Kerala High Court
Employees State Insurance Corporation vs Kunjukrishna Pillai on 3 February, 2026
2026:KER:9246
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE S.MANU
TUESDAY, THE 3RD DAY OF FEBRUARY 2026 / 14TH MAGHA, 1947
INS.APP NO.14 OF 2017
AGAINST THE JUDGMENT DATED 23.02.2017 IN I.C.A NO.1 OF
2012 OF THE E.I.COURT, KOLLAM
APPELLANT/RESPONDENT:
EMPLOYEES STATE INSURANCE CORPORATION
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, PANCHDEEP BHAVAN, NORTH SWARAJ
BHAVAN, POST BAG NO.2, THRISSUR-680020.
BY ADV SHRI.T.V.AJAYAKUMAR
RESPONDENT/APPELLANT:
1 KUNJUKRISHNA PILLAI(*DIED)
KAVYA BHAVAN, PERUMPUZHA P.O.,
KOLLAM.
*ADDITIONAL RESPONDENTS IMPLEADED
ADDL.R2 VALSALA DEVI AMMA
W/O.LATE SRI.KUNJUKRISHNA PILLAI, KAVYA BHAVAN,
PERUMPUZHA.P.O, KOLLAM.
ADDL.R3 KAVYA KRISHNAN
D/O.LATE SRI.KUNJUKRISHNA PILLAI, KAVYA BHAVAN,
PERUMPUZHA.P.O, KOLLAM.
ADDL.R4 ARYA KRISHNAN
D/O.LATE SRI.KUNJUKRISHNA PILLAI, KAVYA BHAVAN,
PERUMPUZHA.P.O, KOLLAM.
THIS INSURANCE APPEAL HAVING BEEN FINALLY HEARD ON
03.02.2026, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2026:KER:9246
Ins.Appeal No.14 of 2017 2
LAA 223 of 2022
JUDGMENT
Employees State Insurance Corporation is challenging the judgment dated 23.02.2017 of the Employees Insurance Court, Kollam in I.C.A.No.1 of 2012.
2. The appeal was filed by the insured employee challenging the decision of the Medical Board dated 24.08.2011 fixing the permanent disability as Nil.
3. The Insured employee was injured in an accident occurred on 11.11.2011. He suffered the following injuries:
1. Open compound fracture medical malleolus
2. Compound fracture lower end of fibula
4. He was treated in various hospitals and temporary disability benefits were granted by the Corporation. The Medical Board attached to T.D.Medical College, Alappuzha examined the insured employee and fixed the disability as 10%. However, the Medical Board attached to the ESI corporation fixed the permanent disability as Nil.
5. Before the Insurance Court, the insured employee was examined as AW1 and Exts.A1 to A7 were marked on his side. The Court concluded that Ext.A1 was prepared without 2026:KER:9246 Ins.Appeal No.14 of 2017 3 LAA 223 of 2022 any proper examination of the insured employee and therefore the report of the Medical Board was set aside. The Court held that the insured employee was entitled to get disablement benefit by fixing the permanent disability as 10%.
6. The ESI Corporation challenges the judgment of the Insurance Court in this appeal. Though notice was issued and legal heirs of the deceased insured employee were impleaded, there is no appearance for them.
7. Heard the learned Standing Counsel for ESI Corporation and perused the records.
8. The learned Standing Counsel submitted that in view of Section 2(15A) of the ESI Act 1948, permanent partial disablement means such disablement of a permanent nature, as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of accident resulting in the disablement. He submitted that unless there was reduction in the earning capacity of the employee, the disablement cannot be considered as of 2026:KER:9246 Ins.Appeal No.14 of 2017 4 LAA 223 of 2022 permanent nature. He submitted that in the instant case, there was no material before the Insurance Court to hold that the insured employee suffered reduction in earning capacity. The learned counsel also submitted that the the power of the court to fix the disablement is provided under Section 75(2A) of the Act. The learned Standing Counsel submitted that the Court ought to have directed the Corporation to have decided the issue and thereafter proceeded with the determination of the disability in accordance with the decision of the Medical Board or the Medical Appeal Tribunal as the case may be. Referring to Section 54A of the Act, the learned Standing Counsel submitted that if the insured employee was not satisfied with the assessment by the Medical Board of the Corporation, remedy was to approach the Medical Appeal Tribunal. Though the aggrieved employee can approach the Employees Insurance Court directly as provided under Section 54A(2)(ii), in such an event, the Insurance Court should proceed as provided under Section 75(2A) as pointed out earlier. He submitted that in the instant case, the Insurance 2026:KER:9246 Ins.Appeal No.14 of 2017 5 LAA 223 of 2022 Court did not proceed as provided under the provisions of Section 75 of the Act and instead resorted to declare that the insured employee suffered 10% of permanent partial disablement without any supporting materials.
