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Kerala Minerals And Metals Ltd., Kollam v. K. Bhaskaran
Factual and Procedural Background
This opinion concerns three appeals arising from orders of the Commissioner for Workmen's Compensation, Kollam, in W.C.C. Nos. 84/88, 64/88 and 63/88. The appellant in all three appeals is Kerala Minerals and Metals, Ltd. The respondents are workmen employed by the appellant. By consent of the parties the three appeals were heard together because the parties and the points for determination are the same.
A concise description of each appeal as set out in the opinion:
- M.F.A. No. 220 of 1993 — A Grade I workman claimed Rs. 45,927 under S. 22 of the Workmen's Compensation Act for injuries allegedly sustained on 19 November 1985 (left thumb crushed due to breakage of an axle). The Commissioner awarded Rs. 22,964 with 6% interest from 17 December 1988, assessing 30% loss of earning capacity.
- M.F.A. No. 221 of 1993 — A workman claimed Rs. 25,000 for an injury to his right thumb allegedly sustained while removing stones from a pit (thumb fractured). The Commissioner awarded Rs. 19,250 with 6% interest from 2 November 1988, assessing 30% loss of earning capacity.
- M.F.A. No. 332 of 1993 — A workman claimed Rs. 25,000 for injuries on 30 January 1987 (middle and ring finger on right hand crushed and fractured). The Commissioner assessed 19% loss of earning capacity and awarded Rs. 12,191 with 6% interest from 2 November 1988.
Legal Issues Presented
- Whether a workman who, after sustaining a permanent partial disablement, continues in employment receiving the same emoluments is nevertheless entitled to compensation under S. 4(1)(c)(ii) of the Workmen's Compensation Act — i.e., whether continuity of employment at the same wages defeats a claim based on loss of earning capacity arising from permanent partial disablement.
Arguments of the Parties
Appellant's Arguments (Management)
- The management's sole legal contention before the court was that because the workmen continued in service and were receiving the same emoluments as at the time of the accident, there was no loss of earning capacity and consequently no liability to pay compensation under S. 4(1)(c)(ii) of the Workmen's Compensation Act.
- To support this contention the management relied on the decision in Sewa Singh Ladka Singh v. Manager, Indian Hume Pipe Company, Ltd., A.I.R. 1964 Pun. 512 (Single Judge, Punjab High Court), where it was held that continuous employment at the same wages post-injury precluded a finding of loss of earning capacity for the purpose of compensation under the Act.
Respondents' Position (Workmen)
- Each respondent workman filed a claim under the Workmen's Compensation Act alleging personal injury arising out of and in the course of employment and sought statutory compensation (specific amounts claimed were indicated in each application).
- The Commissioner found that the injuries resulted in permanent partial disablement and assessed loss of earning capacity (30% in two cases; 19% in the third), awarding corresponding compensation with interest.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sewa Singh Ladka Singh v. Manager, Indian Hume Pipe Company, Ltd., A.I.R. 1964 Pun. 512 | Held by a Single Judge of the Punjab High Court that where a workman, after permanent disablement, continues in the same employment doing the same work and receiving full wages (including increments), there is no loss of earning capacity and compensation under S. 4(1)(c)(ii) is not maintainable. | The appellant relied on this decision to argue that continuation in service at the same emoluments negates loss of earning capacity. The court in the present opinion rejected the reasoning of Sewa Singh and declined to follow it. |
| Sree Lalithambika Enterprises, Salem v. S. Kailasam, 1988 (1) L.L.N. 393 (Division Bench, Madras High Court) | Holds that loss of earning power should not be confined to present capacity; continuing a worker on the same terms cannot be allowed to defeat statutory compensation; prospective disadvantages (e.g., difficulty in securing alternate employment or employer winding up) are relevant to assessment under S. 4(1)(c)(ii). | The court expressly endorsed this Division Bench decision and relied on its reasoning to conclude that continuation in employment at the same wages does not automatically prevent an award for permanent partial disablement under S. 4(1)(c)(ii). |
| Executive Engineer, Public Works Department, Udaipur v. Narain Lal, 1977 (2) L.L.N. 415 (Rajasthan High Court) | Affirms that the Workmen's Compensation Act provides security to workmen independent of employer's benevolence; loss of earning capacity is to be calculated in terms of the permanent partial disability, not by relying on the employer's continued payment. | The court cited this judgment to support the proposition that the statutory protection is independent of any acts of grace by the employer and to reject the management's contention that continued payment of wages defeats a claim for compensation. |
| Judgment of a Single Judge of the Orissa High Court (unnamed in the opinion) | Holds that comparison of wages before and after the accident is not determinative of loss of earning capacity for permanent partial disablement; an employer could otherwise offer temporary employment to avoid liability, which would be contrary to legislative intent. | The court relied on this reasoning as further authority to reject the management's argument that continuation in employment at the same wages precludes an award under S. 4(1)(c)(ii). |
Court's Reasoning and Analysis
The court proceeded by first recounting the factual findings of the Commissioner for each of the three workmen (nature and dates of injuries, the Commissioner's assessment of permanent partial disablement and percentage loss of earning capacity, and the awards with interest).
