Dr. Dilip Kothari vs State of M.P. & Ors.

Both the appeals filed by the employer and employee

arise out of the award dated 26-4-2010 passed by the Commissioner

for Workmen''s Compensation, Labour Court, Jabalpur in Case

No.266/W.C. Act Non-fatal/03. By the impugned award the

competent authority has awarded compensation of Rs.97424/- along

with annual interest at the rate of 7?% p.a. from the date of filing

of the claim application, i.e. 3-9-2003 under the provisions of the

Employee''s Compensation Act, 1923 [hereinafter referred to as `the

Act'']. The employer is aggrieved with the compensation awarded in

favour of the employee whereas another appeal has been filed by the

workman for enhancement of the amount of compensation. Since

both the appeals arise out of the same award, they were heard

analogously and are disposed of by this common order.

For the sake of clarity and convenience, the facts

adumbrated in the appeal filed by the employer in M.A.

No.2742/2010 are taken. The instant appeal has been admitted on

the following substantial question of law by this Court on 12-8-

2010:

"Whether the Workmen''s Compensation Tribunal erred in not applying the principles as enumerated under sub-section (1)(c)(ii) of Section 4 of the Workmen''s Compensation Act, 1923 for calculating the compensation, while there was permanent partial disablement occurred to the respondent in the incident ?" 3. Before adverting to the legal position of the provisions

of the Act, the facts succinctly stated are that the workman - Vinod

Kumar filed an application under the Act claiming compensation

due to injury received by him during course of employment. It is

stated that he was working as a labour in the threshing machine. On

18-02-2002 his left hand had entered into the machine and he

sustained grievous injuries and he was admitted in the hospital for

treatment. According to him, though his hand was operated, but still

the injury could not be cured. In support of his claim he produced

the certificate issued by the District Medical Board, Jabalpur before

the Labour Court, where the Medical Board has certified 40%

physical disability arising out of the said accident in course of

employment of the workman.

The Commissioner after recording evidence of the

parties in proper perspective, passed the impugned award directing

the employer to pay Rs.97424/- towards compensation to the victim

along with interest at the rate of 7?% p.a. from the date of filing of

the claim-application till the date of deposit of the awarded amount.

It also directed that if the said amount is not deposited within a

period of 45 days, the same shall carry interest at the rate of 12%

p.a.

Counsel for the appellant submitted that the competent

authority has erred while awarding compensation under the provisions of the Act, as the loss of earning capacity has not been

assessed by a qualified medical practitioner in terms of Section 4(1)

(c)(ii) of the Act. Further, the Commissioner has erred while

granting compensation on the basis of notional income of the

minimum wages without following the provisions contemplated

under sub-section (1)(c)(ii) of Section 4 of the Act for calculating

the compensation when there was permanent partial disablement

occurred in the accident.

Counsel appearing for the employee submitted that the

compensation has been rightly awarded by the Commissioner

holding that the employer is liable to pay compensation, however,

the amount of compensation is inadequate and improper.

Regard being had to the submissions advanced on behalf

of the parties, it is apposite to refer to the relevant provisions of the

Act. Section 3 of the Act deals with employer''s liability for

compensation. Section 4 provides amount of compensation. Section

4A stipulates time for payment of compensation as computed under

Section 4 of the Act. Sub-section (1) thereof mandates that

compensation shall be paid, as soon as it falls due. Sub-section (2)

of Section 4A postulates a situation where the employer though

accepting his liability to pay compensation to his workmen, but

disputes the accident of the claim of compensation and in such cases

sub-section (2) enjoins him to make a provisional payment based on

the nature of accident to accept the liability by depositing it before

the Labour Court. It is apt to reproduce the relevant portion of

Section 3 of the Act which is reproduced hereunder :

"3. Employer''s liability for compensation. (1) If personal injury is caused to [an employee] by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter: Provided that the employer shall not be so liable - (a) in respect of any injury which does not result in the total or partial disablement of the [employee] for a period exceeding [three] days; (b) in respect of any [injury, not resulting in death [or permanent total disablement] caused by] an accident which is directly attributable to - (i) the [employee] having been at the time thereof under the influence of drink or drugs, or (ii) the wilful disobedience of the [employee] to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of [employees], or (iii) the wilful removal or disregard by the [employee] of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of [employee]." 8. "Partial disablement" is defined under Section 2(g) of

the Act which postulates :

"2(g). `partial disablement'' means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of an 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 a 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 specified in Part II of Schedule I, shall be deemed to result in permanent partial disablement."

Section 4 of the Act provides that subject to the

provisions of the Act the amount of compensation shall be made as

envisaged in the section itself.

From a bare reading of Section 3 of the Act, it is noted

that in order to attract sub-section (1) of Section 3, three conditions

must be fulfilled : (i) personal injury; (ii) accident; and (iii) arising

out of and in course of the employment. Thus, it can safely be

elaborated that the accident must have arisen out of and in course of

employment of the workman. There must be connectivity between

the injuries and the accident occurred and the work done in course

of employment. The workman while doing a part of his duty or any

incidental duty, the accident has resulted. The expression "arising

out of employment" means that ''there must be casual relationship

between the accident and the employment''. If these ingredients are

established then the employer is liable to pay compensation.

