HONOURABLE SRI JUSTICE GHULAM MOHAMMED MA C.M.A.No. 2267 of 2004 JUDGMENT: Oriental Insurance Company is the appellant who filed the appeal challenging the award and decree passed in WC No. 13 of 2003 dated 06.01.2004 on the file of the Commissioner for Workmens’ Compensation and Assistant Commissioner of Labour –III, Hyderabad, in granting compensation of Rs. 3,74,179/- for the injuries suffered by the claimant. 2. The brief facts of the case are as follows: The claimant stated that he was employed as driver on bus bearing No. KA 01 A 4687 of the first respondent-G.P. Travels, Bangalore and is a workman within the meaning of the Workmen’s Compensation Act (for short ‘the WC Act’) Act. On 29.12.2002 while he was proceeding as driver on the said bus from Hyderabad to Bangalore and at about 10 PM when he reached near Amith Cotton Mills in the outskirts of Burula Village, he dashed against another lorry bearing No. AP 21 T 9447, which in turn dashed against yet another lorry bearing No. AP 21 V 1159 and due to which, claimant received fractures and grievous injuries and was shifted to Osmania General Hospital, Hyderabad for treatment and again shifted to Bowring and L.C. Hospital, Bangalore for further treatment. The applicant received fracture of right shaft femur, grievous injury to left shoulder, and other injuries all over the body. The police at Shadnagar Police Station registered a case in Crime No. 450 of 2002 under Sections 304 A and 337 of IPC. The applicant stated that the said accident occurred out of and during the course of employment. He stated that he was drawing wages of Rs. 4,000/- per month and he was aged about 40 years at the time of accident. Therefore, he claimed Rs. 5,00,000/- as lumpsum compensation against the first respondent-owner of the bus and also against the second respondent- Insurance Company. 3. The first respondent-owner of the bus bearing No. KA 01 A 4687 remained ex parte. 4. The Second respondent-Insurance Company filed its counter denying the averments in the petition and submitted that the applicant was not employed by the first respondent-owner of the bus, to drive the vehicle. It is also stated that the owner of the bus is a necessary party for the proceedings and it is stated that the Insurance Company was neither informed by the applicant nor by the first respondent, which indicates clear collusion between them to cause loss to the Insurance Company and the amount claimed is also excessive, exorbitant. 5. On behalf of claimants, he himself examined as AW-1 and examined Dr. S. Vasudeva Rao, Civil Surgeion, Specialist Orthopaedic as AW-2 and Exs A1 to A10 were marked. On behalf of respondents none were examined but Ex. D1 insurance policy was marked. 6. On the basis of the above pleadings, the following issues were settled for trial. 1. Whether the applicant Sri Surender Viswanath, S/o Viswanadh, met with an accident on 29.12.2002, which arose out of and in the course of his employment as driver on bus bearing No. KA 01A 4687 in the employment of the first opposite party and sustained injuries? 2. If yes, what is the percentage of the physical disability and the subsequent loss of earning capacity suffered by him? 3. If yes, who are liable to pay compensation to the applicant? And ; 4. What is the amount of compensation entitled by the applicant? 7. On consideration of both oral and documentary evidence, the Commissioner came to the conclusion that since the accident occurred due to rash and negligent driving of the driver of the accident bus, the respondents 1 and 2 being owner and insurer respectively of the bus, are jointly and severally liable to pay the compensation to the claimant. In order to determine the compensation, the Commissioner taken into consideration of the G.O.Ms.No. 30 LET & F (Lab II) dated 27.7.2000 wherein the Government of Andhra Pradesh has fixed the Minimum Rates of Wages, for employees working in the employment of public motor transport and for a basic wage for a driver of heavy goods vehicle is Rs. 2,587/- and VDA payable as notified by the Commissioner of Labour from time to time is Rs. 840/- fixed the total wage amounting to Rs. 3, 427/- for calculating the amount of compensation. Accordingly, the amount of compensation entitled by the application is Rs. 3,72,933/- (Rs. 3427 x 60/100 x 181.37). The Commissioner also granted Rs. 746 towards stamp fee and Rs. 500/- towards advocate fee totaling to Rs. 3,74,179/- payable by the first and second respondents. Aggrieved by the same, the present CMA has been filed by the Insurance Company. 