Kerala High Court Affirms Overriding Effect of Legal Services Authorities Act in Compensation Disputes
Dependents of Deceased Employee Cannot Claim Additional Compensation After Lok Adalat Settlement
The Kerala High Court, in a landmark judgment delivered on September 22, 2025, reaffirmed the overriding effect of the Legal Services Authorities Act, 1987, over the Employees' Compensation Act, 1923, in settling compensation claims for the death of an employee. The decision was rendered by Justice M.A. Abdul Hakhim in the case of Sivan v. Raju P.V, addressing a crucial legal question regarding the doctrine of election in compensation claims.
In this case, the appellants, parents of the deceased employee Sri. Ambady, sought to challenge the order of the Employee's Compensation Commissioner, who had ruled that they were not entitled to further compensation under the Employees' Compensation Act after having settled the matter in a Lok Adalat for Rs. 10 lakhs.
The appellants argued that the settlement in Lok Adalat should not bar them from seeking additional compensation under the Employees' Compensation Act, citing the statutory provision that prohibits employers from settling compensation without depositing the amount with the Commissioner. However, the court highlighted that the Legal Services Authorities Act, 1987, provides an overriding clause that supersedes conflicting provisions of earlier laws, including the Employees' Compensation Act.
Justice Hakhim emphasized that once the dependents elect to settle under the Legal Services Authorities Act, they cannot subsequently claim compensation under another statute for the same cause of action, invoking the doctrine of election. The court also noted that the Lok Adalat is a judicial body whose awards are binding and non-appealable, further underscoring the finality of such settlements.
The judgment also addressed concerns about the vulnerability of claimants in such settlements, assuring that the interests of weaker sections are safeguarded by the judicial oversight provided in Lok Adalats, which function under the Legal Services Authorities Act.
In conclusion, the court dismissed the appeal, upholding the initial award of the Lok Adalat, and reinforced the legal principle that claimants must choose their remedy wisely, as the election of one statutory remedy precludes subsequent claims under another for the same issue.
Bottom Line:
Legal Services Authorities Act, 1987 has an overriding effect over the Employees' Compensation Act, 1923, and a claim for compensation for the death of an employee can be settled under Section 22C of the Legal Services Authorities Act.
Statutory provision(s): Legal Services Authorities Act, 1987 Section 22C, Employees' Compensation Act, 1923 Section 8(1).