The learned counsel for the appellant raised a single legal question: whether continuation of the workmen in employment at the same emoluments after injury means there is no loss of earning capacity under S. 4(1)(c)(ii) and hence no liability to pay compensation. The appellant relied chiefly on Sewa Singh (Punjab).
The court examined the competing judicial authorities. It expressly rejected the view taken in the Punjab High Court decision (Sewa Singh) and accepted the contrary approach taken by a Division Bench of the Madras High Court (Sree Lalithambika Enterprises v. S. Kailasam), as well as supporting decisions from the Rajasthan High Court (Executive Engineer, P.W.D. Udaipur v. Narain Lal) and a Single Judge of the Orissa High Court.
Key elements of the court's reasoning, drawn from and aligned with the authorities it follows:
- Loss of earning capacity for the purpose of S. 4(1)(c)(ii) should not be restricted to a mechanical comparison of present wages alone. To so confine the concept would allow employers to defeat the statutory scheme by continuing a worker in employment on the same terms despite a permanent disability.
- The Act provides statutory protection that is independent of any voluntary or benevolent acts of an employer; therefore, an employer's choice to continue the worker at the same wages cannot negate the statutory right to compensation where a permanent partial disablement has occurred.
- Consideration must be given to the practical and prospective consequences of the disability (for example, the likelihood of future unemployment, difficulty in obtaining alternative employment, or the employer winding up), which justify assessing compensation despite continuation in employment at the same wages immediately after the accident.
- Allowing the employer's present continuation of wages to be determinative would undermine the beneficial object of the statute and permit evasion of statutory liability.
On this basis, the court concluded that the management's sole legal contention lacked merit and that the Commissioner's awards based on assessed percentages of loss of earning capacity were sustainable.
Holding and Implications
Final Ruling: The court dismissed all three appeals (M.F.A. Nos. 220, 221 and 332 of 1993) and also dismissed the connected miscellaneous petitions: C.M.P. No. 911 of 1993 in M.F.A. No. 220 of 1993-A, C.M.P. No. 914 of 1993 in M.F.A. No. 221 of 1993-A and C.M.P. No. 1417 of 1993 in M.F.A. No. 332 of 1993. The court ordered no costs.
Implications:
- The direct effect of the decision is that the awards made by the Commissioner for Workmen's Compensation (the monetary awards with interest and the assessed percentages of loss of earning capacity) are upheld against the employer's challenge.
- The court explicitly rejected the narrower view that continuation in employment at the same wages automatically negates entitlement to compensation under S. 4(1)(c)(ii); instead it followed decisions that interpret loss of earning capacity more broadly and purposively. The opinion thus applies established authority (as cited) to resolve the legal question in favour of the workmen in these appeals.
- The opinion does not set out any separate or expansive discussion of broader legal consequences beyond affirming the awards and endorsing the reasoning of the cited Division Bench and High Court decisions; the practical consequence is that employers cannot rely on continued payment of wages alone to defeat statutory compensation claims for permanent partial disablement.
Note: This summary is strictly confined to the matters explicitly stated in the provided opinion. No information has been inferred or added beyond the text of the opinion.
Lakshmanan, J.:— Heard both sides. All the three appeals arise out of the orders passed by the Commissioner for Workmen's Compensation, Kollam, in W.C.C Nos 84/88, 64/88 and 63/88. The Kerala Minerals and Metals, Ltd, which is the opposite party before the Commissioner for Workmen's Compensation is the appellant in all the three appeals. The respondents were working in the appellant-company. The parties to the proceedings and the points for determination in all the three appeals are one and the same. Hence by consent of both the parties all the three appeals were taken up together for final hearing.
2. Respondent in M.F.A No 220 of 1993 is a worker, Grade I under the appellant. He filed an application under S. 22 of the Workmen s Compensation Act, 1923, hereinafter referred to as the Act before the Commissioner for Workmen's Compensation, Kollam, hereinafter referred to as the Commissioner claiming an amount of Rs. 45,927 from the appellant alleging that he sustained personal injury on 19 November, 1985 by accident arose out of and in the course of his employment with the appellant. The workman alleged in the application that on account of the accident his thumb on the left hand was crushed due to breakage of the axle of the loaded truck.
