REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9069 OF 2022

(arising out of Special Leave Petition (C) No. 32347 of 2018)

CHANDRAMMA … APPELLANT(S)

VERSUS

MANAGER, REGIONAL OFFICE, NCC LIMITED AND ANR. … RESPONDENT(S)

JUDGMENT

KRISHNA MURARI, J.

Leave Granted.

2.The present appeal is directed against the final order dated 07.08.2018

passed by the High Court of Karnataka, Kalaburgi Bench (hereinafter referred

to as “High Court”) in Miscellaneous First Appeal No. 202250/2017 (WC)

filed by the Appellant praying to call for the records and set aside the judgment

and award dated 02.06.2017 passed by Additional Senior Civil Judge and

Commissioner for Employees Compensation at Bidar (hereinafter referred to as

“Commissioner”) in E.C.A No. 12/2016. The High Court partly allowed the

appeal of the Appellant and assessed the income as Rs.8000/- per month and

accordingly computed the compensation at Rs. 2,19,512/-.

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3.Briefly, the facts relevant for the purpose of this appeal are as follows:

3.1The Appellant was engaged in the construction of government hospital at

Bidar, Karnataka. Respondent No. 1 was the contractor and undertook the

construction of upgradation of the hospital building. On 22.07.2015, Appellant

along with other laborers were attending the work of shifting the cement from

ground floor to the second floor, the centering plate collapsed on the head of the

appellant who fell down from second floor to the ground floor.

3.2Subsequently, the appellant was taken to the hospital wherein it was

established that she has sustained fracture of spinal bone and compound fracture

on various part of the body. After preliminary treatment at government hospital

at Bidar, the Appellant went to Gurupadappa Nagmarpalli Hospital and was

admitted as inpatient. The appellant was informed by the Doctor that she would

not be able to lift any kind of weight through rest of her life.

4.The appellant filed compensation application being E.C.A No. 12/2016

under Section 10 of Employees Compensation Act, 1923 (hereinafter referred to

as “1923 Act”) before the Commissioner seeking compensation of Rs. 20 Lakhs

along with interest at 18% per annum from the date of accident. Vide judgment

and award dated 02.06.2017, the Commissioner held that the Appellant has not

proved that she was paid Rs. 600 per day as cooli and accordingly computed

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notional income at Rs.6000/- per month. Further, it was held that the disability

to the whole body is at 20% and as such assessed the compensation at

Rs.1,32,600/-. Accordingly, the Appellant was held to be entitled for

Rs.1,75,000/- as compensation.

5.Being aggrieved, the Appellant filed an Appeal under Section 30(1) of the

1923 Act before the High Court praying to call for the records and set aside the

judgment and award dated 02.06.2017. Vide final order dated 07.08.2018, the

High Court partly allowed the appeal. The Operative portion of the order reads

as under: -

“Heard both the learned counsel. The relationship between the

employee and employer has not been disputed. The only grounds

taken by the counsel for the employee is in respect of income.

Though it was the case that the income of Rs. 8,000/- is to be

accepted, the same is disbelieved and the commissioner has

assessed the income at Rs. 6,000/- per month which is lower in

side. Though it is claimed that the respondent has not seriously

disputed the income of the claimant, under these circumstances,

the claimants are entitled for enhanced income of Rs. 8,000/-.

Accordingly, same is to be assessed. As per Section 4(1)(b) of the

Employees Compensation Act 1993, 60% of the monthly wages

of injured employee has to be multiplied by relevant factor

184.17 which is applicable to the age of 40 years. Accordingly,

calculation is Rs. 8,000/- X 60% = Rs. 4,800/-. Hence Rs. 4,800

X 184.17 which comes to Rs.8,86,560/-. PW2 the doctor’s

evidence is that injured suffered 20% disability to the whole

body and Tribunal assessed the disability at 20%. Hence the

calculation is Rs.8,86,560 X 20%, which comes to Rs.1,77,312/-

and same is awarded. Order of the E.C. Commissioner stands

modified. Enhanced amount carries interest. Medical expenses

of Rs. 42,200/- as ordered by the Commissioner is retained. In

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total, the compensation would be Rs.2,19,512/- the same is

awarded. Order stands modified. Appeal is partly allowed.”

6.We have heard Mr. Shankar Divate, Learned Counsel appearing on behalf

of the Appellant and Mr. Parijat Kishore, Learned Counsel appearing on behalf

of the Respondents.

