SIMULATNAEOUS COMPENSATION UNDER EMPLOYEE STATE

INSURANCE ACT 1948, WORKMEN COMPENSATION ACT 1923,

AND MOTOR VEHICLES ACT, 1988: A JUDICIAL ANALYSIS

Submitted by
Yashvardhan Singh
Shekhawat
UID: UG20-103

BA.LL.B.(Hons.) Five-Year Integrated Degree Course

Academic Year: 2023-2024

Year: IV Semester: VIII

Submitted to
Prof. Dr. Jagdish Khobragade, Assistant Professor of Law

8.3 Labor Laws II (Final Draft)

March, 2024

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

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2
TABLE OF CASES
S. No. Name of the case Citation Page No.
1 Rajkumar Agrawal v. Vehicle Tata Venture 2023 LiveLaw (SC) 62
Commercial Auto Sales Pvt. Ltd. and Ors.,
2 A. Trehan v. Associated Electrical Agencies (1996) 4 SCC 25
3 National Insurance Co. Ltd v. Hamida Khatoon & Ors, (2009) 13 SCC 361

4 Associated Electrical Agencies v. Commissioner 1995 BOMCR 3 248.

for Workmen
5 Munmahesh v. Ashish Nemichand Katariya and Anr 2019 SCC OnLine Bom
700
6 Dhropadabai & Ors vs M/S. Technocraft Toolings, CA CA No. 8155 OF 2014.
No. 8155 OF 2014.

7 Prem and Ors v. Amarjeet Singh and Ors. 2022 SCC OnLine Raj
597
8 National Insurance Co. Ltd., v. Manimegalai. CMA.No.2405 of 2018,
Mad HC
9 National Insurance Company v. Mastan & Anr (2006) 2 SCC 64
10 United India Insurance Co., Ltd., v. Anthony 2014 (2) TN MAC 227
Selvam
11 New India Assurance Co. Ltd. v. Smt. Bidami & 2009 SCC OnLine Raj
Ors 3440
12 Regional Director, E.S.I Corp. and Anr v. Francis De 1992 SCR (3) 23
Costa and Anr

13 Hindustan Aeronautics Ltd. Vs. P. Venu Perumal AIR 1972 Mysore 255
and Anr
14 Madhya Pradesh State Road Transport Corporation v. 1994 ACJ 579.
Praveer Kumar Bhatnagar
15 Tribhuwan Singh v. Ramesh Chandra 1998 ACJ 579

16 Oriental Insurance Co. Ltd. v. Mohan Kanwar and 2007 ACJ 420 (Raj).
Ors.,

17 Western India Plywood Ltd vs Shri. P. Ashokan 1997) 7 SCC 638

18 Mangalamma And Ors. vs Express Newspapers Ltd. AIR 1982 MAD 223.

19 Tata AIG General Insurance Co. Ltd v. C.M.A.No.2926 of 2018

Jothilakshmi and Ors.
20 Oriental Insurance Co. Ltd. v. Mohan Kanwar and 2007 ACJ 420 (Raj).
Ors.,

21 Western India Plywood Ltd vs Shri. P. Ashokan (1997) 7 SCC 638

22 Mangalamma And Ors. vs Express Newspapers Ltd. AIR 1982 MAD 223.

23 Tata AIG General Insurance Co. Ltd v. C.M.A.No.2926 of 2018

Jothilakshmi and Ors.

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 24 United India Insurance Company Limited, v. Vipin 2019 SCC OnLine Del
Kumar & Ors 9802,
Venkataramanappa v. S. Ananda and Ors. 2012 KLT 106
K.P. Kuriakose v. G. Santhosh Kumar, 2009 SCC
OnLine Ker 6396, Ruma Raha Roy and Ors v. United
India Insurance Co. Ltd. and Anr., 2018 SCC OnLine
Cal 16892.
Rajesh Kumar Tiwari v. Raviram, MA-6228- 2019
(MP)

25 K.P. Kuriakose v. G. Santhosh Kumar 2009 SCC OnLine Ker

6396,

Ruma Raha Roy and Ors v. United India 2018 SCC OnLine Cal 16892.
Insurance Co. Ltd. and Anr

INTRODUCTION
Social security and social insurance in India provide vital safety nets, ensuring economic
stability for citizens. They mitigate poverty, offer healthcare support, and provide pensions,
particularly benefiting vulnerable populations like the elderly and low-income earners. These
programs foster social cohesion and contribute to overall societal welfare and development.
Two principal legislations, the Employee State Insurance Act (ESI Act) 1 and the Workmen's
Compensation Act (WC Act)2, are pivotal in safeguarding employees' well-being and
ensuring fair compensation.