8. The learned counsel appearing for the appellant-Insurance Company contended that the Commissioner enhanced the loss of earnings to 100% without any basis and the Commissioner committed a serious error in overlooking the fact that when both the doctors AW-2 and RW-1 observed that the claimant can drive the vehicle, the Commissioner on a fallacious grounds made the loss of earning capacity to 100%. He also submits that the disability certificate issued by the doctor does not satisfy the requirement of Section 4© (ii) and cannot be acted upon and in the absence of disability, the claimant is not entitled to any compensation. He relied on the judgment of this Court reported in CHAIRMAN, EMPLOYES STATE INSURANCE CORPORATION, HYDERABAD VS. SWAMINATH SINGH AND ANOTHER[1], and also the judgment of the Supreme Court reported in ORINTENTAL INSURANCE COMPANY LIMITED VS. MOHD NASIR AND ANOTEHR[2]. 9. The point that arises for consideration is whether the compensation awarded by the Commissioner granting a total sum of Rs. 3,74,179/- is just and proper? 10. As seen from the record, it is no doubt true that the accident occurred due to rash and negligent driving of the driver of the accident bus, the first respondent and the appellant herein, being owner and insurer respectively of the bus are jointly and severally liable to pay the compensation to the claimant. It is also no doubt true that the deceased was working as driver on the bus and getting salary of Rs. 4,000/- per month. It is evident that the certified copy of wound certificate also reveals that the applicant received (1) communited fracture right femur- postoperative, (2) laceration right politeal fossa- healed and (3) laceration left heal –healed and these injuries resulted in ½ “ shortening of right lower limb, stiffness of right knee and hip, in the accident that occurred on 20.2.2002. In the cross examination, AW-2 said that the applicant was treated in Osmania General Hospital, Hyderabad initially. Ex. A2 was given prior to the operation. Ex.A4 was issued by Bangalore Hospital and he said that the type of fracture healed in 4 to 6 months and he said that it is not possible to give the exact reason for non-union of the fracture. Dr. V.K.R Prasad, Assistant Professor of Orthopaedic, Gandhi Medical College, Hyderabad was examined on behalf of the second respondent as RW-1 and in his evidence he stated that there was bone grafting and it is not possible to give the exact percentage of disability. He said that the percentage of disability at 40% assessed earlier by AW-2 is on the higher side and if everything heals well, the applicant may be able to drive a vehicle in future and as per Mc.Bride Scale the disability could be around 15% to 20%. He also stated that even if best treatment is given, medical science cannot predict and say that the patient will be normal 100% after the treatment. The only dispute is that AW-2 assessed the disability at 40%, and RW-1 assessed the disability around 15% to 20%. 11. in CHAIRMAN, EMPLOYEES STATE INSURANCE CORPORATION , HYDERABAD VS. SWAMINATH SINGH AND ANOTHER (supra-1) while dealing with the matter with regard to loss of earning capacity and the extent of disability, this Court at paragraph 14 held as under: “14. On a bare reading of the aforesaid provision, and having regard to the reference to both the extentof percentage of disablement and the loss of earning capacity, it amply leads to a conclusion that necessarily the extent of disablement which one suffers has to be one of the factor for assessing the percentage of loss of earning capacity. However, this provision does not contemplate that once extent of percentage of disablement is fixed, the same has to be taken as the sole core basis for assessing the earning capacity. Even on a reading of the aforesaid definition clause in the ESI Act, it nowhere contemplates that the said percentage as contemplated either way should be a final one or should have a co-relation and not allowing one to go either against or over and above. Therefore, it cannot be said that the submission made on behalf of the appellant that the extent of disability can form the core or final basis for assessing the loss of earning capacity cannot be accepted.” 