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2025 Supreme(P&H) 1791

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
PANKAJ JAIN, J.
ICICI Lombard General Insurance Company Ltd. – Appellant
Versus 
Manish Kumar and Another – Respondents
FAO No. 1437 of 2025 (O&M)
Decided On : 29-05-2025

Advocates Appeared:
For the Appellant : Mr. Punit Jain, Adv.
For the Respondents: Mr. Ashish Gupta, Adv.

The court affirmed that actual wages can be considered over government notifications for compensation in employee injury cases, provided they are proven under Section 5 of the Employee's Compensation Act.

Headnote:(A) Employee’s Compensation Act, 1923 - Section 4(1-B) - Assessment of compensation - Appellant contested the Commissioner’s assessment of claimant's monthly income as Rs.25,000/- against Rs.15,000/- as per government notification. Functional disability was assessed at 48%, but treated as 100%. Actual wages proved by claimant were deemed correct by Commissioner. The court held that the notification could be bypassed if actual wages were demonstrable under Section 5. (Paras 2-16)

(B) Interpretation of statutory provisions - The legislature’s intention to allow overlap between Section 4(1-B) and Section 5 should be harmonized, thus not rendering either otiose. (Paras 12-13)

Facts of the case:
Appeal by the insurance company against the compensation order for a driver injured during employment. The claimant’s injury rendered him entirely disabled for work, while monthly wages per actual earnings were contested against standardized governmental rates.

Findings of Court:
The compensation was rightly assessed based on actual wages of the claimant, with the Commissioner justifiably ignoring the standard notification under the circumstances of income proof.

Issues: The authenticity of the claimant's income and the extent of disability were key questions in assessing compensation.

Ratio Decidendi: Compensation should align with actual earnings unless those earnings cannot be established, thus upholding practical justice over procedural defaults in statutory directions.

Result: Appeal dismissed.

JUDGMENT :

Pankaj Jain, J.

Insurance company is in appeal aggrieved of order dated 24.10.2024, passed by the Commissioner, Circle-III, Gurugram, under the Employee’s Compensation Act, 1923 (hereinafter referred to as ‘1923 Act’).

2. Primary grievance raised by the insurance company is twofold and the same stems out of the quantum of compensation assessed by the Commissioner. Counsel for the appellant/insurance company submits that the Commissioner erred in taking the monthly income of the injured claimant as Rs.25,000/- instead of the income notified by the Central Government under Section 4 (1-B) of 1923 Act, which is Rs.15,000/- for the relevant date.

2.1. He further submits that despite the fact that disability suffered by the claimant/respondent No.1 was assessed as 48%, the Commissioner erred in treating the same as 100% functional disability.

3. Per contra, counsel for the claimant/respondent No.1 submits that the Commissioner has rightly assessed the compensation. Actual monthly wages of the claimant were proved on record and the Commissioner decided the compensation accordingly. It is contended that notification issued under Section 4 (1-B) is subject to Section 5 of 1923 Act.

3.1. He further submits that the claimant was working as a driver when he suffered injuries in an accident arising out of and during the course of employment. Disability suffered by the claimant was duly proved. PW3-Dr. Vikram Dagar, Ortho Surgeon, proved that the claimant suffered post traumatic comminuted fracture of ploetal end left leg with restricted movement of knee by 60%. He is unable to bear weight with partial loss of stability by 35% due to fix complete loss of function of left knee. There being complete loss of function of one leg, the applicant has been rendered crippled. He cannot walk without the help of stick. He is incapacitated and can neither drive the vehicle nor can do labour work. He, thus, submits that the Commissioner rightly assessed the functional disability of the claimant to be 100% and thus no fault can be found with the impugned order passed by the Commissioner.

4. I have heard counsel for the parties and have carefully gone through records of the case.

5. So far as issue regarding functional disability of the claimant is concerned, the issue is no more res integra. Reference can be made to ratio of law laid down by Four Judges Bench of Supreme Court in Pratap Narain Singh Deo vs. Srinivas Sabata and another , (1976) 1 Supreme Court Cases 289 observing as under:-

“xxxx xxxx xxxx

5. The expression “total disablement” has been defined in Section 2(1)(e) of the Act as follows:

“(1) ‘total disablement’ means such disablement whether of a temporary or permanent nature, as incapacitates workman for all work which he was capable of performing at the time of the accident resulting in such disablement.”

It has not been disputed before us that the injury was of such a nature as to cause permanent disablement to the respondent, and the question for consideration is whether the disablement incapacitated the respondent for all work which he was capable of performing at the time of the accident. The Commissioner has examined the question and recorded his finding as follows:

“The injured workman in this case is carpenter by profession .... By loss of the left hand above the elbow, he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only.”

This is obviously a reasonable and correct finding.

xxxx xxxx xxxx”

6. The aforesaid ratio has been followed with approval lately by Supreme Court in S. Suresh vs. Oriental Insurance Company Ltd. and another , (2010) 13 SCC 777 , observing as under:-

“xxxx xxxx xxxx

In our view, the ratio of the said judgment is squarely applicable to the facts at hand.

9. We are of the opinion that on account of amputation of his right leg below the knee, he is rendered unfit for the work of a driver, which he was performing at the time of the accident resulting in

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