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2007 DIGILAW 38 (GAU)

New India Assurance Co. Ltd. v. Madan Sahu

2007-01-11

I.A.ANSARI

body2007
JUDGMENT I.A. Ansari, J. 1. This is an appeal under Section 30 of the Workmen's Compensation Act, 1923 ('the W.C. Act') preferred by the insurer against the order dated 10.7.2000, passed by the Commissioner, Workmen's Compensation, Golaghat in W.C. Case No. 22 of 1995, determining a sum of Rs. 1,77,354 as the compensation payable to the workman, respondent No. 1, with direction that the appellant, as insurer, shall deposit the said amount of compensation along with interest at the rate of 6 per cent per annum from the date of making of the claim application. Aggrieved by the order dated 10.7.2007, the workman has also impugned the said order by way of a cross-objection filed in this appeal. 2. I have heard Mr. A. Dutta, learned Counsel appearing on behalf of the insurer appellant and Mr. J. Singh, learned senior counsel appearing for the workman, respondent No. 1. 3. At the relevant time of accident, the workman was admittedly a driver of the vehicle, which was involved in the accident, the accident having taken place of and in the course of his employment. What was in dispute, in the claim proceeding, was the nature of the injuries sustained by the workman, extent of his loss of earning capacity and the amount of compensation payable to him. 4. Having examined the workman and also the registered medical practitioner, who had been treating the workman, the Commissioner determined Rs. 1,77,354 as compensation. The quantum of compensation, so determined, is objected to by the insurer appellant in the present appeal on the ground that while calculating the compensation, the Commissioner applied the provisions of the Workmen's Compensation Act as stood amended with effect from 15.9.1995, though the accident had taken place on 10.1.1994 and hence, the provisions of the Workmen's Compensation Act as existed on the date of the said accident, ought to have been applied. What is also contended on behalf of the insurer appellant, is that if the pre-amended provisions of the Workmen's Compensation Act were applied to the case at hand, the compensation would have worked out to a sum of Rs. 73,897.50 and not Rs. 1,77,354. What is also contended on behalf of the insurer appellant, is that if the pre-amended provisions of the Workmen's Compensation Act were applied to the case at hand, the compensation would have worked out to a sum of Rs. 73,897.50 and not Rs. 1,77,354. Resisting the submissions so made on behalf of the insurer appellant, it is contended on behalf of the workman, respondent, that according to the medical evidence on record, the workman's physical disability was to the extent of 75 per cent, but the extent of loss of his earning capacity was 100 per cent inasmuch as the injuries sustained by the workman had rendered him incapable of driving any vehicle. It is also submitted on behalf of the workman, respondent, that he ought to have been granted interest at the rate of 12 per cent per annum instead of 6 per cent per annum as has been done by the Commissioner. 5. The substantial questions of law, which fall for determination in the present appeal, are as follows: (i) Whether the Workmen's Compensation (Amendment) Act, 1995, can be given retrospective effect and if not, what provisions of the Workmen's Compensation Act ought to have been applied in the present case for the purpose of calculating the compensation payable to the workman? (ii) When a workman is rendered incapable of undertaking the work which he used to do, shall he be treated to have sustained loss of earning capacity to the extent of 100 per cent or whether, in order to treat a workman's loss of earning capacity to the extent of 100 per cent, it is necessary that the injuries sustained by him in the accident arising out of and in the course of employment, must have rendered him incapable of undertaking not only the work which he was doing but also any other work which he was capable of doing under his employer, before he sustained the injuries? (iii) Whether the compensation awarded to the workman, respondent and also the rate of interest directed to be paid to him are consistent and in terms of the relevant provisions of the Workmen's Compensation Act, 1923? (iii) Whether the compensation awarded to the workman, respondent and also the rate of interest directed to be paid to him are consistent and in terms of the relevant provisions of the Workmen's Compensation Act, 1923? Question No. 1: Whether the Workmen's Compensation (Amendment) Act, 1995, can be given retrospective effect and if not, what provisions of the Workmen's Compensation Act ought to have been applied in the present case for the purpose of calculating the compensation payable to the workman? 