When Functional Disability Assessed At 50%, Loss Of Earning Capacity Cannot Be Assumed As 100%: Gauhati HC Directs Re-Assessment Of Accident Compensation

The Gauhati High Court has set aside an order of the Commissioner, Workmen's Compensation, Golaghat which directed the Insurance Company to pay Rs. 4,99,152/- a driver who suffered injuries as a result of an accident, on the ground that the Commissioner has erred in assessing the amount of compensation by erroneously accepting the loss of earning capacity of the claimant to be 100% in disregard to the principles contained in section 4(1)(c) of the Employee's Compensation Act, 1923.

The single-judge bench of Justice Kalyan Rai Surana observed:

“………as the Commissioner, Workmen's Compensation had assessed the loss of earning capacity of the respondent at 100%, although the injuries suffered by the respondent was not covered by Schedule-I, Part-I or Schedule-I, Part-II of the EC Act, which was done without taking into consideration the nature of work which the respondent could have performed at the time of the accident, the Court is inclined to hold that the Commissioner, Workmen's Compensation had not computed compensation in accordance with the scheme of the EC Act.”

The case of the respondent-claimant was that on July 3, 2008, while on duty as a driver, his truck had head-on collusion with another truck, which was being driven in a rash and negligent manner and as a result of the accident, he had sustained comminuted compound fracture of right leg (both bone), fracture injuries on both legs and multiple body injuries. He was admitted into hospital and given treatment.

The respondent claimed that he was 26 years of age and getting monthly salary of Rs.4,000/- per month, excluding his daily allowance. It was also claimed that he was totally disabled and rendered unfit for doing job as a driver and accordingly, claimed compensation for a sum of Rs.5,16,672/- under the Workmen's Compensation Act, 1923.

The Commissioner, Workmen's Compensation vide impugned order dated July 9, 2010 and on the basis of opinion of Medical Board which assessed physical disability of the respondent as 50% and loss of earning was 100%, awarded a sum of Rs. 4,99,152/- to the respondent with an interest at the rate of 9% per annum on the quantum of compensation from the date of filing of the claim petition.

The Counsel appearing for the appellant Insurance Company submitted that there was no evidence to prove that the respondent had become totally incapacitated to perform all work he was capable of performing before the accident. It was further submitted that the respondent had not suffered permanent total disablement and in this regard, reliance was placed upon the provision of Section 2(i) of the Employee's Compensation Act, 1923 (EC Act).

It was contended that the Commissioner, Workmen's Compensation had failed to appreciate that as per proviso to Section 2(g) of the EC Act, it is provided that every injury specified in Part-II of Schedule-I shall be deemed to result in permanent partial disablement. Therefore, it was argued that since the nature of injury suffered by the respondent is a non-specified injury in part-II of Schedule-I of the EC Act, it cannot be deemed that the respondent had suffered permanent total disablement.

The issue before the Court was:

“Whether the learned Commissioner erred in assessing the amount of compensation by erroneously accepting the loss of earning capacity of the respondent- claimant to be 100% in disregard to the principles contained in section 4(1)(c) of the Workmen's Compensation Act (now Employees' Compensation Act, 1923)?”

The Court observed that a person suffered double amputation through leg or thigh, or amputation through leg or thigh on one side and loss of other foot, the percentage of loss of earning capacity is prescribed at the rate of 100% under the Part-I of Schedule-I of the EC Act.

“Therefore, when functional disability of the respondent was assessed as 50% because of fracture suffered in his leg, loss of earning capacity cannot be assumed at 100% in every employment which he was capable of undertaking at the time,”the Court said.

The Court further noted that the nature of injuries that the respondent had suffered, i.e. fracture in the leg, appears to be an injury which is not covered either by Schedule-I, Part-I or by Schedule-I, Part-II of the EC Act. Therefore, the Court opined that the respondent was required to prove the loss of earning capacity in reference to nature of work which he was capable of doing at the time of the accident, as provided under Section 2(l) of the EC Act.

The Court relied upon the judgment of the Gauhati High Court in National Insurance Co. Ltd. v. Bimal Nath 2009 (1) GLT 370 and reiterated that before assessing compensation, the Commissioner is required to find out if the earning capacity of the workman has been reduced in every employment that he was capable of doing at the time of the accident and/or if the earning capacity of the workman has been reduced in every work that he was capable of doing at the time of the accident, depending on the nature of disability referred to in section 2(g) and 2(l) of the EC Act.

Thus, the Court set aside the impugned order dated July 9, 2010 passed by the Commissioner, Workmen's Compensation, Golaghat and remanded back the matter to the Commissioner, Employees' Compensation, Golaghat for a fresh decision by determining compensation in accordance with law and by taking into account the nature of the injury.

Citation: 2024 LiveLaw (Gau) 5

Case Title: Bajaj Allianz General Insurance Co. Ltd. v. Prasad Kalita

Case No.: MFA/29/2011

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