FA/3623/2007 1/15 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 3623 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE H.B.ANTANI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= NEW INDIA ASSURANCE CO. LTD. Versus SAMJI GOVIND MATA & ANOTHER ========================================================= Appearance : MR KV GADHIA for Appellant. MR CH VORA for Respondents. ========================================================= CORAM : HONOURABLE MR.JUSTICE H.B.ANTANI Date : 24/04/2008 ORAL JUDGMENT Heard learned advocate Mr. Kishor Gadhia for the appellant and Mr. C.H. Vora for the respondents. FA/3623/2007 2/15 JUDGMENT This appeal, filed under section 30 of the Workmen's Compensation Act, 1923, is directed against the judgment and order dated 16.03.07 passed by Workmen's Commissioner, Kutch-Bhuj in Workman Compensation [NF] Application No. 4 of 2005 by which the learned Commissioner has awarded compensation of Rs.2,41,992/- with interest at the rate of 12% from the date of accident till realization, penalty of Rs.1,20,996/-, Rs.400/- towards court fee stamp and Rs.1000/- towards costs. Being aggrieved by the aforesaid judgment and order, The New India Assurance Company Limited has filed the present appeal. Mr. Gadhia, learned advocate for the appellant submitted that the learned Commissioner has erred in directing the Insurance Company to pay 50% penalty since as per the settled legal position and as per the judgment rendered in the case of Ved Prakash Garg, the Insurance Company cannot be fastened with the liability to pay penalty. He further submitted that the learned Commissioner erred in awarding interest from the date of the accident in view of the judgment rendered by the Apex Court in the case of National Insurance Company v/s. Mubasir Ahmed & Another and interest can be awarded only from the date of completion of the adjudication, which in the present case is 16.03.2007 and therefore the learned Commissioner erred in awarding interest from the date of the accident i.e. 17.1.1997. Learned advocate submitted that the learned Commissioner erred gravely in calculating 100% disability though as per the certificate FA/3623/2007 3/15 JUDGMENT of Dr. Hadia, the claimant has sustained only 50% disability. He submitted that the claimant had suffered injuries which were not specified in Schedule-I of the Act and as per section 4 (1) (c) (ii) Explanation II, the qualified Medical Practitioner has to assess loss of Earning Capacity having due regard to the percentage of loss of earning capacity in relation to the different injuries in Schedule-I. He submitted that Dr. Hadia has not assessed loss of earning capacity but inspite of this, learned Commissioner held that the workman suffered 100% disability. Learned advocate submitted that in view of the aforesaid facts and circumstances, the learned Commissioner ought to have awarded compensation considering 50% disability and not 100% disability. He further submitted that the accident in question took place in the year 1997 but after 4 years, the claimant has obtained Smart Card driving licence, Exh. 25, and on perusal of the Smart Card driving licence, it becomes clear that the workman was able to drive vehicles, otherwise he would not have obtained the smart card licence after a period of 4 years from the date of the accident. He submitted that in view of the aforesaid evidence, the learned Commissioner ought to have rejected the claim of the claimant as he had not sustained permanent disability. Learned advocate submitted that the learned Commissioner has wrongly interpreted section 4-A (3) of the Act in holding that the Insurance Company is liable to pay interest and penalty as the Insurance Company has not deposited the compensation within 30 days from the date of the accident. He submitted that in fact, as per the said section, the employer is liable to deposit the amount of compensation within 30 days from the date of the accident, and the learned Commissioner FA/3623/2007 4/15 JUDGMENT therefore ought to have held that the employer is liable to pay interest and penalty instead of the Insurance Company. Thus, the learned advocate submitted that considering the reasons assigned by the learned Commissioner, the impugned order awarding compensation of Rs.2,41,992/- with interest at the rate of 12% from the date of accident till realization and penalty at 50% to the tune of Rs.1,20,996/- is required to be quashed and set aside. Learned advocate for the appellant has placed reliance on the following judgments: 1. K.R. PATEL vs. SHAHBHAI SOMA BHAI PARMAR reported in 2000 (85) FLR 373. 