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2025 Supreme(Guj) 2116
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
HEMANT M. PRACHCHHAK, J.
New India Assurance Co Ltd - Appellant
Versus
Mithubhai Bhurabhai Jogi & Anr. – Defendants
R/First Appeal No. 4514 of 2008
Decided On : 09-09-2025
For the Appellant : Mr. Palak H. Thakkar
For the Defendants : Mr. Mehul S. Shah.
Important Points
Subject
Labour and Employment Law - Employees' Compensation
Act Referred
Headnote
(B) Appellate Jurisdiction - Scope - Court in appeal should not interfere with assessment of functional loss unless it is perverse - Earning capacity must be judged with reference to the specific nature of work performed by the workman. (Paras 8, 9, 11).
Facts of the case:
A claimant sustained injuries during the course of employment while performing duties as a driver. The primary authority awarded compensation based on total functional disability assessed at 100% due to the consequent inability to continue in the professional capacity, along with interest and penalties. The insurer challenged the order regarding the assessment of disability, the interest commencement date, and the impleadment of the insurer in the proceedings.
Findings of Court:
The court held that the assessment of functional disability was consistent with evidence, noting that physical disability percentages provided by medical practitioners do not always equate to the loss of earning capacity. For a driver whose injuries render them incapable of operating a vehicle, the disability is effectively total. Regarding interest, the court clarified that for insurance policies regulated by vehicular insurance statutes, interest liability commences from the date of the claim application.
Issues: 1. Whether the insurer is a proper party in proceedings for compensation under the Act. 2. Whether 100% functional disability is justified when medical evidence indicates a lower percentage of physical disability. 3. Whether interest should be calculated from the date of the accident or the date of the filing of the application.
Ratio Decidendi: The court affirmed that functional disability is distinct from physiological disability and must be determined by the loss of earning capacity in the specific previous vocation. When injuries preclude the claimant from performing their specific professional tasks, such as driving, it constitutes total functional disability. The liability for interest is modified to align with the application date in accordance with the specific insurance policy terms.
Result: Appeal allowed in part. The impugned award is modified regarding the interest commencement date; rest of the award remains unaltered.
| Table of Content |
|---|
| 1. overview of the appeal against the workmen's compensation commissioner's award. (Para 1 , 2 , 3) |
| 2. parties' contentions regarding employer-employee relationship, disability assessment, and liability for interest/penalty. (Para 4 , 5 , 6) |
| 3. functional disability assessment and determination of insurance liability/interest timing. (Para 7 , 8 , 9 , 10 , 11) |
| 4. final order granting partial relief regarding the interest commencement date. (Para 12) |
JUDGMENT :
HEMANT M. PRACHCHHAK, J.
1. Present appeal is filed by the appellant (original opponent No.2) under Section 30 of the Workmen’s Compensation Act, 1923 (hereinafter be referred to as “the Act”) against the judgment and award dated 24.06.2008 passed by the Workmen’s Compensation Commissioner, Labour Court, Kutch at Bhuj in Workman Compensation (Non Fatal) Case No. 29 of 1997 whereby the learned Commissioner has allowed the claim petition and directed the original opponents No.1 and 2 jointly and severally to pay compensation at Rs.2,36,472/- with 9% interest from the date of accident till realization and further directed insurance company to pay penalty at the rate of 50% of the awarded amount.
2. Facts of the present case are that the respondent – claimant was on duty on 04.05.1996 and going from Panandhro to Mithapur in a truck bearing Registration No.GQY-4846 and driving the truck on the left hand side of the road with moderate and controllable speed. It is alleged that around 3.00 hours on the said day, when the said truck had reached at the place of accident at that time the truck met with an accident, due to which the claimant sustained serious injuries over the different parts of the body resulting into permanent disablement and he became incapable to do any work. The claimant had preferred the aforesaid claim petition claiming Rs.3,98,608/- before the learned Commissioner, which came to be allowed.
3. Being aggrieved and dissatisfied with the impugned judgment and award, the appellant – insurance company has preferred this appeal.
4. Heard Mr.Palak Thakkar, learned counsel for the appellant – insurance company and Mr.Vishal Mehta, learned counsel for the respondent – claimant at length. Perused the material produced on record.
5. Mr.Thakkar, learned counsel for the appellant – insurance company has submitted that the learned Commissioner has considered the disability sustained by the claimant, which is on very higher side. He has submitted that there was no employee and employer relationship, however, without considering the same, the learned Commissioner has awarded the compensation to the tune of Rs.2,36,472/- along with 9% interest and 50% penalty. He has submitted that so far as the liability of penalty is concerned, the learned Commissioner has fastened the same upon original opponent No.1. He has submitted that the learned Commissioner has committed serious error in considering the case of the claimant and there was no sufficient evidence produced before the learned Commissioner with regard to the employee and employer relationship, however, the learned Commissioner has passed the impugned judgment and award. He has submitted that the learned Commissioner has not considered the fact that the policy is under the Motor Vehicle Act and not under the Workmen’s Compensation Act and thus, the liability is not from the date of accident but the same is from the date of filing of the application. He has submitted that since the claim petition was filed after almost a year from the date of accident and, therefore, the liability to pay the interest was fastened upon the appellant – insurance company from the date of accident is incorrect. Mr.Thakkar, learned counsel has submitted that the learned Commissioner has committed an error of facts and law in considering 100% functional disability and thus, the same is required to be quashed. He has submitted that the learned Commissioner has committed jurisdictional error and, therefore, it involves sufficient questions
