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Bai Chanchalben (Widow of Deceased Bhikhabhai Kalandas) Vs. Burjorji Dinshawji Sethna - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 409 of 1966
Judge
Reported in1970ACJ440; (1970)0GLR71; (1969)IILLJ357Guj
ActsWorkmen's Compensation Act, 1923 - Sections 2, 4, 4A, 8(1), 17, 19, 22, 28, 28(1), 29, 30 and 30(1)
AppellantBai Chanchalben (Widow of Deceased Bhikhabhai Kalandas)
RespondentBurjorji Dinshawji Sethna
Cases ReferredRimmalnondi Subba Rao v. Naony Veeraju
Excerpt:
labour and industrial - compensation - sections 2, 4, 4 a, 8 (1), 17, 19, 22, 28, 28 (1), 29, 30 and 30 (1) of workmen's compensation act, 1923 - appeal against deduction in compensation payable to widow of deceased - deceased died on account of injuries suffered in accident arising out of and in course of his employment - liability imposed by first part of section 29 remains unaffected by second part - commissioner not entitled to allow deduction under second part of section 29 - held, respondent liable to pay full compensation to appellant. - - it provides as under :where the amount of any lump sum payable as compensation has been settled by agreement, whether by way of redemption of a half-monthly payment or otherwise, or where any compensation has been so settled as being payable.....1. one bhikhabhi kalandas, a workman working at and doing the work of feeding the huller with paddy in the flour mills of the respondent burjorji dinshawji sethna at ankleshwar received injuries on 8 december, 1963 in an accident arising out of an in the course of his employment. he died on the same day as a result of the injuries so received. his widow who is the appellant here made an application to the commissioner for workmen's compensation (herein-after referred to as the commissioner) under s. 22 read with s. 19 of the workmen's compensation act, 1923 (hereinafter referred to as the act), for an order for compensation under the act. the commissioner held her to be entitled under the provisions of the act to compensation of rs. 3,000 but has awarded rs. 1,500 by deducting a sum of.....
Judgment:

1. One Bhikhabhi Kalandas, a workman working at and doing the work of feeding the huller with paddy in the flour mills of the respondent Burjorji Dinshawji Sethna at Ankleshwar received injuries on 8 December, 1963 in an accident arising out of an in the course of his employment. He died on the same day as a result of the injuries so received. His widow who is the appellant here made an application to the Commissioner for Workmen's Compensation (herein-after referred to as the Commissioner) under S. 22 read with S. 19 of the Workmen's Compensation Act, 1923 (hereinafter referred to as the Act), for an order for compensation under the Act. The Commissioner held her to be entitled under the provisions of the Act to compensation of Rs. 3,000 but has awarded Rs. 1,500 by deducting a sum of Rs. 1,500 earlier paid by deducting a sum of Rs. 1,500 earlier paid by the respondent under circumstances to be presently mentioned. The appellant has come to this Court in appeal under S. 30 of the Act, her grievance being that the Commissioner was in error in ordering a deduction of Rs. 1,500 but should have made an order for payment of Rs. 3,000 which was the amount of compensation payable.

2. In the lower Court the respondent raised various contentions. He, had contended that the deceased Bhikhabhai Kalambhi was not a workman within the meaning of the Act, that he was not at the time of the accident feeding the huller, that the feeding of the huller was not a part of his duties and that at any rate the accident did not arise out of and in the course of his employment. All these contentions do not now arise in this appeal. Sri Vin who appears for the respondent concedes that this Court must proceed on the footing that the deceased Bhikhabhai Kalanbhai was a workman in the employment of the respondent and that the injuries were caused to him by reason of an accident arising out and in the course of employment and further that those injuries had resulted in his death. It is not disputed that the monthly wages of the deceased were Rs. 50 and that having regard to S. 4 of the Act read with Sch. IV to that Act, the compensation payable for the death of the deceased was Rs. 3,000. It would be payable under the provisions of the Act to the dependent of the deceased and the dependent in the present case would admittedly be the appellant alone. These facts are not now in dispute.

