Married Daughter Is Not a Statutory Dependant Under Employees' Compensation Act, Rules Chhattisgarh High Court

The Chhattisgarh High Court has quashed a compensation award in favour of a married daughter substituted after her mother's death, holding she falls outside the Act's closed definition of dependant.

Justice Naresh Kumar Chandravanshi, sitting singly at the High Court of Chhattisgarh at Bilaspur, has quashed a compensation award of Rs 6,12,360/- granted to Smt. Nanda Soni, the married daughter of a deceased factory worker, under the Employees' Compensation Act, 1923. The Court held that a married daughter who was substituted as claimant only after her mother died during pending proceedings cannot claim statutory compensation because she does not qualify as a “dependant” within the meaning of Section 2(1)(d) of the Act. Since no award had been passed in the mother's favour before she died, the cause of action did not survive to the daughter. The judgment, dated 2 September 2026, resolves two cross-appeals arising from a 2022 award by Labour Court No. 1, Raipur.

How the Claim Arose and What the Labour Court Did

Padum Bahadur Soni was allegedly employed at M/s Suraj Pulses Industries, located in the Bhanpuri Industrial Area, Raipur. On 26 April 2015, a boundary wall of the factory collapsed on him. He died from his injuries on the same day.

His widow, Suraji Bai Soni, filed a claim application under Section 22 of the Employees' Compensation Act, 1923 before the Commissioner, Labour Court No. 1, Raipur in Case No. 45/E.C. Act/2015/Fatal. The employer, M/s Suraj Pulses Industries, filed a written statement denying that Padum Bahadur Soni was ever employed under the establishment.

While evidence was still being recorded, Suraji Bai Soni died on 10 May 2021. Her married daughter, Smt. Nanda Soni, applied to be substituted as claimant. The employer objected, arguing that a married daughter is not a dependant under the Act. The Labour Court rejected that objection and, by order dated 6 May 2022, substituted Smt. Nanda Soni. On 13 September 2022, the Labour Court passed an award of Rs 6,12,360/- with interest at 10% per annum from the date of the claim application.

Two cross-appeals followed. Smt. Nanda Soni filed MAC No. 1311 of 2022 seeking enhancement of compensation, a higher rate of interest from the date of the accident, and imposition of the statutory penalty. M/s Suraj Pulses Industries filed MAC No. 1494 of 2022 seeking to quash and set aside the award entirely.

The Threshold Question on Dependency

When the two appeals were clubbed and heard together, the Court on 16 April 2026 framed an additional substantial question of law in the employer's appeal: whether an award of compensation in favour of a person who was not a dependant of the deceased employee is legally sustainable under the Employees' Compensation Act, 1923.

The employer's counsel, Mr. Apurv Goyal, pressed only this question, formally abandoning the three questions of law initially framed on 4 January 2023. He argued that Smt. Nanda Soni, as a married daughter, falls outside the definition of “dependant” under Section 2(1)(d) of the Act entirely.

Counsel for Smt. Nanda Soni, Mr. Pravin Kumar Tulsyan assisted by Mr. Vikas Patel, countered that the original claim was instituted by her mother. Once the mother died and the daughter was substituted as the sole surviving legal heir, she could not be deprived of what her mother had legitimately set in motion. They also pointed out that the substitution order dated 6 May 2022 had never been challenged by the employer and had attained finality. Reliance was placed on a Bombay High Court decision in Praveen Banu Nasir Khan & Anr. v. Vahaanvatti Sizers & Anr. (Writ Petition No. 18070 of 2024).

Reading Section 2(1)(d): Who Qualifies as a Dependant

The Court examined Section 2(1)(d) of the Act, which sets out a closed list of relatives who qualify as dependants. The provision covers, among others, a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter, and a widowed mother under sub-clause (i). Under sub-clause (iii), a married daughter may only qualify as a dependant if she is adopted and a minor, or widowed and a minor, and is wholly or partly dependent on the earnings of the employee.

On a plain reading of this definition, the Court concluded that a married daughter who is neither a minor nor widowed simply does not fall within the statutory category. No evidence had been placed before the Labour Court to show that Smt. Nanda Soni met any of those qualifying conditions.

The Surviving Cause-of-Action Principle

The Court drew on the Division Bench decision of this Court in Amarsai Amar Singh Netam (since dead) through proposed appellant Sukhchand v. M/s N.C. Nehar & Others (2011 SCC OnLine Chh 183), which itself had relied on the Supreme Court's ruling in Melepurath Sankunni Ezhuthassan v. Thekittil Geopalankutty Nair (AIR 1986 SC 411).

The principle drawn from those decisions is this: the right to claim statutory compensation under the Employees' Compensation Act is personal to the dependant of the deceased workman. If the original claimant dies before any award is passed, the cause of action — being personal in nature — does not survive to her legal heir unless that heir is independently a dependant under the Act.

Had the Labour Court passed an award in Suraji Bai Soni's favour during her lifetime, the compensation amount would have merged into a decree and formed part of her estate. Her legal heir could then have claimed it in the capacity of a legal representative. But that is not what happened here. Suraji Bai Soni died on 10 May 2021, before any award was made. The Court held that, in those circumstances, the cause of action did not survive to Smt. Nanda Soni, who is not herself a dependant within Section 2(1)(d).

The Court also rejected the argument that the employer's failure to challenge the substitution order of 6 May 2022 precluded it from raising the dependency objection. The finality of a procedural substitution order does not confer substantive entitlement on a person who lacks statutory standing to receive compensation in the first place.

Interest and Penalty Questions Rendered Academic

Having held the award unsustainable on the dependency question, the Court turned briefly to the two substantial questions raised in Smt. Nanda Soni's own appeal — whether interest should have been granted at 12% per annum from the date of the accident rather than 10% from the date of application, and whether the Labour Court erred in not imposing the statutory penalty under Section 4A(3)(b).

The Court noted that Section 4A(3)(a) of the Act mandates simple interest at 12% per annum where an employer defaults in paying compensation within one month of the date it fell due. It referred to the Supreme Court's ruling in Shobha v. The Chairman, Vitthal Rao Shinde (Civil Appeal No. 1860 of 2022, decided on 11 March 2022) and Ajay Kumar Das v. Divisional Manager (2022 SCC OnLine SC 93), both of which hold that compensation falls due from the date of the accident and that interest must run from that date, not from the date of the award or the date of filing the claim.

The Court accepted that the Labour Court's direction to award interest at 10% from the date of the application, conditional on default, ran contrary to the statutory mandate. However, since the award itself had been held legally unsustainable, the questions on interest and penalty could not lead to any independent relief in favour of Smt. Nanda Soni. Both questions were accordingly treated as academic and left without a substantive answer in her favour.

Order

MAC No. 1494 of 2022 filed by M/s Suraj Pulses Industries is allowed. The judgment and award dated 13 September 2022 passed by the Commissioner under the Employees' Compensation Act, 1923, Labour Court No. 1, Raipur in Case No. 45/E.C. Act/2015/Fatal is quashed and set aside.

MAC No. 1311 of 2022 filed by Smt. Nanda Soni seeking enhancement of compensation and interest is dismissed.

Any compensation amount deposited by M/s Suraj Pulses Industries with the Commissioner/Labour Court, together with any accrued interest, is to be refunded to the employer upon due verification in accordance with law.

The record of the Labour Court is to be transmitted back immediately along with a copy of the judgment for compliance. No order as to costs was made.