In Kamal Dev Prasad v. Mahesh Forge, 2025 INSC 591, the Hon’ble Supreme Court while considering an issue of workplace injury compensation under the Employees’ Compensation Act,1932 held that a disability and loss of earning capacity should not be assessed only on the basis of the Schedule, especially when there is an ambiguity but on the actual functional loss and impact on earning capacity. The Appellant worker, a forging machine operator, lost multiple phalanges on four fingers of his right hand in a factory accident. The commissioner awarded 100% disability compensation, along with 12% interest and 50% penalty for the employer’s delay in payment. However, the High Court reduced the disability to 34% by mechanically applying Schedule 1 of the act based on the loss of phalanges of each of the fingers but not the total impact. The Hon’ble Supreme Court stated that disability should not be assessed only on the basis of the Schedule but on the actual functional loss and impact on earning capacity. The Court held that injury and loss of use of the right hand severely affected the worker’s ability to perform his job. It fixed functional disability at 50% and awarded compensation accordingly, with interest and penalty reaffirming the beneficial nature of the legislation.
