Shri Mahesh Forge v. Kamal Dev Prasad

1. The First Appeal, fled by the employer, assail the judgment and order dated 19/06/2008 passed by the M.M.Salgaonkar Commissioner for Workmen’s Compensation at Kolhapur in Application WC No.5/C-3/2005. Under the impugned judgment, Kamal Dev Prasad (hereinafter referred to as, ‘the employee’) is held entitled for compensation of Rs.3,20,555/- + 12% interest from 06/11/2004, till its realization. He is also entitled for penalty of Rs.1,60,178/-.

2. The Appeal came to be admitted on 11/11/2008 on the following substantial question of law:- “Whether the Commissioner was right in awarding compensation equal to 100% for total permanent disablement, when the permanent disablement was to the extent of 34% only.”

3. The appellant is represented by the learned counsel Mr.M.S.Topkar whereas the respondent employee is represented by the learned counsel Mr.C.M.Kothari alongwith Mr.Rahul Patil. On perusal of the record and proceedings, I have heard the respective counsel on the substantial question of law.

4. The respondent claims to be an employee of M/s. Mahesh Forges, an establishment having 40 employees and he claim to be in the employment from 05/04/2002. He alleges that he was engaged to operate the forging machine and was in receipt of salary of Rs.2,500/- per month, which is recorded in the necessary documents maintained by his employer. On 06/11/2004, while he was engaged in the regular work of forging on the machine, which involved applying compressive force by hammer, at late night hours, some part of the machine fell on his hand while he was removing the band of the handle lock of the boxer machine and his right hand was caught in the machine. On account of the injury sustained on his right hand, he was admitted by his employer in ‘Dr.D.Y.Patil Hospital & Research Institute’ and he remained hospitalized till 24/12/2004. During his stay in the hospital, he underwent plastic surgery, but he lost one phalanx of his little fnger, two phalanges of the ring fnger, three phalanges of the middle fnger and 2 phalanges of the index fnger. The injuries ½ sustained by him are scheduled injuries and he suffered permanent disablement resulting in loss of 5o% of his earning capacity. However, claiming that this resulted in loss of 100% of his earning capacity, since he will not be able to undertake the work, which he could have undertaken before his accident, he claimed compensation accordingly. In the claim petition, fled under Section 22 read with Section 4(a) of the Workemen’s Compensation Act, 1923 (hereinafter referred to as “the W.C. Act”), he claimed compensation of Rs.3,17,685/- alongwith interest at the rate of 12% and penalty of Rs.1,58,842.50/-

5. The claim was opposed by the employer by fling a written statement and a preliminary objection was raised for maintaining the application, on the ground that the accident had occurred when the employee acted in contravention of the instructions received by him from the Occupier and Supervisor. The defence is also taken, that the employee is not engaged on forging machine, but on his own, he operated the said machine, whereas the routine duty assigned to him was a ‘furnace operator’. It was, therefore, pleaded that the employee himself is responsible for breach/disobedience of an order imposed by the rules, for the purpose of securing the safety of workmen and, therefore, is not entitled for any compensation, as claimed. It was also pleaded that, he was asked to resume duty after undergoing the treatment, but instead of resuming, he has joined the duty in some other factory at MIDC, Gokul Shirgaon, Kolhapur under the ghost name. In view of the said contention, the application was sought to be rejected.

6. In the application fled by the employee, the Commissioner/Labour Court, framed the issue as; “Whether the Applicant is entitled for the compensation as prayed for?”. The employee fled his evidence affdavit on 30/01/2006 where he reiterated his claim. On behalf of the employer, affdavit of one Baburao Tukaram Molke, Forging Operator, working with M/s. Mahesh Forge was fled. Both the witnesses were cross-examined by the learned counsel on the opposite side. The employer himself did not enter into the witness box. When his witness, Baburao Molke was cross examined, he admitted that he was working in different capacities and he has also admitted that it is not uncommon for the employees on the establishment to perform multiple tasks. He admit that the employees in the company are required to discharge their duties as per the directions of the owner or the supervisor. He admit that on the date of accident, Kamal Dev Prasad was removing the band of the handle lock and it was the company’s work. He admit that on the said date he was not engaged in any work, but was standing. It is also admitted that every employee has to work as per the directions of the supervisor.

