Palraj vs Div.Controller,Nekrtc

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.

3. The 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.

3

4. It 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 Appellant.

5. Aggrieved 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 appeal.

6. On 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 6

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.

7. Mr. 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.

8. As 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.

9

9. While 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.

1

10. In 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.

11. In 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.

The 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.

12. Section 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) ........................

(b) ........................

(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 I;"

1

13. The 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 Respondent.

14. Accordingly, 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.

1

15. As 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 hereinbelow :

"4A. 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 be passed.

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."

16. It 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.

17. We 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.

18. In 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.

19. We, 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.

20. The appeal is, accordingly, disposed of. There

will be no order as to costs.

................................................J. (ALTAMAS KABIR)

................................................J. (A.K. PATNAIK) New Delhi Dated: 07.09.2010