Functional Disability Must Be Proven; Loss Of Four Fingers Doesn't Necessarily Result In Total Loss Of Earning Capacity: Delhi High Court

The Delhi High Court has held that amputation of a person's four fingers does not by itself establish a 100% loss of earning capacity under the Employees' Compensation Act, adding that functional disability must be assessed on the basis of the employee's vocation and evidence on record. [2026 LiveLaw (Del) 671]Justice Manoj Kumar Ohri thus reduced the claimant's loss of earning capacity from 100% to 50%, holding that the Employees' Compensation Commissioner had applied an incorrect legal standard while assessing compensation.The case arose from an appeal filed by United India Insurance Company challenging an award passed by the Employees' Compensation Commissioner, South District, which had treated the claimant, a bus conductor, as having suffered 100% loss of earning capacity after he lost four fingers of his left hand in an accident during the course of his employment.According to the claimant, the accident occurred in February 2018 when the bus he was working on developed a mechanical defect. While attempting to inspect the engine, his left hand got caught in the fan belt, causing grievous injuries that ultimately led to the amputation of four fingers.Before the High Court, the insurer contended that the Commissioner had wrongly assessed the claimant's loss of earning capacity at 100%, despite the injury being specifically covered under the schedule to the Employees' Compensation Act.Rejecting the insurer's challenge to the findings on the employer-employee relationship and the occurrence of the accident, the Court noted that the only issue requiring consideration was whether the Commissioner was justified in assessing the claimant's loss of earning capacity at 100%.The Court observed that loss of four fingers is specifically covered under Entry 7 of Part II of Schedule I of the Act, which prescribes a 50% loss of earning capacity. While the statutory percentage is not always conclusive and a higher functional disability can be recognised in appropriate cases, any departure from the schedule must be supported by cogent evidence, it said.The High Court noted that the Commissioner had principally relied on the Supreme Court's decision in Pratap Narain Singh Deo v. Srinivas Sabata, where a carpenter was held to have suffered total loss of earning capacity because his work required complete use of his hands. However, Justice Ohri clarified that the said decision turned on its own fact and it cannot be construed to mean that every amputation of fingers would, irrespective of the nature of employment and the evidence on record, automatically result in 100% loss of earning capacity.“The assessment necessarily depends upon the nature of employment, the functional consequences of the injury and the evidence available on record...while the injuries undoubtedly caused permanent Partial disability, however, the material on record does not justify the conclusion that he suffered 100% loss of earning capacity,” the Court held.The Court further observed that, apart from the claimant's own assertion, there was no material to show that he had become completely incapable of undertaking all gainful employment.As such, the Court modified the award and directed the Commissioner to recompute the compensation by assessing the claimant's loss of earning capacity at 50%.Appearance: Mr. Ravi Sabharwal, Advocate for Appellant; Mr. Kishore Kumar & Mr. Ramesh Sharma, Advocates for respondent No.1 Mr. S.N. Parashar and Mr. Ritik Singh, Advocates for respondent No.2Case Title: United India Insurance Company Ltd. v. Digambar & Anr.Citation: 2026 LiveLaw (Del) 671Case No.: FAO 69/2021.Click here to read order

Functional Disability Must Be Proven; Loss Of Four Fingers Doesn't Necessarily Result In Total Loss Of Earning Capacity: Delhi High Court

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Functional Disability Must Be Proven; Loss Of Four Fingers Doesn't Necessarily Result In Total Loss Of Earning Capacity: Delhi High Court

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