2. V.P. GARG VS. PREM DEVI reported in 1997 (77) FLR 637 3. NEW INDIA ASSURANCE CO. LTD. vs. RAMA & ANR reported in 2008 I CLR 593 4. NATIONAL INSURANCE CO. LTD. vs. MUBASIR AHMED & ANR reported in 2007 I CLR 943 5. VANAJAKSHAN (DECD) vs. M.D. JOSEPH reported in 2003- II-LLJ 279 Mr. Kishore Gadhia, learned advocate for the appellant relied on the judgment in the case of K.R. Patel vs. Shahbhai Somabhai Parmar in support of his contention that so far as the question of penalty is concerned, the Insurance Company would not be liable under the provisions of the Act. However, it is required FA/3623/2007 5/15 JUDGMENT to be noted that in this judgment, the Apex Court has held that the Insurance Company would be liable to pay interest. In the second judgment of V.P. Garg [supra], the Apex Court considered section 4A(3) of the WC Act as well as the provisions of the Motor Vehicles Act, and held that the Insurance Company will be liable to meet with the claim for compensation along with interest as imposed on the insured employer by the Workmen's Commissioner but as regards the penalty is concerned, the Insurance Company would not be liable and it would be the liability of the insured employer alone. In the case of New India Assurance Company vs. Rama & Anr [supra], the Karnataka High Court held that in the absence of acceptable evidence to establish that the injury sustained resulted in permanent total disablement as also 100% loss of earning capacity, the learned Commissioner erred in recording his findings on surmises and assumptions to come to conclusion that the workman had sustained 100% loss of earning capacity. In the said case, the High Court also awarded interest from the date of the award upto the date of payment. In the case of National Insurance Co. vs Mushabir Ahmed, the workmen sustained injuries not specified in Schedule I to the Act and the WC Commissioner awarded compensation holding that there was partial loss of earning capacity. In appeals, the High Court held it to be 100% loss of earning capacity. The matter was carried FA/3623/2007 6/15 JUDGMENT to the Apex Court and the Apex Court held that loss of earning capacity is not a substitute for percentage of physical disablement but it only one of the factors to be taken into account. The Apex Court held that since the Doctor who had examined the claimant also noted about the functional disablement, the doctor has taken note of the relevant factors relating to loss of earning capacity and since no basis was indicated by the High Court in taking 100% loss of earning capacity, the same cannot be maintained. The Apex Court also considered the question with regard to liability to pay interest and held that as the accident took place after the Act was amended in 1995, rate of interest at 12% cannot be faulted with, but in the absence of any indication as to when it become due, it has to be taken to be date of adjudication of the claim. Learned advocate also relied on the judgment in the full bench of the Kerala High Court in the case of Vanajakshan [supra] in support of his submission that the workman's disablement has to be determined with reference to work he was capable of performing at the time of the accident and compensation with reference to loss in earning capacity. The Full Bench however held that while determining the loss of earning capacity, the authority has to keep in view the loss of earning capacity of a workman for all work which he was capable of performing and not for the work which he was actually doing. Relying on the aforesaid judgments, learned advocate Mr. Gadhia submitted that in the instant case since the Doctor had assessed 50% disability, the learned FA/3623/2007 7/15 JUDGMENT Commissioner erred in considering his disablement at 100% by enhancing the disability by 50% without there being any evidence in this regard. He, therefore submitted that it is a fit case for remanding the matter to the learned Commissioner for re-considering the enhanced disability of 50% awarded by him. As against the aforesaid submissions, Mr. C.H. Vora, learned advocate for the respondents submitted that the learned Commissioner has, after considering the entire gamut of oral deposition as well as documentary evidence, rightly awarded the compensation, penalty and interest and the same requires no interference in the appeal preferred by the Insurance Company. Mr.Vora submitted that Dr. Hadia who has given the disability certificate has been examined in the present case, and considering the disability of the claimant, the learned Commissioner has assessed 100% disability. Mr. Vora submitted that the learned Commissioner has rightly concluded that though the Doctor has certified 50% disability, since the workman, who was a driver, cannot drive heavy vehicles, his disability is to be assessed at 100% and no interference is called for in the present appeal. As regards penalty and interest, learned advocate submitted that in the facts and circumstances of the case, the learned Commissioner has rightly awarded the same. He submitted that the learned Commissioner has awarded interest at 12% p.a. from the date of the accident till realization and the same requires to be upheld and the appeal is required to be dismissed. Mr. Vora has relied on the following judgments: FA/3623/2007 8/15 JUDGMENT 1. COMMISSIONER, PORT OF CALCUTTA vs. AJIT KUMAR GOSH reported in 1970 ACJ 320 2. PRATAP NARAIN SINGH vs. SHRINIVAS reported in AIR 1976 SC 222 3. BHARAT PREMJIBHAI vs. MUNICIPAL CORPORTION reported in 1978 GLR 585 4. STATE OF GUJARAT vs. RAJENDRA KHODABHAI DESHDIA reported in 1991 (1) TAC 451 5. NEW INDIA ASSURANCE CO. LTD. vs. SUBHAS reported in 2004 (3) TAC 706 (KANT]. Learned advocate has relied on the judgment of the Calcutta High Court in the case of Commissioner, Port of Calcutta Vs. Ajit Kumar Gosh [supra] in support of his submission that Medical witness is opinion evidence and it is only with regard to the physical aspect of the injuries that the opinion of the medical witness is relevant and admissible as the opinion of an expert, but loss of earning capacity is not a matter for medical opinion and is not a matter on which medical witness can speak and it is for