7.Mr. Shankar Divate, Learned Counsel for the appellant vehemently

submitted that the Courts below failed to note that the petitioner suffered spinal

injury and the doctor had clearly and categorically observed that professional

disability is 100%. It was further submitted that the minimum wages as fixed

under the Workmen Compensation Act cannot be lower than the actual wages

earned by a laborer and that the courts below ought to have granted the

compensation on the basis of the actual earning capacity and the appellant is

permanently disabled from working as labour at construction sites. It was also

submitted that the appellant was doing the construction work and given the

injury suffered by the petitioner, she would not be able to do any other work by

which she can earn her livelihood, therefore, the grant of compensation of

Rs.2,19,512/- for permanent disability is inadequate and deserves to be

enhanced.

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8.Per contra, Learned Counsel for the Respondents urged that the grant of

compensation awarded by the High Court is adequate and requires no

interference by this Court.

9.We have carefully considered the rival contentions of the learned counsel

appearing for the parties and perused the entire records. The issue involved in

the instant matter primarily relates to the determination of quantum of

compensation awarded under various heads by the Commissioner and the High

Court.

10.Before adverting to the merits of the case, it is necessary to analyse the

meaning of compensation awarded in cases where the victim has suffered

permanent partial disability. In common parlance, compensation is often

described as “something, typically money, awarded to someone in recognition of

loss, suffering or injury”. Under the Workmen’s Compensation Act, 1923, it is

mandatory for the employers to pay compensation to their employees or

workmen for a work-related accident, fatality, injury, or illness. The Objective

of the 1923 Act is two-fold. First, it enables employees and their dependents to

get compensation from their employers in case an accident causes an

employee’s death or disability; second, it mandates employers to pay

compensation to their workers if they contract certain job-related illnesses or

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diseases.

11.In relation to the above objective, it is essential to advert to Section 3 of

the 1923 Act which states that an employer is liable to pay damages to its

workers under the following conditions:

i.If a worker has an occupational disease mentioned under Part A, B, C

of Schedule III. The disease has to be a result of an injury by accident

during work hours.

ii.An injury sustained by an employee during work that leads to total or

partial disability

iii.Death of an employee due to a work-related hazard.

12.Ideally, the compensation should be provided to the employees against

the hazards of employment to which an employee is exposed. This also

includes any occupational disease or industrial accident that the employee may

encounter arising out of or during the course of employment which leads to

disability or death. Specifically, a worker is entitled to compensation in case of

i.Death

ii.Permanent Total Disablement

iii.Permanent Partial Disablement

iv.Temporary disablement- both total and partial

v.It has contracted an occupational disease.

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13.Disablement is a wide term and under the 1923 Act, it is divided into two

categories ie., Partial disablement and total disablement. According to Section

2(1) (g) of the Act ‘Partial Disablement’ means, where the disablement is of a

temporary nature, such disablement reduces the earning capacity of an

employee in any employment in which he was engaged at the time of the

accident resulting in the disablement, and, where the disablement is of a

permanent nature, such disablement as reduces his earning capacity in every

employment which he was capable of undertaking at that time. Thus, Section

2(1) (g) classifies partial disablement into two kinds, namely, (a) Temporary

partial disablement and, (b) Permanent partial disablement.

13.1The distinction between the two types of partial disablement depends on

the fact whether the disablement results in reduction of earning capacity in the

particular employment in which he was engaged at the time of the accident or in

all employment which the employee was capable of doing. In the former case

the partial disablement is called temporary and in the latter case permanent.

Every injury specified in Part Il of Schedule I of the Employees’ Compensation

Act shall be deemed to result in permanent partial disablement.

14.Whereas, “Total Disablement” is defined under Section 2(1)(l) to mean

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

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accident resulting in such disablement and every injury specified in Part I of

Schedule I or combination of injuries specified in Part II of Schedule I where

aggregate percentage, as specified in Part II against those injuries amounts to

100% or more. Total disablement is of two types-:

i.Temporary Total Disablement– In temporary total disablement the

earning capacity of a workman is lost for a temporary period, for all

work which he was capable of performing at the time of accident.

ii.Permanent Total Disablement– Total permanent disability (TPD) is a

condition in which an individual is no longer able to work due to

injuries. Total permanent disability, also called permanent total

disability, applies to cases in which the individual may never be able

to work again.