3. The dispute centres only round the order of the Commissioner deducting Rs. 1,500 from the amount due as compensation. The reasons why Rs. 1,500 were ordered to be deducted were these. On 7 March, 1964, that is, within four months after the accident the respondent under a receipt which has been produced at Ex. 24 paid Rs. 1,500 to the appellant and her two adult sons Jayantilal and Babubhai. The receipt to which reference will be made in detail later states in effect that the sum of Rs. 1,500 was paid out of mercy, that is to say, ex gratia, and that the heirs had no other legal rights. The payment was not disputed by the appellant. The Commissioner came to the conclusion that this receipt was in writing which fell within the class of writings required to be registered with the Commissioner under S. 28(1) of the act and it not having been registered, the provisions of S. 29 were attracted. He was of the view that having regard to the provisions of S. 29 the respondent was entitled to have this amount of Rs. 1,500 deducted from the full amount of compensation which he was liable to pay under the provisions of the Act. Accordingly he made the order under appeal.

4. Sri G. P. Vyas, the learned advocate for the appellant, contends that S. 29 of the Act on the strength of which the Commissioner has ordered the deduction is not attracted at all. He argues that the document Ex. 24 if properly construed amounts to a contracting out of the liability under the Act and is, therefore, null and void being hit by S. 17 of the Act. He submits that S. 23 of the Act would not come into the picture in respect of a contract or agreement hit by S. 17. Section 28, he points out, concerns an agreement of settlement of amount to be paid as compensation and Ex. 24, he argues, is not such an agreement. What is agreed to be paid under Ex. 24 is a payment ex gratia and therefore S. 28 would not be attracted. He then argues that if that section is not attracted, S. 29 which is consequential would also not be attracted. His last submission is that even if S. 29 is attracted, the second part of that section on which the Commissioners has relied in support of the deduction he has ordered does not, on a true construction, justify this deduction.

5. Sri R. M. Vin, who appears for the respondent, submits that S. 17 of the Act will be attracted only if the contract or agreement has taken place before the accident, that is to say, the contract or agreement has taken place before the liability for compensation has arisen and not after it has arisen. He further submits that at any rate Ss. 17 and 28 must be read together and if the agreement in substance falls under S. 28 it must be treated under that section. His argument is that the agreement read as a whole is an agreement setting the amount of compensation and that the amount of Rs. 1,500 which was paid was in fact paid as compensation and as a matter of settlement of the claim for the compensation payable. He then submits that if so and if it falls under S. 28, then in the absence of registration of this agreement under S. 28, S. 29 would apply and his argument is that under the latter part of S. 29 the Commissioner has the discretion in all cases to allow a deduction in full of the payment already made by the employer to the person entitled to compensation. His last submission is that this appeal does not involve a substantial question of law and is therefore not maintainable in view of the first proviso to S. 30(1).

6. A brief reference to the relevant provisions of the Act will at the outset be appropriate. Sub-section (1) of S. 3 provides that if personal injury is caused to a workman by accident arising out and in the course of his employment his employer shall be liable to pay compensation in accordance with the provisions of that chapter, namely, Chap. II. In that chapter are contained Ss. 3 to 18A. The amount payable as compensation is indicted in S. 4. The material provision, that is, the provision relating to a case where death results from the injuries, is Clause (a) of Sub-section (1) of that section. There is no dispute about the fact that the amount payable in the present case having regard to this provision would be rs. 3,000. The proviso to Sub-section (1) of S. 4 has some relevance with reference to the construction of second part of S. 29 but I propose to refer to that proviso later. Section 8 relates to distribution of compensation and under that subject are covered questions of the manner in which the compensation shall be paid and the persons to whom it is payable. In respect of the deceased workman the compensation is payable, under Sub-sect. (5) of this section, to the dependants of the deceased. The expression 'dependant' is defined in S. 2(d) and there is no dispute about the fact that in the present case the only dependant was the widow, namely, the appellant. Sub-section (1) of S. 8 indicates the manner in which such a compensation is to be paid in certain classes of cases. It provides as under :

'No payment of compensation in respect of a workman whose injury has resulted in death, and no payment of a lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation.'