the Commissioner to decide whether as a result of the physical disability, there has been loss of earning capacity. He, therefore, submitted that in the present case, having regard to the nature of the injury sustained by him, the disability is increased from 50% to 100% and the same cannot be reversed in the appeal preferred by the appellant. In the judgment of the Apex Court in the case of Pratap Narain Singh Deo, the Apex Court considered the FA/3623/2007 9/15 JUDGMENT provisions of section 2 (1) (1) and (g) of the Act and held that amputation of left hand above elbow due to personal injury suffered by a carpenter is a total disablement because a carpenter cannot work with one hand. Learned advocate relied on the judgment in the case of Bharat Premjibhai [supra] in support of his contention that it is not entirely right to always make the future loss of income co-extensive with the extent of permanent disability. This is not an algebraic problem which can be solved by any abstract formula. On the basis of the evidence as to permanent disability, whether complete or partial, an assessment must be made as to what effect such disability would have on the entire functioning of the body and how it would consequently affect the earning capacity. The effect on the earning capacity must be judged in the light of the importance of the lost or permanently affected limb in the vocation or profession or employment of the injured person. In estimating the future loss of income, the primary consideration must be the nature and extent of the disablement of the limb – permanent or temporary, total or partial, and its likely resultant effect on the earning capacity in the chosen avocation, profession, or employment of the injured person. It is, therefore, not right to treat this problem as an abstract mathematical exercise and to make the future loss of income co-extensive with the percentage of permanent disability regardless of the other relevant considerations. Mr. Vora submitted that in the case of State of FA/3623/2007 10/15 JUDGMENT Gujarat v/s Rajendra Khodabhai Deshidia and others, a Division Bench of this Court held that the Commissioner for Workmen's Compensation is required to determine the loss of earning capacity resulting from the accidental injury and since the learned Commissioner has arrived at a finding that the workman has suffered 100% disability, the same is not required to be interfered in the present appeal. Mr. Vora also relied on the judgment in the case of New India Assurance Co. Ltd. V/s. Subhas [supra] wherein the Karnataka High Court held that the qualified medical practitioner assesses only the physical disability and not the loss of earning capacity. Learned advocate submitted that after elaborately dealing with the provisions of the Act, the Karnataka High Court held that loss of earning capacity refers to the economic disability as a result of a physical disability and the same physical disability may lead to a 100% loss of earning capacity in the case of a blue collar worker and may not result in any economic disability at all in the case of a white collar employee. He submitted that assessment of physical disability involves ascertainment of the injuries sustained and its impact on the functioning of the human body and assessment of loss of earning capacity involves assessing the impact of such physical disability on his capacity or ability to discharge the duties/functions relating to such avocation/employment and all work which he was capable of performing at the time of accident. Mr. Vora, therefore, submitted that since the learned Commissioner has assessed 100% disability based on the certificate of qualified medical practitioner, the same needs no FA/3623/2007 11/15 JUDGMENT interference by this Court in the present appeal. I have heard the learned advocates at great length and in great detail. I have also perused the impugned judgment and the reasons assigned by him. I have also perused the record and proceedings of the present case and the evidence recorded by the learned Commissioner, as the R & P of the case is before this Court. I have also considered the afore said judgments cited by the learned advocates. Dr. H.M. Hadiya, a consulting Orthopedic Surgeon has given certificate, Exh.26. He has stated in the certificate that the accidental injuries have resulted in to permanent impairment and loss of the function of both the limbs to the extent of 50% permanent functional disability, and he is not in a position to drive heavy vehicle. Dr. Hadiya has been examined, vide Exh. 27 and he has stated in the examination-in-chief that he is not an expert Doctor to say about the burn injuries sustained by the claimant but on the basis of the injuries sustained by the claimant, he has deposed in his testimony that the claimant has suffered disability to the extent of 50%. In the certificate, Exh. 25, the Doctor has narrated the injuries sustained by the claimant and on the basis of the injuries, the Doctor has certified that the claimant is not in a position to drive heavy vehicle. However, there is no other convincing evidence on record for coming to a conclusion that the workman has suffered 100% disability. FA/3623/2007 12/15 JUDGMENT Mr. Ghadia contended that though the accident in question took place in the year 1997 but after 4 years, the claimant has obtained Smart Card driving licence, and therefore it