# M/S Vasu Infrastructure Private Ltd v. State of U.P. & Ors. 1292 INDIAN LAW REPORTS ALLAHABAD SERIES

- **Citation:** (2019) 3 ILRA 1291
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-13
- **Case number:** Writ C No. 26540 of 2019
- **Bench:** Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-vasu-infrastructure-private-ltd-v-state-of-u-p-ors-1292-indian-law-reports-44659
- **Pages:** 13

## Headnote

A. Service Law -Employees Compensation
Act, 1923 - Section 10. Petitioner deliberately
lingered the proceedings - registered notice
sent prior and also upon registration of claim
petition-Petitioner submitted reply to the
prior notice - Petitioner was aware of the
proceedings-Still did not appear. Ex parte
order rightly passed.

Held: - The aforementioned order passed by
the Employees Compensation Commissioner
can also not be faulted with for the reason
that E.C. Act, 1923 is a piece of social security
legislation providing for a speedy and efficient
machinery for determination and payment of
compensation to the employees. It may also
be taken note of that as per the provisions
under Section 4A compensation is to be paid
as soon as it falls due. (Para 27)

Writ Petition dismissed. (E-9)

List of Cases cited: -

## Text

_Characters 0–39,729 of 41,522. This is a partial read: ask again with offset=39729 for what follows._

3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1291
of the merits of the dispute, uninfluenced
by extraneous considerations of policy or
expediency. The Court insists upon
disclosure of reasons in support of the
order on two grounds : one, that the party
aggrieved in a proceeding before the
High Court or this Court has the
opportunity to demonstrate that the
reasons which persuaded the authority to
reject his case were erroneous; the other,
that the obligation to record reasons
operates as a deterrent against possible
arbitrary
action
by
the
executive
authority invested with the judicial
power."

The aforesaid said judgment has
been quoted with approval by the
Constitution Bench of the Supreme Court
in the case of S.N. Mukherjee Vs. Union
of India, AIR 1990 SC 1984. Similar view
has been taken by the Supreme Court in
the cases of Union of India Vs. Mohan
Lal Capoor, AIR 1974 SC 87; Raj Kishore
Jha Vs. State of Bihar, (2003) 11 SCC
519; Kranti Associates Private Limited
Vs. Masood Ahmed Khan, (2010) 9 SCC
496; Sant Lal Gupta and others v.
Modern Cooperative Group Housing
Society Limited and others, (2010) 13
SCC 336 and J. Ashoka v. University of
Agricultural Science and others, (2017) 2
SCC 609."

20. In view of the aforesaid cases of
the Hon'ble Supreme Court as well as this
Court, it is clear that the reason is the
heartbeat of the order and without reason,
the order becomes dead.

21. The
administrative
order,
without any reason, causes prejudice to
the person against whom it is passed. The
Hon'ble Supreme Court, time and again,
has
emphasized
the
importance
of
recording reason for the decision by the
administrative authorities.

22. In the case in hand, after perusal
of the material available on record, we
find that while passing the impugned
order dated 13.07.2019, the respondent
no. 3 has not assigned any reason for
changing the category of the petitioner
from Group - 1 to Group - 3 for the retail
outlet dealership.

23. For the reasons mentioned
above, we find that the impugned order
dated 13.07.2019 cannot be sustained in
the eyes of law and it is, accordingly,
quashed.

24. The matter is remanded back to
the
respondent
for
passing
afresh
reasoned
and
speaking
order
after
furnishing opportunity of hearing to all
the stake holders.

25. The writ petition is, accordingly,
allowed.

26. No order as to costs.
----------

(2019)11ILR A1291

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.09.2019

BEFORE
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C No. 26540 of 2019

M/S Vasu Infrastructure Private Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents
1292 INDIAN LAW REPORTS ALLAHABAD SERIES
Counsel for the Petitioner:
Sri Akshat Siha

Counsel for the Respondents:
C.S.C.

A. Service Law -Employees Compensation
Act, 1923 - Section 10. Petitioner deliberately
lingered the proceedings - registered notice
sent prior and also upon registration of claim
petition-Petitioner submitted reply to the
prior notice - Petitioner was aware of the
proceedings-Still did not appear. Ex parte
order rightly passed.

