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Mercantile Laws – II

Notes 3.5 Distribution of Compensation (Section 4)

Section 8 of the Act provides for the deposit of the compensation before the Commissioner, as
also to the distribution of compensation by the Commissioner. Section 8 lays down following
rules with regard to distribution of compensation:
(1) No payment of compensation in respect of workman whose injury has resulted in death, and
no payment of lump sum as compensation to a woman or a person under a legal disability, shall
be made otherwise then by deposit with the Commissioner, and no such payment made directly
by an employer shall be deemed to be a payment of compensation.

(2) Any other sum amounting to not less than ten rupees which is payable as compensation may
be deposited with the Commissioner on behalf of the person entitled thereto.

(3) The receipt of the Commissioner shall be a sufficient discharge in respect of any compensation
deposited with him.

(4) On the deposit of any money under sub-section (1), as compensation in respect of a deceased
workman the
Commissioner shall, if he thinks necessary, cause notice to be published or to be served on each
dependant in such manner as he thinks fit, calling upon the dependents to appear before him on
such date as he may fix for determining the distribution of the compensation. If the Commissioner
is satisfied, after any inquiry which he may deem necessary, that no dependent exists, he shall
repay the balance of the money to the employer by whom it was paid.
(5) Compensation deposited in respect of a deceased workman shall, subject to any deduction
made under subsection (4), be apportioned among the dependents of the deceased workman or
any of them in such proportion as the Commissioner thinks fit or may, in the discretion of the
Commissioner, be allotted to any one dependent.
(6) Where any compensation deposited with the Commissioner is payable to any person, the
Commissioner shall, if the person to whom the compensation is payable is not a workman or a
person under a legal disability, and may, in other cases, pay the money to the person entitled
thereto.
(7) Where any lump sum deposited with the Commissioner is payable to a woman or a person
under a legal disability, such sum may be invested, applied or otherwise dealt with for the
benefit of the woman, or of such person during his disability, in such manner as the Commissioner
may direct.
(8) Where a half-monthly payment is payable to a person under legal disability, the
Commissioner may pay it to any dependent of the workman or to any other person whom the
Commissioner thinks best fitted to provide for the welfare of the workman.

(9) Notice must be given to the parties affected.
(10) Where under the previous para, the Commissioner varies an order on the ground .that the
payment of compensation to any person has been obtained by fraud, impersonation or other
improper means, any amount so paid may be recovered by the procedure laid down for the
recovery of arrears of land revenue.
(11) The Commissioner may, on account of neglect of children on the part of a parent or on
account of the variation of the circumstances of any dependent, or for any other sufficient cause,
vary his earlier orders regarding distribution or investment of compensation. But no such order

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