12. In ORIENTAL INSURANCE COMPANY LIMITED VS. MOHD. NASIR AND ANOTEHR[3] the Supreme Court while dealing with the matter with regard to loss of earning capacity at paragraphs 26, 27, 28, 29, 30, 31, 32, 33, 34 and 35 held as under: “26. Both the statutes provide for the mode and manner in which the percentage of laws of earning capacity is required to be calculated. They provide that the amount of compensation in cases of this nature would be directly relatable to the percentage @page-SCW3724 of physical disability suffered by the injured vis-a-vis the injuries specified in the First Schedule of the 1923 Act. Indisputably where injuries are specified in the First Schedule, the mode and manner provided for the purpose of calculating the amount of compensation would be applicable. 27. The statutes provide for determination of the extent of physical disability suffered by a qualified medical practitioner so as to enable him to assess the loss of earning capacity. Explanation 1 appended to clause (c) of sub-section (1) of Section 4 provides that where there are more injuries than one, the aggregate amount of compensation has to be taken but the same should not exceed the amount which would have been payable in case of permanent total disablement. It is also beyond any doubt or dispute that while determining the amount of loss of earning capacity, the Tribunal or the High Court must record reasons for arriving at their conclusion. 28. The 1923 Act which would also be the claims applications arising out of use of motor vehicles in terms of the provisions of 1988 Act would for the purpose of determination of the amount of compensation where the victim of the accident suffers from disability in the cases coming within the purview thereof. The Note appended to the Second Schedule of the 1988 Act raises a legal fiction, stating that 'injuries deemed to result in Permanent Total Disablement/Permanent Partial Disablement and percentage of loss of earning capacity shall be as per Schedule I under the Workmen's Compensation Act, 1923'. Permanent disability, therefore, for certain purposes have been correlated with functional disability. 29. As to what, therefore, in our opinion, would be relevant is to find out the nature of injuries and as to whether the same falls within the purview of Part I or Part II thereof. We have noticed hereinbefore that whereas Part I specifies the injuries which would deem to result in permanent total disablement, Part II specifies injuries which would be deemed to result in permanent partial disablement. 30. The distinction between the 'permanent total disablement' and 'permanent partial disablement' is that whereas in the former it is 100% disablement, in the latter it is only the disablement to the extent specified in the Schedule. Similar terms have been used in clauses (a) and (b) of paragraph 5 of the Second Schedule of the Motor Vehicles Act. It, by reference, incorporates the provisions of the First Schedule of the 1923 Act. Indisputably, therefore, the Note appended thereto would not only be applicable to the cases falling under the 1923 Act but apply to the cases which fall under the 1988 Act as well. 31. Our attention, however, has been drawn to a decision of this Court in National Insurance Co. Ltd. v. Mubasir Ahmed and Anr. [(2007) 2 SCC 349J; wherein it was held : 2007 AIR SCW 1265 "8. Loss of earning capacity is, therefore, not a substitute for percentage of the physical disablement. It is one of the factors taken into account. In the instant case the doctor who examined the claimant also noted about the functional disablement. In other words; the doctor had taken note of the relevant factors relating to loss of earning capacity. Without indicating any reason or basis the High Court held that there was 100% loss of earning capacity. Since no basis was indicated in support of the conclusion, same cannot be maintained. Therefore, we set aside that part of the High Court's order and restore that of the Commissioner, in view of the facts situation. Coming to the question of liability to pay interest, Section 4-A(3) deals with @page-SCW3725 that question. The provision has been quoted above." 32. In determining the amount of compensation, several factors are required to be taken into consideration having regard to the Note. Functional disability, thus, has a direct relationship with the loss of limb. 33. Mohd. Nasir was a driver. A driver of a vehicle must be able to make use of both his feet. It was the case of the claimant that he would not be in a position to drive the vehicle and furthermore would not be able to do any other work. He was incapable of taking load on his body. It, however, appears that in his cross-examination, he categorically stated that only Chief Medical Officer had checked him in his office. No disability certificate had been granted. He admitted that he had not suffered any permanent disability. He, even according to the Chief Medical Officer who had not been examined, suffered only 15% disability. 