THE HON'BLE SRI JUSTICE P.S.NARAYANA C.M.A.No.94 of 2005 8th June, 2010 Between :- New India Assurance Company Limited, Rep. by its Deputy Manager, TP Cell, Alkharim Trade Centre, Ranigunj, Secunderabad .. Appellant and A.Jampaiah and another .. Respondents THE HON'BLE SRI JUSTICE P.S.NARAYANA C.M.A.No.94 of 2005 JUDGMENT:- This C.M.A. is filed under Section 30 of the Workmen’s Compensation Act, 1953 (hereinafter, in short, referred to as ‘the Act’ for the purpose of convenience) by the New India Assurance Company Limited, rep. by its Deputy Manager, TP Cell, Alkarim Trade Centre, Ranigunj, Secunderabad, being aggrieved of the quantum of compensation awarded by the Commissioner for Workmen’s Compensation & Assistant Commissioner of Labour –III, Hyderabad (hereinafter referred to as ‘the learned Commissioner’) in W.C.No.44/2004. 2. This Court while admitting the C.M.A. on 28-1-2005 made the following Order:- “There shall be interim stay as prayed for. The only ground urged by the petitioner – appellant is that there is a difference of 10% in the assessment of disability suffered by the 1st respondent – applicant as made by the Doctor and the Authority under the Workmen’s Compensation Act. Hence, in any event, the applicant would be entitled, prima facie, to a sum not less than Rs.2,00,000/-. In the circumstances, the 1st respondent – applicant is permitted to withdraw a sum of Rs.2,00,000/- (Rs.Two lakhs only) from out of the amount deposited by the petitioner – appellant before the Commissioner, without furnishing any security.” 3. The substantial questions of law raised by the appellant – 2nd opposite party are as hereunder:- 1) Whether the order of the Commissioner is sustainable in view of the well established principle that the per centage of disability should be taken as loss of earning capacity, in case of non-schedule injuries? 2) Whether the Commissioner is correct in awarding compensation, when the injured nor the employer failed to prove the relationship of employer-employee, either orally or by way of documents? Ground No.3 of the Memorandum of Grounds of Appeal reads as hereunder:- “The learned Commissioner erred in taking the loss of earning capacity as 70%, when the evidence of the Doctor clearly shows that the disability is 55% only. The Commissioner ought to have taken the percentage of disability as loss of earning capacity.” 4. Sri Naresh Bairapaneni, the learned Counsel representing the appellant had pointed out to the said substantial questions of law specified supra and also the other grounds raised as Grounds 4, 5,6 and 7 as well. The learned Counsel also had taken this Court through the contents of the order under challenge and would maintain that in the light of the evidence available on record, when the Doctor himself had estimated the physical disability at 55% in the light of Ex.A.5, though loss of earning capacity had been specified as 100%, recording a finding and assessing the same as 70% cannot be sustained. The learned Counsel also pointed out to the relevant provisions of the Act and also Schedule – I (Part II), Items 19 and 20 as well and further would maintain that in the light of the view expressed by the Division Bench in NEW INDIA ASSURANCE COMPANY LTD. V. ABDUL KHADER JILANI @ JILANI[1], the order to be modified specifying the per centage as 55% instead of 70%. The learned Counsel in all fairness would submit that as far as the proof relating to the relationship of employer and employee, in the light of the findings recorded by the learned Commissioner, the learned Counsel is not seriously pressing the same. The learned Counsel also relied on certain other decisions. 5. Per contra, Nivedita representing Pottigari Sridhar Reddy, the learned Counsel representing 1st respondent – applicant had taken this Court through the reasons which had been recorded by the learned Commissioner and would maintain that in the light of the same, this is not a fit matter to be interfered with. The learned Counsel also would further submit that even otherwise the grounds which had been raised cannot be said to be the substantial questions of law and hence on this ground also the C.M.A. is liable to be dismissed. Further the learned Counsel placed strong reliance on NEW INDIA ASSURANCE COMPANY LIMITED v. A.NARSIMHULU AND ANOTHER[2]. 6. Heard the Counsel and perused the order under challenge. 7. The substantial questions of law on the strength of which submissions had been made already had been specified supra. In the light of the submissions made, the principal question to be decided in the C.M.A. is as hereunder:- “Whether the findings recorded by the learned Commissioner in W.C.No.44/2004 to be confirmed or to be disturbed or to be modified in the facts and circumstances of the case and if so to what extent?” 