Held: - The aforementioned order passed by
the Employees Compensation Commissioner
can also not be faulted with for the reason
that E.C. Act, 1923 is a piece of social security
legislation providing for a speedy and efficient
machinery for determination and payment of
compensation to the employees. It may also
be taken note of that as per the provisions
under Section 4A compensation is to be paid
as soon as it falls due. (Para 27)

Writ Petition dismissed. (E-9)

List of Cases cited: -

1. Oriental Insurance Co. Ltd. Vs Mohd. Nasir
& ors., (2009) 6SCC 280

2. The Workmen of M/s Firestone Tyre &
Rubber Co. of India Pvt. Ltd. Vs The
Management & ors., (1973)1 SCC 813 B.D.
Shetty & ors. Vs CEAT Ltd. & anr., (2002) 1
SCC 193

3. Allahabad Bank & anr. Vs All India Alahabad
Bank Retired Employees Association, (2010) 2
SCC 44

4. Jeewanlal Ltd. & ors. Vs Appellate Authority
& ors., (1984) 4 SCC 356

5. Bharat Singh Vs Management of New Delhi
Tuberculosis centre, (1986) 2 SCC 614
6. UPSRTC Vs St. Of U.P. & ors., Writ C
no.6971/2017
7. Nagar Nigam Gorakhpur Vs Suresh Pandey
& ors., Writ C No.-45310/2017
8. Pratap Narain Singh Deo Vs Srinivas Sabata
& ors., 9(1976) 1 SCC 289

(Delivered by Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard Sri Akshat Sinha, learned
counsel for the petitioner and Sri Mata
Prasad,
learned
Standing
Counsel
appearing for the respondent nos. 1 and 2.

2. The present petition seeks to
challenge the order dated 29.3.2019
passed by the Employees Compensation
Commissioner/Assistant
Labour
Commissioner U.P. Gorakhpur whereby
the application filed by the petitioner for
recall of the orders dated 5.8.2016 and
28.7.2017 has been rejected.

3. Learned counsel for the petitioner
has submitted that the orders dated
5.8.2016 and 28.7.2017 having been
passed in proceedings which were exparte
the same ought to have been recalled by
the
Employees
Compensation
Commissioner and the rejection of the
recall
application
in
the
said
circumstances is erroneous. The counsel
for the petitioner has further sought to
contend that even on merits the claim
made by the claimant respondent was not
sustainable.

4. Per contra, learned Standing
Counsel
appearing
for
the
State
respondents has submitted that upon
registration of the claim petition as Case
No. W.C.C. 2/2015 a registered notice
dated 08.01.2016 was duly sent to the
petitioner and it was only thereafter on
05.08.2016 that an order was passed for
proceeding exparte. It has also been
3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1293
pointed out that prior to filing of the claim
petition the claimant had duly served a
registered notice upon the petitioner
under Section 10 of the Employee's
Compensation Act,
19231
and
the
petitioner had submitted a reply to the
same. It is accordingly submitted that the
petitioner
was
fully
aware
of
the
proceedings and despite due notice it
deliberately allowed the case to proceed
exparte and as such there was no
sufficient reason made out for the orders
to be recalled. As regards the contention
sought to be raised by the petitioner on
the merits of the claim, it was submitted
that in the event the petitioner seeks to
challenge the order dated 28.7.2017
awarding compensation on its merits the
statutory remedy of filing an appeal under
Section 30 of the E.C.Act, 1923 may be
availed of.

5. In order to appreciate the rival
contentions it may be necessary to advert
to the relevant statutory provisions as
contained under the E.C.Act,1923 which
are being extracted below :-

"3. Employer's liability for
compensation.- (1) If personal injury is
caused to an employee 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:

Provided that the employer shall
not be so liable --

(a) in respect of any injury
which does not result in the total or partial
disablement of the employee for a period
exceeding three days;

(b) in respect of any injury, not
resulting in death or permanent total
disablement caused by an accident which
is directly attributable to--

(i) the employee having been at
the time thereof under the influence of
drink or drugs, or

(ii) the wilful disobedience of
the employee to an order expressly given,
or to a rule expressly framed, for the
purpose of securing the safety of
employees, or

(iii) the wilful removal or
disregard by the employee of any safety
guard or other device which he knew to
have been provided for the purpose of
securing the safety of employee.