The ESI Act acts as a social security net, providing medical care and financial assistance for
employees facing sickness, maternity, disability, and even work injuries. The WC Act
focuses specifically on work-related mishaps. If an employee suffers an accident,
occupational disease, or permanent/temporary disability due to work, the employer is liable to
compensate them or their dependents under the WC Act. The E.S.I scheme, embodied within
the E.S.I Act, constitutes a comprehensive framework of Social Welfare designed to protect
employees from the consequences of illnesses, maternity, disability, or employment-related
fatalities. It also extends healthcare benefits to insured individuals and their dependents.

The issue regarding double benefit for an employee under two distinct legislation is an
longstanding issue with no definite answer and there were contrary judgements of Supreme
Court and differing views of various High Courts on this matter hence the Supreme Court in
“Rajkumar Agrawal v. Vehicle Tata Venture Commercial Auto Sales Pvt. Ltd. and Ors”3
came across the same issue and the matter was referred to a larger bench.

1
Employees’ State Insurance Act, 1948, No. 34, Acts of Parliament, 1948.
2
Workmen’s Compensation Act, 1923, No. 8, Acts of Parliament, 1923.
3
Rajkumar Agrawal v. Vehicle Tata Venture Commercial Auto Sales Pvt. Ltd. and Ors., 2023 LiveLaw (SC) 62

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This paper explores the debate surrounding dual compensation for the same injury, under
different acts and also examines legal interpretations that assert the inability of procedural
clauses within the ESI Act, such as Section 53 or Section 61, to nullify substantive rights to
alternate legal recourse. The author provides the existing jurisprudence as laid down by
various High Courts and Supreme Court and finally provides their own analysis on whether
dual benefits shall be given to employees or whether employer’s right should be taken into
consideration and only benefit under one act must be given.

RESEARCH QUESTIONS

 What are the statutory provisions regarding compensation under different social
security acts?
 What is the current jurisprudence over simultaneous compensation?
 Should similar benefit under MV Act be given to insured employee under ESI Act?

RESEARCH METHODOLOGY
The author has used a doctrinal mode of research to develop a holistic understanding of the
given topic. The author has also discussed the topic with the faculty to understand the
importance and significance of the topic. In this respect, class lectures form a significant part
in carrying out this project work effectively. A number of reputed articles and judgements
were referred to during the course of the research. Various databases were also used in the
process of making a comprehensive project. Lastly the author has also referred to
commentaries on law on Social Security and labour laws to understand the topic.

AIMS AND OBJECTIVES

- To analyse various statutory provisions under different legislation governing dual
benefits.
- To understand the current jurisprudence as laid down by various High Courts and
Supreme Court over dual compensation.
- To provide analysis on the issue whether insured person be allowed to claim benefit
under Motor Vehicles Act also.

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STATUTORY PROVISIONS
- Section 53 of ESI Act – “Bar against receiving or recovery of compensation or
damages under any other law.—An insured person or his dependants shall not be
entitled to receive or recover, 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), or 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”.4
- Section 61 of ESI Act – “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”.5
- Section 167 of MV Act – “Option regarding claims for compensation in certain
cases—Notwithstanding anything contained in the Workmen’s Compensation Act,
1923 (8 of 1923), where the death of, or bodily injury to, any person gives rise to a
claim for compensation under this Act and also under the Workmen’s Compensation
Act, 1923, the person entitled to compensation may without prejudice to the
provisions of Chapter X claim such compensation under either of those Acts but not
under both”.6

OVERLAP BETWEEN ESI AND WC ACT

The Supreme Court in A. Trehan v. Associated Electrical Agencies, while interpreting
Section 53, determined that the bar is absolute, as evidenced by the phrase "shall not be
entitled to receive or recover any compensation or damages," "whether from the employer of
the insured person or from any other person." Additionally, it determined that when such a
prohibition is established explicitly and unambiguously, it is improper and inappropriate to
deduce an alternative intent by referencing the legislative history. Doing so would be similar
to ignoring the regulatory framework and undermining the intended purpose of the Act. 7 This
view was reiterated by the Supreme Court again in the case of National Insurance Co. Ltd v.
Hamida Khatoon & Ors.8

