JUDGMENT
V.K. Gupta, J.
1. This appeal by the insurer, New India Assurance Co. Ltd., is directed against a judgment and award dated 27.2.98 passed by the Commissioner, Workmen’s Compensation, West Bengal, Calcutta in Claim Case No. 425 of 1994 whereby he has passed an award of Rs. 1,60,178 in favour of the respondent No. 1 and against the appellant along with additional interest at the rate of 12 per cent per annum from the date of the judgment and costs. The claim petition filed by respondent No. 1 before the Commissioner related to the compensation claim lodged by respondent No. 1 in respect of the death of her son Samar Bhowmick who was driving lorry No. WMK 8766 and who died in a road accident involving the said lorry on 7.4.1994. The deceased was aged 23 years at the time of the accident. The Commissioner held that the deceased was earning Rs. 1,500 per month as his wages.
2. In this appeal only one point has been urged by the appellant. The point relates to the extent of the compensation amount awarded by the Commissioner. Undoubtedly the accident had occurred on 7.4.1994, when the son of respondent No. 1 died. Workmen’s Compensation Act, 1923 (‘the Act’ for short) was amended by Workmen’s Compensation (Amendment) Act, 1995 (Act No. 30 of 1995) (hereinafter to be referred to as the ‘Amending Act’). Whereas in Section 4, in case of death resulting from injury, it was provided in the Act prior to its amendment in 1995 that the amount of compensation shall be an amount equal to 40 per cent of the monthly wages of the deceased workman, multiplied by the relevant factor, or an amount of twenty thousand rupees, whichever is more. By the amendment this was modified to raise the compensation amount to an amount equal to 50 per cent of the monthly wages of the deceased workman, multiplied by the relevant factor or an amount of Rs. 50,000, whichever is more. The Commissioner in the judgment and award impugned in this appeal awarded the compensation in respect of the aforesaid claim on the basis of the aforesaid amended Section 4 of the Act despite the fact that the death had occurred on 1 ASA whereas the amendment to Section 4 of the Act was brought about with effect from 15.9.1995 in terms of Section 1(2) of the Amending Act read with Central Government notification of 12.9.1995 issued under this section which fixed 15.9.1995 as the date on which the aforesaid amendment to Section 4 and other sections of the Act would come into force.
3. The only point for consideration thus in this appeal is whether the Commissioner was justified in awarding higher compensation on the basis of the amended Section 4 of the Act, despite the death having occurred on 7.4.1994. The Commissioner supported his decision of awarding higher compensation based on amended Section 4 of the Act, upon a Division Bench judgment of Kerala High Court in the case of Oriental Insurance Co. Ltd. v. Majeed and a judgment of the Apex Court delivered by a two-Judge Division Bench in New India Assurance Co. Ltd. v. V.K. Neelakandan Civil Appeal Nos. 16904-16909 of 1996; decided on 6.11.1996.
4. The Amending Act, apart from amending Section 4(1)(a) of the Act also brought about various other changes to different provisions of the Act. For example, Section 4(1)(b) was also amended to raise the compensation amount in case of permanent total disablement being equal to 60 per cent of the monthly wages of the injured workman multiplied by the relevant factor, instead of the original 50 per cent or an amount of Rs. 60,000 instead of Rs. 24,000 as originally stood. Whereas in Explanation II to Section 4 as it originally stood, it was provided that the monthly wages of a workman for the purpose of clauses (a) and (b) of Section 4 would be deemed to be only Rs. 1,000, even if these actually exceed Rs. 1,000. By the Amending Act this figure has been raised from Rs. 1,000 to Rs. 2,000.
5. In order to determine the extent of applicability of the amendments brought by the Amending Act and whether these amendments would operate retrospectively or would be only prospective, that is, it would apply only to such cases where the accidents occurred after 15.9.1995, we have to necessarily fall back upon Section 1(2) of the Amending Act which clearly says that the provisions in the Amending Act bringing about amendments would come into force on such dates as the Central Government may, by notification in the official gazette appoint and that different dates would be appointed for enforcing different provisions of the Amending Act. As already noticed, vide Central Government notification dated 12.9.1995 amendments to sections 4 and 4-A were notified to be operative from 15.9.1995.