8. The parties hereinafter would be referred to as shown in W.C.No.44/2004 for the purpose of convenience. It is needless to say that Opposite Party No.2 is the present appellant in the C.M.A. 9. In the application it is stated that the applicant is a Workman within the meaning of the Act, employer as 2nd driver on the Eicher Van bearing No.AP-15-V-6555 belonging to Opposite Party No.1 and met with an accident on 4-12-2003, which arose out of and in the course of his employment, resulting in his total disability. The applicant stated that on 4-12-2003, he was on duty as 2nd driver on the Eicher Van and was proceeding towards Karimnger and at about 2.00 a.m., when he reached near Darga Engineering College, Amvarthi Road, the driver of the van drove the vehicle in high speed and dashed against another lorry which was coming in the opposite direction and an accident occurred and in the accident, the applicant sustained left shoulder dislocation, fracture of avulsion of grater turberosity besides other injuries and he was immediately shifted to Sri Vasant Rao Naik Government Medical College and Hospital, Yavatmal and on the next day at his request he was shifted to Hyderabad and admitted as an inpatient and underwent treatment. 10. The applicant said that he has spent Rs.30,000/- towards medical expenses and extra-nourishment and he was totally bedridden and unable to move from the bed and he became permanently totally disabled person. He said that the Police at Yavatmal, registered a case in crime No.628/2003 under Section 279 and 337 of the Indian Penal Code and the same is still pending. 11. It is further stated that the applicant was paid @ Rs.4,500/- per month as wages by the 1st opposite party and was aged about 39 years at the time of the accident. The vehicle was insured with the 2nd opposite party vide Insurance Policy No.612500/31/02/06818, which is valid between 31.3.2003 to 30.3.2004, therefore, claimed a lump sum compensation of Rs.3,00,000/- against both the Opposite Parties and requested for an award to be issued in his favour after deciding the matters incidental to the application. 12. The 1st Opposite Party had not chosen to enter appearance and hence the 1st Opposite Party was set ex parte. 13. The appellant herein – the 2nd Opposite Party resisted the claim denying the involvement of the applicant in the accident on 4-12-2003; denying the very occurrence itself; denying the narration of the accident; denying registering the case by the Police; and denying the applicant sustaining the injury during the course of employment. The 2nd Opposite Party also denied the Wages paid to the applicant, and stated that the amount of compensation claimed is excessive and exorbitant and not in accordance with the Act. 14. The applicant examined himself as A.W.1 and narrated the details and particulars. Apart from A.W.1, A.W.2 – the doctor was examined who had issued Ex.A.5. It is needless to say that since the 1st Opposite Party had not chosen to contest, the 2nd Opposite Party alone had cross-examined and on appreciation of the oral and documentary evidence available on record, the learned Commissioner formulated the following points for consideration:- 1) Whether the applicant Sri A.Jampaiah met with an accident on 4-12-2003, which arose out of in the course of his employment as 2nd driver on Eicher van bearing No.AP- 15-V-6665 in the employment of the 1st Opposite Party and sustained injuries? 2) If yes, what is the per centage of the physical disability and the subsequent loss of earning capacity suffered by him? 3) Who are liable to pay compensation to the applicant? and 4) What is the amount of compensation entitled by the applicant? The learned Commissioner after recording reasons at paras 16, 17, 18, 19, 20, 21 and 22 and came to the conclusion that the 1st and 2nd Opposite Parties are jointly and severally liable to pay compensation to the applicant for the loss of earning capacity suffered by him in an accident that arose out of an in the course of his employment on 4-12- 2003 as 2nd driver on the Eicher van bearing No.AP-15-V-6665 in the employment of the 1st Opposite Party. Compensation amounting to Rs.2,90,443/- together with Stamp Fee of Rs.582/- and Advocate fee of Rs.500/-, total amounting to Rs.2,91,525/- shall be paid by both the Opposite Parties to the applicant. Both the Opposite Parties are directed to deposit the said total amount by means of a demand draft drawn on any nationalized Bank and drawn in favour of the Commissioner for Workmen’s Compensation & Assistant Commissioner of Labour II, Hyderabad, within 30 days from the date of receipt of the order, failing which the applicant shall be entitled to interest @ 9% per annum on the amount of compensation from the date of filing the claim application i.e., on 23-4-2004. 