Full Judgment Text
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CASE NO.:
Appeal (civil) 5623 of 2006
PETITIONER:
National Insurance Co. Ltd. \005..Appellant
RESPONDENT:
Mubasir Ahmed & Anr. \005.Respondents
DATE OF JUDGMENT: 01/02/2007
BENCH:
Dr. ARIJIT PASAYAT & S.H. KAPADIA
JUDGMENT:
J U D G M E N T
[With Civil Appeal Nos. 5625 of 2006 and Civil Appeal No.5624 of 2006]
Dr. ARIJIT PASAYAT, J.
Challenge in these appeals is to the judgment rendered in
each case by learned Single Judge of the Andhra Pradesh High
Court. Respondent no.1 in each case was working as employee
of respondent no.2. Each of them filed a claim petition under
Section 22 of the Workmen’s Compensation Act, 1923 (in short
the ’Act’) claiming compensation for alleged personal injuries
sustained in course of employment. In each case the claimant
claimed to be either a labour or cleaner or driver of the vehicle
which was involved in the accident. While respondent no.1 in
Civil Appeal No.5625 of 2006 claimed to be driver of the
vehicle No.APJ-1907, the respondent no.1 in Civil Appeal
No.5623 of 2006 claimed to be the cleaner of the vehicle.
Respondent no.1 in Civil Appeal No. 5624 claimed to be
employed in a different vehicle. The claim petitions were
adjudicated by the Commissioner for Workmens’
Compensation and Assistant Commissioner of Labour,
Nizamabad (hereinafter referred to as the ’Commissioner’).
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 and temporary disablement,
functional disability and loss of earning capacity as follows:
Civil Appeal No. 5623 of 2006
Permanent/partial disability : 65%
Functional disability : 65%
Loss of earning capacity : 80%
Civil Appeal No. 5624 of 2006
Permanent/partial disability : 65%
Functional disability : 65%
Loss of earning capacity : 65%
Civil Appeal No. 5625 of 2006
Permanent/partial disability : 65%
Functional disability : 70%
Loss of earning capacity : 80%
The appellant-insurer of offending vehicle did not
question correctness of the award made by the Commissioner.
The claimant in each case preferred an appeal under Section
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30 of the Act. By the impugned judgment in each case the
High Court held that there was 100% loss of earning capacity
and, therefore, awarded compensation. It also directed grant
of interest @ 12% p.a. from date of accident till actual
realization.
In support of the appeals, learned counsel for the
appellant submitted that the judgment of the High Court
without any discussion on the loss of earning capacity is
clearly unsustainable, and in addition question of payment of
12% p.a. interest does not arise. The rate of interest is high.
Learned counsel for the respondents supported the
impugned order of the High Court in each case.
In order to decide the basic issues Sections 4 and 4-A of
the Act need to be noted. They read as follows:
"4. Amount of compensation. \026 (1) Subject to
the provisions of this Act, the amount of
compensation shall be as follows, namely :
(a) where
death results
from the
injury
an amount equal to
forty per cent of the
monthly wages of the
deceased workman
multiplied by the
relevant factor;
or
an amount of twenty
thousand rupees,
whichever is more;
(b) where
permanent total
disablement
results from injury
an amount equal to fifty
per cent of the monthly
wages of the injured
workman multiplied by
the relevant factor;
or
an amount of twenty-
four thousand rupees,
whichever is more;
Explanation I \026 For the purposes of Cl. (a) and
Cl. (b), "relevant factor", in relation to a workman
means the factor specified in the second column of
Sch. IV against the entry in the first column of the
schedule specifying the number of years which are
the same as the completed years of the age of the
workman on his last birthday immediately
preceding the date on which the compensation fell
due;
Explanation II \026 Where the monthly wages of a
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workman exceed one thousand rupees, his monthly
wages for the purposes of Cl. (a) and Cl. (b) shall be
deemed to be one thousand rupees only.
(c) where
permanent
partial
disablement
results from
the injury
(i) in the case of an
injury specified in Pt. II
of Sch. 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 the
injury; and
(ii) in the case of an
injury not specified in
Sch. 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 \026 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 \026 In assessing the loss of
earning capacity for the purposes sub-clause (ii), of
the qualified medical practitioner shall have due
regard to the percentage of loss of earning capacity
in relation to different injuries specified in Sch.I;
(d) Where
temporary
disablement,
whether total
or partial
results from
the injury
A half-monthly
payment or the sum-
equivalent to twenty-five
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per cent of monthly
wages of the workman,
to be paid in accordance
with the provisions of
sub-section (2).
Xx xx xx
4-A. Compensation to be paid when due and
penalty for default \026 (1) Compensation under
Sec. 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not
accept the liability for compensation to the
extent claimed, he shall be bound to make
provisional payment based on the event of
liability which he accepts, and, such payment
shall be deposited with the Commissioner or
made to the workman, as the case may be
without prejudice to the right of the workman
to make any further claim.
(3) Where any employer is in default in
paying the compensation due under this Act
within one month from the date it fell due, the
Commissioner may direct that, in addition to
the amount of the arrears, simple interest at
the rate of six per cent per annum on the
amount due together with, if in the opinion of
the Commissioner there is no justification for
the delay, a further sum not exceeding fifty per
cent of such amount, shall be recovered from
the employer by way of penalty."
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.
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 facts situation. Coming to the question of liability to pay
interest, Section 4-A(3) deals with that question. The provision
has been quoted above.
Interest is payable under Section 4-A(3) if there is default
in paying the compensation due under this Act within one
month from the date it fell due. The question of liability under
Section 4-A was dealt with by this Court in Maghar Singh v.
Jashwant Singh (1998 (9) SCC 134). By Amending Act, 14 of
1995, Section 4-A of the Act was amended, inter alia, fixing
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the minimum rate of interest to be simple interest @ 12%. In
the instant case, the accident took place after the amendment
and, therefore, the rate of 12% as fixed by the High Court
cannot be faulted. But the period as fixed by it is wrong. The
starting point is on completion of one month from the date on
which it fell due. Obviously it cannot be the date of accident.
Since no indication is there as when it becomes due, it has to
be taken to be the date of adjudication of the claim. This
appears to be so because Section 4-A(1) prescribes that
compensation under Section 4 shall be paid as soon as it falls
due. The compensation becomes due on the basis of
adjudication of the claim made. The adjudication under
Section 4 in some cases involves the assessment of loss of
earning capacity by a qualified medical practitioner. Unless
adjudication is done, question of compensation becoming due
does not arise. The position becomes clearer on a reading of
sub-section (2) of Section 4-A. It provides that provisional
payment to the extent of admitted liability has to be made
when employer does not accept the liability for compensation
to the extent claimed. The crucial expression is "falls due".
Significantly, legislature has not used the expression "from the
date of accident". Unless there is an adjudication, the
question of an amount falling due does not arise.
The appeals are allowed to the extent indicated, without
any order as to costs.