4
Section 53, Employees’ State Insurance Act, 1948.
5
Section 61, Employees’ State Insurance Act, 1948.
6
Section 167, Motor Vehicles Act, 1988.
7
A. Trehan v. Associated Electrical Agencies (1996) 4 SCC 255, United India Insurance Co. Ltd. v. Ms. Vijaya
R. Baait, 2005 SCC OnLine Bom 1029.
8
National Insurance Co. Ltd v. Hamida Khatoon & Ors, (2009) 13 SCC 361

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In Associated Electrical Agencies v. Commissioner for Workmen the Bombay HC held that
“Once insurance cover is available to an employee and when the insurance premium is
contributed substantially by the employer and partly by the employee, then the Legislature
was justified in creating a bar for employees seeking benefit outside the benefits available
under the ESI Act.”9
The Bombay HC in Munmahesh v. Ashish Nemichand Katariya and Anr. when it is
established that the Employer and claimant are covered under ESI Act and the employee is
insured person in respect of whom contributions are paid by employer, he is entitled for
benefits provided by ESI Act, 1948 then the bar under section 53 of ESI Act, would apply
and he would not be entitled to recover compensation from employer under the WC Act.10

In Dhropadabai & Ors v. M/S. Technocraft Toolings Supreme Court held that after an
employee is classified as a "insured person" under Section 2(14) of the ESI Act the WC Act
prohibits him or his dependents from receiving any kind of payment or damages from the
company. The act's plain language makes this very evident that there cannot be double
compensation under both the acts and therefore there cannot be any other interpretation.11

Hence it can be clearly seen from the judicial decisions of the Apex Court and High Courts
that there is no ambiguity around compensation when an insured employee claims benefit
under ESI Act then he would be barred from claiming compensation under WC Act.

OVERLAP BETWEEN WC AND MV ACT

Different High Courts have given various interpretations of Section 167 of MV Act hence
there is no definitive ruling whether the bar under section 167 is absolute hence the decisions
of various high courts have been classified below.

CASES WHERE SIMULTANEOUS COMPENSATION NOT ALLOWED

The division bench of Rajasthan High Court in the case of Prem v. Amarjeet Singh held that it
is impermissible to permit the claimants to receive double benefits for two claims that were
filed under separate statutes, namely the WC Act and the MV Act. The claimant may only
select one forum, and once that forum has been selected, he is not permitted to select another
forum in order to receive additional benefits. It is not possible for the claimants to assert a
dual benefit under both statutes. The courts should not be regarded as a forum for bargaining,
and claimants should not be permitted to approach two forums if they believe they have not

9
Associated Electrical Agencies v. Commissioner for Workmen, 1995 BOMCR 3 248.
10
Munmahesh v. Ashish Nemichand Katariya and Anr, 2019 SCC OnLine Bom 700.
11
Dhropadabai & Ors vs M/S. Technocraft Toolings, CA No. 8155 OF 2014.

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received adequate compensation, and approach another forum in an effort to obtain more
compensation.12

In National Insurance Co. Ltd., v. Manimegalai the Madras High Court held that WC Act
only allows compensation from the employer only while the MV Act also allows
compensation from a stranger tortfeasor hence it is not necessary that bar under Section 167
will apply in each case and the claimant is not prohibited from pursuing compensation under
the MV Act against the tortfeasor in cases when he is entitled to one remedy under the WC
Act against the employer.13

In National Insurance Co. Ltd v. Mastan and Anr., the Supreme Court established a
connection between Section 167 of the MV Act and the "Doctrine of Election," which is a
subset of the "rule of estoppel" that states an individual may be prevented from asserting a
right that he otherwise would have had due to his actions, conduct, or silence when it is his
duty to speak. When two remedies are available for the same relief, the doctrine of election
states that the aggrieved party may elect either one of them but not both.14
In United India Insurance Co., Ltd., v. Anthony Selvam, the divison bench of Madras High
Court held if an employee makes a claim under WC Act against the employer and an award is
granted then the employee while making claim against the offender under the MV Act not
being the employer the award being passed has to deduct the amount granted by the tribunal
under the WC Act so that the employee does not get dual benefit for the same injury.15

