IN THE HIGH COURT OF DELHI FAO No.326/2007 # The New India Assurance Co. Ltd. ........ Appellant ! through: Mr.D.D.Singh with Mr.Navdeep Singh, Adv. VERSUS $ Smt. Ram Kali & Ors. ........Respondent ^ through: Mr.H.L.Narula with Mr.Bhupesh Narula for respondents 1 to 5 Mr.Bhavya Sethi for Mr.A.K.Dutta for respondent No.6 % DATE OF DECISION: 21.1.2008 CORAM: * Hon'ble Mr.Justice Pradeep Nandrajog 1. Whether reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether judgment should be reported in Digest? : PRADEEP NANDRAJOG, J.(Oral) * 1. Heard. 2. A short issue arises for consideration. The merits of the order passed by the Commissioner, Workmen's Compensation is not in issue. The only issue which arises for consideration is the effect of Rs.One lac paid by the employer to the heirs of the deceased workman. 3. Charan Singh was employed with Marine Carriers Pvt. Ltd. He was a driver. Vehicle bearing No.MH-06-K-0453 belonging to the employer was entrusted to him for being driven. The employer Page 1 of 5 had obtained an insurance cover for the vehicle in question. The policy of insurance covered the risk of injury or death to the driver of the vehicle in question. 4. Unfortunately, while driving the vehicle Charan Singh met an untimely death. His wife and children claimed compensation under the Workmen's Compensation Act, 1923. 5. Immediately after the death of the workman on 10th March 2005 the employer gave Rs.one lac to the widow under cover of a letter which reads as under :- “March 10, 2005 To, Mrs. Ramkali Devi Charan Singh, Village Admimal K Pura, Post Mahua (Porsa), Dist. Morena (M.P.) Sub: Confirmation of Demand Draft of Rs.1,00,000/- This is to request you to kindly confirm to us that you have received a Demand Draft No.227000 Dated 4th February, 2005 drawn on State Bank of Indore for Rs.1,00,000/- sent by us. Further, please note that we have given this amount as goodwill of the company for the services your husband put in with us. This does not in any way admit any liability on our part nor construe as such and is also not any advance towards any compensation for which you may or may not see other avenues. Thank You, Yours truly, For MARINE CARRIERS PVT. LTD. sd/- Pradeed Dhyani Asst. Manager.” Page 2 of 5 6. It is urged by learned counsel for the appellant that under the circumstances Rs.one lac has to be deducted from the amount payable as this amount has been received by the dependents. 7. Learned counsel refers to various decisions latest being the decision of the Himachal Pradesh High Court reported as II (2007) ACC 770 Puran Dutt Vs. HRTC. The said authority has noted certain earlier decisions on the point. 8. The Himachal Pradesh High Court was concerned with a similar issue where the workman who had been disabled had received an ex gratia payment from the employer. This amount was held liable to be adjusted from the sum awarded by the Commissioner, Workmen's Compensation on the ground that the ex- gratia payments were not made towards medical reimbursements. That they were in the nature of compensation. 9. Letter dated 10.3.2005 written by the Marine Carriers Pvt. Ltd. while tendering Rs. One lac to the widow of the deceased clearly records that the said amount was given as goodwill of the company for services of her husband and was not to be treated as an admission of liability. Meaning thereby the payment was not tendered towards compensation payable to the legal heirs of the deceased. 10. Section 8(1) of the Workmen Compensation Act, 1923 reads as under:- Page 3 of 5 “8. Distribution of compensation- (1) 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: 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.” 11. From a reading of proviso to Section 8(1) it is clear that only the amount which has been paid by the employer to the dependents of the deceased workmen as an advance on account of compensation can be deducted from the amount of total compensation and not any other amount which has been paid by the employer under any other head. 12. The issue can also be looked at very simply in law. Right to receive compensation accrues to the dependents of deceased workman in their own right as per the statute. The employer of the deceased workman can, to mitigate their sorrows, pay to them some money as compensation. This payment would be to the dependents in furtherance of their right to receive compensation. Nomenclature of this payment is not material. It may be called ex-gratia. It may be called payment without prejudice. It hardly matters. But at the same time nothing prevents the employer to, by way of gratitude for the services rendered by the employee, pay money for said services Page 4 of 5 rendered. Of course, this money would be tendered to the dependents but would not be in lieu of or partly in right to receive the statutory compensation. 13. Under the circumstances I hold that Rs. one lac paid by the employer under cover of letter dated 10.3.2005 cannot be appropriated towards compensation payable to the legal heirs of the deceased workman. 14. Before concluding I may note that Workmen's Compensation Act is a beneficial legislation and has to be construed liberally in favour of the claimants. 15. No costs. January 21, 2008 PRADEEP NANDRAJOG, J. vg Page 5 of 5