Legal provisions mandate that a permanent disability must involve a demonstrated reduction in earning capacity to qualify for benefits.

J U D G M E N T

Employees State Insurance Corporation is challenging the judgment dated 23.02.2017 of the Employees Insurance Court, Kollam in I.C.A.No.1 of 2012.

2. The appeal was filed by the insured employee challenging the decision of the Medical Board dated 24.08.2011 fixing the permanent disability as Nil.

3. The Insured employee was injured in an accident occurred on 11.11.2011. He suffered the following injuries:

1. Open compound fracture medical malleolus

2. Compound fracture lower end of fibula

4. He was treated in various hospitals and temporary disability benefits were granted by the Corporation. The Medical Board attached to T.D.Medical College, Alappuzha examined the insured employee and fixed the disability as 10%. However, the Medical Board attached to the ESI corporation fixed the permanent disability as Nil.

5. Before the Insurance Court, the insured employee was examined as AW1 and Exts.A1 to A7 were marked on his side. The Court concluded that Ext.A1 was prepared without any proper examination of the insured employee and therefore the report of the Medical Board was set aside. The Court held that the insured employee was entitled to get disablement benefit by fixing the permanent disability as

10%.

6. The ESI Corporation challenges the judgment of the Insurance Court in this appeal. Though notice was issued and legal heirs of the deceased insured employee were impleaded, there is no appearance for them.

7. Heard the learned Standing Counsel for ESI Corporation and perused the records.

8. The learned Standing Counsel submitted that in view of Section 2 (15A) of the ESI Act 1948, permanent partial disablement means such disablement of a permanent nature, as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of accident resulting in the disablement. He submitted that unless there was reduction in the earning capacity of the employee, the disablement cannot be considered as of permanent nature. He submitted that in the instant case, there was no material before the Insurance Court to hold that the insured employee suffered reduction in earning capacity. The learned counsel also submitted that the the power of the court to fix the disablement is provided under Section 75 (2A) of the Act. The learned Standing Counsel submitted that the Court ought to have directed the Corporation to have decided the issue and thereafter proceeded with the determination of the disability in accordance with the decision of the Medical Board or the Medical Appeal Tribunal as the case may be. Referring to Section 54A of the Act, the learned Standing Counsel submitted that if the insured employee was not satisfied with the assessment by the Medical Board of the Corporation, remedy was to approach the Medical Appeal Tribunal. Though the aggrieved employee can approach the Employees Insurance Court directly as provided under (2)(ii), in such an event, the Insurance Court should proceed as provided under (2A) as pointed out earlier. He submitted that in the instant case, the Insurance Court did not proceed as provided under the provisions of of the Act and instead resorted to declare that the insured employee suffered 10% of permanent partial disablement without any supporting materials.

9. The learned Standing Counsel referred to a judgment of a Division Bench of this Court in ESI Corporation v. Pushkaran [ 1993 (2) KLT 187 ]. It is gainful to refer to the following paragraphs of the judgment referred by the learned Standing Counsel.

“6. As provided under S. 54A, the Employees' State Insurance Court will have to determine the extent of loss of earning capacity of the insured person. The circumstance that the employer is refusing employment even though the