15. The learned Commissioner aforesaid calculated the compensation at para 21 as hereunder:- Rs.3700 X 60 X 70 X 186.90 = Rs.2,90,443/- 100 100 16. The evidence of A.W.1 and A.W.2 had been appreciated in elaboration by the learned Commissioner. The oral evidence available on record is that of A.W.1 – the applicant and A.W.2 – Dr.G.Subhash Rao. The documents relied on are as hereunder:- Ex.A.1 :- Certified copy of F.I.R. Ex.A.2 :- Certified copy of the Final Report Ex.A.3 :- Certified copy of Medico Legal Certificate of Sri Vasant Rao Naik, Government Medical College and Hospital, Yavatmal. Ex.A.4 :- Original discharge card of People’s Hospital, Hyderabad Ex.A.5 :- Disability certificate Ex.A.6 :- X-ray films (3) Ex.A.7 :- Original Driving Licence Ex.A.8 :- Xerox copy of R.C. of crime vehicle Ex.A.9 :- Xerox copy of Insurance Policy. 17. On behalf of the appellant herein – the 2nd Opposite Party Ex.D.1 – The Insurance Policy document issued in favour of the 1st Opposite Party had been relied on. 18. As already aforesaid, the only question which had been argued by the Counsel on record - Sri Naresh Bairapaneni, the learned Counsel representing the appellant and Nivedita representing Pottigari Sridhar Reddy, the learned Counsel representing 1st respondent – applicant, is in relation to the assessment of the loss of earning capacity to be taken as 70% or 55% in the light of the provisions of the Act and also in the light of the evidence of A.W.2 and also Ex.A.5 and further in the light of the findings recorded by the learned Commissioner. 19. The learned Commissioner at para 17 observed as hereunder:- “…… The doctor estimated the physical disability at 55% through Ex.A.5. The loss of earning capacity has to be assessed vis-à-vis the nature of employment the applicant was performing at the time of the accident. The applicant is a driver of goods vehicle, whose work requires swift movement of both the upper and lower limbs. Keeping in view the nature of employment and the nature of duties of the applicant, I am inclined to assess the loss of earning capacity at 70%.” 20. Schedule-I (Part I) deals with List of Injuries Deemed to Result in Permanent Total Disabilement and (Part II) deals with List of Injuries Deemed to Result in Permanent Partial Disablement. The relevant serial numbers which had been pointed out are Serial Nos.19 and 20 which specify as hereunder:- Serial No. Description of injury Percentage of loss of earning capacity 19 Amputation below middle thigh to 8.89 cms. Below knee 60 20 Amputation below knee with stump exceeding 8.89 cms., but not exceeding 12.70 cms. 50 21. The learned Counsel placed strong reliance on NEW INDIA ASSURANCE COMPANY LIMITED v. A.NARSIMHULU AND ANOTHER (referred 2nd supra) wherein the learned Judge at paras 3 and 4 observed as hereunder:- “Section 2 (1) (l) of the Act defines 'total disablement' - means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement. Therefore even if a workman suffers physical disablement to a lesser extent, say 25%, 40%, 50% etc. , if such physical disablement itself totally incapacitates the workman from doing any work which he was capable of performing before accident, it can be treated total disablement. In this case Ex. A-4 - disability certificate shows that physical disability suffered by workman is 45% but Doctor -A. W. 2 stated that right leg of the workman was shortened which means that workman can never be driver and therefore, he suffered total disablement. In such situation amount assessed by Commissioner remained unassailable. Insofar amount of interest is concerned, impugned award needs modification as in National Insurance Co. Ltd. v. Mubasir Ahmed, AIR 2007sc 1208 = 2007 (1)An. W. R. 615 (SC ). Supreme Court held as under: Interest is payable under Section 4-A (3)if there is default in paying the compensation due under this Act within one month from the date it fell due. The question of liability under Section 4- A was dealt with by this Court in Maghar Singh v. Jashwant Singh (1998 (9) SCC 134 ). By Amending Act, 14 of 1995, Section 4-A of the Act was amended, inter alia, fixing the minimum rate of interest to be simple interest @ 12%. In the instant case, the accident took place after the amendment and, therefore, the rate of 12% as fixed by the High Court cannot be faulted. But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it fell due. Obviously it cannot be the date of accident. Since no indication is there as when it becomes due, it has to be taken to be the date of adjudication of the claim. This appears to be so because Section 4-A (1) prescribes