http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: WESTERN INDIA PLYWOOD LTD.

       Vs.

RESPONDENT: SHRI. P. ASHOKAN

DATE OF JUDGMENT:       19/09/1997

BENCH: S.B. MAJMUDAR, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:               THE 19TH DAY OF SEPTEMBER, 1997 Present:               Hon’ble Mr. Justice S.B. Majmudar               Hon’ble Mr. Justice B.N. Kirpal A.S. Nambiar,  Sr.  Adv.,  Ms.  Shanta  Vasudevan  and  P.K. Manohar, Adv. with for the Appellant Manoj Swarup, Ms. Lalita Kohli, Adv, for M/S. Manoj Swarup & Co., Adv. for the Respondent.                       J U D G M E N T      The following Judgement of the Court was delivered.                       J U D G M E N T KIRPAL, J.      The sole  question which  arises for  consideration  in this appeal is whether the respondent, who is an employee of the appellant,  can claim  damages  from  the  appellant  on account of  the injury  suffered by him during the course of employment when  he was  already received  the benefit under the  provision   of  the   Employees  State   Insurance  Act 1948(herein after referred to as the ’ESI Act’.      Briefly stated  the facts  are that  the appellant is a company  owning  and  operating  a  plywood  factory.    The respondent, who  was working  with the  company, met with an accident when  he was  feeding the  DAP  compound  into  the roller mill by pushing it with his own hand.  As a result of this   accident    one   of   his   hands   was   amputated. Notwithstanding the  accident,  the  appellant  allowed  the respondent to  continue in its service without any reduction in remuneration.      The ESI  Act was  applicable to  the  employee  of  the appellant company,  including the  respondent.    After  the aforesaid accident  a claim  was maid  thereunder and  as  a result thereof  the disabled  benefit of Rs. 260/- per month on account  of permanent/partial  disablement was ordered to be paid  to the  respondent.  This decision of the employees State Insurance  Corporation to  pay the said amount was not challenged.   It is  the case  of the appellant that besides this benefit under the ESI Act, the medical expenses for the treatment  of  the  respondent  received  the  best  medical treatment available in that area.      While still  in service the respondent filed OP No. 108

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

of 1981  in the  Court of  Subordinate  Judge,  Teilicherry, under Order  33 Rule  1 of  the  Code  of  Civil  Procedure, seeking Permission  of the Court to allow him to file a suit against  the   appellant  herein   for  Rs.   1,50,000/-  as compensation for  the injuries sustained by him on a account of the  aforesaid accident  which had  taken place in April, 1980.  This application was opposed by the appellant herein, inter alia, on the ground that it was liable to be dismissed under Order  33 Rule  5 (d)  and (f)  of the  Code of  Civil Procedure, in view of the provision of Section 53 of the ESI Act,  which   barred  the   receiving  or  recovery  of  any compensation or  damages by  an employee under any law other than the  Employees State Insurance Act.  This Contention of the appellant was upheld and the Subordinate Court dismissed the said application of the respondent.      The respondent  thereafter field  an appeal  before the high Court  of Kerala.   A  division Bench of the High Court doubted  the correctness of an earlier Bench the correctness of an  Decision on  the same question and, consequently, the case  was  referred  to  a  full  Bench.    The  Full  Bench consisting  of   three  learned  judges  held    that    the provisions of   Section 53 and 61 of ESI Act  did not bar an action by  an injured  employee under  tort for compensation against the employer.  It accordingly allowed the appeal and directed the  application of the trial court on merits Order 33 Rule  1 to  be decided  by trial  court on  merits and in accordance with law. Hence  this  appeal by special leave.      It was  submitted  by  Mr.  Nambiar,  learned    senior counsel  for  the  appellant,    that  the  Employees  State Insurance Act  is a  self contained  code  and  the  insured Employees, like  the respondent, are entitled to the benefit in case  of injury  suffered under the provisions of the ESI Act  and such  employees in the case of an Employment injury are debarred  from making  any claim  under any other act or law.   In this  connection our  attention was  drawn to  the relevant provisions  of the  ESI Act.    Mr.  Manoj  Swarup, learned counsel  for the  respondent,   on the  other  hand, submitted that  Section 53  should   be constructed in  such away that  an aggrieved employee is able to receive adequate compensation on  account of  the injury which is sub stained by him.  It was  contended that  the   amount which was paid under the  ESI Act could be regarded as an  adequate measure of  damages  suffered  by  the  respondent  and,  therefore, Section 53  should not  be constructed  in such  a way as to prevent an  employee from  bringing about an action in tort. In the  alternative it  was submitted  that this  court,  in exercise of  its   jurisdiction under  Article  136  of  the constitution, should not interfere in the present case.      There are  only three  provisions of the ESI which  are relevant for  the present  case .   Section 2(8) defines the term ’employment injury’ and reads as follows:      "Employment injury" means perennial      injury to  an occupational  disease      arising out  of and  in the  course      of   his   Employment,   being   an      insurable  employment  whether  the      accident    occurs        or    the      occupational diseases is contracted      within or  outside the  territorial      limits of India.      The two  other sections  with which we are concerned in this case are Sections 53 and 61 which are follows:      "53.  Bar   against  receiving   or      recovery of compensation on damages      under any  other law:-   An insured

