Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 IN THE HIGH COURT OF ORISSA AT CUTTACK FAO No. 384 of 2023 (An appeal under Section 30 of the Employees’ Compensation Act, 1923.) Branch Manager, M/s. National Insurance Co. Ltd., Cuttack …. Appellant(s) -versus- Litu Naik @ Manoranjan Naik & Ors. …. Respondent(s) Advocates appeared in the case through Hybrid Mode: For Appellant(s) For Respondent(s) : : Mr. Pramod Kumar Tripathy, Adv. Mr. Amitav Tripathy, Adv. Mr. Ashok Kumar Behera, Adv CORAM: DR. JUSTICE SANJEEB K PANIGRAHI DATE OF HEARING:-03.12.2025 DATE OF JUDGMENT:-24.12.2025 Dr. Sanjeeb K Panigrahi, J. 1. The appellant in the present appeal assails the judgment dated 18.05.2023 passed in E.C. Case No. 07 of 2012 by the learned Commissioner for Employees’ Compensation-cum-Deputy Labour Commissioner, Berhampur, Ganjam. I. FACTUAL MATRIX OF THE CASE: 2. The brief facts of the case are as follows as culled out from the records and oral submissions: Page 1 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 (i) The respondent no.1 being the applicant before the court below sustained injuries in an accident which occurred on 18.10.2010 while he was working as a labourer under Respondent No. 3. It was alleged that during the course of his employment, he fell down from the 7th floor, resulting in severe and grievous injuries. (ii) Immediately after the accident, the injured claimant was shifted to Yenepoya Hospital, Mangalore, where he remained admitted as an indoor patient for a period of about forty-eight days. During the course of treatment, both his legs and right hand were operated upon. The medical expenses incurred for such treatment were borne by Respondent No. 4. It was further claimed that owing to the nature of injuries sustained, the claimant was rendered incapable of continuing his work. (iii) At the time of the accident, the claimant was stated to be about 27 years of age and earning wages of Rs. 8,000/- per month. (iv) In connection with the said incident, a police case bearing No. 84033 dated 18.10.2010 was registered. (v) Upon issuance of notice, Respondent Nos. 2 to 4 entered appearance and filed a joint written statement contending inter alia that the claimant was employed under a sub-contractor, namely Mithun @ Ketan Chhotray of Kuhudi, District Khurda, and was deployed at the work site on the date of the accident. While it was asserted that the occurrence of the accident could not be entirely disputed, it was contended that Respondent Nos. 2 to 4 were unable to collect Page 2 of 20
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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 detailed information from the work site or obtain the police report. It was further pleaded that a Workmen’s Compensation insurance policy was in force covering the workers engaged at the project site. Respondent No. 5, despite service of notice, was set ex parte. (vi) The Insurance Company, on the other hand, denied the averments made in the claim petition, put the claimant to strict proof of his case, and sought dismissal of the claim. (vii) On the basis of the pleadings and evidence adduced by the parties, the learned Commissioner framed two issues for determination and, upon consideration thereof, decided the same in favour of the claimant, awarding compensation of Rs. 24,90,650/- along with simple interest at the rate of 12% per annum payable from the date of the accident. (viii) Aggrieved by the said judgment and award dated 18.05.2023, the II. 3. (i) appellant has preferred the present appeal. SUBMISSIONS ON BEHALF OF THE APPELLANT: Learned counsel for the appellant earnestly made the following submissions in support of his contentions: It was contended by learned counsel for the appellants that the impugned judgment suffers from serious legal infirmities and perversity and is therefore liable to be set aside. (ii) Relying upon Section 3 of the Employees’ Compensation Act, learned counsel for the appellants contended that the primary liability to pay compensation rests upon the employer, and that unlike claims under Page 3 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 the Motor Vehicles Act, there is no statutory mandate fastening direct
Legal Reasoning
liability upon the insurer. It was urged that the learned Commissioner, without due application of judicial mind, erred in directing the Insurance Company to satisfy the awarded amount, which according to learned counsel is bad in the eye of law and liable to be set aside. (iii) It was further contended by learned counsel for the appellants that Opposite Party Nos. 1 to 3 before the court below had filed their written statement only as a matter of formality and had consistently taken the stand that the applicant was working under a sub-contractor and that there existed no direct employer–employee relationship between the parties. It was submitted that the said Opposite Parties had also stated that they had no information regarding the alleged accident of the applicant nor were they in possession of any police report relating to the injured–applicant. (iv) It was urged that the relationship of employer and employee between the applicant and the alleged employer was not proved by production of any document relating to employment or payment of wages, and that the applicant had utterly failed to establish such employment by adducing any supporting material. In