High Court Upholds Worker Rights: Medical Costs Cannot Offset Compensation

In a truly significant decision, one that undoubtedly brings a sigh of relief to countless workers and their families across the state, the Karnataka High Court has unequivocally ruled that medical expenses borne by an employer are entirely separate from the compensation due under the Employees' Compensation Act (EC Act). This means, quite simply, that employers cannot deduct the cost of medical treatment from the statutory compensation payable to an injured employee or the dependents of a deceased worker.

The ruling came from a single-judge bench led by Justice H.P. Sandesh, hearing a petition filed by M/s United India Insurance Co Ltd. The heart of the matter revolved around a tragic case: an employee, a conductor, passed away while on duty. His employer had, commendably, covered his medical expenses. However, the insurance company argued that these expenses should be subtracted from the total compensation owed to the deceased employee's family. This is where the High Court stepped in, drawing a crucial line.

The court's reasoning, when you look closely, is rooted deeply in the very spirit and objective of the EC Act. This piece of legislation, after all, was designed to provide a speedy and, importantly, inexpensive remedy to workers who suffer injuries or illness due to their employment, or to their families in the unfortunate event of death. To allow the deduction of medical expenses, the court observed, would fundamentally undermine this purpose.

Justice Sandesh highlighted that medical expenses are essentially a reimbursement for the treatment received. They are not, and were never intended to be, a component of the 'compensation' as defined by the Act. Compensation, under the EC Act, is calculated based on factors like the employee's wages, age, and the percentage of disability, not the cost of healthcare. The court firmly stated that there's no specific provision within the Act that permits such a deduction.

Indeed, it's a statutory duty for employers to provide medical care to their employees. To then permit them or their insurers to recover these costs from the compensation meant for the worker's family would, quite frankly, be detrimental. It would dilute the financial security and support that the Act is designed to provide, effectively penalizing the very individuals it seeks to protect.

This landmark judgment also drew strength from previous legal precedents. The High Court referenced a 2022 Supreme Court decision in the case of Raj Kumar Vs. Rajesh Kumar and another, which dealt with a similar principle under the Motor Vehicles Act. In that case, the Supreme Court had already affirmed that medical expenses are a distinct head of claim and not to be adjusted against compensation for injury or death. This provides a consistent and robust legal foundation for the current ruling.

Ultimately, this decision by the Karnataka High Court is a powerful reaffirmation of worker rights. It ensures that the safety net provided by the Employees' Compensation Act remains intact and undiminished. Workers and their dependents can now rest assured that the compensation meant to support them through difficult times will not be eroded by the costs of essential medical care, which, let's be honest, is an employer's inherent responsibility.