Allahabad High Court
The New India Assurance Company Limited vs Taiyyab Alam And Another on 28 April, 2026
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2026:AHC:96974
HIGH COURT OF JUDICATURE AT ALLAHABAD
FIRST APPEAL FROM ORDER No. - 69 of 2026
The New India Assurance Company Limited
.....Appellant(s)
Versus
Taiyyab Alam And Another
.....Respondent(s)
Counsel for Appellant(s)
:
Anubhav Sinha
Counsel for Respondent(s)
:
Mohd. Asim Zulfiquar
Along with :
1.
First Appeal From Order No. 42 of 2026:
Tayyab Alam
Versus
Farooq and another
A.F.R.
Court No. - 53
HON'BLE SANDEEP JAIN, J.
1. FAFO No. 69 of 2026 under Section 30 of the Employees? Compensation Act,1923 has been filed by the insurer, The New India Assurance Company Limited, challenging the impugned order dated 24.10.2025 passed by the Employees? Compensation Commissioner/Deputy Labour Commissioner, Moradabad in ECA Case No. 01 of 2022, Tayyab Alam vs. Farooq and another, whereby for the injuries sustained by the claimant in the course of his employment as a driver, compensation of Rs.9,04,222/- along with interest @ 12% per annum and Rs.3,38,103/- towards reimbursement of medical expenses has been awarded, which has been ordered to be indemnified by the insurer of Truck No. UP-21-CN-8245.
2. FAFO No. 42 of 2026 has been filed by the claimant under Section 30 of the Employees? Compensation Act,1923 against the aforesaid impugned order seeking enhancement of compensation on the ground that the amount awarded by the Commissioner is not commensurate with the injuries suffered by him.
3. Since both the appeals arise out of the same impugned order, they were heard together and are being decided by this common judgment.
4. The factual matrix of the case is that the claimant was employed as a driver on Truck No. UP-21-CN-8245 owned by respondent no.2, Farooq. During the course of his employment, on 14.10.2021, when the truck was being driven by claimant from Bihar to Bahraich, then at Pandeypur within the jurisdiction of Police Station Ekauna, District Shravasti, a stray animal suddenly came in front of the vehicle. In an attempt to save the animal, the driver, Taiyyab Alam, lost control of the vehicle, which overturned and fell into a ditch, causing grievous injuries to the claimant, who was thereafter admitted to a private hospital for treatment. In the accident, both legs of the claimant were fractured and he also sustained injuries to his head and other parts of the body. It is the case of the claimant that he incurred expenditure of Rs.7,00,000/- towards his treatment, which is still continuing, and that he was treated at Medanta Hospital and RR Health Care (Dr. Khare Hospital), Delhi Road, Moradabad.
5. The claimant asserted that at the time of the accident he was drawing a salary of Rs.15,000/- per month besides daily diet allowance of Rs.100/-, and was aged about 30 years. An FIR in respect of the accident was lodged by Farooq on 16.10.2021 at Police Station Ekauna, District Shravasti.
6. Before the Commissioner, the employer/respondent no.2 Farooq appeared and admitted in his written statement that the claimant was employed as a driver on his truck and was being paid salary @ ?15,000/- per month. He further disclosed that the vehicle was insured with the appellant-insurance company for the period 03.12.2020 to 02.12.2021 and, therefore, the insurer was liable to indemnify any compensation awarded by the Commissioner.
7. The insurance company contested the claim by filing its written statement, disputing both the occurrence of the accident and the claimant?s employment with respondent no.2, and put the claimant to strict proof thereof. It was further contended that the claimant had not suffered any permanent disability so as to entitle him to compensation.
8. On the pleadings of the parties, the Commissioner framed the following issues:
-
Whether the claimant, namely Taiyyab Alam, was employed as a driver on Truck No. UP-21-CN-8245 owned by defendant no.1, who became completely disabled due to injuries suffered in the accident dated 14.10.2021 while working under the directions of the owner? If yes, its effect?
-
Whether on 14.10.2021 the vehicle of defendant no.1 was insured with defendant no.2 and was being plied with all valid documents? If no, its effect?
-
Whether on the date of the accident the claimant possessed a valid driving licence? If no, its effect?
-
Whether the claimant is entitled to any compensation, and if yes, to what amount and from whom?
9. The claimant examined himself and one Wajid Hussain in support of his claim, whereas no oral evidence was adduced either by the owner or by the insurer. The claimant also produced a disability certificate dated 02.12.2022 disclosing 45% locomotor disability.
10. The Commissioner, while applying the provisions of the Act, took 60% of the monthly wages of Rs.11,316/-, which amounted to Rs. 6,789.60 and after applying a factor of 295.95 assessed compensation at Rs.9,04,222/-. The Commissioner also awarded Rs.3,38,103/- towards verified medical bills and directed payment of interest @ 12% per annum from the date of accident on only the compensation of Rs.9,04,222/-.