There is a proviso to this sub-section which reads as under :

'Provided that in the case of a deceased workman, an employer may make to any dependant, advances on account of compensation not exceeding an aggregate of one hundred rupees, and so much of such aggregate as does not exceed the compensation payable to that dependant shall be deducted by the Commissioner from such compensation and repaid to the employer.'

7. It will be noticed therefore that compensation payable in respect of a workman whose injury has resulted in his death has to be paid by deposit to the Commissioner and no payment can be made directly by the employer otherwise than by such deposit. This prohibition against direct payment is also applicable in respect of compensation payable to women and persons under legal disability. The payment in the present case is not only to a dependant but to a woman and the payment directly by the employer would, if this provision is attracted, not be deemed to be a payment of compensation. There is a relaxation of this prohibition in the proviso which permits advances on account of compensation not exceeding an aggregate of one hundred rupees and the Commissioner is authorized to deduct such advances from compensation payable to the extent indicated by proviso. Sub-section (4) enacts how the Commissioner is to deal with the deposit made under Sub-section (1) in respect of the amount payable to a dependant and Sub-section (7) enacts a further protection for women and persons under a legal disability who are entitled to payment of compensation. That sub-section provides inter alia that where any lump sum deposited with the Commissioner is payable to a woman or a person under a legal disability, such sum may be invested, applied or otherwise dealt with for the benefit of the woman or of such person during his disability, in such manner as the Commissioner may direct, Section 17 which is the next relevant section reads as under :

'Any contract or agreement whether made before or after the commencement of this Act, whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment shall be null and void in so far as it purports to remove the liability of any person to pay compensation under the Act.'

8. Therefore, under it the contract or agreement whereby a workman relinquishes his right of compensation shall be null and void in so sar as it purports to remove or reduce the liability of any person to pay compensation under the Act.

9. Chapter III is headed 'Commissioners' and deals with various powers and functions of the Commissioner and the manner in which the proceedings before the Commissioner are to be held. Section 19 deals with the question which the Commissioner is empowered to decide and S. 22 prescribes the form of the application to the Commissioner. Section 28(1) which is material relates to agreements between the employer and the person entitled to compensation. It provides as under :

'Where the amount of any lump sum payable as compensation has been settled by agreement, whether by way of redemption of a half-monthly payment or otherwise, or where any compensation has been so settled as being payable to a woman or a person under a legal disability a memorandum thereof shall be sent by the employer to the Commissioner, who shall, on being satisfied as to its genuineness, record the memorandum in a register in the prescribed manner.'

10. The proviso to this sub-section not only lays down the procedure which the Commissioner shall follow to inquire into the question whether the memorandum shall be registered but also gives the power to the Commissioner to refuse to register the memorandum on grounds of inadequacy of the sum or amount or by reason of the agreement having been obtained by fraud or undue influence or other improper means. In case he declines to register power is given to him to make such orders including the order as to any sum already paid under the agreement as he thinks just in the circumstances. Section 29, which is the subject of considerable argument before me, may be set out in full. It reads :

'Where a memorandum of any agreement, the registration of which is required by S. 28, is not sent to the Commissioner as required by that section, the employer shall be liable to pay the full amount of compensation which he is liable to pay under the provisions of this Act, and notwithstanding anything contained in the proviso to sub-section (1) of S. 4, shall not, unless the Commissioner otherwise directs, be entitled to deduct more than half of any amount paid to the workman by way of compensation whether under the agreement or otherwise.'

11. Therefore, the part of that section casts upon the employer the liability for full amount for compensation notwithstanding the memorandum of agreement which though required to be registered under S. 28 was not sent to the Commissioner as required by that section. The second part permits deductions from that full liability of some portion of the amount already paid in those cases which full under the second part and to the extent mentioned therein. Section 30 concerns the right of appeal to the High Court from certain orders of the Commissioner and there is a proviso that no appeal shall lie against any order unless a substantial question of law is involved in the appeal.

