Supreme Court refers issue to larger bench: Can Employee Insured Under ESI Act Claim Motor Accident Compensation?

Supreme Court refers issue to larger bench: Can Employee Insured Under ESI Act Claim Motor Accident Compensation?

The Supreme Court through its division bench comprising of Justices A.S. Bopanna and Sudhanshu Dhulia while hearing the matter of Rajkumar Agrawal vs. Vehicle Tata Venture No. UP 70 BM-1600 Commercial Auto Sales Pvt. Ltd. referred the issue at hand to larger bench. The issue that arose before the Apex Court was whether an employee insured under the Employees' State Insurance Act, 1948 (in short ESI), claim compensation under the Motor Vehicles Act?

The question referred was whether the insurance amount paid under the ESI Act is a "similar benefit" as the compensation which is claimed in a motor accident claim.

In the instant case, the appellant was assailing the judgment passed by the Allahabad High Court dated 28th January, 2021.

The appeal therein arose from a judgment and order dated 22 December, 2018 passed by the Motor Accident Claims Tribunal (for short MACT). Though the Tribunal at the first instance had accepted the claim put forth by the Appellant and had awarded the compensation, the employer/owner of the vehicle in which the Appellant was travelling at the time of the accident had assailed the said judgment contending that the claim would not be maintainable in view of a bar contemplated under Section 53 of the ESI Act, 1948.

The High Court having referred to the said provision reversed the judgment of the Tribunal and dismissed the claim of the Appellant herein.

The learned counsel for the Appellant in addition to Section 53, also referred to Section 61 of the ESI Act to contend that Section 53 cannot be considered as a bar when a claim by an insured employee is made either under Section 163(A) or 166 of the Motor Vehicles Act. Further, it was argued that if the true purport of Sections 53 and 61 of ESI Act was taken note cumulatively, the bar was only if a similar benefit is taken by the workman.

In the instant facts the appellant asserted that it cannot have a similar benefit as was being claimed and has been given to the workman. The appellant has undergone amputation of the lower limb and the benefit paid to him was in terms of Section 46 of ESI Act, which was periodical payment from insurance amount which also contained his contribution and not by way of compensation.

The learned counsel for the respondents per contrary, referred to the judgment passed by this Court in Western India Plywood Ltd. vs. P. Ashokan (1997) 7 to contend that a two Judge Bench of this Court had taken note of the provisions in Section 53, 61 and 2(8) of ESI Act and held that the bar would apply. The Learned Counsel has also cited to the decision in the case of National Insurance Company Ltd. v. Hamida Khatoon and Ors. (2009) to which the High Court had referred during the course of its order.

Referring to these decisions, the bench noted that there is no authoritative pronouncement on the issue whether the insurance amount paid under the ESI Act, is a "similar benefit" as the compensation which is claimed in a case where there is a Motor Vehicle accident and claim subsists so as to bar the same.

The Court also noted the contention that the Motor Vehicle Act, 1988 being a subsequent Act and the provisions in Section 163(A) and 167 begin with a non obstante clause, the bar should not operate against the insured employee under the ESI Act to claim compensation under the Motor Vehicles Act.

The bench therefore placed the matter before a Larger Bench for an authoritative pronouncement on this aspect.