15.Taking the type of disability into concern, just compensation should to

awarded to the person aggrieved. “Just Compensation” should include all

elements that would go to place the victim in as near a position as she or he was

in, before the occurrence of the accident. Whilst no amount of money or other

material compensation can erase the trauma, pain and suffering that a victim

undergoes after a serious accident, (or replace the loss of a loved one), monetary

compensation is the manner known to law, whereby society assures some

measure of restitution to those who survive, and the victims who have to face

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their lives. Under Section 4 of the 1923 Act, the amount of compensation an

employer has to provide workers is as follows:

i.Death of the worker: 50% of the worker’s monthly wages multiplied

with relevant factors; or ₹1,20,000, whichever is more.

ii.Permanent Total Disability: 60% of the monthly wages, multiplied

by relevant factor; or ₹1,40,000, whichever is more.

iii.Permanent Partial Disability: In such cases, the amount payable is a

percentage of the loss of earning capacity due to the injury. These

injuries are mentioned in Part II of Schedule I of the Act.

iv.Temporary Disability: 25% of the employee’s monthly wages.

16. A three-Judge Bench of this Court in Raj Kumar Vs. Ajay Kumar and

Another

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categorically assessed the assessment of future loss of earnings due to

permanent disability. The operative portion of the judgment reads as under: -

“9. The percentage of permanent disability is expressed by the

Doctors with reference to the whole body, or more often than

not, with reference to a particular limb. When a disability

certificate states that the injured has suffered permanent

disability to an extent of 45% of the left lower limb, it is not

the same as 45% permanent disability with reference to the

whole body. The extent of disability of a limb (or part of the

body) expressed in terms of a percentage of the total functions

of that limb, obviously cannot be assumed to be the extent of

disability of the whole body. If there is 60% permanent

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(2011) 1 SCC 343

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disability of the right hand and 80% permanent disability of

left leg, it does not mean that the extent of permanent

disability with reference to the whole body is 140% (that is

80% plus 60%). If different parts of the body have suffered

different percentages of disabilities, the sum total thereof

expressed in terms of the permanent disability with reference

to the whole body, cannot obviously exceed 100%.

10. Where the claimant suffers a permanent disability as a

result of injuries, the assessment of compensation under the

head of loss of future earnings, would depend upon the effect

and impact of such permanent disability on his earning

capacity. The Tribunal should not mechanically apply the

percentage of permanent disability as the percentage of

economic loss or loss of earning capacity. In most of the

cases, the percentage of economic loss, that is, percentage of

loss of earning capacity, arising from a permanent disability

will be different from the percentage of permanent disability.

Some Tribunals wrongly assume that in all cases, a particular

extent (percentage) of permanent disability would result in a

corresponding loss of earning capacity, and consequently, if

the evidence produced show 45% as the permanent disability,

will hold that there is 45% loss of future earning capacity. In

most of the cases, equating the extent (percentage) of loss of

earning capacity to the extent (percentage) of permanent

disability will result in award of either too low or too high a

compensation.

11. What requires to be assessed by the Tribunal is the effect

of the permanently disability on the earning capacity of the

injured; and after assessing the loss of earning capacity in

terms of a percentage of the income, it has to be quantified

in terms of money, to arrive at the future loss of earnings (by

applying the standard multiplier method used to determine

loss of dependency). We may however note that in some

cases, on appreciation of evidence and assessment, the

Tribunal may find that percentage of loss of earning capacity

as a result of the permanent disability, is approximately the

same as the percentage of permanent disability in which case,

of course, the Tribunal will adopt the said percentage for

determination of compensation.

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12. Therefore, the Tribunal has to first decide whether there is

any permanent disability and if so the extent of such

permanent disability. This means that the tribunal should

consider and decide with reference to the evidence:

(i) whether the disablement is permanent or temporary;

(ii) if the disablement is permanent, whether it is permanent

total disablement or permanent partial disablement,

(iii) if the disablement percentage is expressed with reference

to any specific limb, then the effect of such disablement of the

limb on the functioning of the entire body, that is the

permanent disability suffered by the person.

If the Tribunal concludes that there is no permanent disability

then there is no question of proceeding further and

determining the loss of future earning capacity. But if the

Tribunal concludes that there is permanent disability then it

will proceed to ascertain its extent. After the Tribunal

ascertains the actual extent of permanent disability of the

claimant based on the medical evidence, it has to determine

whether such permanent disability has affected or will affect

his earning capacity.

13. Ascertainment of the effect of the permanent disability on

the actual earning capacity involves three steps. The Tribunal

has to first ascertain what activities the claimant could carry

on in spite of the permanent disability and what he could not

do as a result of the permanent ability (this is also relevant

for awarding compensation under the head of loss of

amenities of life). The second step is to ascertain his

avocation, profession and nature of work before the

accident, as also his age. The third step is to find out

whether (i) the claimant is totally disabled from earning any

kind of livelihood, or (ii) whether in spite of the permanent

disability, the claimant could still effectively carry on the

activities and functions, which he was earlier carrying on, or

(iii) whether he was prevented or restricted from discharging

his previous activities and functions, but could carry on

some other or lesser scale of activities and functions so that

he continues to earn or can continue to earn his livelihood.