7. With this material being brought on record, the Commissioner decided the application vide judgment dated 19/06/2008. Referring to the scheme contained in Section 3 of the W.C.Act, it is recorded by the Commissioner that the employer is liable to pay the compensation for the accident to a workman, caused during the course of his employment. On appreciation of the evidence of the claimant/employee and Shri Baburao Molake, the learned Judge record the admission of Shri Molake to the effect that he was working on the forging machine and the employee was working on the direction of the supervisor and the entr4ies in the chart are formal. It is further recorded that it cannot be believed that Kamal Dev Prasad went on the forging machine on his own, nor there is anything on record to show that he worked in disobedience of the expressed order or of any expressed rule. The learned CVOmssioner has, therefore, rendered a fnding to the effect tht the employer cannot claim any excuse under Sectin 3 of the W.C. Act.

8. The learned Commissioner accepted the claimthat the age of the employee was 28 years and he was getting salary of Rs.2,500/- per month. He further accept that there is no dispute about the amputation of the phalanges of the fngers of his right hand and it was physically verifed by him, during the course of hearing. Recording that there was no need of any medical certifcate being produced, since the injuries were covered in Schedule I, he has computed the loss of earning capacity to be 34%, by measuring the disability in Schedule I. The disability was categorized as permanent partial disability, which reduced the earning capacity of a workman in every employment, which he is capable of undertaking at that time and the injuries in Part II of Schedule I are said to be such injuries. Accepting the stand of the employee that he cannot undertake the work, which he was doing earlier to the accident, and, therefore, the loss of earning capacity is total, the learned Judge held him to be entitled to the compensation worked out in Section 4(1)(b) of the W.C.Act in the following manner:- “Rs.2500/- wages x 60% x 213.57 (relevant factor) = Rs.3,20,355/-” The opponent/employer was, therefore, held liable to pay the compensation to the employee on account of the permanent total disability incurred, alongwith interest of 12% with penalty of Rs.1,60,178/-.

9. The Appeal which is fled by the employer specifcally avers that the respondent/employee was claiming compensation under Section 4(1)(c)(i) of the W.C.Act and the learned Commissioner erred in presuming 100% disability and computed the loss of earning capacity, without referring to the assessment, as set out in the W.C. Act. Mr.Topkar, the learned counsel appearing for the appellant, vehemently submits that this assessment of loss of earning capacity at 100% is completely erroneous and unsustainable, since there can be no base for such an inference, particularly since the provision, Section 4(1)(c)(i) of the Act provides that the compensation would be such percentage, which would have been payable in case of permanent total disablement as is specifed therein, as being the percentage of the loss of earning capacity caused by that injury. He would submit that having held that the disablement was 34%, the learned Commissioner ought to have computed the loss of earning capacity to the extent of 34%, instead he has calculated it as 100%, and has arrived at a fgure of Rs.3,20,355/-, which is apparently erroneous. According to him, calculating the loss of earning capacity as 34%, the amount which ought to have been derived by the learned Commissioner is Rs.1,08,920/- and accordingly the penalty and the interest ought to have been levied. It is also argued that the respondent had not produced any medical certifcate, recording the disability or the percentage of loss of earning capacity and, therefore, by calculating the disability as set out in Part II of Schedule I, which enlist the injuries deemed to be result in ‘permanent partial disablement’, by working out the percentage of loss of earning capacity given under the said Schedule, the percentage is rightly calculated as 34%. The submission of Mr.Topkar is, in any case, the injury which is sustained by the respondent employee do not fall in Part I of Schedule I which enlist the injuries deemed to result in permanent total disablement. Per contra, learned counsel Mr.Kothari appearing for the respondent, would submit that though the disablement of employee is to the extent of 34%, the loss of his earning capacity is 100% because the nature of work, which he was undertaking prior to the accident, cannot be performed by him in the wake of the disablement, which has deprived him of his earning capacity and this would be counted as loss of 100% of earning capacity. His submission is to the effect that the parameters which are liable to be invoked while awarding the compensation under the Motor Vehicles Act, 1888 are not applicable in case of compensation to be awarded under the W.C. Act and by referring to a recent decision of the Hon’ble Apex Court in case of Pappu Deo Yadav Vs. Naresh Kumar & Ors.1, he would request this Court to consider the important aspect that when it comes to the loss of earning capacity due to permanent disability, the same should be treated as 100%, since he will never be able to work as a ‘Forging Operator’. The phalanges of his three fngers of right hand has cost him his source of livelihood, as he was aged 27 years at the time of accident and he is not trained to undertake any other job, resultantly the disability has adversely impacted his earning capacity, which the learned Commissioner has rightly taken into consideration, is the submission. The learned counsel would strenuously submits that the traumatic effect of the injury on the respondent as well as his family also deserves a sympathetic consideration and the argument is, any accident, 1 2020 AIR (SC) 4424 whether it is a motor accident or an accident, which takes place in the course of employment. deserves similar consideration as it result into tremendous mental trauma and not only the victim but the entire family undergo inconvenience and also result in loss of dignity for the victim if he is unable to be engaged in any other job, which he was earlier capable of. Learned counsel also placed reliance on the another decision of the Hon’ble Apex Court in case of Jithendran Vs. The New India Assurance Co. Ltd. & Anr.[2] as well as a decision of this Court in case of Transport Manager, Thane Municipal Transport Undertaking, Administrative Building Vs. Rajendra

