In Kamal Dev Prasad v. Mahesh Forge, the Supreme Court of India, in a judgment delivered on 29 April 2025 by a Bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran, held that even when injuries are listed in the Schedule to the Employees’ Compensation Act, 1923, there can be a justified departure from the prescribed percentage of disability if the nature of the injury affects the functionality of the employee’s working limb. The Court partially restored the award of compensation and interest granted by the Commissioner, revising the functional disability to 50% and directing corresponding payment along with interest and penalty.
Background of the Case:
The appellant, Kamal Dev Prasad, was employed by Mahesh Forge as a forging machine operator from 5 April 2002, earning ₹2,500 per month. On the night of 6 November 2004, while working on the machine, his right hand was caught, causing severe injuries. He 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. He was hospitalised until 24 December 2004 and underwent surgery.
The Commissioner under the Employees’ Compensation Act awarded compensation of ₹3,20,355 with 12% interest and 50% penalty (₹1,60,178) for non-payment within one month of the accident. The employer appealed the order, and the High Court reduced the disability to 34%, accepting the employer’s contention that the disability must be confined strictly to the Schedule.
Arguments Before the Supreme Court:
The appellant’s counsel, Ms. Vidya Vijaysinh Pawar, contended that the injuries affected four fingers of the right hand, significantly impairing the employee’s ability to operate machinery, and sought restoration of the original compensation. The respondent’s counsel, Mr. Amol Chitale, argued that as per Part II of Schedule I of the Act, only 34% loss of earning capacity could be attributed, and no medical certificate substantiated higher disability.
Supreme Court’s Observations:
The Court referred to its earlier decision in Oriental Insurance Co. Ltd. v. Mohd. Nasir, (2009) 6 SCC 280, and reiterated that both the Workmen’s Compensation Act and the Motor Vehicles Act are beneficial legislations deserving liberal interpretation. It held:
“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.”
The Court noted that the High Court erred in treating the 34% disability as final when in fact, considering the injuries to four fingers of the same hand (the working right hand), the aggregate disability under the Schedule itself would be 37%. More importantly, the Court held that the functional disability due to the extensive mutilation of the working hand justifies a 50% disability determination, even without a specific medical certificate.
“Though a 100% disability cannot be assessed… we are inclined to determine the loss at 50%.”
Final Decision:
The Court restored the compensation to ₹3,20,355 and fixed the functional disability at 50%, calculating the amount as ₹1,60,177.5. It also directed payment of 12% interest from the date of the accident and 50% penalty, amounting to ₹80,088.75. If the amount as per the High Court had already been paid, the difference shall be paid with 12% interest and half of the enhanced amount as penalty.
The appeal was allowed with these directions, and pending applications were disposed of.