9. The learned Standing Counsel referred to a judgment of a Division Bench of this Court in ESI Corporation v. Pushkaran [1993 (2) KLT 187]. It is gainful to refer to the following paragraphs of the judgment referred by the learned Standing Counsel.
"6. As provided under S. 54A, the Employees' State Insurance Court will have to determine the extent of loss of earning capacity of the insured person. The circumstance that the employer is refusing employment even though the Medical Board determined the employee's disablement at 20 per cent can only be one of the factors to be taken into account. But it is not safe to overrule the opinion of the Medical Board, members of which are technically qualified to assess the disablement, without further evidence. If the party is unable to produce such evidence before the Court, normally the Court should hold that there is no material to interfere with the finding of the Medical Board. Here the employee is challenging the decision of the Medical Board. The burden of establishing that the finding of the 2026:KER:9246 Ins.Appeal No.14 of 2017 6 LAA 223 of 2022 Medical Board was not proper is on the employee. There is very little scope for the Court which is not technically equipped to assess the quantum of disablement or to interfere with the finding of the Medical Board on grounds which are not established before it or on compassionate grounds which cannot be tested by superior Court. Section 51 of the Employees' State Insurance Act which grants disablement benefit to the employees is as follows:
"51. Disablement benefit Subject to the provisions of this Act (a) a person who sustains temporary disablement for not less than three days (excluding the day of accident), shall be entitled to periodical payment at such rates and for such period and subject to such conditions as may be prescribed by the Central Government;(b) a person who sustains permanent disablement, whether total or partial, shall be entitled to periodical payment at such rates and for such period and subject to such conditions as may be prescribed by the Central Government."
Sections 2(15A) and 2(15B) of the Employees' State Insurance Act defines permanent partial disablement and permanent total disablement as follows:
"2(15A) 'permanent partial disablement' means such disablement of a permanent nature, as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of the accident resulting in the disablement: Provided that 2026:KER:9246 Ins.Appeal No.14 of 2017 7 LAA 223 of 2022 every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement;
(15B) 'permanent total disablement' means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement:
Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of the Second Schedule or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent or more."
7. From this it is clear that if only the injury is specified in Part I or Part II of the Second Schedule to the Act, the deeming provision contained in Sub-secs. 15A or 15B of S. 2 will be applicable. Therefore, if the injury is not one specified in either of these parts, the Court will have to examine as to what extent the ingredients of the sub-section are established in the case in hand. In otherwords, whether the employee has suffered permanent partial disablement or permanent total disablement will be a question of fact to be proved before the Court, if the injury is not one specified in the Second Schedule. If such disablement is proved, then in the case of permanent partial disablement the Court has 2026:KER:9246 Ins.Appeal No.14 of 2017 8 LAA 223 of 2022 to examine whether the earning capacity of the workman has been reduced in every employment he was capable of undertaking at the time of the accident and not merely the Particular employment in which he was engaged at the time of the accident resulting in the disablement. (See Upper Doab Sugar Mills, Ltd. V. Daulat Ram [A.I.R. 1936 All.493] and General Manager of the G.I.P. Railway, Bombay v. Shanker [A.I.R.(37) 1950 Nag. 201]. The Court will have to enter a specific finding that the injury suffered, by the employee caused him disablement of a permanent nature which reduces his earning capacity in every employment which he was capable of undertaking at the time of the accident. Sub- section 15A contemplates reduction in the earning capacity and not reduction of the actual earning. This is clear from the fact that the capacity itself is determined with reference to every employment which he was capable of undertaking at the time of the accident. Thus the scope of the words used cannot be confined to the job which the employee was doing or carrying on at the time of the accident. The words refer to his capability generally of doing any job to earn his livelihood. (See Munshigiri v. Employees' State Insurance Corporation [1988 Lab.I.C. 320] (M.P.)"
10. In the instant case, it is clear that the Insurance Court set aside the opinion of the Medical Board attached to the Corporation and granted a declaration without any 2026:KER:9246 Ins.Appeal No.14 of 2017 9 LAA 223 of 2022 reliable materials on record. It gave credence to the opinion of the Medical Board of the Medical College Hospital, where the insured employee was treated. However, the consideration under the ESI Act is different as rightly pointed out by the learned Standing Counsel. Unless the disablement resulted in reduction of the earning capacity of the insured employee, the disablement cannot be considered as permanent partial disablement making the employee entitled for the benefits under the Act. The court failed to approach the issue from a proper perspective and rendered a faulty judgment. In view of the law laid down by the Division Bench of this Court referred to above, I am of the view that the impugned judgment cannot be sustained.
In the result, the appeal is allowed. The impugned judgment shall stand set aside. I.C.A No.1 of 2012 shall stand dismissed.
Sd/-
S.MANU JUDGE PV