12. The first question for determination is what is the nature of the contract or agreement embodied in Ex. 24 dated 7 March, 1964 and whether it attracts S. 17 or 28. The document is in Gujarati. In the beginning the names of the three persons who have signed the document are stated, namely, the appellant and her two adult sons, and the writing goes on the say these three voluntarily are passing that writing to Burjorji Dinshawji Sethna, that is, the respondent. It is then stated that the deceased Bhikhabhai Kalandas was serving in the respondent's mills at Goa bazaar and he died on 8 December, 1963 because of an accident. Then the writing states :

'You have today given Rs. 1,500 out of mercy which we accept gratefully. Because of the said death by accident whatever the legal rights the heirs of the deceased Bhikhabhai Kalandas have to get this amount are null and void by this.'

13. The first point is whether by this writing there is a contracting out as contemplated by S. 17 of the Act, that is to say, whether by this writing the workman relinquishes any right of compensation from the employer for personal injury arising out of and in the course of his employment. It is not disputed that the expression 'workman' used in the section would include a dependant in view of the definition in Clause (n) of S. 2. Now the writing does not say in terms that the signatories relinquished any right of compensation. Whether the writing amounts to a relinquishment has therefore to be gathered from the last part of the writing to which reference has already been made. In that last part the payment is described as a payment made out of mercy, that is to say, it is not a payment by way of or on account of compensation. The ultimate part appears to set out the intended effect of this payment or writing, namely, that the legal rights of the heirs to get this amount because of the death by accident are null and void, that is to say, this payment or writing would operate as a bar to the exercise of any legal rights the heirs may have arising out of death by accident. The plain meaning of the recitals is that the heirs of the deceased having accepted the ex gratia payment of Rs. 1,500 gave up whatever legal rights they had to claim this amount by reason of death by accident. The language is not happy but taking the recitals as a whole they do amount to a relinquishment of the right of compensation which removes or reduces the liability of the respondent. It was argued by Sri Vin that even so S. 17 would not be attracted because the contract or agreement contemplated by that section, he says, must be a contract or agreement entered into before the liability for compensation has arisen. There is nothing in the section to limit its operation to a contract or agreement entered into before the liability has arisen. As regards the point of time when the contract or agreement may be made all that the section says is that it may have been made before or after the commencement of the Act. Therefore, in respect of point of time when the contract or agreement is made the opening words of the section are wide and there is nothing in the remaining part of the section to compel the construction that the liability in respect of which the contracting out has taken place must arise only after the contract or agreement has been made.

14. But if my reading of the agreement is not correct and the agreement does not fall within the mischief of S. 17, it does not then automatically fall under S. 28(1). Section 28(1) concerns certain kinds of agreements and we have to consider whether this agreement is of that kind. The agreements envisaged by S. 28(1) are agreements whereby -

(1) the amount of any lump sum payable as compensation is settled, or

(2) any compensation has been settled as being payable to a woman or a person under disability.

15. One of the necessary ingredients of an agreement falling under this provision is that thereby a compensation payable is settled. Now it was not the case of the respondent that by Ex. 24 the compensation payable was settled. In fact both in the written statement and the evidence he denied his liability to pay any compensation and asserted that the sum of Rs. 1,500 was paid as ex gratia. This was also the case put to the appellant in cross-examination and admitted by her to be correct. However, in construing the agreement we must primarily look at the contents of the agreement and if they show that there was a settlement of compensation, the agreement must be so treated. There is nothing in the language of Ex. 24 which shows that thereby there was a settlement of compensation payable; indeed the language, particularly the emphasis on the payment being ex gratia, negatives such an inference. There is no acceptance of liability for compensation, much less a settlement of it.

