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by sayum
17 February 2026 8:32 AM
“Functional Grip Lost, Right Hand Mutilated – Mere Schedule Entries Cannot Capture the Real Impact”: Supreme Court in a landmark judgment reiterating that in cases under the Employees’ Compensation Act, 1923, functional disability—especially in relation to the work actually performed by the injured employee—must prevail over rigid percentage values listed in the statutory schedule.
“We are inclined to determine the loss at 50%,” said the Court, speaking through Justice K. Vinod Chandran, after noting that the worker had lost phalanges in all four fingers of his dominant hand. “The appellant’s working hand has been seriously mutilated... the middle and index fingers having been disabled completely,” the Court declared.
Accident Left Employee’s Right Hand Crushed, Fingers Mutilated
The appellant, Kamal Dev Prasad, was operating a forging machine when his right hand got caught in the mechanism on the night of November 6, 2004. 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.
The Workmen’s Compensation Commissioner awarded compensation based on 100% disability, along with interest and penalty for the employer’s failure to pay within one month. However, the High Court later reduced this to 34%, strictly applying the percentages mentioned in Part II of Schedule I of the Act.
“Schedule Is Not Absolute”: Supreme Court Affirms Importance of Real Impact Over Statutory Arithmetic
The Supreme Court came down heavily on the High Court’s reduction, stating that the functional loss suffered by the workman had not been properly appreciated.
“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,” the Court noted.
The Bench rejected the High Court’s narrow reliance on the Schedule, emphasizing: “Though a 100% disability cannot be assessed... the mutilation of the one hand which is also the operational hand, the right hand, compels us to determine the loss at 50%.”
It added further, “Functionally it is difficult for the right hand to be used with the same grip as available prior to the accident.”
“Liberal Construction Must Be Given to Beneficial Legislations”: SC Cites Mohd. Nasir Judgment
Referring to the case Oriental Insurance Co. Ltd. v. Mohd. Nasir (2009) 6 SCC 280, the Supreme Court reiterated that both the Motor Vehicles Act, 1988 and the Employees’ Compensation Act, 1923 are beneficial legislations, and deserve liberal interpretation.
“While determining the amount of loss of earning capacity, the Tribunal or the High Court must record reasons for arriving at their conclusion,” the Court said, quoting from the earlier ruling.
It clarified that even under the 1923 Act, tribunals are not bound to mechanically apply Schedule I, especially where functional disability far exceeds physical damage as measured by the number of lost phalanges.
Functional Disability Fixed at 50%, Full Compensation Restored
Ultimately, the Court restored the compensation by recalculating it using the formula applicable for permanent partial disablement under Section 4(1)(c) of the Act, but at 50% disability.
“The loss thus would be accessed as ₹ 2,500/- × 60% × 213.57 which comes to ₹ 3,20,355/-. Fifty percent of the same would come to ₹ 1,60,177.5,” the Court observed. It further directed that the employee is entitled to 12% interest from the date of accident and 50% penalty, restoring significant benefits denied by the High Court.
“If the amounts as directed by the High Court have been paid, then the excess amount shall be paid with interest at 12%... and half of the enhanced amount as penalty,” the Court concluded.
Date of Decision: April 29, 2025
