Oriental Insurance Co. Ltd. v. K. F. Sebastian & Maneesh Kannan (MFA No. 221 of 2006)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** ## **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **&** **THE HONOURABLE MRS. JUSTICE MARY JOSEPH** **MONDAY, THE 22[ND] DAY OF FEBRUARY 2016 / 3RD PHALGUNA, 1937** **MFA NO. 221 OF 2006** **AGAINST THE ORDER IN WCC 249/2003 OF W.C.C., THRISSUR APPELLANT/S:** **ORIENTAL INSURANCE CO.LTD REGIONAL OFFICE, METRO PALACE,, GROUND FLOOR, OPP.NORTH RAILWAY STATION,, ERNAKULAM, REPRESENTED BY ITS, DULY AUTHORISED OFFICER.** **BY ADV SRI.VPK.PANICKER** ## **RESPONDENT/S:** **1 K.F.SEBASTIAN, S/O. FRANCIS, KAVALAKKATT HOUSE, KANDASANKADAVU,, THRISSUR. 2 MANEESH KANNAN S/O.KOLLAPARAMBIL MOHAN, VADOOKKARA,, KOORKKENCHERY, THRISSUR. BY ADV SRI.D.ANIL KUMAR** **THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 22.02.2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** -2- M.F.A No.221 of 2006 ## **JUDGMENT** ## **Ravikumar, J.** This appeal is directed against the order dated 29.6.2006 in WCC No. 249 of 2003 of the Court of the Commissioner for Workmen’s Compensation, Thrichur. The Oriental Insurance Co.Ltd., which was the 2[nd] respondent therein is the appellant herein. The 2[nd] respondent herein filed the same under section 22 of the Workmen’s Compensation Act, 1923 (for short ’the Act’) for compensation for the personal injuries sustained by him allegedly during the course under the 1[st] respondent herein. On the side of the applicant/the 2[nd] respondent herein he got himself examined as PW2 and Dr.C.P.Johny, who issued Ext.A5 disability certificate, was examined as AW1. On his side Exts. A1 to A10 were got marked. On the side of the opposite parties therein viz., the appellant and the 1[st] respondent herein none was examined, but Ext.M1 was got marked. The following issues were framed for consideration:- “1. Whether the applicant was a workman as defined in the Act and whether there were employer-employee relationship between the first opposite party and the applicant? 2. Whether there is an accident arose out of -3- M.F.A No.221 of 2006 and in the course of employment of the applicant? 3. Whether there is any permanent disability and if so what is the percentage of his loss of earning capacity? 4. The age and wage of the applicant at the time of accident? 5. Whether the applicant is entitled to get workmen’s compensation and if so the quantum of compensation payable? 6. Which of the opposite parties is liable to pay compensation?” As against issue Nos.1 and 2 it was found that the 2[nd] respondent-claimant was a workman as defined under section 2(l)(n) of the Act, there was employer-employee relationship between the first respondent and the applicant and that the accident had arisen out of and in the course of employment. The permanent disability was assessed as 25% and the loss of earning capacity as a Mini Lorry Driver was assessed as 45%. At the time of the accident the 2[nd] respondent-claimant was aged 23 years and his monthly wage was determined as Rs.3600/- and taking note of such factors the compensation payable was fixed as Rs.2,15,172/- with simple interest @ 12 % per annum. The appellant was directed to pay the said amount with interest at the aforesaid rate from 4.4.2002 till -4- M.F.A No.221 of 2006 the date of deposit. In case of failure for compliance, the above amount was held liable to be recovered from the appellant herein by initiating Revenue Recovery proceedings. It is in the said circumstances that the Oriental Insurance Co.Ltd., which was the 2[nd] respondent therein filed the captioned appeal. 2. Heard the learned counsel on both sides. 3. Section 30 of the Act that provides an appeal to the High Court against orders of the Commissioner under the Workmen's Compensation Act. Further provides that no such appeal shall lie against any order unless a substantial question of law is involved in the appeal. Construing this provision Krishna Iyer J. in the decision in **N.L. Lalan v. V.A. John** reported in **1972 KLJ 252** held that the said provision should be construed as to discourage appeals at the instance of employers even if there be some question of law or gross errors of facts unless very substantial legal issues arise. Bearing in mind the said provision as also the said decision, we will proceed with the consideration of the contentions and the questions of law raised in this appeal. -5- M.F.A No.221 of 2006 4. The facts in brief necessary for disposal of the appeal are as follows:- The 2[nd] respondent herein/applicant claimed that he is employed as the driver of mini lorry bearing registration No.KL-8/Q-8330 belonging to the 1[st] respondent. On 4.4.2002 at about 11.30 AM while he was driving the said vehicle through Palakkad-Trichur road it collided with a lorry coming from the opposite direction at a place called Kannady and he sustained severe injuries and as a consequence of which he incurred permanent disability resulting in loss of earning capacity. It is seeking compensation for the personal injuries sustained that he filed the aforementioned claim petition. The 1[st] respondent remained _ex parte_ before the Court of the Commissioner. Though the appellant disputed a claim before the Commissioner, a perusal of the contentions in the appeal would reveal that regarding the employee-employer relationship between the 2[nd] and the 1[st] respondents, which issue was found in favour of the claimant, no contention is raised in this appeal. So also, it is evident from the memorandum of appeal that the accident in question and the -6- M.F.A No.221 of 2006 fact that it arose out of and in the course of employment of the 2[nd] respondent are also not in dispute. The core contention is that the Commissioner had erred in refusing to refer the applicant to a medical board in spite of filing an application therefor, by the appellant, taking note of the fact that Ext.A5 disability certificate was disputed. In the said context, the appellant had raised the question whether the Commissioner had committed an error in refusing to refer the applicant to a medical board in spite of documentary evidence that the medical certificate relied on by the applicant was not trustworthy, as substantial question of law. So also, another question of law as to whether the Commissioner had committed error in fixing the loss of earning capacity solely based on Ext.A5 disability certificate ignoring Ext.A10 X-ray showing united fractures, is also raised as a substantial question of law. We will deal with the same a little later. 5. After appreciating the evidence on record, as noticed hereinbefore, the Commissioner had fixed the loss of earning capacity as 45% took the monthly income as Rs.3,600/- and awarded Rs.2,15,172/- along with the simple -7- M.F.A No.221 of 2006 interest at the rate of 12% from 4.4.2002 till the date of realisation. As relates the order for payment of interest from the date of the accident the appellant has paused a question as a substantial question of law on the following lines:- “C) Whether the Commissioner for Workmen's Compensation did not err in fixing the appellant with liability under the Workmen's Compensation Act to pay interest on the amount awarded from the date of accident, when the appellant came to know of the accident and injury only on the subsequent date i.e., on receipt of intimation of the case from the W.C. Court?” 6. We have already noted that in this appeal, the fact that the accident had arisen out of and in the course of employment of the 1[st] respondent is not in dispute. The employee-employer relationship between the 1[st] and 2[nd] respondents is also not in dispute. In the accident the applicant sustained type-III open fracture on both bones of right leg. Ext.A5 is the disability certificate issued by AW1. In Ext.A5 it was noted thus:- “1. Ugly scar on (a) posterior part of leg extending from the middle of calf muscles right to the lower third of leg (b) auteromedial surface lower third of right leg (c) auteromedial side of upper third of leg with keloid tendency right side. -8- M.F.A No.221 of 2006 2. Severe wasting of right Quadriceps. 3. Wasting of right calf muscles 4. Disfigured right leg 5. Swelling of right ankle. 6. Partial anklyosis of (a) right ankle flexion and extension motion limited to an arc from 105[o] ankle to 125[o] plantar flexion (b) right knee motion limited to an arc from 180[o] to 110[o] flexion, 7. Invertion and evertion of the right ankle and foot limited to an arc from 25[o] invertion and abduction to 10[o] evertion and abduction.” 7. True that AW1 had not treated the 1[st] respondent/applicant. However, he is the doctor who medically examined and assessed the extent of disability of the 1[st] respondent and issued Ext.A5. One of the grounds raised in the appeal is that the Commissioner ought to have rejected Ext.A5 disability certificate on the sole ground that AW1 had not treated the applicant nor was associated with the hospital where the applicant was treated. In the contextual situation, it is only apposite to refer to the decision of Honourable Apex Court in **Raj Kumar v. Ajay Kumar** reported in **2011 (1) KLT 620 (SC)** . Though it is a decision rendered in respect of a claim for compensation under Section 168 of the Motor Vehicles Act, 1988 we are of the view that in -9- M.F.A No.221 of 2006 ## respect of the aforesaid question it has great relevance. “8. 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. 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 -10- M.F.A No.221 of 2006 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 (see for example, the decisions of this Court in Arvind Kumar Mishra v. New India Assurance Co.Ltd-2010(10) SCALE 298 and Yadava Kumar v. D.M. National Insurance Co.Ltd. -2010(8) SCALE 567). ## 9. xxxxxx xxxxxx 10. Ascertainment of the effect of 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. 