IMPORTANT POINT
In cases relating to injuries which were not specified in Schedule I of the Workmen’s Compensation Act, when the doctor indicated the percentage of permanent and temporary disablement, functional disability and loss of earning capacity by taking note of the relevant factors, the High Court was held not justified in holding that there was 100% loss of earning capacity, without indicating any reason or basis.

Headnote:Workmen’s Compensation Act, 1923—Sections 4, 4-A, 22 and 30—Compensation claims—Physical disablement and functional disablement—Relevant factors relating to loss of earning capacity—Liability to pay interest—Claimants claimed to be either a labourer or cleaner or driver of the vehicle which was involved in the accident—These cases related to injuries which were not specified in Schedule I—Doctor examined to prove the nature of injuries sustained and the alleged loss of earning capacity, indicated the percentage of permanent and temporary disablement, functional disability and loss of earning capacity—Claimants filed appeals against the award made by the Commissioner—High Court held that in each case there was 100% loss of earning capacity, therefore, awarded compensation directing grant of interest @ 12% p.a. from the date of accident till actual realization—No basis was indicated in support of the conclusion—Whether judgment of the High Court without any discussion on the loss of earning capacity is sustainable—(No)—Whether rate of interest of 12% as fixed by the High Court can be faulted—(No)—However, the period as fixed for the grant of interest is wrong—It cannot be the date of accident—It has to be taken to be the date of adjudication of the claim.
       Held : 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.(Para 7)
       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.(Para 8)
       By Amending Act, 14 of 1995, Section 4-A of the Act was amended, inter alia, fixing 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.(Para 9)

JUDGMENT

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’).

2. 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%

3. 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 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.

4. 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.

5. Learned counsel for the respondents supported the impugned order of the High Court in each case.

6. 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.—(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;

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;

an amount of twenty-four thousand rupees, whichever is more;

Explanation I—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—Where the monthly wages of a 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.

(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

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2007 Supreme(SC) 109

Cases Referred (1)