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THE PERSONAL INJURIES (COMPENSATION INSURANCE) ACT, 1963

Title : THE PERSONAL INJURIES (COMPENSATION INSURANCE) ACT, 1963

Year : 1963



(1) Every employer of workmen to whom this Act applies or is subsequently made applicable, except an employer whose total wages bill for any quarter after the commencement of this Act has never exceeded fifteen hundred rupees, shall, before such date as may be prescribed, or before the expiry of such period as may be prescribed after his having first become such an employer, take out a policy of insurance issued in accordance with the Scheme, whereby he is insured until the expiry of the period of the emergency or until the date, if any, prior to the expiry of the period of the emergency at which he ceases to be an employer to whom this Section applies, against all liabilities imposed on him by this Act.

(2) Whoever contravenes the provisions of sub-Section (1) or, having taken out a policy of insurance as required by that sub- Section, fails to make any payment by way of premium thereon which is subsequently due from him in accordance with the provisions of the Scheme, shall be punishable with fine which may extend to two thousand rupees and shall also be punishable with a further fine which may extend to one thousand rupees for every day after having been so convicted on which the contravention or failure continues.

(3) This Section shall not bind the Government.



(1) Where a person (in this Section referred to as the principal) uses, in the course of or for the purposes of his trade or business, the services of workmen temporarily lent or let on hire to him by arrangement with another person with whom the workmen have entered into contracts of service or apprenticeship, or in the course of or for the purpose of his trade or business, contracts with any other person for the execution by or under such other person of the whole or any part of any work which is ordinarily part of the trade or business of the principal (either such other person being in this Section referred to as the contractor) the principal shall obtain from the contractor the name of the agent of the Central Government acting under Section. 11 with whom he intends to insure, and shall report to the agent the existence of his agreement or contract with the contractor.

(2) Notwithstanding anything elsewhere contained in this Act, in any such case as is referred to in sub-Section (1), it shall not be necessary for the contractor to insure against the liabilities imposed on him by this Act in respect of workmen employed by him whose services are lent or let on hire on such an arrangement or used in the execution of work on such a contract as is referred to in sub-Section (1), where the arrangement or contract is for a term of less than one month.

(3) The Scheme may make provision for supply by a contractor to a principal of any information necessary to enable the purposes of this Section to be carried out including provision for punishment by fine not exceeding two thousand rupees for the contravention of any requirement of the Scheme.



The Central Government may by notification employ or authorise the employment of any" person to act as its agent for any of the purposes of this Act and to pay to the person so employed such remuneration as it may think fit.



(1) After the date on which the Scheme is put into operation, no person shall, except as a person authorised by the Central Government as its agent to issue policies in pursuance of the Scheme, carry on the business or insuring employers in India against the liabilities for insurance against which the Scheme provides.

(2) Nothing in sub-Section (1) applies to any policy of insurance entered into before the date on which the Scheme is put into operation and current after that date or to any policy of insurance covering liabilities undertaken in excess of the liabilities imposed by this Act.

(3) Whoever contravenes the provisions of sub-Section (1) shall be punishable with fine which may extend to five thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first on which the contravention continues.



(1) The Central Government may, after due appropriation made by Parliament by law in this behalf, transfer In each financial year to a fund to be called the Personal Injuries (Compensation Insurance) Fund (hereinafter referred to as the "Fund") such sums, as may be considered necessary, not exceeding the sums received by the Central Government by way of insurance premiums under the Scheme, or by way of payments made on compensation of offences under Section. 18 or by way of expenses or compensation awarded by a Court under Section. 545 of the Code of Criminal Procedure, 1898 (5 of 1898)1, out of any fine imposed in any prose Constitution under this Act or by way of penalties imposed under, the Scheme.

(2) There shall be paid from out of the Fund all sums required for the discharge by the Central Government of any of its liabilities under this Act or the Scheme or for the payment by the Central Government of the remuneration and expenses of agents employed for the purposes of the Scheme or for the payment by the Central Government of the cost of administering the Scheme

Provided that no payment from the Fund shall be made in discharge of any liability of the Government to pay compensation to workmen employed by it.

(3) If at any time when a payment is to be made out of the Fund, the sum standing to the credit of the Fund is less than the sum required for the making of that payment, an amount equal to the deficiency shall after due appropriation made by Parliament by law, be paid into the Fund as an advance out of the Consolidated Fund of India.

(4) If at any time the amount standing to the credit of the Fund exceeds the sum which, in the opinion of the Central Government, is likely to be required for the making of payments out of the Fund, the excess shall be disposed of in such manner as the Central Government may think fit.

(5) The Central Government shall prepare in such form and manner as may be prescribed and shall publish either annually or at such shorter intervals as may be specified therein, an account of all sums received into and paid out of the Fund.

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1. Now Section. 367 of the Code of Criminal Procedure, 1973 (2 of 1974).

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(1) Any person authorised in this behalf by the Central Government may, for the purpose of ascertaining whether the requirements of this Act and of the Scheme have been complied with require any employer to submit to him such accounts books or other documents or to furnish to him such information or to give such certificates as he may reasonably think necessary.

(2) Whoever willfully obstructs any person in the exercise of the powers under this Section or fails without reasonable excuse to comply with any request made there under shall, in respect of each occasion on which any such obstruction or failure takes place be punishable with fine which may extend to one thousand rupees.

(3) Whoever in purporting to comply with his obligations under this section knowingly or recklessly makes a statement false in a material particular shall be punishable with fine which may extend to one thousand rupees.



(1) Without prejudice to the provisions of sub- section (2) of Section. 9, where any person has failed to insure as or to the full amount required by this Act and the Scheme and has thereby evaded the payment by way of premium of any money which he would have had to pay in accordance with the provisions of the Scheme but for such failure, an officer authorised in this behalf by the Central Government, may determine the amount payment of which has been so evaded and the amount so determined shall be payable by such person and shall be recoverable from him as provided in sub-section (2).

(2) Any sum payable in accordance with the provisions of the Scheme by way of premium on a policy of insurance issued under the Scheme and any amount determined as payable under sub-section (1) shall be recoverable as an arrear of land revenue.

(3) Any person against whom a determination is made under sub- section (1) may, within the prescribed period, appeal against such determination to the Central Government whose decision shall be final.



Where an employer has failed to take out a policy of insurance as required by sub-section (1) of Sec. 9, or having taken out a policy of insurance as required by that sub-section, has failed to make the payments by way of premium thereon which are subsequently due from him in accordance with provisions of the Scheme, payment of any compensation for the payment of which he is liable under this Act may be made out of the Fund, and the sum so paid together with a penalty of such amount not exceeding the sum so paid as may be determined by an officer authorised in this behalf by the Central Government shall be recoverable from the employer as an arrear of land revenue for payment into the Fund.



No prosecution for any offence punishable under this Act shall be instituted against any person except by or with the consent of the Central Government or an authority authorised in this behalf by the Central Government.



Any offence punishable under sub-section (2) of Sec. 9 may either before or after the institution of the prosecution, be compounded by the Central Government or by any authority authorised in this behalf by the Central Government on payment for credit to the Fund of such sum as the Central Government or such authority, as the case may be thinks fit.



Where any offence against this Act is tried by a Presidency Magistrate or a Magistrate of the first class, then notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of1898)1*, the Magistrate trying the offence may pass any sentence authorised by this Act.

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1.Now Code of Criminal procedure 1973 (2 of 1974).

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Last updated on August, 2016

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