16. However, assuming that this agreement is one of the kinds covered by S. 28(1), then as it was not sent to the Commissioner by the employer as required by that provision, the immediate consequence is as set out in the first part of S. 29 and that consequence is that

'the employer shall be liable to pay the full amount of compensation which he is liable to pay under the provisions of this Act';

17. that is to say, in the present case he would be liable to pay Rs. 3,000. The second part of S. 29 then speaks of allowable deductions from this liability for the full amount and the short question is what is the scope of that part of section, whether this part under which the employer is entitled to deduct certain amounts from the amount of full liability applies to all cases of direct payment as contended by Sri Vin or applies only to cases, as contended by Sri Vyas, falling under the proviso to Sub-section (1) of S. 4 which has been specifically mentioned in that part and whether in any case a payment which is hit by S. 8(1) is deductible under this part of S. 29.

18. It is now necessary to turn to the relevant provisions of S. 4. That section, as already pointed out, relates to the amount payable as compensation. Clause (a) of Sub-section (1) concerns the amount payable where death results from the injury, Clause (b) concerns the amount payable where permanent total disablement results from the injury, Clause (c) concerns the amount payable where permanent partial disablement results from the injury and Clause (d) concerns payment in respect of temporary disablement whether total or partial, resulting from the injury. In cases falling under Cls. (a), (b) and (c) the compensation payable in accordance with the schedule to the Act is a lump sum and in cases falling under Clause (d) it is half-monthly payment of the sum set out in Sch. IV during the disablement. These half-monthly payments can be converted into a lump sum under S. 7 by agreement between the parties or by the Commissioner on an application by either party. Now the proviso to S. 4(1) reads as under :

'(a) There shall be deducted from any lump-sum or half-monthly payments to which the workman is entitled the amount of any payment or allowance which the workman 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.

(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 workman before the accident exceeds half the amount of such wages which he is earning after the accident.'

19. There is an explanation to Sub-section (1) and also a Sub-section (2) bit they are not relevant for our purpose. Now, the proviso just set out is obviously applicable only to cases of disablement. This is clear from the language of both the clauses of the provisos, and in particular Clause (a) which in terms speaks of payment received from the employer by way compensation during the period of disablement. Sri Vin concedes that the proviso would be attracted only to cases of disablement and not to cases of death resulting from the injury. Under the proviso the employer is entitled to a deduction of all the payments which he has made in cases of disablement and this deduction is to be made from the lump-sum or half-monthly payments to which the workman is entitled under the provisions of the Act.

20. With this we may again turn to the second part of S. 29. It starts with a non obstante clause, and the short question is whether the non obstante clause and the operative clause are co-extensive. If they are, then the deduction permissible would be only in respect of direct payments in cases of disablement. Sri Vin's argument is that the non obstante clause 'notwithstanding anything contained in the proviso to Sub-section (1) of S. 4' does not indicate the scope of the operative clause which follows but has been put by way of abundant caution and therefore the operative clause which follows the non obstante clause must first be read and given full effect and if that is done and it is found that the non obstante clause limits the clear meaning of the operative clause, it should be treated as having been enacted by way of abundant caution. He says that the operative clause here is clear in its scope and the only meaning it carries is that in respect of every payment by way of compensation made by the employer direct he is entitled to a deduction of half the amount but the Commissioner may direct deduction of more than half and even full amount. Sri Vyas for the appellant argues that any extensive meaning of the operative clause will wholly take away the effect of S. 29 and the first part of S. 29 and at any rate that part cannot be read so as to nullify the positive prohibition enacted in S. 8(1) of the Act.

21. The principles to be kept in mind when construing the effect of a non obstante clause are set out in the decision of the Supreme Court in Dominion of India v. Shrinbai [A.I.R. 1954 S.C. 596] to which Sri Vin invited my attention. Their lordships say :

'Although ordinarily there should be a close approximation between the non obstante clause and the operative part of the section, the non obstante clause need not necessarily and always be co-extensive with the operative part, so as to have the effect of cutting down the clear terms of an enactment. If the words of the enactment are clear and are capable of only one interpretation on a plain and grammatical construction of the words thereof, a non obstante clause cannot cut down the construction and restrict the scope of its operation. In such cases the non obstante clause has to be read as clarifying the whole position and must be understood to have been incorporated in the enactment by the legislature by way of abundant caution and not by way of limiting the ambit and scope of the operative part of the enactment.'