[(2) If an employee employed in
any employment specified in Part A of
Schedule
III
contracts
any
disease
specified therein as an occupational
disease peculiar to that employment, or if
an employee, whilst in the service of an
employer in whose service he has been
employed for a continuous period of not
less than six months (which period shall
not include a period of service under any
other employer in the same kind of
employment)
in
any
employment
specified in Part B of Schedule III,
contracts any disease specified therein as
an occupational disease peculiar to that
employment, or if an employee whilst in
the service of one or more employers in
any employment specified in Part C of
Schedule III for such continuous period as
the Central Government may specify in
respect
of
each
such
employment,
contracts any disease specified therein as
an occupational disease peculiar to that
employment, the contracting of the
disease shall be deemed to be an injury by
accident within the meaning of this
section and, unless the contrary is proved,
the accident shall be deemed to have
arisen out of, and in the course of, the
employment:

[Provided that if it is proved,--
1294 INDIAN LAW REPORTS ALLAHABAD SERIES

(a) that an employee whilst in
the service of one or more employers in
any employment specified in

Part C of Schedule III has
contracted a disease specified therein as
an occupational disease peculiar to that
employment during a continuous period
which is less than the period specified
under
this
sub-section
for
that
employment; and

(b) that the disease has arisen
out of and in the course of the
employment, the contracting of such
disease shall be deemed to be an injury by
accident within the meaning of this
section:

[Provided further that if it is proved
that an employee who having served under
any employer in any employment specified in
Part B of Schedule III or who having served
under one or more employers in any
employment specified in Part C of that
Schedule, for a continuous period specified
under this sub section for that employment
and he has after the cessation of such service
contracted any disease specified in the said
Part B or the said Part C, as the case may be,
as an occupational disease peculiar to the
employment and that such disease arose out
of the employment, the contracting of the
disease shall be deemed to be an injury by
accident within the meaning of this section.]]

[(2A) If an employee employed
in any employment specified in Part C of
Schedule III contracts any occupational
disease peculiar to that employment, the
contracting whereof is deemed to be an
injury by accident within the meaning of
this section, and such employment was
under more than one employer, all such
employers shall be liable for the payment
of the compensation in such proportion as
the
Commissioner
may,
in
the
circumstances, deem just.]

[(3) The Central Government or
the State Government, after giving, by
notification in the Official Gazette, not less
than three months' notice of its intention so
to do, may, by a like notification, add any
description
of
employment
to
the
employments specified in Schedule III and
shall specify in the case of employments so
added the diseases which shall be deemed
for the purposes of this section to be
occupational diseases peculiar to those
employments respectively, and thereupon the
provisions of sub-section (2) shall apply, in
the case of a notification by the Central
Government, within the territories to which
this Act extends or, in case of a notification
by the State Government, within the State as
if such diseases had been declared by this
Act to be occupational diseases peculiar to
those employments.]

(4) Save as provided by subsections
(2),
(2A)
and
(3)
no
compensation shall be payable to an
employee in respect of any disease unless
the disease is directly attributable to a
specific injury by accident arising out of
and in the course of his employment.

(5) Nothing herein contained
shall be deemed to confer any right to
compensation on an employee in respect
of any injury if he has instituted in a Civil
Court a suit for damages in respect of the
injury against the employer or any other
person; and no suit for damages shall be
maintainable by an employee in any
Court of law in respect of any injury--

(a) if he has instituted a claim to
compensation in respect of the injury
before a Commissioner; or

(b) if an agreement has been
come to between the employee and his
employer providing for the

payment of compensation in
respect of the injury in accordance with
the provisions of this Act.
3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1295

[(4).
Amount
of
compensation.-
(1)
Subject
to
the
provisions of this Act, the amount of
compensation
shall
be
as
follows,
namely:--

(a) where death results from the
injury : an amount equal to fifty per cent.
of the monthly wages of the deceased
employee multiplied by the relevant
factor;

or an amount of one lakh and
twenty thousand rupees, whichever is
more;

(b)
where
permanent
total
disablement results from the injury : an
amount equal to sixty per cent. of the
monthly wages of the injured employee
multiplied by the relevant factor; or an
amount one lakh and twenty thousand
rupees], whichever is more;

[Provided
that
the
Central
Government may, by notification in the
Official Gazette, from time to time,
enhance the amount of compensation
mentioned in clauses (a) and (b).]

Explanation I.--For the purposes
of clause (a) and clause (b), "relevant
factor", in relation to a [an employee]
means the factor specified in the second
column of Schedule IV against the entry
in the first column of that Schedule
specifying the number of years which are
the same as the completed years of the
age of the [employee] on his last birthday
immediately preceding the date on which
the compensation fell due.