the absence of substantive evidence to show that the applicant sustained injuries arising out of and in the course of employment, the learned Commissioner, according to learned counsel, illegally allowed the claim, which was stated to be highly excessive, exorbitant, and arbitrary. (v) It was further contended that there was no document on record to establish that the applicant was earning wages of Rs. 8,000/- per month, Page 4 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 and that in the absence of any convincing material or substantive evidence, the finding of the learned Commissioner assessing the monthly wage of the injured–applicant at Rs. 8,000/- per month is perverse and untenable in law. (vi) It was further contended by learned counsel for the appellants that the claim case was filed in collusion with the Opposite Party Nos. 1 to 4 before the court below with a view to make illegal gain from the Insurance Company, inasmuch as a Workmen’s Compensation policy was issued in favour of Opposite Party No. 1–Company which, according to learned counsel, did not cover the risk of the alleged employee–applicant. It was submitted that the learned Commissioner, without examining this aspect, illegally awarded compensation and directed the appellants to satisfy the award, which is stated to be against law and liable to be set aside. (vii) It was further contended by learned counsel for the appellants that the injured–applicant had not filed any document relating to his treatment in support of the alleged injuries stated to have been sustained arising out of and in the course of employment. It was submitted that the alleged employer had denied the occurrence of the alleged incident as well as the injuries claimed to have been sustained due to the said accident. In such circumstances, it was urged that the learned Commissioner ought not to have held that the applicant sustained injuries during the course of employment, and that the impugned award is therefore liable to be set aside. Page 5 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 (viii) It was further contended by learned counsel for the appellants that the applicant had sustained a non-scheduled injury and that neither the doctor who issued the disability certificate nor the treating physician under whose care the applicant was treated was examined to establish the extent of disability or loss of earning capacity. It was urged that the learned Commissioner, without compliance with the statutory requirements, illegally assessed 100% loss of earning capacity on account of the alleged injury, which according to learned counsel is contrary to the settled principles of law and liable to be set aside. (ix) It was further contended by learned counsel for the appellants that the judgment passed by the learned Commissioner is vitiated for want of territorial jurisdiction under Section 21 of the Employees’ Compensation Act. It was submitted that the applicant, in his cross- examination, admitted that prior to and after the alleged incident he was residing in his village Kuhudi in Khurda District, while the accident was stated to have occurred at Bangalore. According to learned counsel, in such circumstances, the applicant could have approached the Commissioner having jurisdiction either at Bangalore or at Khurda. (x) It was further alleged that the learned Commissioner, by ignoring the said aspect, passed the judgment intentionally and illegally to favour the applicant, on the ground that a relative of the applicant was an employee under the learned Commissioner, and that for such reasons the impugned award is liable to be set aside. Page 6 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 (xi) It was further contended by learned counsel for the appellants that the imposition of interest at the rate of 12% per annum is contrary to law. It was urged that the direction to impose simple interest at the rate of 12% per annum over and above the assessed quantum and to saddle the entire liability upon the appellants from the date of the accident is bad in law. (xii) It was further contended by learned counsel for the appellants that in the absence of any convincing material or cogent evidence regarding the monthly wage, employment, and the injuries alleged to have been sustained in the incident, the impugned judgment suffers from perversity and is liable to be set aside. (xiii) It was further contended by learned counsel for the appellants that in terms of Section 4A(3) of the Employees’ Compensation Act, the Commissioner is empowered to direct payment of interest only when the employer is in default in paying compensation within one month from the date it falls due, and not against the insurer. It was urged that the direction of the learned Commissioner to pay interest at the rate of 12% per annum on the compensation amount from the date of accident till the date of judgment, and further directing that on failure to deposit the same within one month, a penalty of 50% along with interest at the rate of 12% per annum over the awarded amount till deposit, is erroneous and illegal, and that the impugned award is therefore liable to be set aside. (xiv) It was further contended by learned counsel for the appellants that the employer had not admitted payment of wages and that in the absence Page 7 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 of any document relating to