In the matter of Kamal Dev Prasad v. Mahesh Forge (2025), the Supreme Court of India adjudicated a crucial issue regarding the quantification of compensation for a workplace injury under the Employees’ Compensation Act, 1923 (formerly Workmen’s Compensation Act). The Court reconsidered the statutory disability percentage prescribed in the Schedule to the Act and evaluated the appropriateness of its rigid application when multiple injuries cumulatively affect an employee’s functionality.
The case is significant as it clarifies the interplay between statutory disability percentages and actual functional impairment—particularly in cases involving multiple injuries to a limb essential for occupational duties. It also reinforces the liberal and purposive interpretation of welfare legislation meant for the benefit of workers.
Title of the Case: Kamal Dev Prasad v. Mahesh Forge
Citation: SLP(C) No. 4974 of 2022
Court: Supreme Court of India
Judges: Justice Sudhanshu Dhulia and Justice K. Vinod Chandran
Date of Judgment: April 29, 2025
Factual Background
The appellant, Kamal Dev Prasad, had been employed since April 5, 2002, by the respondent, Mahesh Forge, as an operator of a forging machine. On November 6, 2004, while operating the machine late at night, his right hand got caught in the equipment when a part fell, leading to a traumatic injury. He was hospitalized until December 24, 2004.
As a result of the accident, 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.
His right hand, being his operational hand, was severely mutilated and rendered functionally ineffective for his job.
Proceedings Before the Commissioner
Under the Employees’ Compensation Act, 1923, the matter was first adjudicated by the Commissioner, who:
- Held that the employee had suffered 100% disability,
- Applied the statutory factor of 213.57 to the wages (₹2,500/month),
- Awarded total compensation of ₹3,20,355,
- Ordered interest at 12% per annum from the date of the accident,
- Imposed a penalty of 50% of the awarded compensation amounting to ₹1,60,178 for non-payment of compensation within one month.
High Court Ruling
The employer challenged the Commissioner’s order before the High Court. The employer’s contention was:
- The injury should be assessed strictly in accordance with Part II of Schedule I to the Act.
- As per the schedule, the cumulative disability was only 34%.
- The High Court accepted this contention and reduced the assessed loss of earning capacity from 100% to 34%. The Court further noted the absence of a medical certificate or report by a medical board, which might have otherwise aided in determining the exact extent of functional disability.
Appeal Before the Supreme Court
The aggrieved employee approached the Supreme Court challenging the High Court’s interference and reduction of compensation.
Issues Considered:
- Whether the High Court erred in mechanically applying the percentages listed in Schedule I without evaluating actual functional disability.
- Whether the appellant’s loss of earning capacity, considering the nature of his work and the injuries sustained, justified a higher disability rating.
- Whether compensation ought to be computed based solely on the statutory percentage or should also consider actual functional loss.
Supreme Court’s Observations and Analysis
1. Beneficial Interpretation of the Act
The Court reiterated its prior ruling in Oriental Insurance Co. Ltd. v. Mohd. Nasir [(2009) 6 SCC 280], where it was held that both the Employees’ Compensation Act, 1923, and the Motor Vehicles Act, 1988 are beneficial legislations aimed at expeditiously providing relief to accident victims. Therefore, a liberal and purposive interpretation must be adopted.
The Court acknowledged that while the schedule provides statutory disability percentages, the law does not preclude courts from assessing the actual functional disability, particularly when multiple injuries affect an employee’s ability to perform job-specific functions.
2. Schedule I as a Guideline, Not Limitation
It noted that the injuries suffered by the appellant were indeed mentioned in Schedule I, but pointed out a critical inconsistency—there was no explicit entry for the loss of 2.5 phalanges of the index finger. Applying the closest equivalent (total loss of the index finger), the disability would stand at 14%. This alone would bring the total to at least 37%, not 34% as held by the High Court.
Further, the Court emphasized that multiple finger injuries affecting one hand should not be assessed in isolation. The cumulative impact of such injuries on the employee’s capacity to function—especially considering the right hand was used to operate a forging machine—had to be evaluated in totality.
3. Functional v. Physical Disability
The Supreme Court distinguished between physical disability (loss of limb or part of limb) and functional disability (impact on earning capacity or performance of duties).
It held that while the physical loss may be individually capped at certain percentages, the aggregate impact on the worker’s function, especially when the injured hand was essential to his job, warranted upward revision.
4. Absence of Medical Certificate
Though no medical certificate or functional assessment report was on record, the Court found this not fatal. The undisputed facts—nature of injuries, occupation, and extent of finger amputations—were sufficient to form a reasoned view of the appellant’s incapacity.
5. Application of Section 4 Explanation
Explanation 1 to Section 4(1)(c) of the Act permits aggregation of injuries provided the total does not exceed what would be payable for permanent total disablement.
Thus, even if each injury individually accounted for less than 100% disability, the aggregate impact, if functionally severe, could justify a higher disability percentage, not exceeding 100%.
Judgment and Directions
The Court held:
- The disability should be assessed at 50%, given the nature of the mutilation and its impact on the employee’s specific job role.
- Applying 60% of monthly wages (as per statutory formula) = ₹1,500
- Multiplied by statutory factor (213.57) = ₹3,20,355
- 50% of this = ₹1,60,177.50 as compensation
- Additionally, 12% interest from the date of the accident
- Penalty of 50% on the enhanced amount = ₹80,088.75
If the amount determined by the High Court was already paid, the respondent-employer must pay the differential amount along with interest and penalty as above.
Conclusion
The Supreme Court’s ruling in Kamal Dev Prasad v. Mahesh Forge is a significant reaffirmation of the purpose of the Employees’ Compensation Act, 1923. It reiterates the principle that statutory schedules serve as guidance but cannot limit courts from awarding just compensation based on actual functional disability.
This judgment provides clarity on how injuries impacting multiple parts of a functional limb should be evaluated—not in isolation, but by considering the combined effect on employability. Even without a formal medical certificate, courts can make a reasoned assessment based on undisputed facts and occupational roles.
In sum, the ruling bolsters the rights of employees to fair compensation and reinforces judicial discretion in interpreting welfare statutes to uphold justice in workplace injury cases.