22. Therefore, in respect of a non obstante clause there should ordinarily be a close approximation between it and the operative part of the section though it is not imperative that it should be co-extensive with the operative part. The test to be applied is first to ascertain what is the clear meaning of the operative part. If the meaning is clear and the operative part is capable of only one construction, then the ordinary rule that there should be a close approximation between the non obstante clause and the operative part of the section cannot be invoked in order to limit the operation of the operative part. In such a case the non obstante clause must be treated as having been enacted either to clarify the position or by way of abundant caution. Therefore, while construing the second part of S. 29 we will have to first consider whether the operative clause without the non obstante clause is clear and unequivocal and if so, what is the meaning of that operative clause.

23. Without the non obstante clause the operative clause would seem to cover all payments by way of compensation directly made by the employer to the workman. Direct payment to the workman is permissible under S. 4A. That section reads as under :

'(1) Compensation under S. 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 workman, as the case may be, without prejudice to the right of the workman 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 may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent. per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum, not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty.'

24. Sub-section (1) of this section, therefore, requires early payment of compensation payable by virtue of S. 4. This obviously means the full amount of compensation payable. If the employer disputes the extent of liability, he can make a provisional payment for such liability as he accepts and this can be made by deposit with the Commissioner or direct to the workman as provided for in Sub-section (2). Sub-section (3) empowers the Commissioner to grant interest. This provision in respect of interest emphasizes the need for early payment by the employer. Therefore, direct payment to the workman in respect of compensation payable under S. 4 is permissible. Even when the half-monthly payment is commuted under S. 7 direct payment to the workman of the commuted sum is envisaged by that section. But S. 8(1) creates a bar on direct payment in certain cases, namely, cases where there is death from injury (that is to say, where the compensation is to be paid to the dependant) or where a lump sum as compensation is to be paid to a woman or a person under legal disability and Sub-secs. (4) and (7) which have been earlier referred to impliedly emphasize that bar. If, therefore, direct payment in all cases except those covered by Sub-section (1) of S. 8 is permissible, then the permissible payments do not cease to be valid by reason of the fact that they are made under an agreement settling the amount of compensation. In fact such agreements are not discouraged by the Act. Sections 19 and 22 go to show that the Commissioner is to be approached if there is no settlement by agreement. With this background we may now look at the second part of S. 22. The operative clause in that part entitles the employer to deduct half of any amount paid to the workman by way if compensation under agreement or otherwise. The payment must be by way of compensation. There is no limitation as to the cases in which such payment is made and therefore the reasonable meaning is that it covers all cases of permissible payments under the Act. The reference to the proviso to Sub-section (1) of S. 4 in the non obstante clause is on a reasonable reading, therefore, a reference not to the cases of direct payment but to the availability of amount of deduction, because the said proviso provides for deduction of the full amount of periodical payments made consistent with the proviso during the period of disablement. It was probably thought necessary to specifically refer to that proviso, as the operative clause limits the amount which the employer is entitled to deduct. The Commissioner could no doubt direct otherwise, that is to say, allow full deduction. However, whatever the reason for the non obstante clause it would not be possible having regard to the language of the operative clause read in the light of the scheme of the Act to limit it only to cases falling under the proviso to S. 4(1). Such a construction does not render Ss. 28 and 29 ineffective as argued by Sri Vyas. The consequence which follows the violation of S. 28(1) is the fastening of liability for the full amount of compensation payable, that is to say, the reduced liability, if any, under the agreed settlement is not available. That full liability which is imposed by the first part of S. 29 remains unaffected by the second part. The second part deals with only deductions allowable from that full liability. I am therefore inclined to agree with Sri Vin that the non obstante clause under the second part of S. 29 does not limit the extent of the operative clause. That, however does not help the respondent in this case, because the direct payment which he made was not a permissible payment and was not to be deemed to be a payment of compensation in view of S. 8(1). Sri Vin says that although it may not be deemed to be payment of compensation it does not cease to be a payment 'by way of compensation' which is the expression used in S. 29. I am not able to accept that fine distinction as a valid one. The expression 'compensation' is defined in Clause (c) of S. 2(1) as meaning 'compensation as provided by this Act' and if S. 8(1) of the Act prohibits a particular payment to be treated as a payment of compensation, the payment would not be covered by the expression 'by way of compensation.' The distinction sought to be made by Sri Vin would stultify the prohibitory and the protective provisions contained in S. 8. The Commissioner was therefore not entitled to allow deduction of Rs. 1,500 under the second part of S. 29 of the act.

