1. Employee suffered multiple finger injuries while operating a forging machine — dispute over disability percentage and compensation under the Employees’ Compensation Act, 1923. (Para 2 , 5 )
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2025 Supreme(SC) 738
SUPREME COURT OF INDIA
SUDHANSHU DHULIA, K. VINOD CHANDRAN, JJ.
Kamal Dev Prasad – Appellant
Versus
Mahesh Forge – Respondent
Civil Appeal No. 5667 2025 (@Special Leave Petition (C) No. 4974 of 2022)
Decided On : 29-04-2025
Advocates appeared:
For the Petitioner(s): Ms. Vidya Vijaysinh Pawar, AOR
For the Respondent(s): Mr. Amol Chitale, Adv. Mr. Sarthak Sharma, Adv. Mrs. Pragya Baghel, AOR
For the Petitioner(s): Ms. Vidya Vijaysinh Pawar, AOR
For the Respondent(s): Mr. Amol Chitale, Adv. Mr. Sarthak Sharma, Adv. Mrs. Pragya Baghel, AOR
IMPORTANT POINT
Injury suffered in course of employment – When more than one injury is caused in same accident amount of compensation payable under the Act shall be aggregated, but not to the extent of such aggregation exceeding amount which would have been payable if permanent total disablement had resulted from injuries.
Headnote:
Employees’ Compensation Act, 1923 – Section 10 – Injury suffered in course of employment – Total compensation of Rs. 3,20,355/- alongwith 12% interest and penalty awarded by Commissioner, fixing 100% disability – Loss of phalanges of fingers due to fall of machine on appellant-employee – When more than one injury is caused in same accident amount of compensation payable under the Act shall be aggregated, but not to the extent of such aggregation exceeding amount which would have been payable if permanent total disablement had resulted from injuries – Disability as determined by Statute is for 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 actual loss – Appellants working hand has been seriously mutilated by loss of one or more phalanges of four fingers – Though 100% disability cannot be assessed, insofar as mutilation of one hand which is also operational hand, right hand, Court inclined to determine loss at 50% – Compensation of Rs. 1,60,177/- alongwith 12% interest and 50% of penalty awarded. (Paras 9, 10 and 11)
Facts of the case:
Present appeal is filed against reduction of disability as per Employees’ Compensation Act, 1923. Commissioner under the Act allowed 100% disability and adopted factor of 213.57 thus determining total compensation to be Rs. 3,20,355/-. Commissioner also awarded 12% interest from date of accident and 50% penalty i.e. Rs. 1,60,178/- for reason of employer having not paid compensation within one month from accident. Employer filed appeal, order in which is impugned herein by employee.
Findings of Court:
There is no loss assessment for amputation of two and a half phalanges of index finger as per schedule, which has to be taken as a whole loss for which disability is 14%. Hence, disability even as determined by Schedule to the Act would be 37% aggregating total loss.
Result : Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Employer contended that loss of earning capacity is statutorily determined by Schedule I of the Act, limiting the employee's disability to 34%. (Para 3 )
3. The court observed that beneficial legislation requires liberal construction and functional disability may be assessed beyond statutory schedules if reasons are recorded. (Para 6 , 7 , 10 )
4. Statutory schedules provide a baseline, but courts may determine functional disability based on the actual impact on the employee's ability to perform their work. (Para 7 , 10 )
5. Appeal allowed — disability determined at 50% with corresponding compensation, interest, and penalty. (Para 11 , 12 )
6. Can a court depart from the statutory schedule of injuries in the Employees’ Compensation Act to determine disability?
Yes. While Schedule I provides a mode for calculating compensation, the Act is beneficial legislation requiring liberal construction. Courts may depart from the schedule to determine functional disability, provided they record reasons for arriving at such a conclusion. (Para 7 )
7. How should multiple injuries in a single accident be treated under Section 4 of the Employees’ Compensation Act?
According to Explanation 1 to Section 4(1)(c), when more than one injury is caused in the same accident, the amount of compensation payable shall be aggregated, provided the total does not exceed the amount payable for permanent total disablement. (Para 9 )
8. Does the mere aggregation of statutory disability percentages always determine the actual loss of earning capacity?
No. In cases of serious mutilation of an operational hand affecting grip and functionality, mere aggregation of statutory percentages for individual phalanges may not reflect the actual functional disability. (Para 10 )
JUDGMENT :
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 Rs. 3,20,355/-. The Commissioner also awarded 12% interest from the date of accident and 50% penalty i.e. Rs. 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 Rs. 2,500/- p.m. as recorded in the registers 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 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. Nasir, (2009) 6 SCC 280, 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 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 sa
