KAMAL DEV PRASADversusMAHESH FORGE

                 [2025] 4 S.C.R. 2053 : 2025 INSC 591

                            Kamal Dev Prasad
                                   v.
                             Mahesh Forge
                       (Civil Appeal No. 5667 of 2025)
                                 29 April 2025
           [Sudhanshu Dhulia and K. Vinod Chandran,* JJ.]


                           Issue for Consideration
       Whether the High Court erred in reducing the percentage of
       disability as per the Employees’ Compensation Act, 1923 while
       determining the compensation.

                                  Headnotes†
       Employees’ Compensation Act, 1923 – Schedule to the Act –
       Functional disability – Reduction of – When not proper –
       Determination of compensation – Appellant, a forging machine
       operator met with an accident while operating the machine
       losing one or more phalanges of four fingers of his right hand –
       Commissioner allowed 100% disability and determined the
       compensation – In appeal, High Court while determining the
       compensation reduced the disability to 34% – Interference with:
       Held: There can be a departure from the Schedule in deciding
       the functional disability – There is no loss assessment for
       amputation of two and a half phalanges of the index finger as per
       the schedule, which in any event has to be taken as a whole loss
       for which the disability is 14% – Hence, in any event the disability
       even as determined by the Schedule to the Act would be 37%
       aggregating the total loss – Further, the disability as determined
       by the statute is for the specific loss of a phalanx or a finger and
       in the event of more than one such loss it cannot be said that a
       mere aggregation would determine the actual loss – Appellant’s
       working hand was seriously mutilated by the loss of one or more
       phalanges of four fingers – The middle and index finger having
       been disabled completely and the ring finger and the little finger
       having lost two phalanges and one phalanx respectively, functionally
       it is difficult for the right hand to be used with the same grip as
       available prior to the accident – Though a 100% disability cannot
       be assessed, insofar as the mutilation of the one hand which is
       also the operational hand, the right hand, the loss is determined
       at 50% – Compensation determined. [Paras 7, 8, 10, 11]
* Author
2054                                                         [2025] 4 S.C.R.

                         Supreme Court Reports


                              Case Law Cited
     Oriental Insurance Co. Ltd. v. Mohd. Nasir [2009] 8 SCR 829 :
     (2009) 6 SCC 280 – referred to.

                                List of Acts
     Employees’ Compensation Act, 1923; Motor Vehicles Act, 1988.

                             List of Keywords
     Functional disability; Reduction of functional disability; Forging
     machine operator; Accident; Forging machine; Right hand;
     Operational hand; Lost phalanx of little finger, Lost phalanges of
     fingers; Middle and index finger; Ring finger and the little finger;
     Amputation; 100% disability.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5667
     of 2025
     From the Judgment and Order dated 10.12.2021 of the High Court
     of Judicature at Bombay in FA No. 1781 of 2008

                         Appearances for Parties
     Advs. for the Appellant:
     Ms. Vidya Vijaysinh Pawar.
     Advs. for the Respondent:
     Amol Chitale, Sarthak Sharma, Mrs. Pragya Baghel.

                Judgment / Order of the Supreme Court

                                 Judgment

     K. Vinod Chandran, J.

1.   Leave granted.
2.   The appeal is filed against the reduction of the disability as per the
     Employees’ Compensation Act, 1923 (as it is presently named). The
     Commissioner under the Act allowed 100% disability and adopted
     the factor of 213.57 thus determining the total compensation to be
     ₹ 3,20,355/-. The Commissioner also awarded 12% interest from
     the date of accident and 50% penalty i.e. ₹ 1,60,178/- for reason of
[2025] 4 S.C.R.                                                        2055

