NATIONAL INSURANCE CO. LTD. versus MUBASIR AHMED AND ANR.

Citation: [2007] 2 S.C.R. 117 · Decided: 01-02-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

NATIONAL INSURANCE CO. LTD. 
v. 
MUBASIR AHMED AND ANR. 
FEBRUARY I, 2007 
[DR. ARIJIT PASA YAT AND S.H. KAPADIA, JJ.] 
Workmen's Compensation Act, 1923: 
s. 4(1)(c), Explanations I and II-Injuries sustained by employees in 
course of employment-Assessment of loss of earning capacity-Held, injuries 
being not specified in Schedule I, case covered by s.4(1)(c)-Loss of earning 
capacity is not a substitute for percentage of physical disablement-On facts, 
the doctor who examined the claimants also noted about functional 
disablement and took note of relevant factors relating to loss of earning 
capacity on the basis whereof award was made-High Court without 
indicating any reason or basis erred in holding the loss of earning capacity 
as IOO'Yo---Award of Commissioner restored 
ss.4-A and 4-A(3)-Rate of interest and period from which interest 
would be payable on awarded amount-Held, since the accident took place 
A 
B 
c 
D 
after the 1995 amendment to the Act, the rate 12% as fixed by High Court 
E 
cannot be faulted-The date from which interest becomes payable would be 
the date of completion of one month from adjudication of the claim and not 
from the date of accident-Crucial expression is 'falls due"-Unless there 
is an adjudication, question of amount falling due does not arise. 
Words and Phrases: 
Expression ''false due" occurring in s. 4-A(I) of Workmen's Compensation 
Act, 1923-Connotation of 
F 
Respondents no. I in the appeals, who were working with respondent 
no. 2 as labour/cleaner/driver of its vehicle were injured in an accident of the G 
said vehicle. They were awarded compensation by the Commissioner for 
workmen's compensation and Assistant Commissioner of Labour on the basis 
of the assessment of loss of earning capacity made by the doctor who examined 
the claimants and noted the functional disablement However, the High Court 
117 
H 
118 
SUPREME COURT REPORTS 
[2007] 2 S.C.R. 
A held the loss of earning capacity as 100% and accordingly enhanced the 
compensation. It also directed interest@ 12% from the date of accident till 
actual payment. Aggrieved, the Insurance Company filed the appeals. 
Allowing the appeals in part, the Court 
B 
HELD: 1. These cases related to injuries which were not specified in 
Schedule I and as such cases are covered by Section 4(1)(c)(ii) of the 
Workmen's Compensation Act, 1923. In terms of Explanation II the qualified 
medical practitioner has to assess loss of earning capacity having due regard 
to percentage of loss of earning capacity in relation to the different injuries. 
Loss of earning capacity is, therefore, not a substitute for percentage of the 
C 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. 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, 
D that part of the High Court's order is set aside ::nd the order of the 
Commissioner is restored, in view of the facts situation. jPara Nos. 7-81 
1122-F-H; 123-A-BI 
2. Interest is payable under Section 4A(3) of the Act, ifthere is default 
in paying the compensation due under the Act within one month from the date 
E it fell due. By Amending Act, 14 of 1995, Section 4A of the Act was amended, 
inter alia, fixing the minimum rate of interest to be simple interest@ 12%. 
In the instant case, the accident took place after the amendment and, therefore, 
the rate of 12% as fixed by the High Court cannot be faulted. [Para 91 
[123-C-D] 
F 
Maghar Singh v. Jashwant Singh, 119981 9 SCC 134, referred to. 
3. As regards the date from which the interest would be paid, the starting 
point is on completion of one month from the date on which compensation fell 
due. Obviously it cannot be the date of accident. Since no indication is there 
as to when it becomes due, it has to be taken to be the date of adjudication of 
G the clai.m. Section 4A(l) of the Act prescribes that compensation under 
Section 4 shall be paid as soon as it falls due. The crucial expression is "falls 
due". Significantly, legislature has not used the expression "from the date 
of accident". Unless there is an adjudication, the question of an amount falling 
due does not arise. [Para 91 [123-

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