Workmen’s Compensation; United India Insurance Co. Ltd. Vs. Selvaraj [Kerala High Court, 13-01-2016]

Workmen’s Compensation Act, 1923 – S. 4 (1) (c) (ii) – While assessing compensation for permanent partial disablement resulting from non-scheduled injury the Commissioner is not expected to blindly accept the assessment of loss of earning capacity made by the qualified medical practitioner. If the Commissioner, based on the materials or evidence on record finds that such assessment of loss of earning capacity cannot be accepted, he can certainly refer the applicant for further expert opinion and report.

Workmen’s Compensation Act, 1923 – S. 4A (3) – the Commissioner was legally correct in granting 12% interest on the amount of compensation from the date of accident.

Workmen’s Compensation Act, 1923 – Even if no amount is claimed, the Commissioner must determine the amount which is found payable to the workman.

Workmen’s Compensation Act, 1923 – The Commissioner was correct in passing an award in excess of the claim made in the application for compensation.

# Earning Capacity


IN THE HIGH COURT OF KERALA AT ERNAKULAM

P.R. RAMACHANDRA MENON & ANIL K.NARENDRAN, JJ.

M.F.A.(WCC)No.173 of 2010

Dated this the 13th day of January, 2016

AGAINST THE ORDER IN WCC 269/2006 OF COMMISSIONER FOR WORKMEN’S COMPENSATION, PALAKKAD DATED 10-11-2009

APPELLANT/SECOND OPPOSITE PARTY IN WCC 269/2006

THE UNITED INDIA INSURANCE CO.LTD., NEMMARA BRANCH REPRESENTED BY THE ASSISTANT MANAGER UNITED INDIA INSURANCE CO.LTD. OFFICE OF THE REGIONAL MANAGER, HOSPITAL ROAD ERNAKULAM.

BY ADV. SRI.M.A.GEORGE

RESPONDENTS/APPLICANT AND OPPOSITE PARTY NO..1 IN THE WCC

1. SRI.SELVARAJ,S/O.ARUMUGHAN, PF NO.3350, MANALAROO ESTATE, PADAGIRI PO, NELLIAMPATHY.

2. THE MANAGING DIRECTOR, THE NELLIAMPATHY TEA & PRODUCE LTD, MANALAROO ESTATE, PADAGIRI PO NELLIAMPATHY.

R1 BY ADV. SRI.RAJESH SIVARAMANKUTTY

JUDGMENT

ANIL K.NARENDRAN , J.

The appellant is the second opposite party in W.C.C.No.269 of 2006 on the file of the Workmen’s Compensation Commissioner, Palakkad (hereinafter referred to as ‘the Commissioner’), an application filed by the first respondent herein, under

# Section 22 of the Workmen’s Compensation Act, 1923

(hereinafter referred to as ‘the Act’), read with

# Rule 20 of the Workmen’s Compensation Rules, 1924

(hereinafter referred to as ‘the Rules’), claiming a lump sum amount of Rs.1,00,000/- together with interest as compensation for the injuries sustained in an accident occurred on 14.3.2006, in the course of his employment under the first opposite party, the second respondent herein.

2. The first respondent is a permanent employee in the tea estate owned by the second respondent at Nelliyampathy. On 14.3.2006 at 9.00 am, while the first respondent was plucking tea leaves in the estate, he was attacked by a wild pig, resulting injuries to his right knee. Immediately after the accident, he was taken to the Estate Hospital and from there he was referred to the Medical College Hospital, Thrissur, where he had undergone in-patient treatment till 16.3.2006. At the time of accident, the first respondent was aged 57 years and was working as a Tea Plucker on a daily wages of Rs.120/-. On 4.8.2006, he filed application for compensation before the Commissioner, claiming a lump sum amount of Rs.1,00,000/- from the second respondent. The first respondent contended that he is continuing treatment for the injuries sustained in the accident and that on account of the disability he is not able to work. The first respondent contended further that, since the second respondent has taken a Workmen’s Compensation Policy, the appellant insurer is liable to indemnify the said respondent.

3. After conducting a preliminary enquiry, the application was admitted on 10.11.2006. The second respondent employer was set ex parte and the appellant insurer alone contested the matter. The appellant filed written statement admitting that the second respondent had taken a Workmen’s Compensation Policy. But the appellant insurer denied the averments that, the first respondent sustained employment injury and become permanently disabled due to such injury.

4. On the side of the first respondent Exts.A1 to A4 were marked and also Ext.X1 report of the Medical Board at District Hospital, Palakkad. The first respondent was examined as AW1 and a co-worker was examined as AW2. The second respondent employer or the appellant insurer has not chosen to adduce any oral or documentary evidence.

