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Section 87: Appointment of Competent Authority for compensation

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

Statutory Mandate
Chapter VII: Employee's Compensation
Competent Labour Forum
Act No. 36 of 2020
Section 86 All 163 Sections of Code on Social Security, 2020 Section 88

Legal Commentary & Landmark Judgments: Section 87

Section 87 of the Code on Social Security, 2020 empowers the appropriate Government to appoint Competent Authorities for the determination of compensation under Chapter VII, delineating statutory qualifications, territorial distributions, and institutional mechanisms necessary to create an accessible quasi-judicial dispute resolution infrastructure.

  • Statutory Appointment Criteria and Bench Qualifications: Authorizes the appropriate Government, by official gazette notification, to appoint any person who is or has been a member of a State Judicial Service for a period of not less than five years, an advocate of not less than five years' standing, or a gazetted officer of the Labour Department not below the rank of Assistant Labour Commissioner with prescribed legal and industrial experience to be a Competent Authority.
  • Territorial and Jurisdictional Delimitation: Permits the appropriate Government to specify the local areas and classes of establishments assigned to each Competent Authority, and where multiple authorities are appointed for the same area, provides for the allocation and distribution of business amongst them through general or special administrative orders.
  • Public Servant Status and Immunity: Statutorily declares every Competent Authority to be a deemed public servant within the meaning of Section 21 of the Indian Penal Code (now Section 2(28) of the Bharatiya Nyaya Sanhita, 2023), conferring judicial immunity under the Judicial Officers Protection Act, 1850 for all acts performed in good faith.
  • Concurrent Powers to Issue Transitional and Interim Directions: Enables the Competent Authority to exercise wide preliminary jurisdiction to order urgent provisional medical aid, impound employer machinery or vehicles involved in catastrophic industrial accidents, and issue urgent interim notices to secure compensation funds.
Key Landmark Precedents:
  • Patel Engineering Ltd. v. Union of India (2012) 11 SCC 1: The Supreme Court emphasized that statutory quasi-judicial authorities created by Parliament to administer socio-economic legislation must maintain uncompromising institutional independence and adhere to fundamental standards of administrative fairness.
  • State of Gujarat v. Utility Users' Welfare Association (2018) 6 SCC 21: The Supreme Court ruled that where statutory tribunals or authorities are invested with powers to adjudicate substantial private rights and assess financial liabilities, members possessing judicial training or legal qualifications are essential to uphold constitutional due process under Article 14.
  • Secretary, Minor Irrigation & Rural Engineering Services v. Sahngoo Ram Arya (2002) 5 SCC 521: Reaffirmed that quasi-judicial authorities cannot exercise discretionary power arbitrarily; their jurisdiction must stem strictly from formal statutory gazette notifications defining their territorial and subject-matter competence.
Courtroom Practice & Strategic Litigation Guidance:

Litigation practitioners challenging the jurisdiction of a Competent Authority must verify the official gazette notification appointing the incumbent authority. If an authority acts outside their territorially notified circle or lacks the requisite five-year judicial/labour department standing, an immediate preliminary jurisdictional objection should be recorded under Section 87 before submitting to the merits of the compensation inquiry.

Section 86 All 163 Sections of Code on Social Security, 2020 Section 88