11. Assailing the award, learned counsel for the insurer submitted that as per Schedule IV of the Employees? Compensation Act, 1923, for the age of 31 years the relevant factor is 205.95, whereas the Commissioner erroneously applied the factor of 295.95. It was further contended that mere production of a disability certificate showing 45% disability could not ipso facto establish corresponding loss of earning capacity or functional disability. It was also argued that the certificate relied upon was provisional in nature and subject to reassessment.
12. Per contra, learned counsel for the claimant fairly conceded that the correct factor for the age of 31 years is 205.95. He, however, submitted that pursuant to directions of this Court, the claimant was re-examined by the Chief Medical Officer, Jyotiba Phule Nagar in duly constituted Medical Board on 10.02.2026, whereupon a permanent disability certificate certifying 45% permanent disability was issued on account of right-side hemiplegia. It was further contended that although the physical disability is assessed at 45%, the claimant, being a driver, has suffered 100% functional disability as he is no longer capable of driving any vehicle. It was also urged that in view of the categorical admission of the employer regarding wages of Rs.15,000/- per month, there was no justification for the Commissioner to reduce the monthly wages to Rs.11,316/- and compute compensation on minimum wage basis. It was lastly contended that interest ought to have been awarded even on the amount reimbursed towards medical expenses.
13. I have heard learned counsel for the parties and perused the impugned judgment as well as the material brought on record. Both the appeals are admitted on the following substantial question of law:-
(1) Whether the Commissioner has erred in determining the compensation by applying factor of 295.95?
(2) Whether the claimant has become 100% permanently disabled due to the injuries suffered in the accident?
(3) Whether the claimant is entitled to more compensation for the future loss of earning capacity?
(4) Whether the claimant is entitled to interest @12% per annum on the medical reimbursement amount awarded by the Commissioner?
14. In the present case, the factum of accident and the claimant?s employment as a driver on the truck owned by respondent Farooq is not disputed by the appellant insurance company. The principal controversy is with regard to the extent of disability and the quantum of compensation payable.
15. It is undisputed that the claimant was aged 31 years at the time of accident. Therefore, the relevant factor under Schedule IV of the Act is 205.95. The Commissioner manifestly erred in applying the factor of 295.95.
16. The Apex Court in the case of Mamta Devi and others vs. The Reliance General Insurance Co. Ltd. and another 2023 INSC 566 has held that if the employer accepts in his written statement that the deceased was drawing Rs.6,000/- per month as wages, then there is no reason to disbelieve him keeping in view the minimum wages prevalent at that time.
17. It is further apparent that the claimant pleaded monthly wages of Rs.15,000/-, which were unequivocally admitted by the employer in his written statement. In view of such categorical admission and the judgment of the Apex Court in the case of Mamta Devi (supra), the Commissioner was not justified in discarding the admitted wages and substituting them with minimum wages of Rs.11,316/-. Accordingly, compensation is liable to be computed on the basis of monthly wages of Rs.15,000/-.
18. This Court had occasion to summon the claimant and interact with him personally. Upon close observation of his physical condition, it was found that he was unable to stand properly and was wholly incapable of driving any vehicle.
19. The Apex court in the case of Raj Kumar vs. Ajay Kumar and Another, (2011) 1 SCC 343, while analysing how to determine compensation in cases of permanent disability, has held as under:-
"10. Where the claimant suffers a permanent disability as a result of injuries, the assessment of compensation under the head of loss of future earnings would depend upon the effect and impact of such permanent disability on his earning capacity. The Tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability. Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in award of either too low or too high a compensation.
11. What requires to be assessed by the Tribunal is the effect of the permanent disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency). We may however note that in some cases, on appreciation of evidence and assessment, the Tribunal may find that the percentage of loss of earning capacity as a result of the permanent disability, is approximately the same as the percentage of permanent disability in which case, of course, the Tribunal will adopt the said percentage for determination of compensation. (See for example, the decisions of this Court in Arvind Kumar Mishra v. New India Assurance Co. Ltd. [(2010) 10 SCC 254 : (2010) 3 SCC (Cri) 1258 : (2010) 10 Scale 298] and Yadava Kumar v. National Insurance Co. Ltd. [(2010) 10 SCC 341 : (2010) 3 SCC (Cri) 1285 : (2010) 8 Scale 567] )"
20. The Apex Court in the case of Sarnam Singh vs. Sriram General Insurance Co. Ltd. & Ors. (2023) 8 SCC 193, while analysing when partial disability will amount to 100% earning capacity loss, held as under:-
"10. As to how compensation, in case where permanent disability of an injured affects his functional disability, is to be assessed has been considered by this Court, repeatedly. Reference can be made to the judgment of this Court in Mohan Soni v. Ram Avtar Tomar [Mohan Soni v. Ram Avtar Tomar, (2012) 2 SCC 267 : (2012) 1 SCC (Civ) 747 : (2012) 1 SCC (Cri) 641] . In the aforesaid case the injured was working as a cart puller. As a result of the accident, his left leg was amputated. His permanent disability was assessed at 60%. The Tribunal assessed the compensation taking the loss of earning at 50% on the theory that he can still do some other work while sitting. The High Court did not disturb the finding regarding loss of income on account of disability. This Court found that the Tribunal was in error in taking the loss of earning at 50% as the injured was 55 years of age and it may be difficult for him to find a job at that stage. In fact, any physical disability resulting from an accident has to be judged with reference to the nature of the work being performed by the person who suffered disability. The same injury suffered by two different persons may affect them in different ways. Loss of leg by a farmer or a rickshaw puller may be end of the road as far as his earning capacity is concerned. Whereas, in case of the persons engaged in some kind of desk work in office, loss of leg may have lesser effect. This Court enhanced the loss of earning capacity from 50% to 90%.