5. After considering the materials on record, the Commissioner held that the first respondent is a workmen as defined under Section 2(1)(n) of the Act, who met with an accident during and in the course of his employment under the second respondent and sustained injuries. The Commissioner held further that the first respondent, who was aged 57 years at the time of accident, is eligible for workmen’s compensation. Relying on Ext.A1 wage slip, the Commissioner reckoned the wages of the first respondent at Rs.2,272.65 per month, which was rounded to Rs.2,273/-. In Ext.X1, the Medical Board assessed 100% loss of earning capacity. Accepting the loss of earning capacity as certified in Ext.X1 and applying the age factor of 128.33, the Commissioner found that the first respondent is eligible for workmen’s compensation amounting to Rs.1,75,016/- (2,273 x 128.33 x 60/100 x 100/100 = 1,75,016), together with simple interest at the rate of 12% from the date of accident till the date of deposit. Since the insurance coverage is admitted, the Commissioner directed the appellant insurer to deposit the compensation amount together with interest, within 30 days of receipt of the order, failing which the entire amount was ordered to be recovered under the provisions of the Act.

6. Aggrieved by the order passed by the Commissioner dated 10.11.2009 in W.C.C.No.269 of 2006, the appellant insurer is before this Court in this appeal, under Section 30 of the Act, raising substantial questions of law.

7. In terms of the order passed by the Commissioner dated 10.11.2009 in W.C.C.No.269 of 2006, the appellant insurer deposited an amount of Rs.2,51,248/- before the Indusind Bank, Chandra Nagar Branch, Palakkad, vide cheque No.663361 dated 7.4.2010. By order dated 2.3.2012 in I.A.No.2456 of 2010, this Court granted stay of disbursement of one half of the amount in deposit and also ordered that the Commissioner will forthwith release to the first respondent the remaining portion in deposit.

8. We heard the arguments of the learned counsel appearing for the appellant insurer and also the learned counsel appearing for the first respondent employee.

9. The accident occurred on 14.3.2006. At the time of accident, the first respondent was aged 57 years and was working on a daily wage of Rs.120/-. Relying on Ext.A1 wage slip, the Commissioner reckoned the wages of the first respondent at Rs.2,273/- per month. As borne out from Ext.A4 disability certificate dated 10.7.2008 issued from the Department of Orthopaedics, Government Medical College, Thrissur, the injury sustained by the first respondent was fracture of tibial spine of right knee joint, following traumatic synovitis. He was treated by POP cast immobilisation of right knee. X-ray of his right knee taken on 9.7.2008 showed fracture of tibial spine not united and extensive degenerative changes in knee joints in all compartments. On examination, it was found that there is tenderness along medial joint line; movements of right knee joint is limited and flexion is possible from 10° of flexion deformity to 140° felxion; crepitus felt during movement, suggesting degenerative changes. Anterior drawer test was positive, suggesting anterior cruciate ligament insufficiency. Gait showed painful limping. Considering these findings, in Ext.A4 the permanent disability of the first respondent was assessed at 8% as per McBride Scale and the loss of earning capacity at 20%.

10. On 20.10.2008, the first respondent filed an application before the Commissioner seeking an order to refer him to the Medical Board at the District Hospital, Palakkad, in order to ascertain the percentage of disability and the loss of earning capacity. The members of the Medical Board attached to the District Hospital, Palakkad, examined the first respondent on 30.5.2009 and certified in Ext.X1 that, he has severe arthritis and partial ankylosis at right knee and assessed 15% permanent disability and 100% loss of earning capacity for his work in the estate.

11. The first question that arises for consideration in this appeal is as to whether the Commissioner was legally correct in accepting 100% loss of earning capacity assessed by the Medical Board, in the case of an injury not specified in Schedule I of the Act, i.e., a ‘non-scheduled injury’, in view of the provisions contained in Explanation II to Section 4(1)(c)(ii) of the Act.

12. Chapter II of the Act deals with Workmen’s Compensation (the word “Workmen’s” is substituted by the word “Employee’s” by the Workmen’s Compensation (Amendment) Act, 2009). Section 3 of the Act provides that, if personal injury is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II. Section 4 of the Act provides as to how the compensation should be determined where the injuries have resulted in (a) death; (b) permanent total disablement; (c) permanent partial disablement (due to injuries specified in Part II of Schedule I of the Act or due to non-scheduled injuries); and (d) temporary disablement, whether total or partial. Section 4(1)(c) of the Act, which is relevant for determination of the issues in the present case, reads thus;

# 4. Amount of compensation

(1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:-

(a) xxx xxx xxx

(b) xxx xxx xxx

(c) Where permanent partial disablement results from the injury.