6. While considering this question, what needs to be noted is that a workman becomes entitled to receive compensation, the moment he suffers personal injuries of the type contemplated within the provisions of the Workmen's Compensation Act. Taking this view, a Full Bench of Kerala High Court in United India Insurance Co. Ltd. v. Alavi (1998) IILLJ 896 Ker , had held that it is the amount of compensation payable on the date of the accident and not the amount of compensation payable on account of the amendment made in the Workmen's Compensation Act in the year 1995, which is relevant. The decision so rendered by the Full Bench of Kerala High Court, being in accordance with the decision of the Apex Court in Pratap Narain Singh Deo v. Shrinivas Sabata 1976 ACJ 141, has been held in Kerala State Electricity Board v. Valsala K. (1999) IILLJ 1112 SC to be the correct interpretation of law. In the face of the clearly laid down position of the law in Kerala State Electricity Board's case (supra), there can be no escape from the conclusion that when the accident which caused injuries to the workman in the present case had taken place on 11.1.1994, the compensation payable to him ought to have been calculated in terms of the provisions of the Workmen 's Compensation Act as the same stood on the date of the accident and not on the basis of the Workmen's Compensation (Amendment) Act, 1995, which came into force on 15.9.1995. In short, in determining the compensation payable to a workman under the Workmen's Compensation Act, the provisions contained therein, on the date of the accident, shall be applied and not the provisions of the Workmen's Compensation Act as stands amended subsequently. In short, in determining the compensation payable to a workman under the Workmen's Compensation Act, the provisions contained therein, on the date of the accident, shall be applied and not the provisions of the Workmen's Compensation Act as stands amended subsequently. Viewed thus, it is clear that in the present case the accident having taken place on 11.1.1995, it was pre-amended Act which ought to have been applied for determining the quantum of compensation payable to the workman. Question No. 2: When a workman is rendered incapable of undertaking the work which he used to do, shall he be treated to have sustained loss of earning capacity to the extent of 100 per cent or whether, in order to treat a workman's loss of earning capacity to the extent of 100 per cent, it is necessary that the injuries sustained by him in the accident arising out of and in the course of employment, must have rendered him incapable of undertaking not only the work which he was doing but also any other work which he was capable of doing under his employer, before he sustained the injuries? 7. The scheme of the Workmen's Compensation Act shows that the compensation payable to an injured workman is aimed at compensating the loss of his earning capacity and not the loss of his income. The loss of earning capacity, in the light of the provisions of Section 4 of the Workmen's Compensation Act, has to be determined by a registered medical practitioner. The extent of disability of a workman and the extent of his earning capacity are not one and the same thing. While determining the extent of earning capacity, what has to be determined is as to what work the workman was doing at the time when the accident took place and what is the effect of the injuries sustained by him. If the injuries sustained by him render him incapable of undertaking the work, which he was doing and also makes him incapable of undertaking any work, which he could have undertaken under his employer, the loss of his earning capacity would be 100 per cent. If the injuries sustained by him render him incapable of undertaking the work, which he was doing and also makes him incapable of undertaking any work, which he could have undertaken under his employer, the loss of his earning capacity would be 100 per cent. To put it differently, if a workman, even after sustaining injuries and having been rendered incapable of undertaking the work, which he was doing under his employer, is not denied to be kept in employment, it would be a case of partial disablement; but if the employer terminates the service of the workman, instead of continuing to keep him in employment in some work, other than what the workman had been doing prior to the accident, it would be a case of total disablement. The principle that the workman must be rendered so incapable by the accident that he is unable to do any other work is contextual and has to be, therefore, viewed in the context of the nature of employment of the workman prior to the accident and his status on sustaining injuries in the accident. When a workman, employed as a driver, is rendered incapable of driving vehicle and he is also not kept in employment by his employer in any other capacity, it is unreasonable to say that the workman has not been rendered totally disabled, for he may still work as a clerk or perhaps, as a watchman. If the workman becomes incapable of undertaking the work which he used to do in the past (i.e., prior to the accident) and the employer does not keep him in employment, it becomes a case of total disablement. 