25. The view I am inclined to take receives support from the decision of the Calcutta High Court in Mrs. Kathleen Dias v. H. M. Coria & Sons [1951 - II L.L.J. 192] to which Sri Vyas invited my attention. There one Dias, a workman employed by the respondent as a foreman, died as a result of injuries received in an accident arising out and in the course of his employment. The employer respondent paid the widow and other relatives of the deceased Rs. 3,000 under a receipt. The receipt recited that it was an ex gratia payment. As an agreement it was not sent to the Commissioner under S. 28 and was not registered. The widow made a claim before the Commissioner. The Commissioner came to the conclusion that the right amount of compensation was Rs. 3,500. But taking into account the payment made to the widow he awarded only Rs. 475. The question before the High Court was whether this sum was rightly deducted. Their lordships after referring to S. 2 of the Act go on to observe :

'It is quite clear from this section that even if the sum of Rs. 3,000 had been paid to the appellant by way of compensation, that amount could not be deducted from the actual amount of compensation payable, because the section says that such payment shall not be deemed to be a payment of compensation. In this case the amount was paid to the appellant not as compensation but as an ex gratia payment. Therefore, the observation I have made applies greater force. This amount cannot be deducted from the sum of Rs. 3,500.'

They go on to observe :

'The learned Commissioner thought that there was some sort of equity in favour of the respondent and on that he deducted this sum from the sum of Rs. 3,500. We do not see how any equity arises when the sections of the Act are definite and clear.'

26. No doubt there is no discussion in the judgment of the provisions of S. 29 and it is not clear whether those provisions were brought to their notice. However, when their lordships emphasized that no consideration of equity could override the express provisions of S. 8, they had probably in mind the provisions of S. 29, because they have earlier referred to the non-registration under S. 28.

27. Sri Vin's last submission is that an appeal does not lie as no substantial question of law is involved in the appeal as required by proviso 1 to S. 31. He invited my attention to the decision of the Supreme Court in Chunilal v. Mehta & Sons, Ltd. Century Spinning and . [A.I.R. 1962 S.C. 1314]. Their lordships in that case accepted the test evolved by the Madras High Court in Rimmalnondi Subba Rao v. Naony Veeraju [I.L.R. 1952 Mad. 264] in determining whether a substantial question was involved and said :

'The proper test for interpreting whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so, whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to be applied in determining the question are well-setteled an there is a mere question of applying those principles or that the plea raised is palpably absurd, the question would not be a substantial question of law.'

28. Therefore, even if the question of law is not of general public importance but is one which concerns only the dispute between the parties, if the question of law is fairly arguable or where there is room for difference of opinion on it, then the question would be a substantial question of law. Applying these tests there is no difficulty in holding that this appeal involves a substantial question of law.

29. For these reasons the appeal is allowed and the order passed by the Commissioner in this case is modified by ordering that the respondent shall pay to the appellant Rs. 3,000 as compensation. If the respondent has paid any sum in accordance with the directions of the Commissioner the same shall be given credit for towards the amount of Rs. 3,000 hereby order. There will be no order as to costs.


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