cannot be said that there is no loss of earning capacity. In this connection, Mr. Vora has contended that this is not a new licence, but in place of the old book-type licence, on introduction of the smart card licence, the RTO authorities, without any test issued Smart Card licence to all persons who earlier held book-type licence. According to Mr. Vora, this cannot be construed to say that there is no loss of earning capacity. Be that as it may, no evidence in this regard is brought on record. Even if what is contended by Mr. Vora is true, the same has to be proved by adducing evidence on record. On the basis of the case laws relied upon by the parties, it has been held by various Courts that if the injury received by the workman is a scheduled injury, the minimum of compensation which the workman would be entitled to claim would commensurate with the deemed loss of earning capacity as indicated in the schedule. In case where the workman received non-scheduled injury, as in the present case, he will have to show by leading evidence as to what is the loss of earning capacity suffered by him on account of the accident. In the judgments cited above, the Division Bench has also held that in case of non-scheduled injuries falling within the scope of section 4 (1) (c) (ii) of the Act, the workman is required to prove the loss of earning capacity by leading appropriate evidence. There is no doubt about the proposition of law that the Commissioner is empowered to come to a conclusion that the injury sustained resulted FA/3623/2007 13/15 JUDGMENT in permanent total disablement as also 100% loss of earning capacity. However, in the absence of acceptable cogent and convincing evidence to establish that the injury sustained resulted in permanent total disablement as also 100% loss of earning capacity, this Court is of the opinion that the learned Commissioner was not right in holding that the workman has suffered 100% disability. When the Doctor has assessed disability to the tune of 50%, for enhancing the disability, it was incumbent upon the workman to prove the loss of earning capacity by leading appropriate evidence. At this stage, it is required to be noted that Mr. Kishor Gadhia has submitted before the Court that so far as disability is concerned, the appellant is not challenging the 50% disability as has been certified by the Doctor, but they are challenging only the enhancement of 50% disability by the learned Commissioner. As regards the penalty awarded by the Commissioner, in view of the law laid down by the Apex Court in the case of V.P. Garg, the Insurance Company cannot be held liable to pay penalty, and it would be the liability of he insured employer. As regards interest is concerned, the policy in question is a policy issued under the Motor Vehicles Act in respect of which the contract of insurance would be governed by the Motor Vehicles Act. The terms and condition of the insurance policy under the M.V. Act are altogether different from the Workmen's Compensation FA/3623/2007 14/15 JUDGMENT Policy. In the instant case, the policy does not specifically provide that the Insurance Company is not liable to pay interest. Neither is there any endorsement to the effect that the risk of employees are covered only under the Workmen's Compensation Act. The policy is not a W.C. Policy. Therefore, this Court is not inclined to interfere with the order of interest awarded by the learned Commissioner. In view of aforesaid facts and circumstances of the case, the appeal is partly allowed. The impugned order passed by the learned Commissioner insofar as it relates to enhancement of disability by 50% and penalty are quashed and set aside. The matter is remanded to the learned Commissioner for retrial only with regard to enhancement of 50% disability. It shall be open to the parties to lead evidence in this regard and the learned Commissioner shall, after giving full opportunity to both the sides, decide afresh whether on the basis of 50% disability sustained by the workman as per the certificate or Dr. H.M. Hadiya, the claimant is entitled to 50% loss of earning capacity or whether the claimant is entitled to 100% loss of earning capacity. The learned Commissioner shall complete the said exercise within three months from the date of receipt of writ of this order. Meanwhile, in Civil Application No. 10052/07, this Court has passed an order to the effect that Rs.1,20,996- 00 towards penalty shall be retained by the Commissioner, 60% of Rs.5,43,160-00 shall be invested in a Fixed Deposit and remaining 40% was ordered to be paid to FA/3623/2007 15/15 JUDGMENT respondent No.1. The amount of penalty shall be refunded to the Insurance Company by accounts payee cheque. Since this Court is not inclined to interfere with the order of interest and costs, and as the matter is remanded to the learned Commissioner for retrial on the issue of enhancement of 50% disability, the remaining amount shall be disbursed to the claimant and/or refunded to the Insurance Company in accordance with the final decision that may be arrived at by the learned Commissioner on conclusion of the retrial on the issue of enhancement of 50% disability. The Registry is directed to forthwith return the Record & Proceedings to the learned Commissioner for Workmen's Compensation, Kutch-Bhuj. The appeal stands partly allowed accordingly. No order as to costs. mathew [H.B.ANTANI, J.]