8. In the present case, the medical evidence on record is that the workman had suffered physical disability to the extent of 75 per cent but the accident has rendered him wholly incapable of driving any vehicle for the workman suffered bilateral interstitial lung disease due to haemothorax caused by injuries of the chest. This apart, the cogent and unassailed evidence of the workman is that he has been rendered so disabled that he cannot drive any vehicle. Nothing has been elicited from the cross-examination of the workman or the doctor to show that the evidence, so given, is incorrect or untrue. This apart, the cogent and unassailed evidence of the workman is that he has been rendered so disabled that he cannot drive any vehicle. Nothing has been elicited from the cross-examination of the workman or the doctor to show that the evidence, so given, is incorrect or untrue. Moreover, no evidence has been adduced by either the employer or the insurer to show that the findings given by the doctor and/or the evidence given by the workman with regard to the fact that he has been rendered incapable of driving vehicles is untrue or false. Situated thus, there can be no escape from the conclusion that the workman, who was capable of driving vehicle, has been rendered incapable of driving vehicle. In such circumstances, the onus lies on the employer to show that notwithstanding the injuries so sustained by the workman, he has been kept employed by the employer for some other work or that the workman is still capable of performing such work as he was capable of at the time of said accident. In the face of the fact that this onus has not been discharged by the owner and the insurer has also adduced no evidence in this regard the conclusion which is irresistible to draw is that the workman in the present case has suffered 100 per cent loss of his earning capacity and it is on this basis and in terms of the pre-amended Workmen's Compensation Act that the compensation payable to the workman ought to have been and now needs to be determined. What may in this regard be pointed out is that there is no dispute before this Court that if the loss of earning capacity of the workman were treated to be 100 per cent, then the compensation would have worked out to a sum of Rs. 98,530. 9. Turning now to the question of interest payable to the workman, what needs to be noted is that the accident which had disabled the workman took place on 11.1.1994 and Section 4-A of the Workmen 's Compensation Act, as stood on that day, read as under: 4-A. Compensation to be paid when due and penalty for default.--(1) Compensation under Section 4 shall be paid as soon as it falls due. (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim. (3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty. 10. Section 4-A stands, amended by the Workmen's Compensation (Amendment) Act 1995, with effect from 15.9.1995 and with the amendment so incorporated, Section 4-A, now reads as under: 4-A. Compensation to be paid when due and penalty for default.--(1) Compensation under Section 4 shall be paid as soon as it falls due. (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim. (3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall- (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and (b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears, and interest thereon pay a further sum not exceeding fifty per cent of such amount by way of penalty: Provided that an order for the payment of penalty shall not be passed under Clause (b) without giving a reasonable opportunity to the employer to show-cause why it should not be passed. 11. A careful reading of Section 4-A, as the same stood on the date of accident, shows that on the compensation, which could be determined by the Commissioner, the workman was entitled to receive interest at the rate of 6 per cent per annum. In the case at hand, therefore, the interest awardable to the workman was 6 per cent per annum and since the Commissioner, Workmen's Compensation, has ordered interest to be paid at the rate of 6 per cent per annum, the rate of interest directed to be paid to the workman, must be held and I do hold, to be consistent with relevant provisions of the Workmen's Compensation Act as in force on the date of the accident. 12. Because of the conclusions reached as indicated above, I hold that workman is entitled to receive a sum of Rs. 98,530 as compensation and the same shall be paid to him with interest at the rate of 6 per cent per annum from the date of the making of the application for compensation. As the insurer appellant has already deposited the entire awarded amount of Rs. 1,77,354 with the Commissioner, Workmen's Compensation, Golaghat, compensation now determined by this Court, shall be paid to the workman and the balance amount shall be refunded to the insurer. Since the record reveals that entire compensation amount of Rs. As the insurer appellant has already deposited the entire awarded amount of Rs. 1,77,354 with the Commissioner, Workmen's Compensation, Golaghat, compensation now determined by this Court, shall be paid to the workman and the balance amount shall be refunded to the insurer. Since the record reveals that entire compensation amount of Rs. 1,77,354 deposited by the insurer appellant has already been withdrawn by the workman respondent on 10.1.2001, it is hereby directed that the excess amount of compensation, received by workman-respondent, shall be refunded by him to the insurer appellant within a period of three months from the date of the receipt of the L.C.R. by the Commissioner, Workmen's Compensation, Golaghat. The amount so refundable by workman-respondent shall be deposited by him with the Commissioner, Workmen's Compensation, Golaghat, within the period specified hereinbefore, so as to enable the insurer appellant to receive the same. Sendd back the L.C. Rs.