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PERSONAL INJURIES (COMPENSATION INSURANCE) ACT, 1963
37 OF 1963
An Act to impose on employers a liability to pay compensation to workmen sustaining personal injuries and to provide for the insurance of employers against such liability. BE it enacted by Parliament in the Fourteenth year of the Republic of India as follows:-
CHAPTER 1 : PRELIMINARY
SECTION 1 : Short title, extent and commencement
(1) This Act may be called the Personal Injuries (Compensation Insurance) Act, 1963.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may by notification appoint.
SECTION 2 : Definitions
In this Act, unless the context otherwise requires,- (a) "employer" includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means the latter person while the workman is working for that other person;
(b) the "Fund" means the Personal Injuries (Compensation Insurance) Fund constituted under (section 13) ;
(c) "gainfully occupied person" and "personal injury" have the meanings respectively assigned to those expressions in (Personal Injuries (Emergency Provisions) Act, 1962) ;
(d) "notification" means a notification published in the Official Gazette;
(e) "partial disablement" means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time the injury was sustained, and where the disablement is of a permanent nature, such disablement as reduces his earning capacity in any employment which he was capable of undertaking at that time: Provided that permanent partial disablement shall be deemed to result from every injury, or from any combination of injuries, specified in the Schedule, where the percentage, or the aggregate percentage, of disability as specified in the Schedule against such injury, or combination of injuries amounts to less than one hundred per cent;
[(f) "period of emergency" means, in relation to the Proclamation of Emer- gency issued under clause (1) of article 352 of the Constitution,-
( i) on the 26th day of October, 1962, the period beginning with the 26th day of October, 1962, and ending with the 10th day of January, 1968, that is to say, the date on which the said Emergency was declared, by notification of the Government of India in the Ministry of Home Affairs No. G.S.R. 93, dated the 10th January, 1968, to have come to an end;
( ii) on the 3rd day of December, 1971, the period beginning with the 3rd day of December, 1971, and ending with such date as the Central Government may, by notification in the Official Gazette, declare to be the date on which the said emergency shall come to an end;]
(g) "prescribed" means prescribed by rules made under (section 22) ;
(h) "total disablement" means such disablement whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time the injury was sustained: Provided that permanent total disablement shall be deemed to result from every injury, or from any combination of injuries, specified in the Schedule, where the percentage, or the aggregate percentage, of disability as specified in the Schedule against such injury, or combination of injuries, amounts to one hundred per cent or more;
(i) the "Scheme" means the Personal Injuries (Compensation Insurance) Scheme referred to in sub-section (1) of (section 8) ;
(j) "wages" means wages as defined in the (Workmen's Compensation Act, 1923 (8 of 1923)) , and "monthly wages" has the meaning assigned to that expression by (section 5 of the Workmen's Compensation Act, 1923 (8 of 1923)) , and shall be calculated for the purposes of this Act in the manner laid down in that section;
( k) "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is employed in any of the employments specified in (section 3) .
*FOR RELEVANT RULES FRAMED UNDER THE ACT, NAMELY, PERSONAL INJURIES (COMPENSATION INSURANCE) RULES, 1972 AND PERSONAL INJURIES (COMPENSATION INSURANCE) SCHEME, 1972, SEE VOLUME 4.
CHAPTER 2 : COMPENSATION PAYABLE UNDER THE ACT
SECTION 3 : Workmen to whom the Act applies
The workmen to whom this Act applies are- (a) workmen employed in any employment or class of employment which is, or has been declared to be, an essential service under rule 126AA of the 3 (2) 2.Substituted for "Defence of India Rules, 1962;" by the Personal Injuries (Compensation Insurance) (Amendment) Act, 1971. [Defence of India Rules, 1962, or under rule 119 of the Defence of India Rules, 1971;]
( b) the workmen employed in any factory as defined in clause ( m) of (S.2 of the Factories Act, 1948) ;
(c) workmen employed in any mine within the meaning of the (Mines Act, 1952) ;
(d) workmen employed in any major port;
(e) workmen employed in any plantation as defined in clause (f) of (S.2 of the Plantations Labour Act, 1951) ;
(f) workmen employed in any employment specified in this behalf by the Central Government by notification.
SECTION 4 : Compensation payable under the Act, by whom and how payable
(1) There shall, subject to such conditions as may be specified in the Scheme, be payable by an employer in respect of personal injury sustained by a gainfully occupied person who is a workman to whom this Act applies, compensation, in addition to any relief provided under the Personal Injuries (Emergency Provisions) Act, 1962 (59 of 1962), of the amount and kind provided by (section 7) : Provided that where an employer has taken out a policy of insurance, as required by sub-section (1) of (section 9) , and has made all payments by way of premium thereon which are subsequently due from him in accordance with the provisions of the Scheme or where by the provisions of sub-section (1) of (section 9) or of sub-section (2) of (section 10 ) the employer is not required to insure, the Central Government shall assume and discharge on behalf of the employer the employer's liability to pay compensation under this sub-section.