(i) In the case of an injury specified in Part II of Schedule I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury; and

(ii) In the case of an injury not specified in Schedule I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;

Explanation-I. – Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries.

Explanation II. – In assessing the loss of earning capacity for the purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I.

(d) xxx xxx xxx

13. Section 2(g) of the Act defines the term “partial disablement” to mean, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of an employee in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time: provided that every injury specified in Part II of Schedule I shall be deemed to result in permanent partial disablement. Similarly, Section 2(l) of the Act defines the term “total disablement” to mean, such disablement, whether of a temporary or permanent nature, as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement. The Proviso to Section 2(l) provides that, permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the Part II against those injuries, amounts to one hundred percent or more.

14. Part I of Schedule I of the Act contains the list of injuries deemed to result in permanent total disablement. Section 4(1)(a) deals with determination of compensation where death results from the injury. Section 4(1)(b) deals with determination of compensation in cases where permanent total disablement results from employment injury, in which case the Commissioner has to determine whether the injury sustained by the employee has in fact resulted in permanent total disablement or not. There is no need to decide the percentage of loss of earning capacity as a consequence of such permanent total disablement, since it is assumed that the loss of earning capacity is 100% in cases where permanent total disablement results from the injuries specified in Part I of Schedule I of the Act. Therefore, Section 4(1)(b) does not contemplate any assessment of loss of earning capacity by a qualified medical practitioner.

15. However, Section 4(1)(c) of the Act, which deals with determination of compensation in cases where permanent partial disablement results from the injury, makes a distinction between the extent of ‘physical disability’ and the extent of ‘loss of earning capacity’. In such cases compensation depends not on the extent of permanent partial disablement, but on the loss of earning capacity resulting from such permanent partial disablement. As per sub-clause (i) of clause (c), where permanent partial disablement has arisen from the injuries specified in Part II of Schedule I, then the percentage of loss of earning capacity will be as specified in the said Schedule. On the other hand, sub-clause (ii) of clause (c) provides that, where permanent partial disablement has arisen from the injuries which are not specified in Part II of Schedule I, i.e., ‘non-scheduled’ injuries, then the percentage of loss of earning capacity resulting therefrom has to be determined by the Commissioner, as assessed by the qualified medical practitioner.

16. Explanation I to Section 4(1)(c) of the Act states that, where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries. Similarly, Explanation II states further that, in assessing the loss of earning capacity for the purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I.

17. In

# Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289

a Four-Judge Bench of the Apex Court had occasion to deal with a case in which the injured, who was working as a carpenter for doing some ornamental work in a cinema hall of the appellant, fell down and suffered injuries resulting in amputation of his left arm from the elbow. The Commissioner for Workmen’s Compensation in his order held that, the respondent was a carpenter by profession and by loss of his left hand above the elbow he has evidently been rendered unfit for the work as carpenter as the work of carpentry cannot be done by one hand only and therefore adjudged him to have lost 100% of his earning capacity. Aggrieved by the said order, the appellant filed writ petition in the High Court at Orissa, which was dismissed summarily, and the matter ultimately reached the Apex Court. The appellant argued that the injury did not result in permanent total disablement of the respondent, and that the Commissioner committed gross error of law in taking that view as there was only partial disablement within the meaning of Section 2(1)(g) of the Act, which should have been deemed to have resulted in permanent partial disablement at the nature referred to in Item 3 of Part II of Schedule I. This argument has been advanced on the ground that the amputation was from 8″ from tip of acromion and less than 4½” below tip of olecranon. The Apex Court repelled the said argument holding that, the question for consideration is whether the disablement incapacitated the respondent for all work which he was capable of performing at the time of the accident. The Commissioner has examined the question and recorded his finding that, the injured workman is carpenter by profession and by loss of the left hand above the elbow, he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only. Therefore, the said finding of the Commissioner is obviously a reasonable and correct finding. Para.5 of the judgment reads thus;

“5. The expression “total disablement” has been defined in Section 2(l) of the Act as follows: “(l) “total disablement” means such disablement, whether of a temporary or permanent nature, as incapacitates workman for all work which he was capable of performing at the time of the accident resulting in such disablement.”

It has not been disputed before us that the injury was of such a nature as to cause permanent disablement to the respondent and the question for consideration is whether the disablement incapacitated the respondent for all work which he was capable of performing at the time of the accident. The Commissioner has examined the question and recorded his finding as follows: ”The injured workman in this case is carpenter by profession ….. By loss of the left hand above the elbow, he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only.”