Merely, because loss of earning capacity has not been

assessed by the doctor in his certificate, the employee cannot be

denied the right of compensation, as in the present case the doctor

has assessed the disability to 40% which is covered as `permanent

partial disability'' under Section 2(g) of the Act. Once the disability

has been established, as required under Section 2(g) and the

necessary ingredients of Section 3 of the Act fulfilled, then liability

of the employer for payment of compensation cannot be discarded

merely because of non-assessment of loss of earning capacity in the

medical certificate.

Thus, the liability to pay compensation is dependant on

the factors aforementioned, if established. In the present case, it is

not in dispute that the respondent was employed by the appellant for

his work and while discharging the work he sustained the injury.

Once the accident occurred during course of employment has not

been disputed, the liability to pay compensation cannot be denied by

the appellant. The injury received by the employee is partial

disablement for a period exceeding 30 days. Thus, in the present

case case of the employee is not covered under any of the exceptions

mentioned in Section 3 of the Act.

The next plank of submission of the counsel for the

appellant is that the amount of compensation has not been computed

in accordance with the provisions as envisaged in Section 4 of the

Act and, therefore, the entire award is void, cannot be accepted.

Once the liability is established under Section 3 of the Act on

fulfilment of the necessary ingredients, then the method of

calculation of the amount of compensation would not render the

award void or illegal. Section 4 of the Act begins : "subject to

provisions of this Act", which means that amount of compensation

is subject to the liability which is to be established under Section 3

of the Act and once the liability has been established, the

compensation shall be calculated in accordance with the provisions

of Section 4 of the Act.

At this stage the counsel for the employee fairly

admitted that the case of the appellant is covered under Section 4(1)

(c) of the Act. The said provision being useful is extracted

hereunder:

"4. Amount of compensation.- (1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:--

(a) where death results from the injury : an amount equal to fifty per cent. of the monthly wages of the deceased [employee] multiplied by the relevant factor; or an amount of [one lakh and twenty thousand rupees], whichever is more;

(b) where permanent total disablement results from the injury : an amount equal to sixty per cent of the monthly wages of the injured [employee] multiplied by the relevant factor; or an amount of [one lakh and twenty thousand rupees], whichever is more;

[Provided that the Central Government may, by notification in the Official Gazette, from time to time, enhance the amount of compensation mentioned in clauses (a) and (b).]

Explanation I.--For the purposes of clause (a) and clause (b), "relevant factor", in relation to a [employee] means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the [employee] on his last birthday immediately preceding the date on which the compensation fell due.

(c) where permanent partial disablement result from the injury:

(i) in the case of an injury specified in Part II of Schedule I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury; and

(ii) in the case of an injury not specified in Schedule I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;

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 not 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 purpose of sub-clause (ii), the qualified medical practitioner shall have due regard to the percentages of loss of earning capacity in relation to different injuries specified in Schedule I."

Counsel for the appellant submitted that the

Commissioner ought to have awarded the compensation only as per

the provision envisaged in Schedule I of Section 4(1)(c)(ii) of the

Act, which should have been proportionate to the loss of the earning

capacity as assessed by a qualified medical practitioner,

permanently caused by the injury. He submits that the

Commissioner has calculated the loss of earning capacity of the

workman on the basis the notional income admissible to a workman

and thereafter the multiplier was applied. In the present case, the

District Medical Board has certified the disability to the extent of

40%. The workman was operating the thresher in the employment

of the appellant and the Labour Court has rightly held that operating

a threshing machine is certainly a work semi-skilled in nature and,

therefore, the Commissioner has taken into consideration the

minimum wages notified in this regard, for a semi-skilled workman

minimum wage was Rs.2156/- per month at the relevant time and

recorded the finding that it has incapacitated him from operating the

said threshing machine, permanently, and the Court has applied the

principle of computation of compensation by applying the multiplier

of 26 by adopting the formula, as prescribed under the Act, taking

out of 60% of the minimum wage, i.e. Rs.1293/- and the relevant

factor 215.28 on his age. The Commissioner has calculated the total

amount of Rs.278357/- as per the formula and he has taken 35% of

the said amount as compensation, i.e., Rs.97424/- which is

according to the Schedule I of Section 4(1)(c) of the Act.

This Court is of the considered view, after taking into

consideration the provisions of Section 4A of the Act that as the

compensation has to be paid as soon as it falls due to the accident,

there is no illegality or perversity of approach by the Labour Court

in awarding the interest as well. So far as the appeal of the

employee is concerned, counsel for the appellant could not

substantiate his contention that the appellant was a skilled labour at

the relevant time and he was earning Rs.2700/- per month. There is

no evidence in this regard. The Commissioner has rightly taken into

consideration the minimum wages prescribed for the semi-skilled

workman and thereafter calculated the amount of compensation in

accordance with the provisions of the Act.

In view of the preceding analysis, the findings ascribed

by the learned Authority do not warrant interference in appellate

jurisdiction. Accordingly, both the appeals fail and are hereby

dismissed. No order as to costs.