children, whether married or unmarried, her dependent parents, her husband's dependent parents and her deceased son's widow and children:

Provided that if a member by notice in writing to the Commissioner expresses her desire to exclude her husband from the family, the husband and his dependent parents shall no longer be deemed to be a part of the member's family for the purpose of this scheme, unless the member subsequently cancels in writing any such notice.

Explanation.-In either of the above two cases, if the child of a member or, as the case may be, the child of a deceased son of the member has been adopted by another person and if, under the personal law of the adopter, adoption is legally recognised, such a child shall be considered as excluded from the family of the member.'

"70. Accumulations of a deceased member, to whom payable.-On the death of a member before the amount standing to his credit has become payable or where the amount has become payable before payment has been made-

(i) if a nomination made by the member in accordance with para 61 subsists,.;or

(ii) if no nomination subsists or if the nomination relates only to a part of the amount standing to his credit in the fund; the whole amount or the part thereof to which the nomination does not relate, as the case may be, shall become payable to the members of his family in equal shares:

Provided that no share shall be payable to-

(a) sons who have attained majority;

(b) sons of a deceased son who have attained majority;

(c) married daughters whose husbands are alive;

(d) married daughters of a deceased son whose husbands are alive; if there is any member of the family other than those specified in clauses (a), (b), (c) and (d):

Provided further that the widow or widows, and the child or children of a deceased son hall receive between them in equal parts only the share which that son would have received if he bad survived the member, and had not attained the age of majority at the time of the member's death;

(iii) in any case, to which the provisions of clauses (i) and (ii) do not apply the whole amount shall be payable to the person legally entitled to it.

Explanation.-For the purpose of this paragraph a member's posthumous child, if born alive shall be treated in the same way as a surviving child born before the member's death."

(Emphasis supplied)

The statutory beneficiaries in whom the accumulations vest for being distributed in equal shares are the members of the family as defined in para. 2(g) with the rider embodied in the proviso that no share shall be payable to sons and sons of a deceased son who have attained majority and to married daughters, or married daughters of a deceased son whose husbands are alive. It also takes care of the situation where the designated members of the family do not exist. In that event, the amount is payable to the person legally entitled thereto (meaning thereby heirs under the ordinary law).