CASES WHERE SIMULTANEOUS COMPENSATION NOT ALLOWED

In New India Assurance Co. Ltd. v. Smt. Bidami & Ors., it was held that the doctrine of
election only applies in the case where the tortfeasor under the MV Act also happens to be
employer under the WC Act and to protect the employer from getting vexed twice for the
same injury. If the tortfeasor is not the employee the claimant can never take compensation
under WC Act hence the bar under Section 167 is not logical when under certain facts and
circumstances, he can only approach WC Act against employer and MV Act against the
tortfeasor. Section 53 does not grant exemption or immunity to negligent parties, regardless
of compensation received under the WC Act or ESI. Even if compensation is awarded under
the Motor Vehicles Act, it does not lead to double benefits or unjust enrichment. Since
different legislations and forums are involved, compensation from each source is legitimate,
12
Prem and Ors v. Amarjeet Singh and Ors., 2022 SCC OnLine Raj 597.
13
National Insurance Co. Ltd., v. Manimegalai CMA.No.2405 of 2018, Mad HC.
14
National Insurance Company v. Mastan & Anr, (2006) 2 SCC 64.
15
United India Insurance Co., Ltd., v. Anthony Selvam, 2014 (2) TN MAC 227

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as they pertain to distinct parties and causes. Therefore, claimants are entitled to both
compensations without setoff or deduction, as they arise from separate circumstances and
legal obligations.16

OVERLAP BETWEEN ESI AND MV ACT

There is no common view regarding the bar on claiming benefits under ESI Act and MV act
as there is no definite authority hence this matter is referred to a larger bench of Supreme
Court but there are differing views which are classified below.

CASES WHERE SIMULTANEOUS COMPENSATION NOT ALLOWED

One of the first matter where the issue regarding simultaneous compensation came was in the
case of Regional Director, E.S.I Corp. and Anr v. Francis De Costa and Anr. wherein the
Supreme Court held that “The general law of tort or special law in Motor Vehicles Act or
Workman Compensation Act may provide a remedy for damages. The coverage of insurance
under the Act in an insured employment is in addition to but not in substitution of the above
remedies and cannot on that account be denied to the employee.”17

In the case of Hindustan Aeronautics Ltd. Vs. P. Venu Perumal and Anr, 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.”18
In the case of Madhya Pradesh State Road Transport Corporation v. Praveer Kumar
Bhatnagar according to the honourable judge's interpretation of section 53 of ESI Act,
provisions of the MV Act were not covered by section 53 since the phrase "any other law"
must legitimately relate to a measure of legal provision with an identical theme to the ESI Act
and since MV Act was based on law of torts section 53 would not apply.19

CASES WHERE SIMULTANEOUS COMPENSATION ALLOWED

In the matter of Tribhuwan Singh v. Ramesh Chandra it was ruled that Section 53 of the
E.S.I. Act doesn't bar the employee from pursuing legal action against the tortfeasor as per

16
New India Assurance Co. Ltd. v. Smt. Bidami & Ors., 2009 SCC OnLine Raj 3440.
17
Regional Director, E.S.I Corp. and Anr v. Francis De Costa and Anr 1992 SCR (3) 23.
18
Hindustan Aeronautics Ltd. Vs. P. Venu Perumal and Anr, AIR 1972 Mysore 255
19
Madhya Pradesh State Road Transport Corporation v. Praveer Kumar Bhatnagar, 1994 ACJ 579.

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the provisions of the MV Act. Furthermore, it concluded that section 53 of the ESI doesn't
nullify the right to receive compensatory damages under the MV Act.20

Rajasthan HC in the case of Oriental Insurance Co. Ltd. v. Mohan Kanwar and Ors that any
claim related to a work injury as defined by Section 53 of the E.S.I. Act clearly relates to a
claim related to the employment, and such provisions have no bearing on a claim that is
brought by the insured individual or his dependents against a third party.21

In Western India Plywood Ltd vs Shri. P. Ashokan, the Apex Court held that the inclusion of
the term "or Otherwise" in section 53 implies that its scope extends beyond excluding relief
solely under any specific statute. However, the practical application of this section prevents
an insured individual from pursuing tort claims recognized under the ESI Act. Despite the
ESI Act being a beneficial legislation, the legislature has deemed it appropriate to prohibit
insured individuals from seeking compensation or damages under any other legal provision,
including tort law, in cases of employment-related injuries sustained by them.22
In United India Insurance Company Ltd. v. Vaneeta and Ors. the Punjab & HC Held that
despite the bar under section 53 an insured employee may still claim compensation under MV
act if it is shown that
A: The accident took place in a public location;
B: The injury is not related to employment, even if it occurred at the workplace; and
C: It is a claim against a third party.
In this case, the claimant received compensation under the ESI scheme because he was
present at the workplace when the incident occurred. However, the injury he sustained as not
directly related to his employment. Therefore, he had a legitimate entitlement to make a claim
under the MV Act since the incident occurred as a result of the negligent actions of the driver
of the vehicle at fault. Therefore, the claims under the two legislations are completely distinct
and independent.23