6. A Division Bench of Kerala High Court in the case of Oriental Insurance Co. v. Majeed , while holding that the amendment is retrospective observed that the Act being a piece of welfare legislation should be construed liberally and a beneficial interpretation should be given so that the affected workman can be allowed to take advantage of such liberal approach. To the same effect is the judgment of a two-Judge Bench of the Supreme Court in New India Assurance Co. Ltd. v. V.K. Neelakandan Civil Appeal Nos. 16904-16909 of 1996. We reproduce hereinbelow the observations of their Lordships with regard to the retrospective effect of the amendments, as held by their Lordships in this judgment:
It is not disputed that Section 4 of the Act was amended in 1995 by the Amendment Act No. 30 whereunder the deemed income has been increased from Rs. 1,000 to Rs. 2,000. Learned counsel for the assurance company has vehemently contended that since the accident took place in the year 1981, the law operating on that date is applicable and as such the heirs of the workmen are not entitled to the benefit of the amendment. We do not agree with the learned counsel. We are finally determining the rights of the workmen today. The Act is a special legislation for the benefit of the labour. Keeping in view the scheme of the Act we are of the view that the only interpretation which can be given to the amendment is that if any benefit is conferred on the workmen and the said benefit is available on the date when the case is finally adjudicated, the said benefit should be extended to the workmen. We, therefore, hold that the compensation to be paid to the heirs of the workmen has to be calculated on the basis of the actual wages Rs. 1,800 drawn by them. Learned counsel for the assurance company has worked out the amount to be paid to the heirs taking the monthly wages to be Rs. 1,800.
The aforesaid judgment in New India Assurance Co. Ltd. v. V.K. Neelakandan (supra), as would be seen was delivered by a two-Judge Bench of the Supreme Court.
7. In Rai Sahib Ramdayal Ghasiram Oil Mills v. Labour Appellate Tribunal AIR 1964 SC 567, a Bench of four Judges, while dealing with the applicability of Section 25-H of the Industrial Disputes Act, 1947, clearly held that this provision cannot apply to a workman who had been retrenched before it came into force since the legislature did not intend that the provision should come into effect retrospectively. Dealing with the legislative intent, their Lordships observed that when the mandate of legislature was that the provision was to become effective prospectively, no Tribunal or Government had the jurisdiction, on the basis of its own conception of social justice, to ignore such mandate and apply the provision, or its underlying principle, to a dispute which arose before the provision actually came into force. The following observations can be quoted with advantage:
We will, however, say a word about the ground upon which the Tribunal thought it fit to give the retrenched workers the benefit of the provisions of Section 25-H on the ground of social justice. Wide though the powers of an Industrial Tribunal are while adjudicating upon industrial disputes, it cannot arrogate to itself powers which only the legislature alone can confer or do something which the legislature has not permitted to be done. Section 25-H provides for re-employment of retrenched workmen in certain circumstances in preference to newcomers. But Act 43 of 1953 which enacted this provision clearly provides in Sub-section (2) of Section 1 thereof that ‘it shall be deemed to have come into force on 24.10.1953’. Clearly, therefore, the provisions of this section cannot apply to workmen who had been retrenched before this provision came into force. The legislature did not intend the provisions to come into force before 24.10.1953. When that is the mandate of the legislature no Tribunal has jurisdiction on the basis of its own conception of social justice to ignore it and apply the provisions or its underlying ‘principle’ to a dispute which arose before the provisions came into force.
8. A three-Judge Bench of the Supreme Court in Katikara C. Dora v. Guatreddi Annamanaidu , while adjudicating upon the rights of the parties in the light of an amendment brought about in the substantive law during the pendency of an action observed as under:
It is well settled that ordinarily, when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was begun unless the new statute shows a clear intention to vary such rights [Maxwell on Interpretation, 12th Edn., 220]. That is to say, in the absence of anything in the Act, to say that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act is passed.