This is obviously a reasonable and correct finding. Counsel for the appellant has not been able to assail it on any ground and it does not require to be corrected in this appeal. There is also no justification for the other argument which has been advanced with reference to Item 3 of Part II of Schedule I, because it was not the appellant’s case before the Commissioner that amputation of the arm was from 8″ from tip of acromion to less than 4½” below the tip of olecranon. A new case cannot therefore be allowed to be set up on facts which have not been admitted or established.”

18. The decision in Pratap Narain Singh Deo‘s case (supra) was distinguished by a Two-Judge Bench of the Apex Court in

# Amar Nath Singh v. Continental Constructions Ltd., (2001) 10 SCC 760

It was a case in which the appellant workman lost his left eye and made a claim as having lost his complete vision in that eye, but medically it was assessed that the loss of vision was only 80%. The Workmen’s Compensation Commissioner, on an application being made to it by the appellant, assessed the compensation payable to him as 100%, under Item 4 of Part I of Schedule I. On appeal to the High Court, the compensation which was fixed at 100% was reduced to 30% relying on the provisions under Item 26 of Part II of Schedule I, and the matter ultimately reached the Apex Court. The contention raised before the Apex Court was that, the reduction made by the High Court is improper. The learned counsel for the appellant relied on the Apex Court judgment in Pratap Narain Singh Deo‘s case (supra). The Apex Court observed that, the decision in Pratap Narain Singh Deo‘s case (supra) turned on its own facts, therefore the principles therein cannot be extended to the present case. On an overall assessment of the matter, the Apex Court held that, out of Rs.1,97,000/- deposited in the High Court towards compensation and penalty, which has been withdrawn by the appellant, a sum of Rs.1,00,000/- shall be retained by him, while the balance amount of Rs.97,000/- shall be refunded to the respondent in six months from the date of judgment. Paras.3 and 4 of the judgment read thus;

“3. The contention put forth before this Court is that the reduction made by the High Court is improper. The learned Counsel for the appellant relied upon a decision of this Court in

# Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289

wherein the case of amputation of left arm from the elbow causing total disablement to perform the work of carpenter was discussed and contended in the present case that there is a loss of one eye and the earning capacity of the appellant has been reduced from what he was capable of earning at the time of the accident, as a result of disablement. Learned counsel for the respondent refuted this contention and submitted that as the appellant himself has been claiming that he was fit for work and his evidence discloses the same and in the circumstances the view taken by the Commissioner, Workmen’s Compensation is incorrect and that of the High Court is justified. The decision in Pratap Narain Singh Deo v. Srinivas Sabata turned on its own facts, therefore, the principles therein cannot be extended to the present case.

4. Having gone through the papers and having heard learned counsel on both the sides, we are of the opinion that we should not be unduly fettered by the principles stated either, in the Act or made in the course of the proceedings in this case and on overall assessment of the matter, we think that out of Rs.1,97,000/- deposited in the High Court towards compensation and penalty, which has been withdrawn by the appellant, a sum of Rs.1,00,000/- shall be retained by the appellant while a balance of Rs.97,000/- shall be refunded to the respondent in six months from today. It is open to the appellant to pay that amount of Rs.97,000/- in different installments if he so chooses. The appeal is disposed of accordingly modifying the order made by the Commissioner, Workmen’s Compensation and that of the High Court.”

19. In

# National Insurance Co. Ltd. v. Mubasir Ahmed, (2007) 2 SCC 349

a Two-Judge Bench of the Apex Court had occasion to deal with a batch of appeals arising out of claim petitions filed before the Commissioner for Workmen’s Compensation, under Section 22 of the Act, claiming compensation for alleged personal injuries sustained in the course of employment. In each case the claimant claimed to be either a labourer or cleaner or driver of the vehicle which was involved in the accident. The claim petitions were adjudicated by the Commissioner for Workmens’ Compensation. In order to prove the nature of injuries sustained and the alleged loss of earning capacity, a doctor was examined as witness. The doctor who was examined, indicated the percentage of permanent/ partial disablement, functional disability and loss of earning capacity, ranging from 65% to 80%. The appellant, the insurer of offending vehicle, did not question the correctness of the award made by the Commissioner. The claimant in each case preferred appeal under Section 30 of the Act and the High Court held that there was 100% loss of earning capacity and therefore, awarded compensation together with interest at the rate of 12% p.a. from date of accident till actual realisation, and the matter ultimately reached the Apex Court. The appellant insurer contended that, the judgment of the High Court without any discussion on the loss of earning capacity is clearly unsustainable, and in addition to that the question of payment of interest at 12% per annum does not arise. The Apex Court held that the cases before it related to injuries which were not specified in Schedule I and as such covered by Section 4(1)(c)(ii) Explanation. In terms of Explanation II the qualified medical practitioner has to assess loss of earning capacity, having due regard to percentage of loss of earning capacity in relation to the different injuries in Schedule I. The Apex Court held further that, loss of earning capacity is not a substitute for percentage of the physical disablement. It is one of the factors taken into account. The doctor who examined the claimants noted the functional disablement (ranging from 65% to 70%). In other words, the doctor had taken note of the relevant factors relating to loss of earning capacity. However, without indicating any reason or basis the High Court held that there was 100% loss of earning capacity. Since no basis was indicated by the High Court in support of the conclusion, the Apex Court set aside that part of the High Court’s order and restored that of the Commissioner. Paras.7 and 8 of the judgment read thus;

