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2008 DIGILAW 2716 (MAD)

Divisional Manager New India Assurance Co. Ltd. v. Sundaram & Another

2008-07-30

P.R.SHIVAKUMAR

body2008
Judgment For several hearings there was no representation on behalf of the respondents. Today also there is no representation on behalf of the respondents. Hence this court is constrained to hear the arguments advanced on behalf of the appellant and pronounce judgment. 2. The order of the Deputy Commissioner of Labour, Salem in his capacity as Commissioner for Workmens Compensation, dated 11.03.2002, made in W.C.No.23/2000, is the subject matter of challenge in this Civil Miscellaneous Appeal preferred under Section 30 of the Workmens Compensation Act, 1923. The first respondent herein was the applicant before the Commissioner for Workmens Compensation in the above said W.C.No.23/2000. 3. contending that he sustained injuries on 11.05.1999 in an accident arising in the course of and out of his employment under the second respondent herein and that the same resulted in amputation of two fingers on his left hand, the first respondent/applicant had prayed for an award directing the second respondent herein, as the employer and the appellant herein as the insurer to pay a sum of Rs.2,50,000/-together with an interest at the rate of 12% per annum from the date of accident till payment of compensation. 4. The relationship of employer and employee between the second respondent and the first respondent herein has not been disputed. The further fact that the accident to the first respondent took place in the course of and out of his employment under the second respondent is also not disputed. The further fact that an insurance policy to indemnify the liability of the employer towards his employees under the provisions of the Workmens Compensation Act was in force is also not disputed. It is also not in dispute that the first respondent/applicant was aged 19 years as on the date of accident. 5. In the light of the above said facts and circumstances of the case, the Commissioner for Workmens Compensation held that the first respondent/applicant suffered 55% of permanent disability because of the amputation of two fingers in the left hand. As there was no concrete evidence regarding the salary paid to the second respondent/applicant, the learned Commissioner for Workmens Compensation took the minimum wages applicable to cleaners as per G.O.Ms.No.625/Labour and Employment Department dated 25.09.1995 and assessed the monthly salary of the first respondent/applicant at Rs.2,153/-. As there was no concrete evidence regarding the salary paid to the second respondent/applicant, the learned Commissioner for Workmens Compensation took the minimum wages applicable to cleaners as per G.O.Ms.No.625/Labour and Employment Department dated 25.09.1995 and assessed the monthly salary of the first respondent/applicant at Rs.2,153/-. However, as per Explanation II to Section 4(1) of the Workmens Compensation Act, 1923 as it then stood, the maximum amount that could be taken as the monthly wages of a workman for the purpose of computing compensation under the Workmens Compensation Act, 1923 was only Rs.2,000/-. Holding that the petitioner was aged about 19 years, the Commissioner selected the relevant factor 225.22 on the ground that the first respondent/applicant suffered permanent disability at 55% and the loss of income was equivalent to the said percentage, the Commissioner made the calculations according to the formula and awarded a sum of Rs.1,48,645/-as compensation to the first respondent/applicant. The assessment of disability and the consequential calculation of compensation is challenged in this Civil Miscellaneous Appeal. 6. The short point that arise for consideration is "whether the Commissioner for Workmens Compensation is right in relying on the certificate issued by the Medical practitioner regarding the percentage of disability when the injury is a scheduled injury?" 7. This court heard the submissions made by Mr.C.Ramesh Babu, learned counsel for the appellant and perused the materials available on record. 8. Admittedly, the injury sustained by the petitioner is the one found in part 2 of first schedule to the Workmens Compensation Act, at Sl.No.9 dealing with the amputation of two fingers of one hand. As per the said entry, such an injury shall be assessed to have caused 20% of permanent disability. It is trite law that if the employment injury falls in any one of the entries in the schedule, then the percentage of disability noted against such injury alone should be adopted for computation of compensation under the Workmens Compensation Act and that in such a case, relying on the medical practitioners assessment regarding loss of earning capacity is not permissible. In view of the same, this court does have no hesitation in coming to the conclusion that the Commissioner for Workmens Compensation has committed an error in accepting the assessment of the disability made by medical practitioner in respect of a scheduled injury. In view of the same, this court does have no hesitation in coming to the conclusion that the Commissioner for Workmens Compensation has committed an error in accepting the assessment of the disability made by medical practitioner in respect of a scheduled injury. Therefore, the very conclusion made by the Commissioner for Workmens compensation is liable to be held improper. 9. The compensation to which the first respondent/applicant is entitled can be properly assessed by adopting the percentage of the disability as per Sl.No.9 of Part 2 of first schedule at 20%. Applying the formula the compensation is calculated as follows: 2000 x 60/100 x 225.22 x 20% = 54052.80 Rounded off to Rs.54,053/- Therefore, the order of the Commissioner has got to be modified by reducing the amount of compensation from Rs.1,48,645/- to Rs.54,053/-. 10. The Commissioner for Workmens Compensation in paragraph 15 of the order has directed the respondents to pay compensation within one month from the date of the order of the Commissioner with a rider that in case of default, the compensation amount shall carry an interest at the rate of 12% per annum from the date of accident. This court has come across several orders passed by the Commissioners of Workmens Compensation in ignorance of the ambit of Section 4-A (3) of the Workmens Compensation Act, 1923. The said provision says that in case the compensation due under the Act is not paid within one month from the date it fell due, the Commissioner shall direct the employer to pay simple interest at the rate of 12% per annum or at such higher rate not exceeding the lending rate of any scheduled bank as may be specified by Central Government by notification in the official Gazette, on the amount due. This provision has been wrongly interpreted by the Commissioner to make payment of interest conditional on failure to deposit the amount within a month from the date of award passed by the Commissioner. The same is not the intention of the legislature in enacting the said provision. The compensation becomes due soon after the accident take place resulting in the disability. The liability of the employer to pay compensation is not depending upon an order of Commissioner quantifying the amount. Liability arises earlier and the order of the Commissioner is only declaratory in nature. The compensation becomes due soon after the accident take place resulting in the disability. The liability of the employer to pay compensation is not depending upon an order of Commissioner quantifying the amount. Liability arises earlier and the order of the Commissioner is only declaratory in nature. Therefore disallowing interest if the amount quantified by the Commissioner is paid within one month from the date of award of the Commissioner is quite erroneous and against spirit of Section 4-A (3) of the Workmens Compensation Act. 11. For the above said reasons, the employer shall be liable to pay interest on the compensation amount from the date of accident. However, it is admitted that the employer has not deposited the amount within a month from the date of accident. Therefore, that part of the award dealing with the payment of interest has got to be modified. Therefore, the employer and in turn the appellant/insurance company are held liable to pay interest on the above said amount of compensation at the rate of 12% from the date of accident. The award of the Commissioner shall also be modified to that effect. 12. In the result, this appeal is allowed in part and the award of the Tribunal is modified by reducing the amount of compensation from 1,48,645/- to Rs.54,053/-. The said amount shall carry an interest at the rate of 12% per annum from the date of accident till the date of deposit. After deducting the above said amount of compensation and the interest as indicated, the appellant insurance company can withdraw the balance amount, if any, along with proportionate accrued interest. There shall be no order as to costs.