the employment and wages of the applicant, the finding of the learned Commissioner that the applicant was earning Rs. 8,000/- per month is not sustainable in the eye of law, and that the judgment and award are therefore liable to be set aside. III. SUBMISSIONS ON BEHALF OF THE RESPONDENTS: 4. (i) The Learned Counsel for the respondents earnestly made the following submissions in support of his contentions: Learned counsel submitted that while performing his duties on 18.10.2010 at about 8.00 A.M., the claimant fell from the 7th floor, resulting in severe and grievous injuries to his head, waist, both hands, and both legs. He became unconscious after the accident and was immediately shifted to a hospital at Mangalore, where he remained admitted as an indoor patient for about one month and eighteen days. Both his legs and right hand were operated upon and steel rods were inserted. It was further submitted that the claimant thereafter underwent additional treatment at Oltopur and other hospitals. According to the evidence adduced before the learned Commissioner, he is unable to perform his work and was earning wages of Rs. 8,000/- per month from Respondent No. 4. (ii) With regard to the contention raised by the appellant–Insurance Company disputing the existence of an employer–employee relationship, it was submitted that the said issue had been considered by the learned Commissioner in the impugned judgment. It was contended that the written statements filed by Opposite Party Nos. 1 and 3 disclose that the claimant was engaged through a sub-contractor Page 8 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 and that the accident occurred while he was performing his duties at the work site. It was further submitted that the medical expenses were borne by Respondent No. 4, the incident was reported to the police, and Respondent No. 5 had also acknowledged the engagement of the claimant. On the basis of such pleadings and admissions, it was contended that the employer–employee relationship stood established. (iii) So far as loss of earning capacity is concerned, learned counsel submitted that although the permanent disability was assessed at 65%, the nature of injuries sustained by the claimant, particularly to the spinal cord and waist, rendered him incapable of pursuing his avocation. It was contended that in cases of functional disability, the loss of earning capacity may be assessed at 100% notwithstanding a lower percentage of physical disability. (iv) With respect to assessment of wages, it was submitted that the learned Commissioner assessed the monthly wage at Rs. 8,000/- by taking into consideration the oral evidence of the claimant as well as the statutory amendment to the Employees’ Compensation Act vide Notification No. S.O. 1258(E) dated 31.05.2010, whereby the minimum wage for the purpose of computation of compensation was fixed at Rs. 8,000/- per month. (v) It was submitted that the appeal, having been preferred by the Insurance Company, essentially seeks re-appreciation of findings of fact relating to employment, wages, and injuries. Since no substantial question of law arises for consideration under Section 30 of the Page 9 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 Employees’ Compensation Act, the appeal was contended to be not maintainable. IV. FINDINGS OF THE COMMISSIONER FOR EMPLOYEES’ COMPENSATION- CUM-DEPUTY LABOUR COMMISSIONER, BERHAMPUR, GANJAM: 5. Upon consideration of the pleadings and the oral and documentary evidence on record, the learned Commissioner framed two issues, namely: (i) whether the applicant was a workman within the meaning of the Employees’ Compensation Act, 1923 and had sustained injuries in an accident arising out of and in the course of employment; and (ii) whether the compensation claimed was due and, if so, from whom it was payable. 6. On Issue No. 1, the learned Commissioner treated the preliminary examination of the applicant as evidence-in-chief and relied upon his deposition that he was working as a labourer under Opposite Party No. 3 at the relevant time and that on 18.10.2010, while performing his duties in a lift, he fell from the 7th floor and sustained severe and grievous injuries. The learned Commissioner also took into account the written statements of Opposite Party Nos. 1 to 3, wherein it was pleaded that the applicant had been deployed at the work site through a sub-contractor and that the occurrence of the accident could not be entirely disputed. The fact that the medical expenses were borne by Opposite Party No. 3 and that the incident had been reported to the police was also noticed. On the basis of such material, the learned Commissioner held that the applicant was a workman within the meaning of the Act and that the injuries were sustained in an accident Page 10 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 arising out of and in the course of employment under Opposite Party No. 3. 7. With regard to the age of the applicant, the learned Commissioner considered the transfer certificate produced on record, which disclosed the date of birth of the applicant as 25.07.1982, and accordingly accepted his age as 28 years at the time of the accident. 