(c) where permanent partial
disablement result from the injury: (i) in
the case of an injury specified in Part II of
Schedule I, such percentage of the
compensation which would have been
payable in the case of permanent total
disablement as is specified therein as
being the percentage of the loss of
earning capacity caused by that injury;
and

(ii) in the case of an injury not
specified in Schedule I, such percentage
of the compensation payable in the case
of permanent total disablement as is
proportionate to the loss of earning
capacity (as assessed by the qualified
medical practitioner) permanently caused
by the injury;

Explanation
I.--Where
more
injuries than one are caused by the same
accident, the amount of compensation
payable
under
this
head
shall
be
aggregated but not so in any case as to
exceed the amount which would have
been
payable
if
permanent
total
disablement
had
resulted
from
the
injuries.

Explanation II.--In assessing the
loss of earning capacity for the purpose of
sub-clause (ii), the qualified medical
practitioner shall have due regard to the
percentages of loss of earning capacity in
relation to different injuries specified in
Schedule I;

(d)
where
temporary
disablement, whether total or partial,
results from the injury : a half monthly
payment of the sum equivalent to twentyfive per cent. of monthly wages of the
employee, to be paid in accordance with
the provisions of sub-section (2).

[(1A) Notwithstanding anything
contained in sub-section (1), while fixing
the amount of compensation payable to a
an employee is respect of an accident
occurred outside India, the Commissioner
shall take into account the amount of
compensation, if any, awarded to such
employee in accordance with the law of
the country in which the accident
occurred and shall reduce the amount
fixed
by
him by
the
amount of
1296 INDIAN LAW REPORTS ALLAHABAD SERIES
compensation awarded to the employee in
accordance with the law of that country.]

[(1B) The Central Government
may, by notification in the Official
Gazette, specify, for the purposes of subsection (I), such monthly wages in
relation to an employee as it may consider
necessary.]

(2) The half-monthly payment
referred to in clause (d) of sub-section (1)
shall be payable on the sixteenth day --

(i) from the date of disablement
where such disablement lasts for a period
of twenty-eight days or more, or

(ii) after the expiry of a waiting
period of three days from the date of
disablement where such disablement lasts
for a period of less than twenty-eight
days; and thereafter half-monthly during
the disablement or during a period of five
years, whichever period is shorter:

Provided that--

(a) there shall be deducted from
any lump sum or half-monthly payments
to which the employee is entitled the
amount of any payment or allowance
which the [employee] has received from
the employer by way of compensation
during the period of disablement prior to
the receipt of such lump sum or of the
first half-monthly payment, as the case
may be; and

(b) no half-monthly payment
shall in any case exceed the amount, if
any, by which half the amount of the
monthly wages of the [employee] before
the accident exceeds half the amount of
such wages which he is earning after the
accident.

Explanation.--Any payment or
allowance which the employee has
received from the employer towards his
medical treatment shall not be deemed to
be a payment or allowance received by
him by way of compensation within the
meaning of clause (a) of the proviso.

[(2A) The employee shall be
reimbursed
the
actual
medical
expenditure incurred by him for treatment
of injuries caused during course of
employment.]

[(3) On the ceasing of the
disablement before the date on which any
half-monthly payment falls due there
shall be payable in respect of that halfmonth a sum proportionate to the duration
of the disablement in that half-month.]

[(4) If
the injury of the
employee results in his death, the
employer shall, in addition to the
compensation
under
sub-section
(1),
deposit with the Commissioner a sum of
not less than five thousand rupees for
payment of the same to the eldest
surviving dependant of the employee
towards the expenditure of the funeral of
such employee or where the employee did
not have a dependant or was not living
with his dependant at the time of his death
to the person who actually incurred such
expenditure.]

[Provided
that
the
Central
Government may, by notification in the
Official Gazette, from time to time,
enhance the amount specified in this subsection.]

[(4A). Compensation to be
paid when due and penalty for default.-
(1) Compensation under section 4 shall be
paid as soon as it falls due.

(2) In cases where the employer
does
not
accept
the
liability
for
compensation to the extent claimed, he
shall be bound to make provisional
payment based on the extent of liability
which he accepts, and, such payment shall
be deposited with the Commissioner or
made to the employee, as the case may
3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1297
be, without prejudice to the right of the
employee to make any further claim.