3. The management has refuted the claim of the workmen and contended that after the accident the workman is getting the same emoluments which he was drawing at the time of the accident and, therefore, no loss or damage caused to the workman as a result of the injury.
4. The Commissioner after considering the evidence, both oral and documentary, directed the management to pay a sum of Rs. 22,964 with 6 per cent interest from 17 December, 1988 to the workman as compensation for permanent disablement and sustaining 30 per cent loss of earning capacity.
5. M.F.A No. 221 of 1993 was also filed by the same management against another worker who raised similar contentions and claimed a compensation of Rs. 25,000 alleging that he sustained injuries during employment and that when he was removing stones from the pit, his right thumb accidentally touched the brim of the bucket and sustained an injury on his right thumb and thumb fractured. The management refuted the contention as in the other case. The Commissioner awarded a compensation of Rs. 19,250 together with interest at 6 per cent from 2 November, 1988 to the workman and has also assessed the loss of earning capacity as 30 per cent due to the injury.
6. M.F.A No. 332 of 1993 was again filed by the same management against few other workers against the order of the Commissioner for Workmen's Compensation. In this case the workman has claimed a sum of Rs. 25,000 from the management alleging that he sustained personal injury on 30 January, 1987 by accident arising out of and in the course of his employment. The workman has alleged that while he was on duty on 30 January, 1987 the finger on his right hand got in between the wheel of the truck and the rail on which it was run and consequently the middle finger and ring finger on the right hand was crushed and fractured. The Commissioner fixed the loss of earning capacity at 19 per cent and awarded a compensation of Rs. 12,191 with 6 per cent interest from 2 November, 1988.
7. At the time of hearing the learned counsel for the appellant raised the only legal contention. According to the learned counsel for the management that since the workman has not suffered loss of earning capacity which alone will make the management liabel for compensation under S. 4(1)(c)(ii) of the Act and that mere loss of some fingers or other injuries without there being loss of earning capacity the workman will not be entitled for compensation. He further submitted that since the workmen were being continued in service they will not be entitled to any compensation for the injury sustained by them. In support of his contention the learned counsel for the management cited the decision reported in Sewa Singh Ladka Singh v. Manager, Indian Hume Pipe Company, Ltd., [A.I.R 1964 Pun. 512]. The above ruling was rendered by a learned Single Judge of the Punjab High Court. In that case the appellant was working as a fitter with the respondent-company and the appellant sustained a fracture on his right leg and was hospitalised for a period of five months from where he was discharged on the 1st of December 1959. Thereafter the appellant has been continuously employed with the respondent-company after his permanent disability. The claim of the workmen was founded on Cl. (c) of Sub-sec. (1) of S. 4 of the Workmen's Compensation Act, 1923, which provides that compensation would be payable where permanent partial disablement results from the injury. It was contended on behalf of the management that should the appellant be discharged and compelled to seek employment elsewhere at a reduced wage he would be entitled to claim compensation under S. 4, Sub-sec. (1) Cl. (c) Sub-cl. (ii) of the Act. The learned Single Judge of the Punjab High Court held that in assessing compensation under S. 4(1)(c)(ii) the loss of earning capacity of a workman as a result of his permanent total disablement has to be taken into consideration and indeed the compensation has to be made proportionate to the loss of earning capacity. Therefore, where the workman after his permanent total disablement due to an accident was continuously employed to do the same work which he was doing before the accident and received full wages as well as increments which had accrued since the time when he was discharged from the hospital. The Court held that there was no loss of earning capacity and hence the workmen's claim for compensation under S. 4(1)(c), Sub-cl. (ii) was not maintainable.
8. With respect we are unable to subscribe to the views expressed by the learned Single Judge of the Punjab High Court in the above judgment. The Madras High Court, Orissa High Court and the Rajasthan High Court have take diametrically opposite view. We shall now refer to the decision of the Division Bench of the Madras High Court reported in Sree Lalithambika Enterprises, Salem v. S. Kailasam, [1988 (1) L.L.N 393].