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14. For example, if the left hand of a claimant is amputated,

the permanent physical or functional disablement may be

assessed around 60%. If the claimant was a driver or a

carpenter, the actual loss of earning capacity may virtually be

hundred percent, if he is neither able to drive or do carpentry.

On the other hand, if the claimant was a clerk in government

service, the loss of his left hand may not result in loss of

employment and he may still be continued as a clerk as he

could perform his clerical functions; and in that event the loss

of earning capacity will not be 100% as in the case of a driver

or carpenter, nor 60% which is the actual physical disability,

but far less. In fact, there may not be any need to award any

compensation under the head of `loss of future earnings', if

the claimant continues in government service, though he may

be awarded compensation under the head of loss of amenities

as a consequence of losing his hand. Sometimes the injured

claimant may be continued in service, but may not found

suitable for discharging the duties attached to the post or job

which he was earlier holding, on account of his disability, and

may therefore be shifted to some other suitable but lesser post

with lesser emoluments, in which case there should be a

limited award under the head of loss of future earning

capacity, taking note of the reduced earning capacity.”

17.In the case at hand, the appellant is a skilled labour, who was involved in

the work of construction of hospital building. On 22.07.2015, the appellant fell

down from second floor to ground floor when the centering plate collapsed on

her head. It is pertinent to mention that doctors who treated the appellant have

held that she sustained fracture of spinal bone and compound fracture on

various parts of the body. Appellant herein, contended that the contractor had

not provided any safety gears, instead he allowed the labourer to take the

cement on the head. The negligence of the contractor lead to appellant’s

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permanent partial disablement. The commissioner computed the income of the

appellant as follows: -

“14. According to Section 4(1)(b) of the Employees

Compensation Act, 1993, 60% of monthly wages of the

injured employee has been multiplied by relevant factor.

Hence in view of the said provision, the compensation is

calculated (Rs. 6000 X 60/100 = Rs. 3600/-). The age of the

claimant is 40%, it should be multiplied by relevant factor

is 184.17. It comes to Rs. 6,63,012/-. The PW-2 had opined

that, there is 26% of disability to the whole body. But i feel

it proper to consider the whole-body disability @ 20% (Rs.

663012 X 20(permanent disability)/100 = Rs. 1,32,602/-). It

is rounded off to Rs. 1,32,600.

15. The petitioner is not entitled for compensation in any

other conventional head. The petitioner had produced

medical bills of Rs. 42,200/- issued by United Hospital and

Gurupadappa, Hospital. As per Section 4 2 (A) Employees

Compensation Act, the medical expenses should be

reimbursed. Hence, in the entire petitioner entitle for Rs.

1,74,800/-. It should be off to Rs. 1,75,000 as compensation

from respondent no. 2.”

Further, the appellant filed an appeal before the High Court seeking

enhancement of compensation and same was allowed in part. The High

Court enhanced the compensation to Rs. 2,19,512/- by assessing the

income of the appellant at Rs. 8000/- per month.

18.Predominantly, it is to be noted that the appellant is suffering from

permanent partial disablement which also implies that she will not be able to do

anything manually such as unloading building materials or using hand tools like

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shovels or picks or operating other machinery. Therefore, On the issue of

disability, what is relevant is the statement of the Dr. Mallikarjun who examined

the appellant for making an assessment of the disability. The disability report

showed that there is Permanent Partial Disability of about 58% of the limb,

which corresponds with 26% whole body.

19.There is no dispute that the appellant suffered from disablement of

permanent nature. The disablement has incapacitated her from doing the work

which she was capable of doing. The said work was of that of a laborer.

Therefore, the Commissioner for Workmen’s Compensation was wrong in

holding that the disability of the appellant will have to be treated as 20%

disability as the work of an appellant involves lifting heavy weights and the

appellant has been rendered incapable from doing such work due to her

disability. Hence, the case of the appellant will be covered by the definition of

‘total disablement’, therefore, being 100% disabled.

20.Thus, it is an admitted position that the appellant can no longer pursue the

work of a labourer. This Court in Raj Kumar Vs. Ajay Kumar (Supra) held

that:-

“13. Ascertainment of the effect of the permanent disability

on the actual earning capacity involves three steps. The

Tribunal has to first ascertain what activities the claimant

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could carry on in spite of the permanent disability and what

he could not do as a result of the permanent ability (this is

also relevant for awarding compensation under the head of

loss of amenities of life). The second step is to ascertain his

avocation, profession and nature of work before the accident,

as also his age. The third step is to find out whether (i) the

claimant is totally disabled from earning any kind of

livelihood, or (ii) whether in spite of the permanent

disability, the claimant could still effectively carry on the

activities and functions, which he was earlier carrying on, or

(iii) whether he was prevented or restricted from discharging

his previous activities and functions, but could carry on some

other or lesser scale of activities and functions so that he

continues to earn or can continue to earn his livelihood.