[(3) Where any employer is in
default in paying the compensation due
under this Act within one month from the
date it fell due, the Commissioner shall--

(a) direct that the employer
shall, in addition to the amount of the
arrears, pay simple interest thereon at the
rate of twelve per cent. per annum or at
such higher rate not exceeding the
maximum of the lending rates of any
scheduled bank as may be specified by
the Central Government, by notification
in the Official Gazette, on the amount
due; and

(b) if, in his opinion, there is no
justification for the delay, direct that the
employer shall, in addition to the amount
of the arrears and interest thereon, pay a
further sum not exceeding fifty per cent,
of such amount by way of penalty:

Provided that an order for the
payment of penalty shall not be passed
under clause (b) without giving a
reasonable opportunity to the employer to
show cause why it should not be passed.

Explanation.--For the purposes
of this sub-section, "scheduled bank"
means a bank for the time being included
in the Second Schedule to the Reserve
Bank of India Act, 1934 (2 of 1934).

[(3A) The interest and the
penalty payable under sub-section (3)
shall be paid to the employee or his
dependant, as the case may be.]

(10). Notice and claim.- (1) No
claim
for
compensation
shall
be
entertained by a Commissioner unless
notice of the accident has been given in
the manner hereinafter provided as soon
as practicable after the happening thereof
and unless the claim is preferred before
him within two years of the occurrence of
the accident or in case of death within two
years from the date of death:

Provided
that
where
the
accident is the contracting of a disease in
respect of which the provisions of subsection (2) of section 3 are applicable, the
accident shall be deemed to have occurred
on the first of the days during which the
employee was continuously absent from
work in consequence of the disablement
caused by the disease:

[Provided further that in case of
partial disablement due to the contracting
of any such disease and which does not
force the employee to absent himself from
work, the period of two years shall be
counted from the day the employee gives
notice of the disablement to his employer:

Provided further that if
a
employee who, having been employed in
an employment for a continuous period,
specified under sub-section (2) of section
3 in respect of that employment, ceases to
be so employed and develops symptoms
of an occupational disease peculiar to that
employment within two years of the
cessation of employment, the accident
shall be deemed to have occurred on the
day on which the symptoms were first
detected: ]

[Provided further that the want
of or any defect or irregularity in a notice
shall not be a bar to the entertainment of a
claim]--

(a) if the claim is preferred in
respect of the death of an employee
resulting from an accident which occurred
on the premises of the employer, or at any
place where the employee at the time of
the accident was working under the
control of the employer or of any person
employed by him, and the employee died
on such premises or at such place, or on
any premises belonging to the employer,
or died without having left the vicinity of
1298 INDIAN LAW REPORTS ALLAHABAD SERIES
the premises or place where the accident
occurred, or

(b) if the employer or any one
of several employers or any person
responsible to the employer for the
management of any branch of the trade or
business in which the injured employee
was employed had knowledge of the
accident from any other source at or about
the time when it occurred:]

Provided
further
that
the
Commissioner may entertain and decide
any claim to compensation in any case
notwithstanding that the notice has not
been given, or the claim has not been
preferred, in due time as provided in this
subsection, if he is satisfied that the
failure so to give the notice or prefer the
claim, as the case may be, was due to
sufficient cause.

(2) Every such notice shall give
the name and address of the person
injured and shall state in ordinary
language the cause of the injury and the
date on which the accident happened, and
shall be served on the employer or upon
any one of several employers, or upon
any person responsible to the employer
for the management of any branch of the
trade or business in which the injured
workman was employed.

[(3) The State Government may
require that any prescribed class of
employers shall maintain at their premises
at which employees are employed a
notice book, in the prescribed form,
which shall be readily accessible at all
reasonable times to any injured employee
employed on the premises and to any
person acting bona fide on his behalf.

(4) A notice under this section
may be served by delivering it at, or
sending it by registered post addressed to,
the residence or any office or place of
business of the person on whom it is to be
served, or, where a notice-book is
maintained, by entry in the notice-book.]"