“7. These cases related to injuries which were not specified in Schedule I and as such cases are covered by Section 4 (1)(c)(ii) Explanation. In terms of Explanation II the qualified medical practitioner has to assess loss of earning capacity having due regard to percentage of loss of earning capacity in relation to the different injuries in Schedule I. Explanation I also provides that where there are more than one injury, the aggregate has to be taken, so that the amount which would be payable for permanent total disablement is not exceeded.

8. Loss of earning capacity is, therefore, not a substitute for percentage of the physical disablement. It is one of the factors taken into account. In the instant case the doctor who examined the claimant also noted about the functional disablement. In other words, the doctor had taken note of the relevant factors relating to loss of earning capacity. Without indicating any reason or basis the High Court held that there was 100% loss of earning capacity. Since no basis was indicated in support of the conclusion, same cannot be maintained. Therefore, we set aside that part of the High Court’s order and restore that of the Commissioner, in view of the fact situation. ….”

20. In

# New India Assurance Co. Ltd. v. Sreedharan, 1995 (1) KLT 275

a Full Bench of this Court held that, when the statute specifically postulated that the compensation to be awarded should be proportionate to the loss of earning capacity permanently caused by the injury, as assessed by the qualified medical practitioner, Court cannot obviously overlook the legislature’s intention in accepting and recognising the expert opinion of the medical practitioner. It is only the medical practitioner who can, in the circumstances of the case, assess the loss of earning capacity, which would certainly depend on the facts and circumstances of each case. To hold that the Commissioner can disregard it without calling for any other data would be doing violence to the statutory provision.

21. In Sreedharan‘s case (supra), the question that came up for consideration before the Full Bench of this Court was as to whether the loss of earning capacity assessed by the qualified medical practitioner has to be given its due weight or the Commissioner can unilaterally arrive at a conclusion disregarding the certificate. That was a case where the workman, during the course of his employment as driver in an autorikshaw, sustained injuries including fracture of tibia and fibula. The qualified medical practitioner certified 30% permanent disability and certificate does not mention the loss of earning capacity. The Commissioner, disregarding the said assessment, fixed 100% loss of earning capacity and determined compensation on that basis. After holding that, it is only the medical practitioner who can assess the loss of earning capacity, the Full Bench held that, if the Commissioner, on the basis of the evidence tendered before him, finds that the medical certificate issued by the medical practitioner cannot be accepted, he can certainly refer the applicant to medical board for expert opinion and report. Without doing so, coming to a decision of his own based on the interested testimony of the applicant would not be justifiable. As it is always open to the Commissioner to send the applicant before a medical board, he can very well adopt that method in a case where he finds that the certificate issued by a qualified medical practitioner is found wanting or suffers from any infirmity.

22. In Sreedharan‘s case (supra), the Full bench held further that, in a case where the report of the qualified medical practitioner certifying loss of earning capacity alone is there and no other evidence is available the Commissioner cannot ignore the report and fix the compensation disregarding it. In a case where the applicant has produced only the medical certificate and has not produced any other evidence and when the Commissioner has not called for a second medical report or has not cared to send the applicant to be examined by a Medical Board, he cannot just ignore the medical practitioner’s report and determine the compensation on the basis of his own assessment. The probative value of the report of the qualified medical practitioner will have to be considered on its own along with other evidence, if any.

23. In the case on hand, it is not in dispute that the injury sustained to the right knee of the first respondent is an injury not specified in Schedule I of the Act. At the time of accident, the first respondent was working as a Tea Plucker in the estate owned by the second respondent. Where permanent partial disablement result from such non-scheduled injury, the Commissioner has to assess compensation in terms of the provisions contained in sub-clause (ii) of Section 4(1)(c) of the Act, which should be based on the percentage of loss of earning capacity permanently caused by such injury, as assessed by the qualified medical practitioner. However, as we have already noticed, Explanation II to Section 4(1)(c) of the Act makes it explicitly clear that, in assessing the loss of earning capacity for the purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I.