Elaborating further on the scope of the applicability of the amendments in the substantive law, in the light of the provisions contained in the Amending Acts, their Lordships observed as under in the same judgment:
Let us, therefore, see whether there is anything in the Amending Acts 17 and 18 of 1957 which in clear language gives them a retrospective effect. A plain reading of these Amending Acts would show that there is nothing of this kind in them, which, expressly or by necessary intendment, affects pending actions.”
“There is no non-obstante clause in these Amending Acts of 1957 with reference to pending or closed civil actions. Nor is there anything in the scheme, setting or provisions of these Amending Acts which fundamentally alters the conditions on which such actions were founded. No back date or dates of their commencement have been specified in the body of these statutes as was done in Madras Estates Land Amendment Act, II of 1945, which was expressly enforced with effect from the date of commencement of the Act 18 of 1936. These Amending Acts were published in the Government Gazette on 23.12.1957 and will, therefore, be deemed to have come into force from that date only. The provisions of these amending statutes are not merely procedural but affect substantive rights, and impose new obligations and disabilities. In them the legislature has not spoken in clear language that they would unsettle settled claims or take away or abridge rights already accrued, or cause abatement of pending actions. These Amending Acts, therefore, can be construed as having a prospective operation only. They cannot be interpreted as taking away the rights of the litigants in suits O.S. No. 47 of 1953 and O.S. 101 of 1954 (which were at the commencement of these amendments pending at the appellate or original stage) to have their respective claims determined in accordance with the law in force at the time of the institution of the actions.”
9. A four-Judge Bench of the Supreme Court in the case of Arjan Singh v. State of Punjab , while dealing with applicability of Section 32-KK of the Pepsu Tenancy and Agricultural Lands Act, 1955, as amended by the Pepsu Tenancy and Agricultural Lands (Amendment) Act, with regard to the retrospective or prospective nature of applicability of the new provision, clearly held that Sub-section (2) of Section 1 of the Amending Act in specific terms said that the newly introduced Section 32-KK should be deemed to have come into effect from 30.10.1956, by fixing this date the legislature had clearly shown its intention. After discussing elaborate and detailed reasoning with regard to such applicability of the newly introduced provision, their Lordships observed as under:
It is a well-settled rule of construction that no provision in a statute should be given retrospective effect unless the legislature by express terms or by necessary implication has made it retrospective and that where a provision is made retrospective, care should be taken not to extend its retrospective effect beyond what was intended.
10. In the case of Pratap Narain Singh Deo v. Shrinivas Sabata 1976 ACJ 141 (SC), a four-Judge Bench of the Supreme Court, while dealing with the import, effect and applicability of Section 3 of the Act vis-a-vis the employer’s liability to pay compensation held that the employer became liable to pay compensation as soon as the personal injury was caused to the workman by the accident which arose out of and in the course of employment. The following observations of their Lordships being very pertinent and relevant for our purposes are quoted with advantage:
Section 3 of the Act deals with the employer’s liability for compensation. Sub-section (1) of that section provides that the employer shall be liable to pay compensation if ‘personal injury is caused to a workman by an accident arising out of and in the course of his employment’. It was not the case of the employer that the right to compensation was taken away under Sub-section (5) of Section 3 because of the institution of a suit in a civil court for damages, in respect of the injury, against the employer or any other person. The employer, therefore, became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is, therefore, futile to contend that the compensation did not fall due until after the Commissioner’s order dated 6.5.1969 under Section 19. What the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner. There is, therefore, nothing to justify the argument that the employer’s liability to pay compensation under Section 3, in respect of the injury, was suspended until after the settlement contemplated by Section 19. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant and there is no justification for the argument to the contrary.