11. Xxxx xxxx xxx 12. xxxx xxxx xxxx. The Tribunal -11- M.F.A No.221 of 2006 may invariably make it a point to require the evidence of the Doctor who treated the injured or who assessed the permanent disability. Mere production of a disability certificate or Discharge Certificate will not be proof of the extent of disability stated therein unless the Doctor who treated the claimant or who medically examined and assessed the extent of disability of claimant, is tendered for crossexamination with reference to the certificate. If the Tribunal is not satisfied with the medical evidence produced by the claimant, it can constitute a Medical Board (from a panel maintained by it in consultation with reputed local Hospitals/Medical Colleges) and refer the claimant to such Medical Board for assessment of the disability.” 8. In the light of the aforesaid decision the appellant cannot be heard to contend that Ext.A5 disability certificate ought to have been rejected solely on the ground that AW1 had neither treated the applicant nor was associated with the hospital, where the applicant was treated. Evidently, he is the doctor who medically examined the 1[st] respondent/applicant and issued Ext.A5 after assessing the extent of disability. As stated in the impugned order AW1 was also subjected to cross-examination by the opposite party, viz., the appellant. When the fact is that AW1 is the doctor who medically examined the 1[st] respondent/applicant and issued Ext.A5 after -12- M.F.A No.221 of 2006 assessing the extent of disability and he was tendered for cross-examination on behalf of the appellant, with reference to the certificate and when nothing was elicited to discredit him the aforesaid contention of the appellant is only to be rejected. It cannot be said that, in the said circumstances, merely because the appellant disputed the correctness of the medical certificate with respect to the assessment of the extent of disability, the Commissioner should have referred the applicant to a medical board. As held by the Apex Court, the reference of constitution of a medical board is required only if the Commissioner is not satisfied by the medical evidence produced by the claimant. No specific provision was brought to the notice in the Act, which mandates that when such an application is made invariably the claimant should be referred to a medical board. The afore-extracted paragraph 10 of the decision in **Raj Kumar's** case (supra) reveals the method to be adopted for ascertainment of the effect of permanent disability on the actual earning capacity. The permanent disability was assessed under Ext.A5 as 25%. The loss of earning capacity in respect of the applicant was assessed, -13- M.F.A No.221 of 2006 taking note of his avocation as a mini lorry driver. Taking note of the nature of work, definitely frequent use of the legs is required. The nature of the difficulties noted in Ext.A5 disability certificate and the assessed permanent disability would indicate that the assessed percentage of loss of earning capacity is not excessive. The appellant has taken a contention that in terms of Part II of Schedule I of the Act the maximum percentage of loss of earning capacity which could be reckoned for computing compensation for amputation below knee is only 50%. This is assigned as a reason to contend that the Commissioner had erred in fixing the loss of earning capacity at 45%. We do not find any force in the said contention. The effect of permanent disability on actual earning capacity would depend upon many aspects, such as nature of work, difficulties arising out of the permanent disability, etc. Though the Commissioner had not undertaken a detailed examination of such aspects, in view of a finding that Ext.A5 was rightly admitted into evidence and rightly acted upon and also taking note of the nature of the avocation taken up by the applicant and the nature of the difficulties noted in M.F.A No.221 of 2006 -14- Ext.A5, we do not find any reason to interfere with the fixation of loss of earning capacity as 45% by the Tribunal. Consequently, the disinclination on the part of the Commissioner to refer the applicant to a medical board despite the filing of application in that regard by the appellant, cannot be said to be a gross error that warrants an appellate interference. 9. With respect to the contention of the appellant that the Commissioner committed an error in fixing the liability of the appellant to pay interest on the amount awarded from the date of accident, we are of the view that, merely because the appellant came to know about the accident only on a subsequent date cannot be a reason to raise such a contention. We have no hesitation to hold that once it is found that the applicant is a workman going by the definition under Section 2(l)(n) of the Act, the accident arose out of and in the course of employment and further that on account of the injuries sustained the applicant incurred permanent disability resulting loss of earning capacity, no illegality can be attributed in the matter of direction to grant interest for the -15- M.F.A No.221 of 2006 awarded amount from the date of the accident. It is to be noted that simple interest is ordered only at the rate of 12% per annum till the date of realisation. This also cannot be said to be a matter warranting appellate interference. In the light of the discussion as above, this appeal is to be found as meritless. Consequently, the appeal stands dismissed. **Sd/C.T.RAVIKUMAR JUDGE** **sd/MARY JOSEPH JUDGE** das