24. In Ext.A4 disability certificate dated 10.7.2008 issued from the Department of Orthopaedics, Government Medical College, Thrissur, where the first respondent had undergone inpatient treatment, the permanent disability is assessed at 8% as per McBride Scale and the loss of earning capacity at 20%. Based on an application made by the first respondent, he was referred to the Medical Board at District Hospital, Palakkad, in order to ascertain the percentage of disability and loss of earning capacity. The Medical Board certified in Ext.X1 that, the first respondent has severe arthritis in right knee and partial ankylosis at right knee and assessed 15% permanent disability and 100% loss of earning capacity for his work in the estate. However, the criteria adopted for assessing 100% loss of earning capacity in relation to a non-scheduled injury upto 15% permanent disability, is not discernible from Ext.X1 certificate issued by the Medical Board.

25. The list of injuries deemed to result in permanent partial disablement in Part II of Schedule I of the Act includes injuries resulting in amputation of lower limbs. In cases of amputation below middle thigh and below knee, the percentage of loss of earning capacity specified in Schedule I ranges from 60% to 50%. There is nothing on record to show that the assessment of 100% loss of earning capacity made in Ext.X1 is with due regard to the percentage of loss of earning capacity in relation to different injuries specified in Schedule I. Further, the first respondent, who was examined before the Commissioner as AW1, or the co-worker who was examined as AW2 has not stated anything about the physical disability related to the right lower limb of the first respondent, resulting out of the injury sustained to his right knee. In such circumstances, the conclusion is irresistible that, the Commissioner went wrong in blindly accepting 100% loss of earning capacity assessed by the Medical Board in Ext.X1, in respect of a non-scheduled injury, even without satisfying that the assessment so made is with due regard to the percentage of loss of earning capacity in relation to different injuries specified in Schedule I. The said question is answered in favour of the appellant insurer.

26. While assessing compensation for permanent partial disablement resulting from non-scheduled injury, in terms of subclause (ii) of Section 4(1)(c) of the Act, the Commissioner is not expected to blindly accept the assessment of loss of earning capacity made by the qualified medical practitioner. If the Commissioner, based on the materials or evidence on record finds that such assessment of loss of earning capacity cannot be accepted, he can certainly refer the applicant for further expert opinion and report. In the case on hand, such a course should have been adopted by the Commissioner, since the assessment of 100% loss of earning capacity made by the Medical Board at District Hospital, Palakkad, is without indicating any valid reasons. Therefore, the Commissioner should have referred the first respondent to the Medical Board at Medical College, Thrissur, in order to assess his loss of earning capacity resulting out of the injury sustained to his right knee.

27. The second question that arises for consideration in this appeal is as to whether the Commissioner was legally correct in granting 12% interest on the amount of compensation from the date of accident, in view of the provisions contained in subsection (3) of Section 4A of the Act and in view of the decisions of the Apex Court reported in

# Kamla Chaturvedi v. National Insurance Co., (2009) 1 SCC 487

and in

# Oriental Insurance Company Limited v. Mohd. Nasir, (2009) 6 SCC 280

28. A Four-Judge Bench of the Apex Court in

# Pratap Narain Singh Deo v. Srinivas Sabata, (1976) 1 SCC 289

held that, an employer becomes liable to pay compensation as soon as the personal injury is caused to the workmen by the accident which arose out of and in the course of employment. Thus, the relevant date for determination of the rate of compensation as provided by Section 4 of the Act is the date of the accident and not the date of adjudication of the claim. Paras.7 and 8 of the judgment read thus;

“7. Section 3 of the Act deals with the employer’s liability for compensation. Sub-section (1) of that section provides that the employer shall be liable to pay compensation if “personal injury is caused to a workman by accident arising out of and in the course of his employment.”

It was not the case of the employer that the right to compensation was taken away under sub-section (5) of Section 3 because of the institution of a suit in a civil court for damages, in respect of the injury, against the employer or any other person. The employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is therefore futile to contend that the compensation did not fall due until after the Commissioner’s order dated May 6, 1969 under Section 19. What the Section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner. There is therefore nothing to justify the argument that the employer’s liability to pay compensation under Section 3, in respect of the injury, was suspended until after the settlement contemplated by Section 19. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is no justification for the argument to the contrary.