11. In the case of Maghar Singh v. Jashwant Singh , a three-Judge Bench of the Supreme Court while dealing with the claim of a workman who had lost his hands because of an accident occurring and arising out of and in the course of employment on 26.7.1984, determined the compensation in accordance with the formula prescribed under Section 4(1)(b) of the Act as it stood prior to the Amendment Act, even though the case was decided by the Supreme Court on 24.9.1996.
12. In the light of the aforesaid authoritative pronouncements of law by the Apex Court in the aforesaid judgments, all of which have been rendered by Benches of three/four/five Judges, when we consider the judgment of two-Judge Division Bench in V.K. Neelakandan Civil Appeal Nos. 16904-16909 of 1996, we find that their Lordships did not go into the effect and import of Section 1 (2) of the Amending Act which clearly prescribed about the prospective coming into force of the amendments brought about by the Amending Act. Their Lordships merely observed that the court was determining the rights of the workmen as on the date of the judgment and that the Act being a special legislation for the benefit of the labour, the only interpretation which would be given to the amendment was that its benefit be conferred on the workmen and that such benefits should be available as on the date when the case is finally adjudicated.
13. In the case of Union of India v. Raghubir Singh , it has clearly been held that the judgment of a larger Bench of the Supreme Court is binding and that if there is a difference of opinion on a question of law between a larger Bench and a smaller Bench, the views expressed by the larger Bench shall prevail. While discussing this issue their Lordships posed a question in para 276 of this judgment which we quote:
What then should be the position in regard to the effect of the law pronounced by a Division Bench in relation to a case realising the same point subsequently before a Division Bench of a smaller number of Judges?
After a detailed discussion, by referring to the constitutional and statutory prescriptions both in India as well as in the United States of America and by taking into account the need to guard against the possibility of inconsistent decisions on points of law by different Division Benches, their Lordships ultimately held as under:
We are of the opinion that a pronouncement of law by a Division Bench of this court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the court. We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this court in the future should be rendered by Division Benches of at least three Judges unless, for compelling reasons, that is not conveniently possible.
14. To the same effect are the judgments of the Supreme Court in the case of Union of India v. K.S. Subramanian and in the case of State of U.P. v. Ram Chandra Trivedi .
15. We, therefore, with utmost respect and total deference to their Lordships constituting the two-Judge Division Bench in V.K. Neelakandan C.A. Nos. 16904-16909 of 1996 and with all humility hold that the ratio as propounded in judgments of larger Benches of the Supreme Court regarding the prospective application of the Amending Act would be binding on us. As we have culled out the aforesaid pronouncements of law by the larger Benches of the Apex Court, we have no doubt in our mind that these larger Benches, either with reference to the provisions of the Act itself or while dealing with other similar provisions in other substantive laws clearly held that in the absence of a specific legislative intent to the contrary, amendments in a substantive law would operate prospectively and that if an Amending Act itself specifically and clearly provides that it shall come into force on a particular date, it would operate prospectively with effect from that date and cannot be held to operate retrospectively from any earlier date.
16. A Full Bench of Kerala High Court in the case of United India Insurance Co. Ltd. v. Alavi , while discussing in details the nature and effect of the amendments brought about in sections 3 and 4-A of the Act, in the light of the language employed in Section 1 (2) of the Amending Act and the notification dated 12.9.1995 bringing into force the amendments effective from 15.9.95 clearly held that the amendments were prospective in application and that this could not be considered to be retrospective at all. It accordingly overruled the Division Bench judgment of Kerala High Court in Oriental Insurance Co. Ltd. v. Majeed sic Oriental Insurance Co. Ltd. v. Ashokan . The Full Bench had also in the aforesaid judgment very minutely discussed, considered and examined the effect, binding or otherwise of the judgment of the Supreme Court in V.K. Neelakandan’s case Civil Appeal Nos. 16904 to 16909; decided on 6.11.1996, in the light of the judgments of the Apex Court rendered earlier by larger Benches. The Full Bench also came to the conclusion that the ratio laid down by the larger Benches was binding.