6. From a reading of the aforementioned
statutory provisions it may be noticed that the
provisions under Section 3 provide for
employer's liability for compensation in a case
if personal injury is caused to an employee by
accident arising out of and in the course of his
employment. The amount of compensation is
to be assessed as per terms of Section 4.
Furthermore in terms of Section 4A it has
been provided that compensation under
Section 4 is to be paid as soon as it falls due
and even in cases where the employer does
not accept the liability for compensation to the
extent claimed, he shall be bound to make
provisional payment based on the extent of
liability which he accepts and such payment is
to be deposited with the Commissioner or
made to the employee, as the case may be,
without prejudice to the right of the employee
to make any further claim. Sub-section (3) of
Section 4A mandates that where any
employer is in default in paying the
compensation due under this Act within one
month from the date it fell due, the
Commissioner shall direct that the employer
shall, in addition to the amount of the arrears,
pay simple interest thereon at the rate of
twelve per cent per annum or at such higher
rate not exceeding the maximum of the
lending rates of any scheduled bank as may
be specified by the Central Government, by
notification in the Official Gazette, on the
amount due and if in his opinion there is no
justification for the delay, direct that the
employer shall, in addition to the amount of
the arrears and interest thereon, pay a further
sum not exceeding fifty per cent of such
amount by way of penalty.

7. The Workmen's Compensation
Act, 19232 was enacted as a piece of
welfare legislation for the purposes of
3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1299
providing social security to employees in
a situation of growing complexity of
industry with the increasing use of
machinery and consequent danger to
workmen along with their comparative
poverty rendering them vulnerable.

8. In order to appreciate the scheme
of the Act, the statement of objects and
reasons of the statutory enactment may be
referred to. For ease of reference the
relevant extract from the statement of
objects and reasons is being reproduced
herein under :-

"The
growing
complexity
of
industry in this country, with the increasing
use of machinery and consequent danger to
workmen, along with the comparative poverty
of the workmen themselves renders it
advisable that they should be protected as far
as possible, from hardship arising from
accidents. A legislation of this kind helps to
reduce the number of accidents in a manner
that cannot be achieved by official inspection,
and to mitigate the effect of accidents by
provision for suitable medical treatment,
thereby making industry more attractive to
labour and increasing its efficiency. The Act
provides for cheaper and quicker disposal of
disputes relating to compensation through
special tribunals than possible under the civil
law."3

9.

The
W.C.Act,
1923
has
undergone several amendments in order
to widen its scope and in terms of the
amending Act 45 of 2009 the long title
and the provisions of the Act have been
amended so as to substitute "workman"
by the "employee".

10. The object of the Act as
reflected from the statement of objects
and reasons is to protect the workmen
from the hardship arising from accidents
occurring
during
the
course
of
employment. The benefits so conferred
are aimed to give an increased sense of
security
to
the
workmen
as
an
ameliorative measure so as to render
industrial life more attractive and increase
the
availability,
productivity
and
efficiency of labour.

11. The objects of the E.C.Act, 1923
came up for consideration in the case of
Oriental Insurance Co. Ltd. Vs. Mohd.
Nasir and Ors.4, and after taking notice
of the statutory provisions contained
therein it was held that the Act is a
beneficial legislation in so far as it
provides for payment of compensation to
workmen employed by the employers and
accordingly the provisions therein are to
be liberally construed keeping in mind the
legislative intent with a view to give
effect it its objects.

12. The E.C.Act, 1923 being thus a
piece of social security and welfare
legislation with its dominant purpose to
protect the employees, the provisions of
the Act have to be interpreted so as to
subserve the object of the legislation
which
is
to
make
the
employer
responsible for the loss caused to the
employee by injuries or death arising out
of and in the course of employment.

13. The provisions under the Act
provide for necessary measures to protect
the employees and their dependents from
the hardships arising from the accidents
occurring
during
the
course
of
employment and with this object in mind
the rights of the employees are to be
generously treated while applying the
statutory provisions so as to ensure a
speedy and efficient machanism for
1300 INDIAN LAW REPORTS ALLAHABAD SERIES
determination
and
payment
of
compensation as per the provisions of the
Act.

14. Applying the rule of beneficent
construction, the provisions of the E.C.
Act, 1972 are to be interpreted so as to
give them a wide meaning rather a
restrictive meaning which may negate the
very object of the enactment. A beneficial
legislation, it is well settled, as to be
construed in its correct perspective so as
to
fructify
the
legislative
intent
underlying its enactment.