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

    person or  his depends shall not be      entitled  to  receive  or  recovery      whether from  the employer  of  the      insured person  or from  any  other      person, any compensation or damages      under  the  Workmen’s  Compensation      Act, 1923  (8 of 1923) of any other      law for  the time being in force or      otherwise,   in   respect   of   an      employment injury  sustained by the      insured person as an employee under      this Act.      61. bar  of  benefits  under  other      enactments:-  When   a  person   is      entitled to  any  of  the  benefits      provided by  this Act, he shall not      be entitled  to receive any similar      benefit   admissible    under   the      provisions of any other enactment."      The  aforesaid   provisions  have   been  construed  by different courts  including this  Court.   Mr. Nambiar first relied upon the decision of the Karnataka High Court in K.S. Vasantha  and   Ors.  Vs.  Karnataka  State  Road  Transport Corporation [(1982)  60 FJR  118] wherein it was held, while constructing Section  53 of  the ESI Act, that where workmen travelling to  work on  a transport provided by the employer had suffered injury by an accident caused to the vehicle, it amounted to  employment injury  and Section  53 was a bar to any claim  by  the  insured  under  any  other  law  or  the Workmen’s Compensation  Act, 1923.   Their  remedy,  it  was held, was  only to  claim compensation  or damages  from the Employees State  Insurance Corporation.   To the same effect is the  judgement or  the Madras  High Court  in the case of Mangalamma and  Ors. Vs.  Express Newspapers  Ltd. and  Anr. [AIR 1982  madras 223].   While  constricting Section 53 the Madras High  Court held that the object of Section 53 of the Act was to save the employer from facing more than one claim in relation to the same accident.  In Annapurna and Ors. Vs. General Manager, Karnataka State Road Transport Corporation, Bangalore and  Ors. [1984 lab. I.C. Journal 1355] a Division Bench of  the Karnataka  high  Court  followed  its  earlier judgement and  reiterated that  Section 53  created a bar to the recovery  of Compensation  under any  other law in cases where the insured person had received an employment injury      Mr. Swarup, however, relied on the decision in the case of Hindustan  Aeronautics Ltd.  Vs. P. Venu Perumal and Anr. [Air 1972 Mysore 255].  It was held by the Mysore High Court that  the   right  to  sue  under  the  Motor  Vehicles  Act originates from  the substantive  law, namely,  the  law  of tort.   This law was not an enactment and, consequently, the provisions of  Section 61  of the ESI Act could not prohibit an employee  from making  a claim  under section  110 of the Motor Vehicle  Act claiming  damages on  account of injuries suffered in  an accident.   Through  the observations in the said judgement  do support  the submission of Mr. Swarup but the  High   Court  did   not  consider   in  that  case  the applicability and  effect of  Section  53,  with  which  are concerned here.      The position  with regard  to the claim of an employees against his  employer on  his suffering an employment injury now stands  settled with  the decision  of this  Court in A. Trehan Vs.  Associated Electrical Agencies and Anr.[(1996) 4 SCC 255].   In  that case Trehan, who was an employee of the Respondent, received  injuries on  his  face  while  he  was carrying out  repairs of  a television  in the course of his

