Palraj Vs. Div. Controller,
NEKRTC  INSC 710 (7 September 2010)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7430 OF 2010 (@ SPECIAL
LEAVE PETITION (C) No.10416 2008) PALRAJ ... APPELLANT VS.
ALTAMAS KABIR, J.
sole respondent who is the Divisional Controller, North East Karnataka Road
Transport 2 Corporation, being duly represented and having regard to the facts
involved in the appeal, the same was taken up for final disposal at the stage
of admission itself.
Appellant was employed as a Bus Driver in the Karnataka State Road Transport
Corporation. On 10th October, 1998, the vehicle being driven by the Appellant,
met with an accident in which he sustained grievous injuries. The Medical
Officer who examined the Appellant came to the conclusion that the Appellant
had suffered 65% of total body disability and 20% of functional disability. The
Commissioner, Workmen's Compensation, however, took 85% as functional disability
for quantifying the compensation payable to the Appellant, who was admittedly
drawing a salary of Rs.15,000/- per month on the date of the accident.
was also admitted that on account of the injuries suffered by him, the
Appellant was no longer able to drive a vehicle and the Corporation accordingly
appointed him as a Peon in the Corporation where he is drawing the same salary.
Taking the above
percentage of disability, both permanent and functional, the Commissioner made
an Award granting compensation amounting to Rs.1,75,970/-, together with
interest @12% per annum from 10.11.1998 till the date of deposit, to the
by the compensation awarded by the Commissioner to the Appellant herein, the
Corporation through its Divisional Controller filed Misc. First Appeal No.3771
of 2003 in the Karnataka High Court. The only question which was raised in the
appeal was whether the percentage of disability taken by the Commissioner,
Workmen's Compensation, 4 Gulbarga, at 85% was against the weight of medical
evidence adduced in the case. The appeal was heard by the learned Single Judge
of the Karnataka High Court who agreed with the case of the Respondent herein
that the Commissioner, Workmen's Compensation, had erroneously taken 85% to be
the extent of disability suffered by the Appellant and that the same ought to
have been 20% instead. On such basis, the learned Single Judge modified the
Award passed by the Commissioner, Workmen's Compensation, and reduced the
amount of compensation from Rs.1,75,970/- together with interest at the @12%
per annum, to Rs.41,404.80p.
It was also held that
the Commissioner had committed an error in awarding interest from the date of
filing of the claim petition and the Appellant was entitled to interest on the
compensation amount only after 30 days from the date of passing of the Award.
The appeal was, 5 accordingly, allowed in part, and the Award passed by the
Commissioner, Workmen's Compensation, was modified and reduced from
Rs.1,75,970/- to Rs.41,405/- together with interest @12% per annum on the said
amount from 30 days after the date of the passing of the Award. The amount
which was in deposit before the Court was directed to be transferred to the
Commissioner, Workmen's Compensation, Gulbarga, for disbursement. It is the
said order of the learned Single Judge, which has been challenged in this
behalf of the Appellant it was contended that the doctors had certified that
the Appellant was 100% disabled as far as his functioning as a Driver was
concerned and that his total disability had been found to be 65% while his
functional disability was assessed at 20%. Taking the two together the
Commissioner, Workmen's Compensation had found the Appellant to have acquired
85% disability that entitled him to a sum of Rs.1,75,970/- in accordance with
Schedule IV of the Workmen's Compensation Act, 1923, by taking his monthly
income as Rs.2,000/- in view of Explanation 2 to Section 4 of the above Act and
multiplying it with the multiplier of 172.52.
Basava Prabhu S. Patil, learned Senior counsel for the Appellant, also
submitted that, in fact, the limit imposed by way of Explanation 2 to Section 4
had been increased from Rs.2,000/- to Rs.4,000/- with effect from 8th December,
2000, and the amount of compensation awarded to the Appellant should have been
computed on the basis of his monthly wages being Rs.4,000/-. It was contended
that the High Court had wrongly interfered with the compensation of the
Commissioner, Workmen's Compensation, Gulbarga, and the compensation 7
assessed by him. It was submitted that the High Court had erred in granting
compensation on the basis of 20% functional disability thereby reducing the figure
from Rs.1,75,970/- to Rs.41,404.80p.