15. In construing a remedial statute
courts are to give it the widest amplitude
which its language would permit. The
principle
of
applying
a
liberal
construction to a remedial legislation has
been emphasised in the Construction of
Statues by Crawford5 pp. 492-493 in
the following terms:-

"...Remedial statutes, that is,
those which supply defects, and abridge
superfluities, in the former law, should be
given a liberal construction, in order to
effectuate the purposes of the legislature,
or to advance the remedy intended, or to
accomplish the object sought, and all
matters fairly within the scope of such a
statute be included, even though outside
the letter, if within its spirit or reason."

16. To a similar effect is the
observation made by Blackstone in
Construction and Interpretation of
Laws6, by stating as under:-

"It may also be stated generally
that the courts are more disposed to relax
the severity of this rule (which is really a
rule of strict construction) in the case of
statutes obviously remedial in their nature
or designed to effect a beneficent
purpose."

17. In the context of beneficial
construction
as
a
principle
of
interpretation, it has been observed in
Maxwell on The Interpretation of
Statutes7 as follows:-

"...where they are faced with a
choice between a wide meaning which
caries out what appears to have been the
object of the legislature more fully, and a
narrow meaning which carries it out less
fully or not at all, they will often choose
the former. Beneficial construction is a
tendency, rather than a rule."

18. Further, in the same treatise, in
the context of industrial legislation, it has
been stated as follows:-

"Industrial legislation provides
a fruitful field for the application of the
tendency
towards
beneficial
construction..."

19. The principle of applying a
liberal construction to a labour welfare
legislation was emphasised in the case of
The Workmen of M/s Firestone Tyre &
Rubber Company of India Pvt. Ltd. Vs.
The Management & Ors.8 where in the
context of the provisions of the Industrial
Disputes Act, 1947, it was observed as
follows:-

"35. ...We are aware that the Act
is a beneficial piece of legislation enacted
in the interest of employees. It is well
settled that in construing the provisions of
a welfare legislation, courts should adopt,
what is described as a beneficent rule of
construction. If two constructions are
reasonably possible to be placed on the
3 All. M/S Vasu Infrastructure Private Ltd. State of U.P. & Ors.
1301
section, it follows that the construction
which furthers the policy and object of
the Act and is more beneficial to the
employees, has to be preferred..."

20. The mode of interpretation of a
social welfare legislation, in the context
of the provisions of the Industrial
Employment
(Standing
Orders) Act,
1946, came up for consideration in the
case of B.D. Shetty & Ors. Vs. CEAT
Ltd. & Anr.9, and it was held as follows:-

"12. ...a beneficial piece of
legislation has to be understood and
construed in its proper and correct
perspective
so
as
to
advance
the
legislative
intention
underlying
its
enactment
rather
than
abolish
it.
Assuming two views are possible, the
one, which is in tune with the legislative
intention and furthers the same, should be
preferred to the one which would frustrate
it."

21. The principle of applying a
liberal
construction
to
a
beneficial
legislation
having
a
social
welfare
purpose was reiterated in the context of
the Payment of Gratuity Act, 1972 in the
case of Allahabad Bank & Anr. Vs. All
India
Allahabad
Bank
Retired
Employees Association10, and it was
observed as follows:-

"16. ...Remedial statutes, in
contradistinction to penal statutes, are
known as welfare, beneficent or social
justice oriented legislations. Such welfare
statutes
always
receive
a
liberal
construction. They are required to be so
construed so as to secure the relief
contemplated by the statute. It is well
settled and needs no restatement at our
hands that labour and welfare legislation
have to be broadly and liberally construed
having due regard to the directive
principles of State policy. The Act with
which we are concerned for the present is
undoubtedly one such welfare oriented
legislation
meant
to
confer
certain
benefits upon the employees working in
various establishments in the country."

22. A similar view was taken with
regard to adopting the beneficial rule of
construction in respect of social welfare
legislation, in the case of Jeewanlal Ltd.
& Ors. Vs. Appellate Authority under
the Payment of Gratuity Act & Ors.11,
wherein it was stated as follows:-

"11. In construing a social
welfare legislation, the court should adopt
a beneficent rule of construction ; and if a
section is capable of two constructions,
that construction should be preferred
which fulfils the policy of the Act, and is
more beneficial to the persons in whose
interest the Act has been passed..."