that compensation under Section 4 shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim made. The adjudication under Section 4 in some cases involves the assessment of loss of earning capacity by a qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The position becomes clearer on a reading of sub-section (2) of section 4-A. It provides that provisional payment to the extent of admitted liability has to be made when employer does not accept the liability for compensation to the extent claimed. The crucial expression is "falls due". Significantly, legislature has not used the expression "from due". Significantly, legislature has not used the expression "from the date of accident". Unless there is an adjudication, the question of an amount falling due does not arise. Above decision was followed in Kamla chaturvedi v. National Insurance Co. Ltd. , (2009) 1 SCC 487 = 2009 (1) SCJ 342. Keeping the ratio laid down by Supreme court, this Court holds that workman shall be entitled to claim simple interest at 8% p. a. , if the amount was not paid by insurer within one month of award passed by Commissioner.” 22. The learned standing Counsel representing the appellant – 2nd Opposite Party placed strong reliance on NEW INDIA ASSURANCE COMPANY LTD. V. ABDUL KHADER JILANI @ JILANI (referred 1 supra) the decision of the Division Bench of this Court, wherein the Division Bench specifically observed that the view expressed in National Insurance Company Limited. V. Rajesh Heimandge (2001 (3) ALT 251) is the correct law. The learned Division Bench also observed at paras 12 and 25 as hereunder:- “Section 4 specifies the amount of compensation payable in case of death/ permanent total disablement or permanent partial disablement resulting from the injury. In case of permanent partial disablement in the context of an injury specified in Part II of schedule I, the amount of compensation payable to the workman is at par with the one which would have been payable in the case of permanent total disablement. If the injury is not specified, then the proportionate compensation is payable keeping in view the loss of earning capacity to be assessed by the qualified medical practitioner. There is nothing in the plain language of section 4 (1 ) (c) (ii) from which it can be inferred that in the case of an injury not specified in schedule I, the compensation is to be paid keeping in view the entries contained in parts I and II of Schedule I. The very fact that the Legislature has designedly omitted reference to any part of Schedule I in section 4 (1) (c) (ii) indicates that the entries contained in those parts do not control the exercise of discretion of the competent authority in the matter of award of compensation, which, as mentioned above, is required to be determined keeping in view the loss of earning capacity as assessed by the qualified medical practitioner. If the legislature wanted that in the case of an unspecified injury, the amount of compensation should be awarded with reference to the entries contained in Parts I and II of Schedule I, then the provision of section 4 (1) (c) (ii) would have been differently worded. Though none of the above judgments directly deal with the question about the relevance of entries in Parts I and II of schedule I in the matter of assessment of loss of earning capacity for non-schedule injuries, the ratio which can be deduced from the law laid down in those cases is that in the case of unspecified non-scheduled injuries, the compensation is to be paid keeping in view the loss of earning capacity as assessed by the qualified medical practitioner and the court's discretion to award compensation is not controlled by the entries contained in parts I and II of Schedule I. The quantum of compensation to be awarded to the workman will always depend on the assessment made by the qualified medical practitioner on the issue of the loss of earning capacity of the workman. If the judgment of the learned Single judge in National Insurance Company Ltd. v. Rajesh Heimandge (2001 (3) ALT 251) is considered in the light of the above discussion, we do not have any hesitation to hold that the same lays down a correct law.” The learned Division Bench, in fact, had referred to the under-noted decisions:- 1. Pratap Narain Singh v. Shrinivas Sabata (1976 ACJ 141 (SC). 2. National Insurance Company Limited v. Rajesh Heimandge(2001 (3) ALT 251. 3. Pasupuleti Ramarao v. Pothinaboina Durgarao (2000 (2) ALT 603) 4. Charan singh v. G. Vittal Reddy (2003 (1) An.W.R. 741 (DB) 5. New India Assurance Company Limited v. Sammayya (1995 (3) ALT 470) 6. Gona Sivasankar v. K.Varaprasad (2005 (3) ALT 40) 7. National Insurance Company Limited v. D.Sivasankar (2006 (4) ALT 526) 8. Punambhai Khodabhai Parmar v. G.Kenel Construction (1984 ACJ 739 (Gujarat) 9. National Insurance Company Limited v. Susanta Das (2001 ACJ 1047 (Calcutta). 