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A bench of Justices Chandrachud and Bopanna on Saturday pulled up New India Assurance (NIA) for pursuing a litigation up to the Supreme Court for settling the claim of a lorry helper who died in 2004. The Court while upholding the order of the Labor Commissioner also imposed a cost of Rs.1 lakh on the company.

When Advocate Viresh B Sahayara, appearing for New India Assurance requested the Court to reduce the cost, Justice Bopanna said “We won’t, you will have to understand the mistake you committed.”

During the course of the hearing, Advocate Anirudh Sanganeria, appearing for the petitioner argued that the accident took place in 2004 and the parents of the workman had pursued proceedings before the High Court and the Supreme Court.

He further submitted that the workman, who was a poor farmer's son, was working as a helper in a truck. The truck was insured and on October 30, 2004, when the driver of the truck allegedly lost control of the vehicle, he dashed against the helper, causing him injuries.

Consequently, the helper succumbed to his injuries shortly. The deceased was 24 years of age and his salary was Rs. 2,400/month which was admitted by the employer as well. The claim for workmen’s compensation under the Workmen’s Compensation Act, 1923 was disposed off in February 2016 by a Labour Commissioner.

The Commissioner had directed the company to deposit Rs.2.4 lakhs along with an interest of 12% and against this order of the Labour Commissioner, a challenge plea was moved in the High Court. 

The High Court reduced the compensation amount to Rs.1.9 lakhs. The High Court reduced the claim on the basis that there was no material on record to indicate salary of the deceased was Rs.2,400 and accordingly, it proceeded on the minimum wage of Rs. 910 to which a multiplier of 2.14 was applied. The High Court though held that there was provision to grant interest in such cases but reduced it to 8% from 12%.

The Apex Court after hearing the parties, held that in the present case, the claim was on the basis that the deceased was receiving Rs. 2,400 per month, therefore, there was no basis for the High Court to reject the claim and proceed on the basis of the minimum wage.

The Court said that the provision of award of interest was within the ambit of the statute and did not call for interference.

The bench also added that there was no justification on behalf of the insurer to take a matter involving such a paltry sum based on such facts, and to drag a poor farmer and his wife who have lost their son, into a long drawn-out litigation.

Therefore, the Court set aside the order passed by the High Court and directed New India Assurance to pay a cost of Rs.1 lakh to the family of the deceased towards meeting the cost of fighting this litigation.

Cause Title: Shantilal Sethy & Anr vs The Divisional Manager of New India Assurance & Anr