High Court Affirms Its Discretion to Adjust Awards Under the Employees’ Compensation Act; Confirms Burden on Insurer and Waiver of Penalty in Labour Compensation Appeals
Summary
| Category | Data |
|---|---|
| Case Name | FAO/124/2025 of MANAGER(LEGAL), M/S RELIANCE GENERAL INSURANCE CO. LTD., BBSR Vs MRUTYUNJAYA NAYAK |
| CNR | ODHC010110052025 |
| Date of Registration | 17-03-2025 |
| Decision Date | 18-08-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | Dr. Justice Sanjeeb K. Panigrahi |
| Court | Orissa High Court |
| Bench | Single Judge |
| Precedent Value | High Court judgment |
| Overrules / Affirms | Affirms existing discretionary powers under the Employees’ Compensation Act |
| Type of Law | Labour / Employees’ Compensation |
| Questions of Law | Whether, in the absence of any evidence from the insurer disputing disability or income, the High Court can exercise its discretion to reduce the compensation awarded by the Commissioner for Employees’ Compensation. |
| Ratio Decidendi |
|
| Logic / Jurisprudence / Authorities Relied Upon | Application of the High Court’s inherent discretion in adjusting compensation awards when challenges lack evidentiary support. |
| Facts as Summarised by the Court | The appeal by the insurer challenged the Commissioner’s award of Rs. 9,46,926 for injuries sustained in employment. No evidence was led by the insurer to dispute claimed disability or income. The parties agreed to a reduced compensation during hearing, and the full award amount had already been deposited. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts under the Orissa High Court |
| Persuasive For | Other High Courts considering appeals under the Employees’ Compensation Act |
What’s New / What Lawyers Should Note
- Confirms that an insurer disputing disability or income must adduce evidence; unsubstantiated contentions will be rejected.
- Upholds High Court’s power to propose and direct a consolidated reduction of compensation amounts in labour appeals.
- Clarifies that penalty and penal interest imposed by the Commissioner can be waived by the High Court.
- Demonstrates that deposit of the full award before the Commissioner permits immediate disbursement of the reduced amount and refund of the balance.
Summary of Legal Reasoning
- The insurer challenged the Commissioner’s finding on disability and income but led no evidence; thus, those challenges were rejected.
- Exercising inherent discretion, the High Court proposed a consolidated reduction of the compensation award from Rs. 9,46,926 to Rs. 7,50,000.
- The claimant agreed to the reduced amount; the insurer left the quantification to the Court’s discretion.
- As the full award had already been deposited, the Court directed disbursement of Rs. 7,50,000 with accrued interest to the claimant and refund of the balance with interest to the insurer.
- The Court waived the penalty and penal interest previously imposed by the Commissioner.
Arguments by the Parties
Petitioner (Insurer):
- Disputed the claimant’s degree of disability and income level.
- Did not adduce any evidence in support of those contentions.
Respondent (Claimant):
- Accepted the proposed reduction of compensation to Rs. 7,50,000.
- Had the full compensation amount deposited before the Commissioner.
Factual Background
The claimant, employed as a helper on a truck, sustained injuries during the course of employment. The Commissioner for Employees’ Compensation-cum-Joint Labour Commissioner awarded Rs. 9,46,926 by way of compensation. The insurer appealed, disputing disability and income but produced no evidence. During the High Court hearing, the court proposed a reduced consolidated award of Rs. 7,50,000, which the claimant accepted. The full award amount had already been deposited before the Commissioner.
Alert Indicators
- ✔ Precedent Followed – High Court’s discretion in adjusting awards under labour compensation statutes reaffirmed.