Learned counsel for
the Appellant submitted that the order of the Commissioner, Workmen's
Compensation, Gulbarga, was liable to be restored.
opposed to the aforesaid submissions made on behalf of the Appellant, it was
submitted by Ms. Hetu Arora, learned counsel appearing on behalf of the
Respondent-Corporation, that in addition to the compensation awarded to the
Appellant, he had also been given alternative employment as Peon in the
establishment of the Corporation and was also being paid the same salary which
he would have drawn if he had continued to be a Driver, so that despite his
accident, the Appellant did not face any loss of earnings. She also submitted
that since the 8 Commissioner, Workmen's Compensation, had erroneously
confused the amount of functional disability of the Appellant as against his
permanent disability, the Commissioner ought to have taken the percentage of
the disability of the accident of 20% and not 85%, after taking into consideration
the fact that the Appellant had been provided with employment as a Peon in the
Respondent-Corporation, where he was drawing the same salary as earlier.
Learned counsel for the Respondent submitted that the Appellant was also
entitled to interest as awarded on the reduced amount only after 30 days from
the date of the passing of the Award. On the aforesaid findings, the learned
Single Judge allowed the appeal in part and modified the Award passed by the
Commissioner, Workmen's Compensation, Gulbarga from Rs.1,75,970/- awarded by
the Commissioner to Rs.41,405/- awarded by the High Court.
computing compensation for disabilities being suffered by a workman in the case
of his employment, it is the functional disability resulting in loss of earning
capacity which is the criteria which is followed in assessing compensation. The
Workmen's Compensation Act, 1923, hereinafter referred to as "the 1923
Act", has its own formula in computing compensation on account of injuries
suffered during employment which is reproduced in Schedule I to the said Act.
In Part II of the said Schedule the loss of earning capacity in terms of
percentage has been directly related to the loss of any of the limbs and parts
thereof, both of the upper limbs as also the lower limbs. Loss of earning
capacity is commensurate to the injuries suffered and the loss of earning
capacity as a result thereof.
the instant case, it is no doubt true that the Appellant has lost his capacity
to function as a driver, but with the help of external aids his mobility has,
to some extent, been restored and he is able to perform work which is suitable
to his physical condition after the accident.
the Appellant's case, by virtue of the injuries suffered by him, his
disablement as far as driving a vehicle is concerned is 100%, but that is not
the measure of loss of his earning capacity.
Commissioner, Workmen's Compensation, seems to have confused the issue by
combining both functional disability and permanent disability in arriving at
the figure of 85% by way of loss of earning capacity and has, therefore,
arrived at a sum of Rs.1,75,970/- towards compensation. The High Court, on the
other hand, realizing the mistake committed by the Commissioner, assessed the
1 loss of earning capacity as 20% instead of 85% and reduced the compensation
payable from Rs.1,75,970/- to Rs.41,404.80p. and awarded interest on the
compensation amount only after 30 days of passing of the Award.
4 of the 1923 Act which had been referred to by Mr. Basava Prabhu S. Patil,
learned Senior Counsel for the Appellant, provides for the amount of
compensation payable to a workman in different contingencies. Section
4(1)(c)(ii) provides as follows :
"4. Amount of
compensation.- (1) Subject to the provisions of this Act, the amount of
compensation shall be as follows, namely:- (a) ........................
(c) Where permanent
partial disablement result from the injury 1 (i) in the case of an injury
specified in Part II of Schedule I, such percentage of the compen- sation 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
aforesaid provision would indicate that where a workman suffers injury which is
not specified in Schedule I to the Act, compensation is to be assessed on such
percentage of the compensation payable in the case of permanent total
disablement as is proportionate to the loss of earning capacity, permanently
caused by the injury as assessed by a qualified medical practitioner.