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

employment as  a result  of which he lost vision in the left eye.   After receiving the benefit from the Employees’ State Insurance Corporation  under the  ESI Act he served a notice on the  respondent demanding  Rs. 7  lacs as compensation of Rs. 1,06,785/-.   The  employer objected to the maintainable of the  same and relied upon Section 53 of the ESI Act.  The Commissioner overruled the employer’s objection and followed the judgement  of the Full Bench of the Kerala High Court in the present  case and  observed that  ESI  being  a  welfare legislation, the  Parliament  could  not  have  intended  to create a  bar against the workmen claiming more advantageous benefit under  the Workmen’s  Compensation Act.   The single judge of the High court dismissed the writ petition filed by the employer but the Division Bench, in appeal, held that in view of  the bar  created by Section 53, the application for compensation filed  by Trehan  was not  maintainable.    The Court analysed  the provisions  of Section 53 of the Act and observed at page 260 as follows:      " In  the background and context we      have to  consider the effect of the      bar created  by Section  53 of  the      ESI Act.   Bar is against receiving      or recovering  any compensation  or      damages   under    the    Workmen’s      Compensation Act  or any  other law      for the  time  being  in  force  or      otherwise   in    respect   of   an      employment  injury.    The  bar  is      absolute as  can seen  from the use      of the word’s shall not be entitled      to receive  or  recover,  "wheather      from the  employer of  the  insured      person or  from other person", "any      compensation or damages" and "under      the  Workmen’s   compensation  Act,      1923 (8  of 1923) or, any other law      for the  time  being  in  force  or      otherwise".  The words "employed by      the  legislature"   are  clear  and      unequivocal.   When such  a bar  is      created in  clear and express terms      it would neither be permissible nor      proper   to   inter   a   different      intention  by   referring  to   the      previous     history     of     the      legislation.   That would amount to      bypassing the bar and defeating the      object of  the provision.   In view      of  the   clear  language   of  the      section we find no justification in      interpreting or  constructing it as      not taking  away the  right of  the      workman who  is an  insured  person      and an  employee under  the ESI Act      to  claim  compensation  under  the      Workmen’s Compensation Act.  We are      of the  opinion that the High Court      was right  in holding that the view      of the bar created by Section 53 of      the  application  for  compensation      filed by  the appellant  under  the      Workmen’s Compensation  Act was not      maintainable."      The judgement  under appeal  in the present case of the Full bench  of the  Kerala High  Court was considered and it

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

was  observed  that  "we  cannot  agree  with  some  of  the assumption and  observations made  by the Kerala High Court. Moreover, the  Kerala High Court has taken that view without referring to  and considering  the effect  of the  clear and express words used in that section."      In view of the aforesaid observations in Trehan’s case, with which  we respectfully  agrees, it  is clear  that  the respondent could  not make  a claim for damages.  Section 53 disentitles an  employee who  wads  suffered  an  employment injury from  receiving compensation  or  damages  under  the Workmen’s Compensation  Act or  any other  law for  the time being in  force or otherwise.  The use of the expression "or Otherwise" would  clearly indicate  that this section is not limited to  ousting the relief claimed only under any status but the  workings of  the section  are such  that an insured person would  not be entitled to make a claim in Torts which has the force of law under the ESI Act.  Even though the Esi Act is a beneficial legislation the Legislature had throught it fit  to prohibit  an insured  person  from  receiving  or recovering compensation  or damages  under  any  other  law, including  Torts,   in  cases  where  the  injury  had  been substained by him is an employment injury.      The  ESI  Act  has  been  enacted  to  provide  certain benefits to  the case  of sickness, maternity and employment injury and  make provisions  in respect thereof.  Under this Act contribution  is made  not only by the employee but also by the  employer .   The  claim by  the employer against the employer where the relationship of the employer and employee exists were  meant to  be governed by the ESI Act alone.  It is precisely  for this  reason that the Madras High Court in Mangalamma’s case  (supra) had  observed that  the object of Section 53  of the  ESI Act  was to  save the  employer from facing more than one claim in relation to the same accident. This, in  our opinion,  is the  correct reading  of the said provision.   This being  so the  claim of  the ESI  Act, the trial court  was right  in dismissing  the application under Order 33 Rule 1 of the Code Of Civil Procedure.      The provision  in law  being clear and concluded by the decision of  this Court  in Trehan’s  case (supra) we see no justification for  the Court not exercising its jurisdiction counsel.   The incorrect  decision on  a point of law of the High Court has to be corrected.      During the  course of  hearing it  had been argued that Section 53  should not  be constructed  in such away that an insured person  cannot rise a claim against a third party in the event  of his  suffering an  employment injury.   It was submitted that  though qua  the employer only one remedy may available, namely,  under the  ESI Act  but as  far as third persons are  concerned Section  53  cannot  taken  up  as  a defence to  an action  in tort  in a  claim being  made  for damages because  the ESI  Act creates  certain rights  as  a result of  the  employment  qua  the  employer  and  has  no application as  far as third parties are concerned.  In this ’employment injury’  in Section  53 relates to a claim which is relatable  to the  employment of  the insured person with his employer.      In our  opinion, though  there is considerable force in the said submission but it is not necessary for the decision of the  present case  the claim  which was sought to be made was not  against the third party but against the third party but against  the employer itself.  Perhaps this question may require considerable in an appropriate case.      For the  aforesaid reasons this appeal is allowed.  The judgement of  the High  Court is set aside that of the trial court dismissing the respondent’s application under Order 33

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

Rule 1  of the  Code of  Civil Procedure is restored.  There will be no order as to costs.