23. Reference may also be had to
the
case
of
Bharat
Singh
Vs.
Management
Of
New
Delhi
Tuberculosis Centre, New Delhi &
Ors.12, where purposive interpretation
safeguarding the rights of have-nots was
preferred to a literal construction in
interpreting a welfare legislation, and it
was held as follows:-

"11....the court has to evolve the
concept of purposive interpretation which
has
found
acceptance
whenever
a
progressive social beneficial legislation is
under review. We share the view that
where the words of a statute are plain and
unambiguous effect must be given to
them. Plain words have to be accepted as
such but where the intention of the
1302 INDIAN LAW REPORTS ALLAHABAD SERIES
legislature is not clear from the words or
where two constructions are possible, it is
the court's duty to discern the intention in
the context of the background in which a
particular Section is enacted. Once such
an intention is ascertained the courts have
necessarily
to
give
the
statute
a
purposeful or a functional interpretation.
Now, it is trite to say that acts aimed at
social amelioration giving benefits for the
have-nots
should
receive
liberal
construction. It is always the duty of the
court to give such a construction to a
statute as would promote the purpose or
object of the Act. A construction that
promotes the purpose of the legislation
should
be
preferred
to
a
literal
construction. A construction which would
defeat the rights of the have-nots and the
underdog and which would lead to
injustice should always be avoided..."

24. The aforementioned position of
law
has
been
discussed
in
recent
judgments of this Court in U.P.S.R.T.C.
Thru Its R.M. Vikasnagar Kanpur Vs.
State Of U.P. And 3 Others13 and
Nagar Nigam Gorakhpur Thru Nagar
Ayukt Vs. Suresh Pandey And 2
Others14.

25. In the case at hand the facts as
reflected from the order dated 28.7.2017
indicate
that
the
Employees
Compensation Commissioner has duly
taken note that before filing of the claim
petition the requisite notice of claim
under Section 10 had been duly served
upon the petitioner-employer and upon
registration of the claim also a registered
notice dated 8.1.2016 had been sent to the
petitioner and only thereafter the order
dated 5.8.2016 was passed directing the
case
to
proceed
exparte.
It
was
subsequent thereto that the Employees
Compensation Commissioner upon taking
into consideration the facts of the case
and the evidence on record had proceeded
to allow the claim petition of the claimant
respondent.

26. The order dated 29.3.2019
passed upon the recall application filed by
the petitioner also takes note of the fact
that prior to filing of the claim petition the
claimant had served a registered notice
under Section 10 upon the petitioneremployer and in response to the same a
reply had also been submitted by the
employer
admitting
the
factum
of
employment of the claimant with the
petitioner. The order also records that
after filing of the claim petition and
despite issuance of notice the petitioner
did not appear and allowed the case to
proceed exparte and only after passing of
the order dated 28.7.2017 awarding
compensation and upon issuance of a
show cause notice dated 9.12.2017
pursuant thereto the petitioner-employer
filed
the
recall
application.
The
Employees Compensation Commissioner
has accordingly drawn an inference that
the petitioner deliberately wanted to
linger the proceedings and in the facts of
the case where the claimant had suffered
100% disability and was not in a position
to contest the proceedings further, taking
into considering the larger interest of
justice the recall application has been
rejected.

27. The aforementioned order
passed by the Employees Compensation
Commissioner can also not be faulted
with for the reason that E.C.Act, 1923 is a
piece
of
social
security
legislation
providing for a speedy and efficient
machinery for determination and payment
of compensation to the employees. It may
3 All. M/S Ajay Kumar Vs. State of U.P. & Ors.
1303
also be taken note of that as per the
provisions
under
Section
4A
compensation is to be paid as soon as it
falls due. In this regard reference may be
had to the judgment in the case of Pratap
Narain Singh Deo Vs. Srinivas Sabata
and Ors.15, wherein it was held that
compensation becomes payable on the
date of the accident and not on the date of
determination of the amount thereof. The
relevant
observations
made
in
the
judgment are as follows:-

"7. Section 3 of the Act deals
with
the
employer's
liability
for
compensation. Sub-section (1) of that
section, provides that the employer shall
be liable to pay compensation if "personal
injury is caused to a workmen by accident
arising out of and in the course of his
employment". It was not the case of the
employer that the right to compensation
was taken away under Sub-section (5) of
Section 3 because of the institution of a
suit in a civil court for damages, in
respect of the injury, against the employer
or any other person. The employer
therefore become liable to pay the
compensation as soon as the aforesaid
personal injury was caused to the
workmen
by
the
accident
which
admittedly arose out of and in the course
of the employment.