Simultaneous compensation under the MV Act and the Employees’ State Insurance Act

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INTRODUCTION 

An employee who has received an injury during the course of his employment should be given compensation as fast as possible, for him to be able to make good his losses. Motor accidents are also very frequently heard in our daily lives which lead to considerable loss of person and property. 

For the same reason the Employees’ State Insurance Act, 1948 was enacted with the purpose of providing benefit to the victims dealing with the cases of injury during the course of employment or dealing with maternity and sickness. The contribution is not necessarily always made by the employer it can sometimes be made by the employee. For the compensation to be claimed under this act it is necessary that there should pre-exist an employer-employee relationship.

The Motor vehicle Act, enacted in 1988, has a designed “structured formula basis” framework to provide compensation to the injured party. This framework may include the victim’s age, his or her income, previous suffering or injuries, etc. This act was further amended in 2019 to curb the road accident and enhance road safety. This amendment has various new operating standards for both commercial and personal motor vehicle, along with the introduction of fresh penalties and compensation amount.

The Employees’ State Insurance Act was enacted by the legislation subsequent to the Motor Vehicles Act. Therefore is the employee has received compensation from the Employees’ State Insurance Act he cannot further claim from the Motor Vehicle Act. 

For this very reason, the Madras High Court in a popular Mangalamma’s case pronounced the judgment that the primary purpose of Section 53 of Employees’ State Insurance Act is to prevent the employer from the liability of more than one claim in connection to the same injury or accident. 

Cases dealing with the claim of damages

In a very celebrated case of Oriental Insurance Co. Ltd. v. Mohan Kanwar and Ors., the question of whether the victim can claim compensation from both Employees’ State Insurance Act, 1948 and Motor Vehicles Act, 1988 was decided by the court. In this case, the plaintiff, under the course of his employment, met with an accident involving the company’s vehicle. The plaintiff claimed compensation from the Motor Vehicle Act as well as from the Employees’ State Insurance Act. The contention raised here by the insurance company was that the plaintiff, being an employee, was already compensated by the employer under the Employees’ State Insurance Act and therefore he should not be compensated again by the insurance company. The court sited Sec 53 and 61 of the Employees’ State Insurance which reads that if an employee’s claim has been covered by one provision then he cannot claim compensation for the same from other provision which deals with the same issue. Therefore, since the plaintiff was already compensated by the company under the 1948 Act, he cannot again claim compensation under the Motor Vehicle Act, 1988. 

Whenever the cases concerning compensation for the damage come before the court of law, section 53 plays a vital role in determining the maintainability of the claim. This section puts a limit on the claim on compensation for damage from different provisions. Similarly, section 61 also deals with the same issue. 

Another landmark case is a case of Trehan v. Associated Electrical Agencies and Anr. In this case, the employee got injured on his face while performing his duty. Because of the injury, he lost the vision of his left eye. He recovered his compensation amount under the Employees’ State Insurance Act, but still, he further demanded from his employer. In defence, the employer invoked section 53 of the ESI Act, 1948. The court upheld the employer’s claim and denied giving compensation to the employee. 

Even though the Employees’ State Insurance Act is welfare legislation, but the legislature was of the view that if the employee has sustained an injury during his course of employment and has received compensation, then he should be prohibited from claiming compensation from other sources for the same injury. 

The Supreme Court in Sarla Verma v. Delhi Transport Corporation pointed out the fact that different corporation or tribunals use a different mechanism to calculate similar factual scenario, which results in lack of uniformity and consistency while deciding compensation under specified claims.  

Fair Proceedings 

It is the duty of the state and the court to make sure that the legitimate claim of the victim should be heard and should not be defeated on the grounds that he is illiterate or he does not hold sufficient resources. In many a case, it happens that the victim’s case his not produced before the judge or it is not heard and the reason being his poverty n\and illiteracy. 

It is also important to mention that in cases where the victim is very poor that he could not afford the prescribed fees, then in such cases he may remit such fees. And if the case is decided in the favour of the victim, then the commissioner is required to pay the prescribed fees along with the cost of the case.  

Since the Motor Vehicle Act is welfare legislation enacted with the intent to provide maximum benefit to the victim. The court in several cases also stated that the victim can claim compensation of amount excess to the one that he has claimed. Section 168 of the Motor Vehicle Act grants court to provide just and reasonable compensation to the victim. Reasonable compensation can be claimed from the evidence produced. And also there is no time-barred in the Motor Vehicle Act to claim compensation.

Conclusion

After analyzing both the Employees’ State Insurance Act and the Motor Vehicle Act it is reasonable to conclude that both the legislature are designed in such a way that the victim can claim compensation from any one of them and not from both. 

This article has been written by Nimisha Mishra, a second-year student of NALSAR University of Law.

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