10. In the wake of the rival submissions, I turn to the substantial question of law, required to be answered in the Appeal. The Workmen’s Compensation Act, 1923 is an enactment to provide for the payment of compensation by certain classes of employers to their employees for injury caused by accident. The said enactment being enacted to deal with the hardship to the employees working in various industries, with increasing use of machinery and consequent danger to the workmen alongwith the comparative poverty of the workmen themselves. The enactment cast an obligation on the employer to provide adequate medical treatment to their workmen, to mitigate the effects of the accident and also to add the sense of

2 Civil Appeal No.6494/2021 decided on 27/10/2021 3 2020 (5) Mh.LJ 480 security so as to render the industrial life more attractive and increase the available supply of labour. The Act defnes two terms with which I am concerned with, being ‘partial disablement’ in Section 2(g) and ‘total disablement’ in Section 2(l) which read thus:- “2(g) ‘partial disablement’ means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a employee in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time; provided that every injury specifed in Part II of Schedule I shall be deemed to result in permanent partial disablement.” “2(l) ‘total disablement’ means such disablement, whether of a temporary or permanent nature, as incapacitates a employee for all work which he was capable of performing at the time of the accident resulting in such disablement.”

11. Section 3 of the enactment is the liability of the employer to pay compensation, if personal injury is caused to the employee in an accident, arising out of and in the course of the employment, with the exception provided in the proviso. The amount of compensation to be paid is specifed in Section 4 and in the wake of the defnition of ‘partial disablement’ and ‘total disablement’, the compensation is payable. Where permanent total disablement results from the injury, the compensation payable is governed by Section 4(1)(b), which is an amount equal to 60% of the monthly wages of the injured employee, multiplied by the relevant factor or an amount of Rs.One Lakh and Forty Thousand, whichever is more. Where permanent partial disablement results from the injury, the compensation is provided in Section 4(1)(c) and it is bifurcated into two parts; (i) in case of injuries specifed in Part II Schedule I, such percentage of the compensation which would have been payable in case of permanent total disablement as is specifed therein, as being the percentage of the loss of earning capacity caused by that injury; and (ii) in case of an injury not specifed in Schedule I, such percentage of the compensation payable in case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualifed medical practitioner) permanently caused by the injury. Explanation I and Explanation II, appended to the said Section is relevant, which read thus:- “Explanation I.- Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but no so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted from the injuries. Explanation II.- In assessing the loss of earning capacity for the purposes of sub-clause (ii), the qualifed medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specifed in Schedule I.”

12. On perusal of Schedule I appended to the Act, it is found to be divided into two parts; being Part I enlisting the list of injuries deemed to result in permanent total disablement and Part II enlisting list of injuries deemed to result in permanent partial disablement When Part I is perused, it consists of those injuries, which has resulted in loss of hands and a foot, double amputation through leg or thigh, loss of sight which would render the claimant unable to perform any work for which eye sight is essential, absolute deafness and severe facial disfgurement. Part II enlist the injuries which would result in loss of earning capacity with varying ranges and against each of the injuries described in Column 2 of Part II of the Schedule I, percentage of loss of earning capacity is given in Column 3. The injury of the applicant is listed in Part II of Schedule I under Head A-Fingers of right or left hand and in terms of Explanation I appended to Section 4, which provide that the injuries, if more than one, being caused by same accident, the amount of compensation has to be aggregated, but it shall not in any case, exceed the amount which would have been payable, if permanent total disablement has resulted from the injuries. Accordingly, the injuries sustained by him, when pitched against the last column in the said charge, refecting the loss of earning capacity, the picture which emerges is as under:- “i. one phalanx of little fnger 5% (37) ii. two Phalanges of ring fnger 6% (36) iii. three Phalanges of middle fnger 12%(31) iv. 2 Phalanges of index fnger ½ 11%(28) Thus, strictly going by Section 4 read with Schedule I Part II, disablement of the respondent is 34%. Based on that, the loss of earning capacity would also be the same i.e. 34%. Admittedly, there is no medical certifcate produced on record, showing to the contrary and necessarily the compensation to be awarded will be governed by Section 4(1)(c)(i).