34. The Tribunal has arrived at the following findings : "On page 16 original of disability certificate the prescription of medicine X-Ray report of Sarvodaya and of Mohan X-Rays have been produced which reveals the fracture of right leg. CMO certificate O/M 9/2003 dated 21.3.2005 has also been produced which is alleged to be false by insurance Co. I have perused them carefully which bears signature of Deputy CMO officer of Disability Board, Moradabad had it shown that the applicant had appeared before them for medical check up and whose examination was done by senior orthopedics surgeon Dr. R. K. Singh on the basis of recommendation of Dr. Bansal operation was done on 2.10.2004 the applicant walk with the help of the support and is not competent to drive the heavy motor vehicle the said certificate was issued with recommendation that after six months his condition is to be reviewed. That document was filed on 29.3.2005. Insurance company has stated the doctor who has issued disability certificate has not been produced in the court. But looking into the aftermath situation the plea of insurance company that the said certificate is forged and the same has not been issued by any MBBS doctor, carries no force." 35. The learned Tribunal had held that there has been a 15% disability but then there was nothing to show that he suffered 100% loss of earning capacity. The Commissioner has applied the 197-06 as the relevant factor, his age being 35. He, therefore, proceeded on the basis that it was a case of permanent total disablement. However, his income was taken to be at Rs. 1,920/- per month. There is nothing on record to show that the qualified medical practitioner opined that there was a permanent and complete loss of use of his right leg or that he became totally unfit to work as a driver. In that situation, the High Court, in our opinion, was not correct in determining the loss of income at 100%. 36. In Ramprasad Balmiki v. Anil Kumar Jain and Ors. [(2008) 9 SCC 492], wherein upon referring to the evidence of the Doctor who did not say that any permanent disability had been caused, this Court held : 2008 AIR SCW 7362 "18……Be that as it may, the High Court, in our opinion, correctly proceeded on the assumption that the extent of permanent disability suffered by the appellant is only 40% and not 100%." 37. We, therefore, are of the opinion that the extent of disability should have been determined at 15%, and not 100%. The appeal is allowed to the aforementioned extent.” 13. Viewed from any angle, the doctor who treated the claimant assessed the disability of the applicant at 40% while the doctor examined on behalf of the second respondent-Insurance Company assessed it around 15% to 20% and both the doctors opined that it will be difficult for the applicant to drive a vehicle with these injuries. But the Commissioner wrongly took the loss of earning capacity as 100%. Hence, loss of earning capacity should be taken as 40%. If calculated the amount of compensation entitled by the applicant comes to Rs. 1,49,173/- (3,427x60/100 x 40/100 x 181.37) 14. Accordingly, the Civil Miscellaneous Appeal field by the Insurance Company is allowed in part reducing the amount of compensation granted by the Commissioner from Rs. 3,74,179/- to Rs. 1,49,173/- . However, the amount already withdrawn by the claimant cannot be recovered. There shall be no order as to costs. 15. As far as the rate of interest is concerned, counsel appearing for the appellant contended that the rate of interest granted by the Tribunal at 9% per annum, from the date of petition till the date of payment is on high side and requested to reduce the same. 16. Taking into consideration catena of Supreme Court Judgments and also the prevailing current rate of interest, the rate of interest granted by the Tribunal is reduced from 9% per annum to 7% per annum. 17. Accordingly, the appeal filed by the Insurance Company is allowed. There shall be no order as to costs. _____________________ GHULAM MOHAMMED, J Date: 22.07.2010 KA [1] 2007 (5) ALD 166 (Db) [2] (2009) 6 SCC 280 [3] (2009) 6 SCC 280