                        Kamal Dev Prasad v. Mahesh Forge


      the employer having not paid the compensation within one month
      from the accident. The employer filed an appeal, the order in which
      is impugned herein by the employee.
3.    The only contention taken is that Part II of Schedule I of the Act lists
      out the injuries and the percentage of loss of earning capacity is
      statutorily determined. The appellant is entitled to only 34% was the
      contention of the employer which was accepted by the High Court.
4.    We heard learned counsel, Ms. Vidya Vijaysinh Pawar appearing
      for the appellant employee and learned counsel, Mr. Amol Chitale
      appearing for the respondent employer.
5.    The appellant was an employee from 05.04.2002 and at the relevant
      time was engaged to operate a forging machine. The employee was
      also paid a salary of ₹ 2,500/- p.m. as recorded in the registers
      maintained by the employer. On 06.11.2004, late in the night, while
      operating the machine, a part of the machine fell on his hand and
      while he was removing the band of the handle lock, his right hand was
      caught in the machine. He was admitted to a hospital and remained
      there till 24.12.2004. At the hospital, he underwent surgery and lost
      one phalanx of the little finger, two phalanges of the ring finger,
      three phalanges of the middle finger and two and a half phalanges
      of the index finger.
6.    The loss of phalanges of each of the fingers are specifically noticed
      in the Schedule to the Act wherein the loss of earning capacity
      also has been determined, totalling which, loss of earning capacity
      occasioned to the employee is determined. The High Court found
      that the disability is only to the extent of 34%. Many decisions
      with respect to functional disability were referred to and they were
      distinguished on the ground that those were with respect to motor
      accident claims whereas in the present case, the loss has been
      statutorily determined. It was also noticed that there was no disability
      certificate issued by a doctor or a Medical Board.
7.    We have to first notice that contrary to what the High Court found,
      in Oriental Insurance Co. Ltd. v. Mohd. Nasir,1 this Court held that
      both the Workmen’s Compensation Act, 1923 and the Motor Vehicles
      Act, 1988 are beneficial legislations aimed at providing expeditious


1    (2009) 6 SCC 280
2056                                                           [2025] 4 S.C.R.

                          Supreme Court Reports


     relief to the victims of accidents; in the former to employees and in
     the latter to third parties. It was also held that the statutes hence
     deserve liberal construction. True, this Court also held in the cited
     decision that when injuries are specified in Schedule I and the
     mode and manner for calculating the amount of compensation
     also stipulated, the same would be applicable. This Court had also
     noticed that the Motor Vehicles Act created a legal fiction insofar as
     permitting reference to Schedule I of the Workmen’s Compensation
     Act, 1923 (as it was named then) which correlates the permanent
     disability, at least in certain cases, with the functional disability. After
     noticing Explanation 1 to Section 4 of the Act of 1923, this Court, in
     the cited case, also held that ‘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.’(sic-para27). Hence it is not as if there can never be a
     departure from the Schedule in deciding the functional disability, which
     it has been recognised would in certain cases have a corelation with
     the physical disability.
8.   In the present case, we have a situation in which not one finger was
     affected but four fingers of the same hand. The employee also has a
     contention that he can no more work as a forging machine operator,
     the functionality for which he has been deprived, by reason of the
     accident. We have to first notice that there is no loss assessment for
     amputation of two and a half phalanges of the index finger as per
     the schedule, which in any event has to be taken as a whole loss for
     which the disability is 14%. Hence, in any event the disability even
     as determined by the Schedule to the Act would be 37% aggregating
     the total loss.
9.   In this context, we have to notice Explanation 1 to sub-Section (1)
     (c) of Section 4 which provides that when more than one injury is
     caused in the same accident the amount of compensation payable
     under the Act shall be aggregated, but not to the extent of such
     aggregation exceeding the amount which would have been payable
     if permanent total disablement had resulted from the injuries.
10. The disability as determined by the statute is for the specific loss of
    a phalanx or a finger and in the event of more than one such loss it
    cannot be said that a mere aggregation would determine the actual
    loss. True a medical certificate had not been produced which would
[2025] 4 S.C.R.                                                          2057

                      Kamal Dev Prasad v. Mahesh Forge


     have aided the Court in assessing the functional disability. However,
     the fact remains that the appellants working hand has been seriously
     mutilated by the loss of one or more phalanges of four fingers. The
     middle and index finger having been disabled completely and the
     ring finger and the little finger having lost two phalanges and one
     phalanx respectively, functionally it is difficult for the right hand to be
     used with the same grip as available prior to the accident. Though
     a 100% disability cannot be assessed, insofar as the mutilation of
     the one hand which is also the operational hand, the right hand, we
     are inclined to determine the loss at 50%.
11. The loss thus would be accessed as ₹ 2,500/- x 60% x 213.57 which
    comes to ₹ 3,20,355/-. Fifty percent of the same would come to
    ₹ 1,60,177.5. The employee would also be entitled to 12% interest
    from the date of accident and 50% of the penalty; i.e. ₹ 80,088.75/-
    as penalty. If the amounts as directed by the High Court has been
    paid, then the excess amount shall be paid with interest at 12% from
    the date of accident and half of the enhanced amount as penalty.
12. The Appeal stands allowed with the above directions.
13. Pending application(s), if any, shall stand disposed of.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Divya Pandey