(2) The compensation payable under this Act shall be payable in accordance with the provisions made in this behalf in the Scheme.
(3) This section shall be binding on the Government.
SECTION 5 : Limitation on right to receive compensation otherwise than under this Act andAct 59 of 1962
Where any person has a right apart from the provisions of this Act and of (Personal Injuries (Emergency Provisions) Act, 1962) , to receive compen- sation (whether in the from of gratuity, pension, compassionate payment or otherwise) or damages from an employer in respect of a personal injury in respect of which compensation is payable under this Act, the right shall extend only to so much of such compensation or damages as exceeds the amount of compensation payable under this Act.
SECTION 6 : Special provisions in relation to employees of Government
Where any person in the employ of Government has under the rules regulating the conditions of his service a right apart from the provisions of this Act or of (Personal Injuries (Emergency Provisions) Act, 1962) , to receive any sum, whether as extraordinary pension, gratuity, compas- sionate payment or damages, from the Government in respect of a personal injury in respect of which compensation is payable under this Act, then notwithstanding anything contained in this Act or the Personal Injuries (Emer- gency Provisions) Act, 1962, that person shall have the right to receive the sum admissible under those rules and if the sum so admissible is less than the amount payable as compensation under this Act and the Personal Injuries (Emergency Provisions) Act, 1962, then, he shall have a further right to receive an amount equal to the difference between the sum admissible under those rules and the amount of compensation payable under this Act.
SECTION 7 : Amount of compensation
(1) The compensation payable under this Act shall be as follows:-
(a) where death results from the injury, the amount payable in a like case under the (Workmen's Compensation Act, 1923 (8 of 1923)) , reduced by the value in lump sum of the amount payable under (Personal Injuries (Emergency Provisions) Act, 1962) ;
(b) where permanent total disablement results from the injury, the amount payable in a like case under (the Workmen's Compensation Act, 1923) , reduced by the value in lump sum of the amount payable under the Personal Injuries (Emergency Provisions) Act, 1962;
(c) Where permanent partial disablement results from the injury-
(i) in the case of an injury specified in the Schedule- such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of disablement;
(ii) in the case of an injury not specified in the Schedule- the percent- age of such compensation specified in the Schedule for disablement held by a competent medical authority acting under the Scheme made under the (Personal Injuries (Emergency Provisions) Act, 1962) , to be of corresponding degree;
(iii) where more injuries than one are sustained-the aggregate of the compensation payable in respect of those injuries, so however as not to exceed in any case the compensation which would have been payable if permanent total disability had resulted from the injuries;
(d) where temporary disablement, whether total or partial, results from the injury, the half-monthly payments payable in a like case under (the Workmen's Compensation Act, 1923 (8 of 1923)) , reduced in each case, so long as he receives any payment under the Scheme made under the Personal Injuries (Emergency Provisions) Act, 1962 (59 of 1962), by the amount payable under the said Scheme.
(2) Where the monthly wages of a workman are more than five hundred rupees, the compensation payable under this Act shall be the amount payable under the provisions of sub-section (1) in the case of a workman whose monthly wages are more than four hundred rupees.
CHAPTER 3 : PERSONAL INJURIES (COMPENSATION INSURANCE) SCHEME
SECTION 8 : Personal Injuries (Compensation Insurance) Scheme
(1) The Central Government shall, by notification, put into operation a Scheme to be called the Personal Injuries (Compensation Insurance) Scheme whereby provision is made for all matters necessary to give effect to the purposes of this Act and whereby the Central Government undertakes, in relation to employers of workmen to whom this Act applies, the liabilities of insuring such employers against liabilities incurred by them to workmen under this Act and the Scheme : 3 (3) 3. Inserted by the Personal Injuries (Compensation Insurance) (Amendment) Act, 1971. [Provided that different schemes shall be put into operation in relation to different periods of emergency.]
(2) The Scheme shall secure that any liability of the Central Government as insurer under the Scheme is determined by a policy of insurance issued in the prescribed form by a person acting on behalf of the Central Government.
(3) The Scheme may provide that it shall come into operation or shall be deemed to have come into operation on such date as may be specified therein.
(4) The Scheme may be amended at any time by the Central Government.