8. In relation to wages, the learned Commissioner noticed that the applicant had stated in his preliminary examination that he was earning Rs. 8,000/- per month and that during cross-examination he stated that he was earning Rs. 300/- per day. Observing that Opposite Party Nos. 1 to 3 had neither disclosed the wages in their written statement nor produced any document relating to wages, the learned Commissioner assessed the monthly wage of the applicant at Rs. 8,000/-. 9. As regards disability and loss of earning capacity, the learned Commissioner relied upon the disability certificate, which assessed the permanent physical disability of the applicant at 65%. Taking into account the nature of injuries, including injuries to the spinal cord and waist, the medical records, and the physical condition of the applicant as observed by the learned Commissioner during hearing, it was held that although the physical disability was assessed at 65%, the functional loss of earning capacity was 100%, as the applicant was no longer capable of performing work as a labourer. 10. On such basis, the learned Commissioner computed the compensation payable by applying the statutory formula, taking the monthly wage at Page 11 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 Rs. 8,000/-, 60% thereof, 100% loss of earning capacity, and the relevant age factor of 211.79, and determined the compensation at Rs. 10,16,592/. 11. Relying upon the decision of the Supreme Court in Oriental Insurance Co. Ltd. v. Siby George & Ors1., the learned Commissioner directed payment of simple interest at the rate of 12% per annum on the compensation amount from the date of the accident, i.e., 18.10.2010, till the date of judgment, which was quantified at Rs. 14,74,058/-, thereby making the total payable amount Rs. 24,90,650/-. The learned Commissioner further directed that the awarded amount be deposited within one month from the date of the judgment, failing which a penalty of 50% along with further interest at the rate of 12% per annum would be levied. Holding that a valid Workmen’s Compensation insurance policy covering the relevant period was in force in respect of the workers engaged at the project site, the learned Commissioner fastened the liability to satisfy the award upon Opposite Party No. 5–Insurance 12. 13. Company. V. COURT’S REASONING AND ANALYSIS: 14. 15. 16. Heard learned counsel for the parties and perused the material on record. At the outset, it is necessary to bear in mind the statutory framework governing the present appeal. Section 30 of the Employees’ Compensation Act, 1923 provides an appeal to this Court only against the specific orders enumerated in 1 (2012) 12 SCC 540. Page 12 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 clauses (a) to (e) of sub-section (1), and the first proviso further mandates that such appeal shall lie only if it involves a substantial question of law. The provision, by its very design, restricts the scope of appellate scrutiny and does not permit a re-appreciation of facts as in a regular first appeal under Section 96 of the Code of Civil Procedure. 17. In this regard, the Supreme Court in North East Karnataka Road Transport Corpn. v. Sujatha2 observed that the High Court’s jurisdiction under Section 30 is not akin to a first appeal under Section 96 Code of Civil Procedure and that it is confined only to substantial questions of law. The relevant extract is reproduced hereinunder: “9. At the outset, we may take note of the fact, being a settled principle, that the question as to whether the employee met with an accident, whether the accident occurred during the course of employment, whether it arose out of an employment, how and in what manner the accident occurred, who was negligent in causing the accident, whether there existed any relationship of employee and employer, what was the age and monthly salary of the employee, how many are the dependants of the deceased employee, the extent of disability caused to the employee due to injuries suffered in an accident, whether there was any insurance coverage obtained by the employer to cover the incident, etc. are some of the material issues which arise for the just decision of the Commissioner in a claim petition when an employee suffers any bodily injury or dies during the course of his employment and he/his LRs sue(s) his employer to claim compensation under the Act. 2 (2019) 11 SCC 514. Page 13 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 10. The aforementioned questions are essentially the questions of fact and, therefore, they are required to be proved with the aid of evidence. Once they are proved either way, the findings recorded thereon are regarded as the findings of fact. 11. The appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner lies only against the specific orders set out in clauses (a) to (e) of Section 30 of the Act with a further rider contained in the first proviso to the section that the appeal must involve substantial questions of law. 12. In other words, the appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner is not like a regular first appeal akin to Section 96 of the Code of Civil Procedure, 1908 which can be heard both on facts and law. The appellate jurisdiction of the High Court to decide the appeal is confined only to examine the substantial questions of law arising in the case.” 18. Keeping the aforesaid principles in view, this Court proceeds to examine whether the grounds urged by the appellant–Insurance Company disclose the existence of any substantial question of law warranting interference with the impugned judgment and award passed by the learned Commissioner. 