In Tata AIG General Insurance Co. Ltd v. Jothilakshmi and Ors. the Madras HC held that the
compensation awarded under the MV Act is distinct from the benefits granted under the ESI
Act. The compensation provided under the Motor Vehicle (MV) Act pertains to tortious

20
Tribhuwan Singh v. Ramesh Chandra, 1998 ACJ 579
21
Oriental Insurance Co. Ltd. v. Mohan Kanwar and Ors., 2007 ACJ 420 (Raj).
22
Western India Plywood Ltd vs Shri. P. Ashokan, (1997) 7 SCC 638
23
Mangalamma And Ors. vs Express Newspapers Ltd. AIR 1982 MAD 223.

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liability, while the benefits granted under the ESI Act do not preclude the award of
compensation for fatalities resulting from motor vehicle accidents.24

In United India Insurance Company Limited, v. Vipin Kumar & Ors, the Delhi HC held that
by co-jointly interpreting Section 53 and Section 61 of the ESI Act, it is can be deduced that
these provisions solely restrict an employee from seeking a second claim for similar
compensation from the employer. Given the lack of similarity between the benefits provided
under the MV Act and the ESI Act, it is impermissible to conflate the provisions of two
statutes in order to deny compensation to a victim under the MV Act. Therefore, the
advantages provided by these two statutes are completely dissimilar and distinct. 25

Karnataka HC in the case of Venkataramanappa v. S. Ananda and Ors. held that even if the
injured party was protected by the ESI Act, his claim under the MV Act would maintainable,
and that the money obtained under the ESI Act must be subtracted. Additionally, it was noted
that the entitlement to compensation against third parties would not be prohibited by Section
53 of the ESI Act.26

The High Court of Kerala in the case of K.P. Kuriakose v. G. Santhosh Kumar held the term
“any person” in Section 53 of the E.S.I. Act, do not encompass the tort claim against the
stranger/tortfeasor under the M.V. Act for compensation for loss incurred in a accident
caused by negligence. The term “any other person” in Section 53 refers only to the person
who is sought to be held liable, under or on the basis of the employment contract, to pay the
employee for the 'employment injury' sustained by him. If an injury is sustained in a motor
vehicle accident and it is also an employment injury, Section 53 does not preclude a tort
action against the stranger tort feasor under Section 166 of the MV Act. However, the claim
against the employer under any other legislation is barred.27

The MP High Court recently in the case Rajesh Kumar Tiwari v. Raviram28, MA-6228- 2019
(MP) summarised the claim under ESI Act and MV Act and gave two points:-
A: The bar under Section 53 of the ESI Act will only apply if the claimant received
compensation in respect of an employment injury as defined by Section 2 (8) of the
ESI Act;

24
Tata AIG General Insurance Co. Ltd v. Jothilakshmi and Ors., C.M.A.No.2926 of 2018
25
United India Insurance Company Limited, v. Vipin Kumar & Ors 2019 SCC OnLine Del 9802,
26
Venkataramanappa v. S. Ananda and Ors. 2012 KLT 106
27
K.P. Kuriakose v. G. Santhosh Kumar, 2009 SCC OnLine Ker 6396, Ruma Raha Roy and Ors v. United India
Insurance Co. Ltd. and Anr., 2018 SCC OnLine Cal 16892.
28
Rajesh Kumar Tiwari v. Raviram, MA-6228- 2019 (MP)

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 B: Injured/legal representatives of the deceased cannot claim amounts under the
provisions of the MV Act which were claimed and received by them towards
reimbursement under the provisions of the ESI Act; and

ANALYSIS

CONCLUSION

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BIBLIOGRAPHY
 STATUTES
- Code on Social Security, 2020
- Workmen’s Compensation Act, 1923
- Employee’s State Insurance Act, 1948
- Motor Vehicles Act, 1988

 BOOKS
- Avatar Singh & Harpreet Kaur, Introduction to Labour Laws and Industrial
Relations, 1st ed. 2022, LexisNexis Publishing.
- Dr. S.R Myneni, Labour Law-II, 1st ed. 2019, Asia Law House.
- SC Srivastava, Industrial Relations and Labour Laws, 8 th ed. 2016, Vikas
Publishing House.

 ARTICLES AND JOURNALS

 ONLINE RESOURCES

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