17. With utmost respect we feel that the Kerala High Court Full Bench was correct in its view, in the light of the ratio laid down earlier by the larger Benches of the Supreme Court and that sections 4 and 4-A of the Act, as amended by the Amending Act and enhancing the amount of compensation and rate of interest could not be held to be applicable retrospectively and hence these provisions could not be said to be applicable to such compensation claims which related to accidents which had arisen prior to 15.9.1995.
18. Right of the legal representatives of a deceased workman, or for that matter the right of the injured workman himself, to claim compensation in respect of the death or injury, arising out of and in the course of employment springs from sections 3(1), 4(1) and 4-A of the Act and it is under these provisions that entitlement to get compensation is created. The entitlement, in other words the right to claim compensation gets crystallised the moment the event of injury happens. The corresponding liability of the employer to make good his claim also accordingly springs forth simultaneously. This liability has to be reckoned as per the aforesaid relevant provisions of the Act. It is now a well-settled rule of interpretation that the corresponding liability, springing forth from the right and entitlement is based on same cause of action, which in the present case is directly related to the accrual of the event of injury. In this legal backdrop, therefore, we have no hesitation to hold that the Act itself, read with the Amending Act did not ever intend that the entitlement to receive compensation, including the extent or the quantum of the compensation amount has to be postponed to a period after the event of the injury has already occurred, or that it can be related to the date of final adjudication of the claim case. There is nothing to indicate that the provisions in the Amending Act were intended to operate retrospectively in such a manner that the entitlement to receive claim compensation was either postponed to the date of filing adjudication or that the quantum as raised by the Amending Act was to be applicable to a stage when the event of injury had already taken place. As already noticed, Section 1 (2) of the Amending Act clearly says that the provisions amending the Act would come into force prospectively, on such date as the Central Government may appoint. If the legislature wanted to have the provisions to operate retrospectively, it could have provided for such retrospective operation in the Amending Act itself. It is a well-settled rule of construction that no provision in a statute should be given retrospective effect unless the legislature by express terms or by necessary implication has said that it would operate retrospectively. The general presumption in law is that every legislation is to operate prospectively unless, either expressly or by necessary implication it is intended to operate retrospectively. In case of procedural laws undoubtedly a presumption of its applicability to pending legal proceedings can always be raised but if the law is substantive in nature, the presumption against its retrospective application always subsists and is validly available subject of course always to the condition that it is open to the court to examine whether the amended provision ever intended to deal with the rights of the parties from a retrospective date. If the amended provisions are sought to be given effect to, as in our case, in a matter relating to enhanced compensation in respect of an accident which occurred prior to 15.9.1995 that will undoubtedly affect the existing rights and obligations of both the parties. Actually an anomalous situation can arise, as has been very aptly illustrated in the Full Bench judgment of Kerala High Court, if such retrospective application is given to the amending provisions. We bodily lift the illustration highlighting the anomalous position from the judgment of the Kerala High Court:
Suppose an accident occurred prior to 15.9.1995, and the claim was decided prior to the said date, the law applicable is the unamended provisions of the Workmen’s Compensation Act, 1923. But if the claim could not be settled prior to 15.9.1995, going by the Division Bench decision in Asokan’s case , those claimants would get the benefits of the Amendment Act. In other words, the benefit would depend on when the case is decided, either prior to 15.9.1995 or subsequent. This was never the intention of the legislature.
19. Based on the aforesaid reason, therefore, while fully concurring with the aforesaid judgment of the Kerala High Court and following the principles of law laid down by the above-referred judgments of the Apex Court, we hold that the provisions of the Amending Act were prospective in nature insofar as the determination of the quantum of compensation was concerned, namely, that such enhanced compensation would be available only to such claims in whose cases the injury occurs after 15.9.1995.
20. We accordingly set aside the impugned judgment and award to the extent it awards compensation in terms of Section 4 and 4-A of the Act as amended by the Amending Act.
21. The amount of compensation, however, as per the law as it stood prior to 15.9.1995 would remain valid and intact.
The appeal is allowed. No order as to costs.
P.K. Sen, J.
22. I agree.