11. Applying the same principle to the case in hand, we find that the appellant herein was working as a gunman with Bharat Hotel Limited. On account of amputation of his right leg above the knee, he was terminated from service w.e.f. 31-5-2015. It is not a matter of dispute that a person with his right leg amputated cannot perform the duty of a gunman. This is his functional disability. He was 50 years & 5 months old at the time of accident. Considering the aforesaid facts, in our view, the Tribunal was right in assessing the loss of earning capacity of the appellant at 100% and assessing the compensation accordingly. The High Court was in error in reducing the loss of earning capacity to 80%, relying upon the judgment [Shri Ram General Insurance Co. Ltd. v. Sarnam Singh, 2017 SCC OnLine Del 13011] of the High Court, despite there being a judgment of this Court available on the issue."
21. It is apparent that earlier a temporary disability certificate was issued to the petitioner disclosing 45% disability, but the subsequent certificate dated 10.02.2026, has confirmed that the petitioner has suffered 45% permanent disability due to hemiplegia affecting right side of the body.
22. Applying the settled principle of law laid down by the Apex Court in the case of Raj Kumar (supra) and Sarnam Singh (supra) the real test is the impact of the injury on earning capacity and ability to pursue the avocation previously undertaken. Since the claimant was employed as a driver and is now incapable of driving, he has suffered 100% functional disability notwithstanding the medical assessment of 45% physical disability.
23. The High Court of Madras in the case of Chandrasekaran vs. P. Marappan and Another in CMA No.2581 of 2021 decided on 13.02.2024, has held as under:-
"19. The next question of law related to the payment of interest for the medical expenses. Sub section 1 of 4(A), states that the compensation under section 4 shall be paid as soon as it falls due. As stated in the earlier paragraph, the claimant is entitled to get compensation for the medical expenses. Since the payment of medical expenses forms part of the compensation as prescribed under section 4 of the Act, 1923, this compensation is entitled for interest since sub section 3(a) of 4(A) prescribes that where the employer is entitled to pay compensation due under the Act is liable to pay interest for the compensation. The reimbursement of medical expenses could not be termed that it is not part of compensation, the reimbursement of medical expenses also forms part of compensation prescribed under Section 4(A), it carries interest in case of delay. This interest is liable to be paid as soon it falls due, as interpreted by the Apex Court in K. Sivaraman and others vs. P. Sathishumar and others [2020 ACJ 1361] that the interest shall paid from the date of accident. Accordingly, the respondents is liable to pay the interest for the medical expenses also. Accordingly, the second question of law raised in this appeal is answered."
(emphasis supplied)
24. The Commissioner has awarded Rs.3,38,103/- towards medical reimbursement but omitted to grant interest thereon. The claimant is entitled to interest @ 12% per annum on the said amount as well, from the date of accident i.e. 14.10.2021.
25. Accordingly, the claimant is entitled to compensation for loss of future earning capacity as follows:
(Rs.15,000X60/100) X 205.95=Rs.18,53,550/-
26. The claimant shall also be entitled to Rs.3,38,103/- towards reimbursement of medical expenses, together with interest @ 12% per annum on both amounts from the date of accident, i.e., 14.10.2021, till actual payment.
27. Accordingly, the impugned order dated 24.10.2025 passed by the Commissioner is modified to the aforesaid extent.
28. FAFO No. 69 of 2026 preferred by the insurer stands dismissed, whereas FAFO No. 42 of 2026 preferred by the claimant for enhancement of compensation is hereby allowed.
29. Interim order, if any, stands vacated.
30. The insurance company is directed to deposit the enhanced amount of compensation before the Commissioner within a period of two months after adjusting the amount already deposited.
(Sandeep Jain,J.) April 28, 2026 Himanshu