19. At the outset, it must be noted that the primary thrust of the challenge laid by the appellant is directed against the findings recorded by the learned Commissioner on the issues relating to the occurrence of the accident, the existence of employer–employee relationship, assessment of wages, extent of disability, and loss of earning capacity. A careful Page 14 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 scrutiny of the submissions advanced on behalf of the appellant would reveal that these grounds essentially seek a re-appreciation of the evidence and a reassessment of factual conclusions arrived at by the Commissioner. 20. So far as the occurrence of the accident and its nexus with the course of employment is concerned, the learned Commissioner has recorded findings on the basis of the oral testimony of the applicant, the pleadings of Opposite Party Nos. 1 to 3 acknowledging deployment of the applicant at the work site through a sub-contractor, the bearing of medical expenses by the employer, and the registration of a police case. These are all matters squarely falling within the domain of factual appreciation. No perversity, misreading of evidence, or disregard of material on record has been demonstrated so as to elevate the said findings to the level of a substantial question of law. 21. The contention raised by the appellant disputing the existence of an employer–employee relationship likewise does not give rise to any substantial question of law. The learned Commissioner has taken note of the fact that the applicant was engaged at the project site through a sub-contractor and was discharging duties connected with the work of the principal employer. It is well settled that for the purposes of the Employees’ Compensation Act, engagement through a sub-contractor does not, by itself, negate the existence of an employer–employee relationship when the workman is employed in connection with the work of the principal employer. The finding recorded in this regard is thus a finding of fact, supported by material on record. Page 15 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 22. With respect to the assessment of wages, the learned Commissioner has noticed the statements of the applicant regarding his earnings and has also taken into account the failure of the employer to produce any documentary evidence relating to wages. In such circumstances, the assessment of monthly wages at Rs. 8,000/- cannot be said to be arbitrary or perverse. The determination of wages is essentially a factual exercise, and in the absence of any patent illegality or perversity, no interference is warranted in exercise of appellate jurisdiction under Section 30 of the Act. 23. The challenge to the finding on loss of earning capacity also does not merit interference. The learned Commissioner has relied upon the disability certificate assessing permanent physical disability at 65% and has further recorded reasons for assessing functional loss of earning capacity at 100%, taking into consideration the nature of injuries, particularly to the spinal cord and waist, the nature of work performed by the applicant as a labourer, and the physical condition of the applicant as observed during the course of proceedings. The distinction between physical disability and functional disability is well recognised and the assessment of loss of earning capacity based on functional disability is a matter within the domain of the fact-finding authority. The appellant has failed to demonstrate that the said assessment suffers from any legal infirmity or perversity. 24. The objection raised with regard to territorial jurisdiction under Section 21 of the Employees’ Compensation Act has also been duly considered by the learned Commissioner. The finding that the applicant was Page 16 of 20 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 13-Jan-2026 11:04:35 residing within the jurisdiction of the Commissioner at Berhampur, based on the affidavit and deposition on record, is a factual determination. The said finding does not disclose any jurisdictional error or misapplication of law so as to warrant interference by this Court. 25. The contention alleging collusion and bias on the part of the learned Commissioner has been raised without any substantive material on record. Allegations of this nature, in the absence of cogent evidence, cannot be a ground for interference in an appeal under Section 30 of the Act and do not give rise to any substantial question of law. 26. However, the grievance raised by the appellant with regard to the direction for payment of interest and penalty under Section 4A(3) of the Employees’ Compensation Act requires closer examination. 27. While the learned Commissioner has relied upon the decision of the Supreme Court in Oriental Insurance Co. Ltd. v. Siby George & Ors3. to award interest from the date of accident, the statutory scheme under Section 4A(3) contemplates the levy of interest and penalty upon default by the employer in payment of compensation. The fastening of such liability directly upon the insurer, particularly in relation to penalty, raises a legal issue touching upon the scope and manner of application of Section 4A(3) of the Act. 28. In Ved Prakash Garg v. Premi Devi4, the Supreme Court examined the scope of the liability of the insurer under the Employees’