13. The argument advanced on behalf of the respondent is that the injuries sustained in the accident and its impact on the life of a victim cannot be calculated arithmetically and that is how the Hon’ble Apex Court has dealt with the issue in various decisions. My attention is invited to the following observations made by their Lordships of the Hon’ble Apex Court in Pappu Deo Yadav (supra) “16. In Raj Kumar v. Ajay Kumar [(2011) 2 SCC 343], this Court specifcally gave the illustration of a driver who has permanent disablement of hand and stated that the loss of future earnings capacity would be virtually 100%. Therefore, clearly when it comes to loss of earning due to permanent disability, the same may be treated as 100% loss caused to the appellant since he will never be able to work as a driver again. The contention of the respondent Insurance Company that the appellant could take up any other alternative employment is no justifcation to avoid their vicarious liability. Hence, the loss of earning is determined by us at L 54,000 per annum. Thus, by applying the appropriate multiplier as per the principles laid down by this Court in Sarla Verma v. DTC [(2009) 6 SCC 121: (2209) 2 SCC (Civ) 770: (2009) 2 SCC (Cri) 1002], the total loss of future earnings of the appellant will be at L 54,000 W 16 + L 8,64,000.” Recently, in Anthony Alias Anthony Swamy v. Managing Director, K.S.R.T.C. (2020) SCC OnLine SC 493, where the victim was a painter by profession, a three-judge bench had followed Raj Kumar v. Ajany Kumar (2011) 1 SCC 343 and Nagarajappa v. Divisional Manager, Oriental Insurance Company Limited (2011) 13 SCC 323. The High Court had assessed the injury to be 25% permanent disability, although the treating doctor had said that the injury incurred by the bus passenger (who was earning L 9,000/- per month) was 75% of the left leg and 37.5% for the whole body. In Raj Kumar Supra n.22, the physical disability of the upper limb was determined as 68% in proportion to 22.23% of the whole body. The High Court had assessed the injury as 25% and granted compensation. However, this court assessed the injury on the basis that the disability was 75%. The earning capacity of the appellant as on the date of the accident stand completely negated and not reduced. He has been rendered permanently incapable of working as painter or to do any manual work. The appellant is therefore held entitled for compensation for loss of future earning based on 75% permanent physical functional disability recalculated with a salary by applying the multiplier.” The observations in case of Sandeep Khanduja Vs. Atul Dande[4] to the following effect are also relied upon, “Where the claimant suffers a permanent disability as a result of injuries, the assessment of compensation under the head of loss of future earnings would depend upon the effect and impact of such permanent disability on his earning capacity. The Tribunal should not mechanically apply the percentage of 4 2017(3) SCC 351 permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability. Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in award of either too low or too high a compensation.”

14. Relying upon the aforesaid decisions, the Hon’ble Apex Court in case of Pappu Deo Yadav (supra), has made the following observations:- “22. In parting, it needs to be underlined that Courts should be mindful that a serious injury not only permanently imposes physical limitations and disabilities but too often inficts deep mental and emotional scars upon the victim. The attendant trauma of the victim’s having to live in a world entirely different from the one she or he is born into, as an invalid, and with degrees of dependence on others, robbed of complete personal choice or autonomy, should forever be in the judge’s mind, whenever tasked or adjudge compensation claims. Severe limitations inficted due to such injuries undermine the dignity (which is now recognized as an intrinsic component of the right to life under Article 21) of the individual, thus depriving the person of the essence of the right to a wholesome life which she or he had lived, hithero. From the world of the able bodied, the victim is thrust into the world of the disabled, itself most discomfting and unsettling. If courts nit-pick and award niggardly amounts oblivious of these circumstances, there is resultant affront to the injured victim.”