(5) Without prejudice to the generality of the provisions of sub-section ( 1), the Scheme may-
(a) make provisions regulating the payment of the compensation payable under this Act and the Scheme, including provisions for punishment by fine not exceeding two thousand rupees for the contravention of any requirement of the Scheme;
(b) make provisions specifying the persons to whom and the proportions and manner in which payments under this Act shall be made;
(c) make provisions for determining the value in lump sum of the amount payable under (Personal Injuries (Emergency Provisions) Act, 1962);
(d) specify conditions or circumstances which will disentitle a workman to the compensation payable under this Act, and make it an express or implied condition of any policy of insurance issued under the Scheme that the payment of compensation in defiance of such specification is not covered by the policy;
(e) specify the conditions or circumstances under which the compensation payable to a workman may be withheld, cancelled, reduced or reviewed if the award made under the Scheme made under (Personal Injuries (Emergency Provisions) Act, 1962) , is withheld, cancelled, reduced or reviewed;
(f) provide for cases in which an employer has of his own accord undertaken a part or the whole of the liability imposed by this Act;
(g) provide for the final assessment of the total premium due on a policy of insurance under the Scheme either as the equivalent of all advance payments of premium already made by an employer, or as a percentage of the total wages bills of an employer for the periods with reference to which the amount of any advance payments made by him was fixed or as a percentage of the total wages bill of an employer for a period of not less than twelve or more than fifteen months immediately preceding the expiry of the period of the emergency, and for the assessment of the total premium due on a policy which has ceased to be in force before the expiry of the period of the emergency owing to the employer having gone out of business;
(h) provide for the recovery from an employer of the total premium due on a policy of insurance including provision for its recovery by periodic advance payments of an amount based on a percentage of his total wages bill for any prescribed period, the separate funding of the payments so made by each employer, and the eventual adjustment of the total premium as finally assessed against the total of such periodic payments : Provided that where the amount of the periodic payment based on the total wages bill of the prescribed period is less than eight rupees, it shall be increased to eight rupees: Provided further that the first of such periodic payments shall, subject to the aforesaid minimum of eight rupees, be at such rate as the Central Government may specify in this behalf: Provided further that such periodic payments shall not be more frequent than once in each quarter of a year: Provided further that the rate of any periodic payment after the first shall, subject to the aforesaid minimum of eight rupees, be such as the Central Government may, after considering its liabilities under this Act, fix from time to time, and the Central Government may, where the total amount in the Fund so requires, either waive or postpone any periodic payment.
SECTION 9 : Compulsory insurance
(1) Every employer of workmen to whom this Act applies or is subsequently made applicable, except an employer whose total wages bill for any quarter after the commencement of this Act has never exceeded fifteen hundred rupees, shall, before such date, as may be prescribed, or before the expiry of such period as may be prescribed after his having first become such an employer, take out apolicy of insurance issued in accordance with the Scheme, whereby he is insured until the expiry of the period of the emergency or until the date, if any, prior to the expiry of the period of the emergency at which he ceases to be an employer to whom this section applies, against all liabilities imposed on him by this Act.
(2) Whoever contravenes the provisions of sub-section (1) or, having taken out a policy of insurance as required by that sub-section, fails to make any payment by way of premium thereon which is subsequently due from him in accordance with the provisions of the Scheme, shall be punishable with fine which may extend to two thousand rupees and shall also be punishable with a further fine which may extend to one thousand rupees for every day after having been so convicted on which the contravention or failure continues.
(3) This section shall not bind the Government.
SECTION 10 : Principals and contractors
(1) Where a person (in this section referred to as the principal) uses, in the course of or for the purposes of his trade or business, the services of workmen temporarily lent or let on hire to him by arrangement with another person with whom the workmen have entered into contracts of service or apprenticeship, or in the course of or for the purposes of his trade or business, contracts with any other person for the execution by or under such other person of the whole or any part of any work which is ordinarily part of the trade or business of the principal (either such other person being in this section referred to as the contractor) the principal shall obtain from the contractor the name of the agent of the Central Government acting under (section 11) with whom he intends to insure, and shall report to that agent the existence of his arrangement or contract with the contractor.
(2) Notwithstanding anything elsewhere contained in this Act, in any such case as is referred to in sub-section (1), it shall not be necessary for the contractor to insure against the liabilities imposed on him by this Act in respect of workmen employed by him whose Services are lent or let on hire on such an arrangement or used in the execution of work on such a contract as is referred to in sub-section (-1), where the arrangement or contract is for a term of less than one month.
(3) The Scheme may make provision for the supply by a contractor to a principal of any information necessary to enable the purposes of this section to be carried out including provision for punishment by fine not exceeding two thousand rupees for the contravention of any requirement of the Scheme.
SECTION 11 : Employment of agents by the Central Government
The Central Government may by notification employ or authorise the employment of any person to act as its agent for any of the purposes of this Act and to pay to the person so employed such remuneration as it may think fit.
SECTION 12 : Prohibition of certain insurance business
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