Can the amount received under the ESI Scheme be deducted from compensation awarded under the Motor Vehicles Act, 1988?

No, where the claim is made against a third party tortfeasor. The ingredients of Section 53 of the Employees' State Insurance Act, 1948 are not to be read in a disjunctive manner and have to be understood cumulatively, and the most crucial factor which provides the actual bar is when the claim is made by the insured person as an employee under the ESI Act. Here the accident had happened in a public place, the consequential injury by no stretch could be construed as an employment injury, and the legal heirs made the claim against the owner of the offending vehicle based on the individual capacity of the deceased and not against the employer. The benefits given under the ESI Act being independent and de hors the benefit which a person will be entitled to receive under a different Enactment in a different capacity, a tortfeasor and his insurer seeking such deduction would amount to putting a premium on illegality.

Employees' State Insurance Act, 1948 — s.53 — s.61 — Motor Vehicles Act, 1988 — s.166 — Bar against receiving or recovery of compensation under any other law — Employment injury — Claim against a third party tortfeasor — Deduction of ESI benefits — Employees' State Insurance Act, 1948 — s.53 — Ingredients cumulative, not disjunctive — Held: The ingredients of Section 53 are not to be read in a disjunctive manner and have to be understood cumulatively. The actual bar arises only when the claim is made by the insured person as an employee under the ESI Act. (¶19, 20) Employees' State Insurance Act, 1948 — s.53 — Claim against a third party tortfeasor — Held further: Where the accident takes place in a public place, the injury is not an employment injury and the legal heirs claim against a third party tortfeasor in the individual capacity of the deceased, the bar under Section 53 does not operate. (¶24, 27) Employees' State Insurance Act, 1948 — Benefits independent and de hors other Enactments — Held further: The benefits given under the ESI Act are independent and de hors the benefit which a person will be entitled to receive under a different Enactment in a different capacity. They cannot be deducted from the compensation determined under the MV Act. (¶23, 33) Motor Vehicles Act, 1988 — Deduction claimed by the tortfeasor and insurer — Premium on illegality — Held further: A tortfeasor and his insurer cannot seek deduction from the compensation determined under the MV Act only on the ground that benefits were availed under the ESI Act. That would amount to putting a premium on illegality. Appeal allowed and award modified. (¶28, 29, 34)

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