SRINAGAR: The Jammu Kashmir and Ladakh High Court has upheld a compensation award of Rs 93,000 to a casual labourer who suffered permanent disability in a workplace accident, while directing the Labour Commissioner to reconsider whether the employer should pay an additional penalty for delaying the payment.
Justice Shahzad Azeem, in a judgment pronounced on October 5, partly allowed an appeal filed by Mohi Ud Din of Shagan village in Banihal tehsil of Ramban district, holding that the original compensation calculation did not warrant interference but the claim for a penalty had not been properly examined.
The case relates to an accident on September 20, 2006, when a rolling boulder struck Ud Din’s right leg while he was engaged in drilling work on the Nachalana-Hingni-Bhata road. He was employed as a casual labourer and earned Rs 3,170 a month, including an additional payment for operating a drilling machine or jackhammer. His permanent disability was assessed at 30 per cent.
The Assistant Labour Commissioner, acting as the Commissioner under the Employees’ Compensation Act, 1923, had awarded him Rs 93,000 along with simple interest of Rs 47,400 at 12 per cent per annum for the period from the date of the accident until January 10, 2011.
Challenging the award, Ud Din argued that his loss of earning capacity should have been assessed at 100 per cent despite the medical disability assessment of 30 per cent. He also sought compensation of Rs 2,58,465 and an additional penalty of up to 50 per cent for the delayed payment.
The respondents, including the Union of India and officials associated with the General Reserve Engineer Force, opposed the appeal, arguing that Ud Din had subsequently been employed as a watchman and had not established that the delay in payment was unjustified.
Rejecting the challenge to the compensation calculation, the High Court observed that the admitted monthly wages, age of 47 years at the time of the accident and 30 per cent disability supported the amount awarded by the Commissioner.
The court calculated compensation for permanent total disablement at Rs 3,10,159 by applying the statutory factor of 163.07 to 60 per cent of the monthly wages. Applying the 30 per cent loss of earning capacity resulted in Rs 93,047.74, which rounds to Rs 93,048. The difference from the Rs 93,000 awarded was attributable to rounding and did not constitute an error in the calculation method.
The court also rejected the claim for Rs 2,58,465, explaining that the figure was based on the statutory formula applicable to death cases and did not apply to permanent partial disablement.
On the claim that the loss of earning capacity should have been assessed at 100 per cent, Justice Azeem held that the appellant had not established any perversity in the Commissioner’s assessment. The question of whether the injury affected his ability to perform other work, including the watchman’s job referred to by the respondents, involved an appreciation of evidence that could not be reopened in an appeal confined to a substantial question of law under Section 30 of the Act.
However, the court found that the claim for an additional penalty required separate consideration. Under Section 4-A(3)(a), interest follows a default in payment, while Section 4-A(3)(b) permits a penalty of up to 50 per cent if the Commissioner finds that the delay was unjustified. The employer must first be given a reasonable opportunity to show cause before such a penalty can be imposed.
The judgment noted that the compensation had not been deposited within one month of the accident, but the Commissioner had neither issued a show-cause notice nor recorded a finding on whether the delay was justified.
Referring to the Supreme Court’s judgment in The Oriental Insurance Co. Ltd. v. Siby George and Others (2012), the High Court said that a penalty could not be imposed merely because the claimant had sought it. The statutory procedure and the Commissioner’s assessment of the reasons for the delay were necessary.
The court held that it could not itself determine the employer’s liability for a penalty in the appeal and left it open to Ud Din to approach the Commissioner for a decision on the issue.
Accordingly, the matter has been remitted to the Commissioner solely for reconsideration of the penalty claim after hearing both sides and following the prescribed procedure. The Commissioner has been directed to dispose of the matter within three months of receiving a certified copy of the judgment.
The compensation award otherwise stands upheld.
