Labour Law Presentation 18010277 Pramit Dev Pandey

Case Analysis: Roshan Deen Vs. Preeti Lal, AIR 2002 SC 33

I. FACTS

1. This present case was an appeal to the decision given by the High Court and the
Commissioner appointed under the Workmen’s Compensation Act, 1923.
2. Roshan Deen was a young man aged 25. Preeti Lal owned a Flour Mill cum Sugarcane
factory. Roshan worked in the factory for a salary of Rs. 1500/-. On 4th March 1993, Roshan
Deen made a Claim on Preeti Lal for a sum of Rs. 7 lakhs. This was because he was
operating a machine in the mill and had a major mishap.
3. He splintered in the shaft of a column and was totally snapped and was badly injured. He
suffered multiple injuries on his neck, hands, legs, etc. and had multiple fractures. However,
his plight did not end here, an emergency tracheotomy was performed to save his life,
however, the trachea and other vessels of the neck were totally impaired. One of his leg
and hand had to be amputated.
4. Thus, he filed a petition before the Commissioner for Workmen’s Compensation, Yamuna
Nagar (Haryana) on 6.2.1997, claiming compensation of Rs.5 lakhs plus medical expenses
of Rs.2 lakhs, in accordance with the provisions of the Workmen’s Compensation Act,
1923.

II. ISSUE: That whether Roshan Deen was eligible for compensation for his permanent
disability under the Employees Compensation Act, 1923.
III. ROSHAN’S ARGUMENTS: That under Section 4 of the Employees Compensation
Act, 1923, he was eligible for compensation from the employer as his permanent
disability occurred when he was employed by Preeti Lal and during the course of his
employment while carrying out his employer’s work.
IV. PREETI LAL’S ARGUMENTS: Simply stated that that no such accident as described
by the appellant had happened nor had the appellant sustained any injury whatsoever.
Also possessed a private agreement under which Roshan relinquished his rights over
the compensation.

V. PETITION BEFORE THE COMMISSIONER

1. When the compensation petition was pending before the Commissioner, an application
dated 12.3.1999 was filed in which it was stated that the appellant (Roshan Deen) and the
respondent (Preeti Lal) have entered into an agreement with each other and therefore, the
appellant did not want to pursue any claims against the respondents, due to which the
Commissioner passed an order in favour of the respondent.
2. However, on 16.4.1999, the appellant filed a counter petition before the Commissioner
praying that he recalls this order because the application was not signed by the applicant
 and only contained a thumb impression, which was gathered fraudulently on pretext that
he was paying his advocate Rs. 9500/-.
3. That the Commissioner having called the respondent to reply to this petition, believed his
arguments and passed an order that on 11.10.1999, on the basis of Section 151 of CPC and
Section 17 of the Employees Compensation Act which declares any agreement (by which
a workman relinquishes any right to get compensation from the employer for personal
injury) as null and void. To this the appellant filed an appeal to the High Court.

VI. APPEAL BEFORE THE HIGH COURT

1. In the writ petition filed under Article 227 of the Constitution, where Roshan prayed that
the said order of the Commissioner must be quashed and recalled and new decision must
be made on the matter.
2. However, the learned Judge, R.L. Anand upheld the order of the Commissioner, stating that
a compromise was reached with Roshan and Preeti, due to which there was a clear intention
from the side of Roshan that he did not want to pursue his case. Moreover, the judge did
not buy the argument of fraud as Roshan had not accepted that the thumb impression was
not his.
3. The Judge provided only consolation and allowed him to adopt any other legal remedy
against the Order. Aggrieved with this order, Roshan moves to Supreme Court.

VII. APPEAL BEFORE THE SUPREME COURT – JUDGEMENT

1. The Judges of the Hon’ble Supreme Court were aggrieved by the insensitivity reflected in
the High Court Judgement. They felt that judges should utilise all legal measures to provide
justice to an aggrieved and disabled man. They empathised with his situation. They
invalidated the order of the Commissioner dated 19.3.1999 as they believed it to be the by-
product of fraud and cheating. They set aside the impugned judgment and restored the order
passed by the Commissioner on 11.10.1999. They also directed the Commissioner to fasten
the proceedings and dispose of the claim without any further delay.

2. Moreover, The Court went into the reading of Section 17 of the Employees Compensation
Act, 1923 and points out that for any agreement for relinquishment of right to compensation
under this Act, shall be null and void. Moreover, when this section is read with Section 28
and 29 of the ECA, it is seen that if any such agreement is reached, it must be recorded and
registered with the Commissioner in a prescribed manner, otherwise when there are prima
facie clues to fraudulently obtaining of the agreement, the Commissioner has the power to
reject the agreement under Section 29. But this section only allowed for payment of
compensation through the agreement which would be reached between the employer and
the employee, and not relinquishment of such compensation.
3. As the process followed by the Commissioner did not meet with the procedure laid down
in the Act, the agreement was not a duly registered agreement under Section 28 and 29 of
the Employees Compensation Act, 1923. Thus, relying on the case of United India
Insurance Co. Ltd. vs. Rajendra Singh and Ors., [2000] 2 SCR 264, the SC recalled the
order of the HC and Commissioner as it was convinced that order was wangled through
fraud or misrepresentation of such a dimension as would affect the very basis of the claim.

ANALYSIS
This case highlights two important aspects:
1. First, it upheld the objective of the beneficial legislation of the Employees Compensation
Act, 1923, when it said that every employee falling within the meaning of this Act, have a
legitimate right to have their claim. This power has been given by the legislation to
compensate for the damage caused to the employees in the course of their employment.
Moreover, it also closed the doors to any malpractice done by the employers to coerce the
employees to contract out of the compensation, by solidifying the position of the statute
given under Section 17 of the Act read with Sections 28 and 29 of the Act.
2. Second, an act of fraud on court is always viewed seriously. A collusion or conspiracy with
a view to deprive the rights of the others in relation to a property would render the
transaction void ab initio. Fraud and deception are synonymous. Although in each case a
deception may not amount to fraud, fraud is anathema to all equitable principles and any
affair tainted with fraud cannot be perpetuated or saved by the application of any equitable
doctrine including res judicata. Fraud is proved when it is shown that a false representation
has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless
whether it be true or false.
Thus, the Supreme Court from this judgement filled a lacunae in the law by not allowing private
contracts being made between the employer and the employees to opt out of the Compensation
Scheme given under the statute and deprive the rightful claim of the employees.