10. S.S.Patil v. Erappa Basappa Bhavihala (2004 ACJ 333 (F.B.) (Kar.) 11. National Insurance Company Limited v. Mohd.Saleem Khan (1991 (3) ALT 504) 12. Rayapati Venkateswar Rao v. Mantai Sambasiva Rao (2001 (1) ALT 169) 13. Janatha Modern Rice mills v. G.Satyanarayana (1995 (1) ALT 197) 14. United India Insurance Company Limited v. Sethu Madhavan (1993 (4) ACJ 1035 (F.B.) Kerala) 15. S.S. Patil V. Erappa Basappa Bhavihal (2004) 104 FJR (Kar) (F.B.) 16. Vanajakshan (Decd) v. M.D.Joseph(2003-II-LLJ 1103 (F.B.) (KER) 17. Shankaralal v. G.M., Cental Railway (1999-III-LLJ (Supp) 273 (M.P.) 23. I n NATIONAL INSURANCE COMPANY LIMITED, HYDERABAD V. RAJESH HOLMANDGE[3] the learned Judge of this Court at para 24 observed as hereunder:- “Insofar as the submission that it is not necessary to examine the doctor to determine the percentage of disability or loss of earning capacity, I have already held the distinction between the scheduled injuries and non- scheduled injuries, and the method of computation of compensation for damages in respect of the two in the case of non-specified injury, the percentage of compensation payable and in the case of permanent partial disablement, the compensation proportionate to the loss of earning payable. Further, section 4 (1) (c) (ii) and the Explanation to the said provision clearly indicates that the evidence of qualified medical practitioner shall be relevant and the Commissioner shall have due regard to the percentage of compensation payable as assessed by a qualified medical practitioner. Therefore, the non-examination of the doctor who had issued medical certificate does not satisfy the requirement of law, because the Tribunal may not be in a position to determine whether the disablement would lead to total loss of earning capacity or whether the workman suffered permanent partial disability, enabling him to discharge normal duties with the employer or any other employer. As already observed above, a workman would be entitled to compensation irrespective of his ability to work if he suffers any scheduled injuries. However, in the case of disablement sustained by him, which falls within the definition of section 2 (1) (g), for the purpose of proper adjudication and determination, the examination of the doctor to assess the loss of earning capacity in case of non- scheduled injury is essential and an unexceptionable requirement of law. Any order of the Commissioner without applying the statutory requirement of section 4 (1) (c) (ii) and Explanation II would be contrary to the statute, and cannot be sustained. Therefore, I hold that in case of non- scheduled injury, to assess the loss of earning capacity, it is mandatory to examine qualified medical practitioner.” 24. In GONA SIVASANKAR AND OTHERS v. K.VARAPRASAD AND OTHERS[4] the learned Judge observed at paras 5 and 6 as hereunder:- “The Act provides for payment of compensation in the event of, or injuries to the workman while on duty. Schedule i of the act enumerates different kinds of injuries under two categories, viz., those resulting in permanent total disablement, and permanent partial disablement. The disability caused to a limb or organ of an employee, does not render the employer to pay the maximum compensation. The liability has to be commensurate with the extent of loss of earning capacity, arising out of such injuries. In respect of injuries enlisted in schedule-I, the corresponding percentage on loss of earning capacity is indicated. Where an employee suffers an injury, other than the one specified in schedule-i, the commissioner is required to follow the procedure prescribed under Section 4 (1) (c) (ii). This clause directs that the percentage of disability as well as the percentage of loss of earning capacity shall be determined and certified by a medical practitioner. In New India Assurance Co. , Ltd. V. Sammayya (1995 (3) ALT 470), it was held that if there does not exist any certification by the medical practitioner, as to the loss of earning capacity, it shall be competent for the commissioner to determine the same. This exercise, however has to be undertaken, duly taking into account the percentage of disability, and the nature of functions to be discharged by the workman. There cannot be any arbitrary fixation of loss of earning capacity unrelated to the extent of injury and nature of functions. In the cases on hand, the medical practitioners have certified the percentages of disability to the respective appellants. However, they did not certify the extent of loss of earning capacity. Therefore, the commissioner has taken upon himself the