Summary
An employee operating a forging machine lost phalanges of four fingers of his right, working hand; the Commissioner under the Employees' Compensation Act, 1923 assessed 100% loss of earning capacity but the High Court reduced it to the Schedule I aggregate of 34%. The Supreme Court held that the scheduled percentages for individual finger injuries are not an inflexible ceiling where several injuries in one accident together destroy the functionality of the operational hand, assessed the loss of earning capacity at 50%, and restored interest and a proportionate penalty.
Issues
- Whether, when several injuries listed in Part II of Schedule I are sustained in the same accident, loss of earning capacity is confined to the arithmetic aggregate of the scheduled percentages.
- What loss of earning capacity should be assessed for the mutilation of four fingers of the employee's operational hand in the absence of a medical disability certificate.
- What compensation, interest and penalty follow from the revised assessment.
Provisions considered
- Section 4(1)(c), Explanation 1; Part II of Schedule I, Employees' Compensation Act, 1923Explanation 1 requires the compensation for more than one injury caused in the same accident to be aggregated, subject to the ceiling of permanent total disablement. The Court read the Schedule as fixing the loss for the specific loss of a phalanx or finger, and held that where several such losses occur a mere aggregation does not determine the actual loss of earning capacity; a departure from the Schedule for functional disability is permissible, with reasons, as recognised in Oriental Insurance Co. Ltd. v. Mohd. Nasir. (¶¶ 3, 6, 7, 8, 9, 10)
- Reference to Schedule I of the Workmen's Compensation Act, 1923, Motor Vehicles Act, 1988Referred to, through Oriental Insurance v. Mohd. Nasir, for the proposition that both the 1923 Act and the Motor Vehicles Act are beneficial legislations deserving liberal construction and that the Motor Vehicles Act creates a legal fiction permitting reference to Schedule I, which correlates permanent disability with functional disability in certain cases. (¶ 7)
Held
- The High Court was wrong to treat motor accident decisions on functional disability as irrelevant. In Oriental Insurance v. Mohd. Nasir this Court held that both the 1923 Act and the Motor Vehicles Act are beneficial legislations deserving liberal construction; while the scheduled mode of computation applies to specified injuries, the tribunal or High Court must record reasons for its assessment of loss of earning capacity, so a departure from the Schedule in deciding functional disability, which in certain cases correlates with physical disability, is not foreclosed. (¶¶ 6, 7)
- Amputation of two and a half phalanges of the index finger has no separate entry in the Schedule and must be taken as whole loss of the finger (14%); even on the Schedule the aggregate disability would therefore be 37%, not the 34% found by the High Court. (¶ 8)
- The statutory percentages are for the specific loss of a phalanx or finger, and where more than one such loss occurs in the same accident mere aggregation cannot be said to determine the actual loss. Although no medical certificate was produced and 100% disability cannot be assessed, the working hand was seriously mutilated, with the middle and index fingers completely disabled and the ring and little fingers partly lost, so that the hand cannot be used with its earlier grip; loss of earning capacity assessed at 50%. (¶¶ 8, 10)
- Compensation at 50% works out to Rs 1,60,177.50 (half of Rs 3,20,355 computed as Rs 2,500 x 60% x factor 213.57), with 12% interest from the date of the accident and 50% penalty of Rs 80,088.75. If the amounts directed by the High Court have been paid, the excess shall be paid with 12% interest from the date of accident and half of the enhanced amount as penalty. (¶ 11)
Result
Appeal allowed; loss of earning capacity fixed at 50%; compensation of Rs 1,60,177.50 with 12% interest from the date of accident and penalty of Rs 80,088.75; any excess over amounts already paid under the High Court order to be paid with 12% interest and half of the enhanced amount as penalty; pending applications disposed of.