14. For example, if the left hand of a claimant is amputated,

the permanent physical or functional disablement may be

assessed around 60%. If the claimant was a driver or a

carpenter, the actual loss of earning capacity may virtually

be hundred percent, if he is neither able to drive or do

carpentry. On the other hand, if the claimant was a clerk in

government service, the loss of his left hand may not result in

loss of employment and he may still be continued as a clerk

as he could perform his clerical functions; and in that event

the loss of earning capacity will not be 100% as in the case

of a driver or carpenter, nor 60% which is the actual

physical disability, but far less. In fact, there may not be any

need to award any compensation under the head of `loss of

future earnings', if the claimant continues in government

service, though he may be awarded compensation under the

head of loss of amenities as a consequence of losing his

hand. Sometimes the injured claimant may be continued in

service, but may not found suitable for discharging the duties

attached to the post or job which he was earlier holding, on

account of his disability, and may therefore be shifted to

some other suitable but lesser post with lesser emoluments,

in which case there should be a limited award under the head

of loss of future earning capacity, taking note of the reduced

earning capacity.

15. It may be noted that when compensation is awarded by

treating the loss of future earning capacity as 100% (or even

anything more than 50%), the need to award compensation

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separately under the head of loss of amenities or loss of

expectation of life may disappear and as a result, only a

token or nominal amount may have to be awarded under the

head of loss of amenities or loss of expectation of life, as

otherwise there may be a duplication in the award of

compensation. Be that as it may.”

(emphasis supplied)

21.Similarly, in the case of K.Janardhan Vs. United India Insurance Co.

Ltd. & Anr.

2

, this Court held that :-

“The loss of earning capacity in the case of tanker driver

who had met with an accident, and lost one of his legs due to

amputation. The commissioner for Workment’s

Compensation assessed the functional disability of the

tanker driver as 100 % and awarded compensation on that

basis. The High Court, however, referred to Schedule 1 to

the Workmen’s Compensation Act, 1923, and held that loss

of a leg on amputation resulted in only 60% loss of earning

capacity. This Court set aside the judgment of the High

Court, and held that since the workman could no logner

earn his living as a tanker driver due to loss of one leg, the

functional disability had to be assessed as 100%.”

22.This Court in the case of S.Suresh Vs. Oriental Insurance Co. Ltd.&

Anr.

3

, held that :-

“9. We are of the opinion that on account of amputation of

his right leg below knee, he is rendered unfit for the work of

a driver, which he was performing at the time of the

accident resulting in the said disablement. Therefore, he has

2 (2008) 8 SCC 518

3 (2010) 13 SCC 777

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lost 100% of his earning capacity as a lorry driver, more so,

when he is disqualified from even getting a driving licence

under the Motor Vehicles Act, 1988.”

(emphasis supplied)

23.Having considered the aforesaid facts of the present case and the dictum

of the judicial pronouncements referred to above and the position of the

appellant after the accident, incapacitated her from carrying out her vocation as

a labourer, we are of the opinion that the impugned order passed by the High

Court is not liable to be sustained. The functional disability of the appellant is

liable to be assessed as 100% and, accordingly, the compensation is to be

determined. The functional disability of the appellant being 100%, her age

being 40 years and income being Rs.8000/-, 60% whereof works out to be

Rs.4800/- and applying the multiplier of 184.17, as per Schedule IV of the 1993

Act, the compensation works out to be Rs.8,84,016/-. Adding an amount of

Rs.42,200/- towards medical expenses for which the bills were presented, the

total compensation works out to be Rs.9,26,216/- rounded of to Rs. 9,30,000/-.

The appellant shall also be entitled for payment of interest @ 9% per annum,

from the date of making the application till the date of actual payment.

24.The respondent Insurance Company is directed to pay the enhanced

amount of compensation to the appellant along with 9% interest, calculated

from the date of making of the application till the date of payment within six

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weeks from today.

25.The Civil Appeal stands allowed in the aforesaid terms. All the pending

applications, if any, are accordingly disposed of. Ordered accordingly.

….......………….....………….,J

(KRISHNA MURARI)

….…..…....…..........................J.

(S. RAVINDRA BHAT)

NEW DELHI;

09

TH

DECEMBER, 2022

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