8. It was the duty of the appellant, under Section 4A(1) of the Act, to pay the compensation at the rate provided by Section 4 as soon as the personal injury was caused to the respondent. He failed to do so. What is worse, he did not even make a provisional payment under sub-section (2) of Section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence. Then there is the further fact that he paid no heed to the respondent’s personal approach for obtaining the compensation. It will be recalled that the respondent was driven to the necessity of making an application to the Commissioner for settling the claim, and even there the appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the respondent to file a memorandum of agreement settling the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner. In these facts and circumstances, we have no doubt that the Commissioner was fully justified in making an order for the payment of interest and the penalty.”

29. A Three-Judge Bench of the Apex Court in

# Kerala State Electricity Board v. Valsala K., (1999) 8 SCC 254

following the dictum laid down in Pratap Narain Singh Deo‘s case (supra), approved the judgment of a Full Bench of this Court in

# United India Insurance Co. Ltd. v. Alavi, 1998 (1) KLT 951

wherein the Full Bench of this Court took the view that the injured workman becomes entitled to get compensation the moment he suffers personal injuries of the types contemplated by the provisions of the Workmen’s Compensation Act and it is the amount of compensation payable on the date of the accident.

30. However, in

# National Insurance Co. Ltd. v. Mubasir Ahmed, (2007) 2 SCC 349

a Two-Judge Bench of the Apex Court held that, the compensation becomes due on the basis of the adjudication of the claim and hence, no interest can be levied prior to the date of the passing of the order determining the amount of compensation. In

# Kamla Chaturvedi v. National Insurance Co., (2009) 1 SCC 487

a decision relied on by the appellant insurer, a Two-Judge Bench of the Apex Court followed the dictum laid down in Mubasir Ahmed‘s case (supra). Later, in

# Oriental Insurance Company Limited v. Mohd. Nasir, (2009) 6 SCC 280

another decision relied on by the appellant insurer, a Two-Judge Bench of the Apex Court held that, “there cannot be any doubt whatsoever that interest would be from the date of default and not from the date of award of compensation”. The Court then went on to say that the Act does not prohibit grant of interest at a reasonable rate from the date of filing of the claim petition till an order is passed on it, adding that the higher, statutory rate of interest under sub-section (3) of Section 4A of the Act would be payable in a case that attracted that provision and for which “a finding of fact as envisaged therein has to be arrived at”. The Court then referred to paragraph 9 of the decision in Mubasir Ahmed‘s case (supra) but declined to follow it observing that the earlier decision had not considered the aspect of the matter as was being viewed in the case of Mohd. Nasir‘s case (supra). In Mohd. Nasir‘s case (supra) the Apex Court finally directed for payment of interest at the rate of 7% per annum from the date of filing the application till the date of the award, further observing that thereafter interest would be payable at the rate as directed in the order passed by the Commissioner.

31. In

# Oriental Insurance Co. Ltd. v. Siby George, (2012) 12 SCC 540

the Apex Court noted that, neither the decision in Mubasir Ahmed‘s case (supra) nor the one in Mohd. Nasir‘s case (supra) can be said to provide any valid guidelines on the question, when does the payment of compensation fall due and what would be the point for the commencement of interest, because the Larger Bench decisions of the Apex Court in Pratap Narain Singh Deo‘s case (supra) and that in Valsala‘s case (supra), by which that issue was concluded, were not brought to the notice of the Two-Judge Bench, which rendered the later decisions. The decision in Pratap Narain Singh Deo‘s case (supra) is by a Four-Judge Bench and that in Valsala‘s case (supra) is by a Three-Judge Bench of the Apex Court, which were fully binding on the Court in Mubasir Ahmed‘s case (supra) and Mohd. Nasir‘s case (supra), each of which was heard by Two-Judge Bench. Therefore, the Apex Court held in Siby George‘s case (supra) that, in light of the decisions in Pratap Narain Singh Deo‘s case (supra) and Valsala‘s case (supra), it is not open to contend that the payment of compensation would fall due only after the Commissioner’s order or with reference to the date on which the claim application is made, and that the decisions in Mubasir Ahmed‘s case (supra) and Mohd. Nasir‘s case (supra), insofar as they took a contrary view to the earlier decisions in Pratap Narain Singh Deo‘s case (supra) and Valsala‘s case (supra) do not express the correct view and do not make binding precedents. Paras.12 and 13 of the judgment read thus;

“12. The decision in Pratap Narain Singh Deo (1976 (1) SCC 289) was by a four-Judge Bench and in Valsala K. (1999 (8) SCC 254) by a three-Judge Bench of this Court. Both the decisions were, thus, fully binding on the Court in Mubasir Ahmed (2007 (2) SCC 349) and Mohd. Nasir (2009 (6) SCC 280), each of which was heard by two Judges. But the earlier decisions in Pratap Narain Singh Deo and Valsala K. were not brought to the notice of the Court in the two later decisions in Mubasir Ahmed and Mohd. Nasir.

