Kamal Dev Prasad vs Mahesh Forge

Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO………..…….2025 (@SPECIAL LEAVE PETITION (C) NO.4974 OF 2022)

KAMAL DEV PRASAD …APPELLANT

VERSUS

MAHESH FORGE …RESPONDENT

J U D G M E NT

K. VINOD CHANDRAN, J.

1. Leave granted.

2. The appeal is filed against the reduction of

the disability as per the Employees’ Compensation Act,

1923 (as it is presently named). The Commissioner under

the Act allowed 100% disability and adopted the factor

of 213.57 thus determining the total compensation to be

₹ 3,20,355/-. The Commissioner also awarded 12%

Signature Not Verified interest from the date of accident and 50% penalty i.e. ₹ Digitally signed by Nirmala Negi Date: 2025.04.29 18:05:58 IST Reason: Page 1 of 8 CA @ SLP(C) No. 4974 of 2022 1,60,178/- for reason of the employer having not paid the

compensation within one month from the accident. The

employer filed an appeal, the order in which is impugned

herein by the employee.

3. The only contention taken is that Part II of

Schedule I of the Act lists out the injuries and the

percentage of loss of earning capacity is statutorily

determined. The appellant is entitled to only 34% was the

contention of the employer which was accepted by the

High Court.

4. We heard learned counsel, Ms. Vidya

Vijaysinh Pawar appearing for the appellant employee

and learned counsel, Mr. Amol Chitale appearing for the

respondent employer.

5. The appellant was an employee from

05.04.2002 and at the relevant time was engaged to

operate a forging machine. The employee was also paid

a salary of ₹ 2,500/- p.m. as recorded in the registers

Page 2 of 8 CA @ SLP(C) No. 4974 of 2022 maintained by the employer. On 06.11.2004, late in the

night, while operating the machine, a part of the machine

fell on his hand and while he was removing the band of

the handle lock, his right hand was caught in the

machine. He was admitted to a hospital and remained

there till 24.12.2004. At the hospital, he underwent

surgery and lost one phalanx of the little finger, two

phalanges of the ring finger, three phalanges of the

middle finger and two and a half phalanges of the index

finger.

6. The loss of phalanges of each of the fingers

are specifically noticed in the Schedule to the Act

wherein the loss of earning capacity also has been

determined, totalling which, loss of earning capacity

occasioned to the employee is determined. The High

Court found that the disability is only to the extent of

34%. Many decisions with respect to functional disability

were referred to and they were distinguished on the

Page 3 of 8 CA @ SLP(C) No. 4974 of 2022 ground that those were with respect to motor accident

claims whereas in the present case, the loss has been

statutorily determined. It was also noticed that there was

no disability certificate issued by a doctor or a Medical

Board.

7. We have to first notice that contrary to what

the High Court found, in Oriental Insurance Co. Ltd. v.

Mohd. Nasir1, this Court held that both the Workmen’s

Compensation Act, 1923 and the Motor Vehicles Act, 1988

are beneficial legislations aimed at providing

expeditious relief to the victims of accidents; in the

former to employees and in the latter to third parties. It

was also held that the statutes hence deserve liberal

construction. True, this Court also held in the cited

decision that when injuries are specified in Schedule I

and the mode and manner for calculating the amount of

compensation also stipulated, the same would be

1 (2009) 6 SCC 280

Page 4 of 8 CA @ SLP(C) No. 4974 of 2022 applicable. This Court had also noticed that the Motor

Vehicles Act created a legal fiction insofar as permitting

reference to Schedule I of the Workmen’s Compensation

Act, 1923 (as it was named then) which correlates the

permanent disability, at least in certain cases, with the

functional disability. After noticing Explanation 1 to

Section 4 of the Act of 1923, this Court, in the cited case,

also held that ‘It is also beyond any doubt or dispute that

while determining the amount of loss of earning capacity,

the Tribunal or the High Court must record reasons for

arriving at their conclusion.’(sic-para27). Hence it is not as

if there can never be a departure from the Schedule in

deciding the functional disability, which it has been

recognised would in certain cases have a corelation with

the physical disability.

8. In the present case, we have a situation in

which not one finger was affected but four fingers of the

same hand. The employee also has a contention that he

Page 5 of 8 CA @ SLP(C) No. 4974 of 2022 can no more work as a forging machine operator, the

functionality for which he has been deprived, by reason

of the accident. We have to first notice that there is no loss

assessment for amputation of two and a half phalanges of

the index finger as per the schedule, which in any event

has to be taken as a whole loss for which the disability is

14%. Hence, in any event the disability even as

determined by the Schedule to the Act would be 37%

aggregating the total loss.

9. In this context, we have to notice Explanation

1 to sub-Section (1) (c) of Section 4 which provides that

when more than one injury is caused in the same

accident the amount of compensation payable under the

Act shall be aggregated, but not to the extent of such

aggregation exceeding the amount which would have

been payable if permanent total disablement had

resulted from the injuries.

Page 6 of 8 CA @ SLP(C) No. 4974 of 2022

10. The disability as determined by the statute is

for the specific loss of a phalanx or a finger and in the

event of more than one such loss it cannot be said that a

mere aggregation would determine the actual loss. True

a medical certificate had not been produced which

would have aided the Court in assessing the functional

disability. However, the fact remains that the appellants

working hand has been seriously mutilated by the loss of

one or more phalanges of four fingers. The middle and

index finger having been disabled completely and the

ring finger and the little finger having lost two phalanges

and one phalanx respectively, functionally it is difficult

for the right hand to be used with the same grip as

available prior to the accident. Though a 100% disability

cannot be assessed, insofar as the mutilation of the one

hand which is also the operational hand, the right hand,

we are inclined to determine the loss at 50%.

Page 7 of 8 CA @ SLP(C) No. 4974 of 2022

11. The loss thus would be accessed as ₹ 2,500/-

x 60% x 213.57 which comes to ₹ 3,20,355/-. Fifty percent

of the same would come to ₹ 1,60,177.5. The employee

would also be entitled to 12% interest from the date of

accident and 50% of the penalty; i.e. ₹ 80,088.75/- as

penalty. If the amounts as directed by the High Court has

been paid, then the excess amount shall be paid with

interest at 12% from the date of accident and half of the

enhanced amount as penalty.

12. The Appeal stands allowed with the above

directions.

13. Pending application(s), if any, shall stand

disposed of.

……………..……………, J.

[SUDHANSHU DHULIA]

……………..……………, J.

[K. VINOD CHANDRAN] NEW DELHI;

APRIL 29, 2025.

Page 8 of 8 CA @ SLP(C) No. 4974 of 2022