Shantilata Sethy & Anr. v. M/s Divisional Manager, The New India Assurance Company Ltd. & Anr.
Background
The appellants' son, a young helper working on a goods truck, died in 2004 after the truck driver lost control and struck him while he was helping load cargo at the roadside. The parents sought compensation of Rs. 3,00,000 under the Workmen's Compensation Act. The Commissioner awarded about Rs. 2,64,895 with 12% interest, but the Odisha High Court later reduced this, holding there was no proof of the son's actual wages and applying a lower minimum-wage figure instead, and also cut the interest rate from 12% to 8%.
Decision Breakdown
The Supreme Court allowed the appeal and restored (with minor recalculation) compensation based on the deceased's actual claimed wages of Rs. 2,400/month, holding there was no basis for the High Court to discard this figure since the employer itself had never disputed it in its written statement. The Court also held that daily food expenses paid to the worker fell within the statutory definition of "wages" for compensation purposes. It restored the 12% interest rate from the date of the accident, relying on precedent that compensation becomes due from the date of the accident, not the date of final adjudication. The Court used strong language criticizing the insurance company for dragging a poor farming family through years of litigation over a modest compensation amount, and additionally awarded Rs. 1 lakh in costs to the appellants.
Lesson Learnt
In workmen's compensation claims, an employer's own undisputed admission about a worker's wages is strong evidence that courts should not discard in favour of a generic minimum-wage estimate, and compensation interest runs from the date of the accident, not the date the claim is finally decided: insurers who prolong litigation over small awards risk being penalised in costs.