Since in the instant
case, the nature of injury suffered by the Appellant is not specified in
Schedule I, the compensation has necessarily to be assessed on the basis of the
loss of earning capacity caused by the injury which could amount to 100%
disablement in a given case. In the instant case, however, although the
Appellant has lost the use of his legs for the purpose of driving a vehicle,
which could be said to be total disablement so far as driving of a vehicle is concerned,
he is in a position to earn a living 1 other than by functioning as a driver,
which, in fact, he is currently doing, having been posted as a Peon by the
apart from the fact that the Commissioner, Workmen's Compensation, had confused
the concept of functional disablement with permanent disablement in arriving at
the figure of 85% loss of earning capacity, we also have to take into
consideration the fact that the injury suffered by the Appellant did not
disable him permanently from earning his living other than as a driver. We,
therefore, are of the view that the percentage of functional disablement has to
be modified, since the Appellant is permanently disabled as far as earning a
livelihood as a driver is concerned.
far as the question of payment of interest is concerned, reference may be made
to Section 4-A of the 1923 Act, which is reproduced herein below:
Compensation to be paid when due and penalty for default.- (1) Compensation
under section 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 extent 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 shall - (a) direct that the
employer shall, in addition to the amount of the arrears, pay simple interest
thereon at the rate of twelve per cent per annum or at such higher rate not
exceeding the maximum of the lending rates of any scheduled bank as may be
specified by the Central 1 Government, by notification in the Official
Gazette, on the amount due; and (b) if, in his opinion, there is no
justification for the delay, direct that the employer shall, in addition to the
amount of the arrears and interest thereon, pay a further sum not exceeding
fifty per cent of such amount by way of penalty :
Provided that an
order for the payment of Penalty shall not be passed under clause (b) without
giving a reasonable opportunity to the employer to show cause why it should not
Explanation.- For the
purposes of this sub-section, "scheduled bank" means a bank for the
time being included in the Second Schedule to the Reserve Bank of India Act,
1934 (2 of 1934).
(3A) The interest and
the penalty payable under sub-section (3) shall be paid to the workman or his
dependant, as the case may be."
will be evident that compensation assessed under Section 4 is to be paid as
soon as it falls due and in case of default in payment of the 1 compensation
due under the Act within one month from the date when it falls due, the
Commissioner would be entitled to direct payment of simple interest on the
amount of the arrears @12% per annum or at such higher rates which do not
exceed the maximum lending rates of any scheduled Bank as may be specified by
the Central Government. Both the Commissioner, Workmen's Compensation, as also
the High Court, therefore, rightly held that interest under the 1923 Act cannot
be claimed from the date of the filing of the application, but only after a
default is committed in respect of the payment of compensation within 30 days
from the date on which the payment becomes due.
are satisfied that the impugned order of the High Court was only an attempt to
correct the erroneous interpretation of Part II of Schedule I of the Workmen's
Compensation Act, 1923, by the 1 Commissioner, Workmen's Compensation. The
loss of earning capacity has to be computed keeping in mind the alternate
employment given to the Appellant on the same salary as he was enjoying while
performing the duty of a bus driver. The same cannot be ignored in computing
the amount of compensation which the Appellant was entitled to.
that view of the matter, we are in agreement with the order passed by the High
Court, but we are of the view that the percentage of functional disablement has
to be modified from 20% to at least 35%, having regard to the Appellant's
mobility on account of the medical treatment received after the accident and
also because of the Appellant's loss of future earnings and also promotion.
therefore, maintain the order of the High Court and direct that the Appellant
be provided with compensation on the basis of functional 1 disability to the
extent of 35% and not 20% as indicated by the High Court.
appeal is, accordingly, disposed of. There will be no order as to costs.