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Section 47: Corporation's right to recover damages

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IV: Employees' State Insurance Corporation
Competent Labour Forum
Act No. 36 of 2020
Section 46 All 163 Sections of Code on Social Security, 2020 Section 48

Legal Commentary & Landmark Judgments: Section 47

Section 47 of the Code codifies the Corporation's right to recover damages from an employer or third party whose unlawful act, negligence, or failure to observe statutory safety standards directly caused the employment injury or disease necessitating ESI benefits.

  • Subrogation & Statutory Indemnification Remedy: Subrogates the Corporation to the rights of the injured worker, empowering ESIC to sue negligent employers or third-party tortfeasors to recover the capitalized value of paid benefits.
  • Employer Strict Liability for Safety Defaults: Imposes direct financial liability on the employer where an employment injury resulted from willful disregard of statutory machine guarding, ventilation, or safety regulations.
  • Capitalized Actuarial Valuation of Damages: Authorizes the Corporation to recover the full present actuarial value of lifetime pensions awarded to disabled workers or surviving dependants.
Key Landmark Precedents:
  • Regional Director, E.S.I.C. v. Francis De Costa (1996) 6 SCC 1: Supreme Court recognized that while workers are insulated from tort litigation, the Corporation possesses statutory rights to enforce employer accountability for workplace safety.
  • Organo Chemical Industries v. Union of India (1979) 4 SCC 573: Affirmed that damages under social security enactments are exemplary and compensatory, designed to penalize delinquency and reimburse social funds.
  • M.C. Mehta v. Union of India (1987) 1 SCC 395: Supreme Court affirmed that enterprises creating workplace hazards must indemnify public and statutory bodies for all resulting medical and disability expenses.
Courtroom Practice & Strategic Litigation Guidance:

In defending against an ESIC damages notice under Section 47, company counsel must demonstrate strict adherence to factory safety standards and obtain certified Inspector-cum-Facilitator reports showing zero safety contraventions prior to the accident.

Section 46 All 163 Sections of Code on Social Security, 2020 Section 48