13. In light of the decisions in Pratap Narain Singh Deo and Valsala K., it is not open to contend that the payment of compensation would fall due only after the Commissioner’s order or with reference to the date on which the claim application is made. The decisions in Mubasir Ahmed and Mohd. Nasir insofar as they took a contrary view to the earlier decisions in Pratap Narain Singh Deo and Valsala K. do not express the correct view and do not make binding precedents.”

32. Later, in

# Saberabibi Yakubbhai Shaikh v. National Insurance Co. Ltd., (2014) 2 SCC 298

applying the dictum in Siby George‘s case (supra), the Apex Court held that, the High Court of Gujarat erred in directing the respondent insurer to pay interest from the date of adjudication of claim application and not from the date of accident.

33. In view of the law laid down by the Larger Bench of the Apex Court in Pratap Narain Singh Deo‘s case (supra) and Valsala‘s case (supra) and reiterated by a Two-Judge Bench in Siby George‘s case (supra) we hold that the Commissioner was legally correct in granting the first respondent 12% interest on the amount of compensation from the date of accident. The said question is answered against the appellant insurer.

34. The third question that arises for consideration in this appeal is as to whether the Commissioner was correct in passing an award in excess of the claim made in the claim application, in view of the decision of the Apex Court in

# Shyama Devi v. Union of India, (2005) 12 SCC 217

In Shyama Devi‘s case (supra), a decision relied on by the appellant insurer, the Apex Court held as follows;

“6. So far as quantum of compensation is concerned, the Presiding Officer has recorded a finding that the deceased was earning Rs.1600 and was aged 56 years at the time of his death. On the basis of his last wages and age, according to Schedule IV of the Workmen’s Compensation Act, 1923, a total sum of Rs.1,05,560 was payable as compensation on the death of the deceased but since the claim was made for Rs.84,448, we will restrict the award for the aforesaid sum as has been claimed in the claim petition. Apart from the above quantum of compensation, the appellant would be entitled to statutory interest payable on this sum. The appeal is accordingly allowed. The appellant is awarded compensation in the sum of Rs.84,448 with statutory interest under Section 4A(3) of the Workmen’s Compensation Act. The amount shall be paid by the Railways within a period of eight weeks.”

35. However, in Mohd. Nasir‘s case (supra) the Apex Court observed that, no principle of law has been laid down by the Court in Shyama Devi‘s case (supra) and that, no reason has been assigned in support of the conclusion in restricting the award for the amount claimed in the claim petition. The decision in Shyama Devi‘s case (supra), therefore, must be held to have been rendered in the facts and circumstance of the case and not as a law laid down in terms of Article 141 of the Constitution of India. In Mohd. Nasir‘s case (supra) the Apex Court held further that, the function of Commissioner is to determine the amount of compensation as laid down under the Act. Even if no amount is claimed, the Commissioner must determine the amount which is found payable to the workman. In view of the decision of the Apex Court in Mohd. Nasir‘s case (supra), we hold that the Commissioner was correct in passing an award in excess of the claim made by the first respondent in the application for compensation. The said question is also answered against the appellant insurer.

36. In view of our finding on the first question that, the Commissioner went wrong in blindly accepting 100% loss of earning capacity assessed by the Medical Board in Ext.X1, in respect of a non-scheduled injury, even without satisfying that the assessment so made is with due regard to the percentage of loss of earning capacity in relation to different injuries specified in Schedule I, this appeal is disposed of by remanding the matter to the Commissioner for Workmen’s Compensation, Palakkad (redesignated as the Commissioner for Employee’s Compensation, by the Workmen’s Compensation (Amendment) Act, 2009), for the limited purpose to assess the loss of earning capacity of the first respondent resulting out of the injury sustained to his right knee and to refix the amount of compensation based on such assessment, keeping in mind the observations contained in this judgment.

37. The Commissioner shall refer the first respondent to the Medical Board at Medical College, Thrissur, in order to assess his loss of earning capacity resulting out of the injury sustained to his right knee and thereafter assess the compensation payable to him. The parties are at liberty to adduce fresh/further evidence before the Tribunal, if they are so advised.

Since the claim petition is of the year 2006, the Commissioner shall finally dispose of the matter, as expeditiously as possible, at any rate within a period of six months from the date of receipt of a certified copy of this judgment.

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