The above ruling was rendered by a Division Bench of the Madras High Court. In that case the management has preferred the appeal against the judgment of the Additional Commissioner for Workmen's Compensation, Coimbatore, and the learned Single Judge of the Madras High Court. In so far as the workman has been awarded compensation in a sum of Rs. 11,020.80 under the Workmen's Compensation Act. The workman in that case filed petition under S. 10 of the Act claiming compensation for the loss of four fingers in his left hand due to an accident which took place on 17 August, 1978. The said accident took place in the course of the employment in the appellant's enterprises. The management opposed the claim inter alia on two grounds:
(1) The accident took place on a day which was a holiday for the factory, and
(2) in any event, by the loss of four fingers on the left hand the workman had not suffered any loss of earning capacity under S. 4(1)(c). Both the above contentions have been negatived by the Additional Commissioner for Workmen's Compensation and the compensation was awarded Some points were reiterated before the learned Single Judge. The decision of the Punjab High Court in Sewa Singh v. Indian Hume Pipe Company reported in A.I.R 1964 Pun. 512 was also cited by the management. Mohan, J., as he then was speaking for the Division Bench observed as follows:
“We have given our very careful consideration to the above arguments. We are of the view that both the points raised by the learned counsel for the appellant are not sustainable. In this case, the evidence discloses that the accident took place round about 9.30 A.M because by 9.40 A.M a medical officer by name Dr. Sundaramurthi had come to treat the workman when the latter was brought to the hospital of which due intimation was given to the police. Therefore, though the management had examined the manager of State Bank of Travancore to the effect that he inspected the factory at 11 A.M on 17th August, 1978, and that it was a holiday, that will not advance the case of the appellant. Inasmuch as the accident took place during the course of cleaning the machinery certainly it must be held to be ‘in the course of employment.’ We see no reason to dislodge the factual finding.
Coming to the scope of S. 4(1)(c)(ii) of the Act, we are of the view that the loss of earning power should not be confined only to the present capacity because it is contended by the management that at the same salary the workman is continued in employment. That will be only begging the question. If this were to be the Taw, the employer can easily evade the provisions of the Act by continuing the employment of the same terms as was enjoyed by the workman prior to the accident. Therefore, we are unable to agree with the view taken by the Punjab High Court in Sewa Singh v. Indian Hume Pipe Company (vide supra). Nor again can it be said that if in future the workman is compelled to seek employment at reduced wages he can claim compensation. That would only result in the negation of the beneficial provisions of the Act which are intended to benefit unfortunate workmen like the respondent herein. Added to this, should the management wind up its business, the workman will be in the lurch because no person with his eyes open will give employment to a person who had suffered an injury of this kind. Therefore, this is clearly a case to which S. 4(1)(c)(ii) of the Act would apply. Consequently, we agree with the judgment forming the subject-matter of the appeal”
9. The decision in Executive Engineer, Public Works Department Udaipur v. Narain Lal, [1977 (2) L.L.N 415], is another judgment against the management. In that case also for the injuries sustained during the course of employment the workman claimed a compensation of Rs. 4,800. The management challenges the award on the ground that there was no permanent partial disablement and there was no loss of earning capacity and the workman continued in the same service and earning the same emoluments. The learned Single Judge of Rajasthan High Court held as allows, in Para. 9, at page 415:
“…Held, the Workmen's Compensation Act is to provide security to the workmen who sustain partial incapacity resulting in the earning capacity. This statutory protection is independent of the acts of grace or mercy which the employer might show him. In a welfare State, the protection afforded to a workman cannot be allowed to rest on the mercies of the employer. If the employer does so, it is commendable, but the workman still has a stake in his employment which is guaranteed to him under the Workmen's Compensation Act. Therefore, the loss in the earning capacity has to be calculated in terms of the permanent partial disability to which the workman has been subjected to….”
10. Another judgment rendered by a learned Single Judge of the Orissa High Court can also be usefully referred to in the present context. Before the said Court the management has taken the plea that in case of continuance of engagement and non-reduction in earning, compensation is not payable. The said argument of the management was not found favour with the Court. The Court held, in Para. 16, at page 419:
“… In considering the loss of earning capacity in the case of a ‘permanent partial disablement,’ the comparison between the wages drawn by the workmen before and after the accident, from his employer at the time of the accident is not a determinative factor. If that be so, the cunning employer to tide over the liability may offer a temporary employment to the claimant — Workman to deprive him his entitlement under the Act. That would be against the legislative intent. The plea that there being no loss in the wages, compensation could not have been awarded, cannot be accepted.”
11. We respectfully agree with the Division Bench judgment reported in 1988 (1) L.L.N 393 (vide supra). The Division Bench of the Madras High Court and the judgments rendered by the Orissa and Rajasthan High Court is a direct answer to the question of law raised by the counsel for the appellant at the time of hearing. We, therefore, dismiss all the three appeals. C.M.P No. 911 of 1993 in M.F.A No. 220 of 1993-A, C.M.P No. 914 of 1993 in M.F.A No. 221 of 1993-A and C.M.P No 1417 of 1993 in M.F.A No. 332 of 1993 also stand dismissed. No costs.
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