# The New India Assurance Comp. Ltd v. Taiyyab Alam & Anr

- **Citation:** (2026) 4 ILRA 2265
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-04-28
- **Case number:** First Appeal From Order No. 69 of 2026
- **Bench:** Sandeep Jain
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-comp-ltd-v-taiyyab-alam-anr-54497
- **Pages:** 8

## Text

4 All. The New India Assurance Comp. Ltd. Vs. Taiyyab Alam & Anr.
2265
57. Interim order, if any,stands vacated.

58. Office is directed to send back the record of the trial court, forthwith.
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(2026) 4 ILRA 2265
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.04.2026

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 69 of 2026

The New India Assurance Comp. Ltd. ...Appellant
Versus
Taiyyab Alam & Anr. ...Respondents

Issues for Consideration
(i) Whether the Employees' Compensation Commissioner committed an error in applying an incorrect relevant
factor under Schedule IV of the Employees' Compensation Act, 1923 while computing compensation?
(ii) Whether a driver who suffered 45% permanent physical disability resulting in inability to drive any vehicle
is entitled to compensation by treating the loss of earning capacity as 100% functional disability?
(iii) Whether the Commissioner was justified in computing compensation on the basis of minimum wages
despite categorical admission by the employer regarding the claimant's monthly wages?
(iv) Whether interest under Section 4A of the Employees' Compensation Act, 1923 is payable on the amount
awarded towards reimbursement of medical expenses?

Headnotes
Employees' Compensation Act, 1923 - Sections 4 and Schedule IV - Compensation - Relevant
factor - Incorrect application of factor - Effect.

HELD: The claimant was aged 31 years on the date of accident and the relevant factor prescribed under
Schedule IV of the Employees' Compensation Act, 1923 was 205.95. The Commissioner committed a manifest
error in applying the factor of 295.95 while calculating compensation. The award was liable to be modified by
applying the correct statutory factor. [Paras 15 and 25]

Employees' Compensation Act, 1923 - Section 4 - Compensation - Monthly wages - Admission
by employer - Evidentiary value.

HELD: Where the employer unequivocally admitted in the written statement that the claimant was employed
as a driver on monthly wages of Rs.15,000/-, there was no justification for the Commissioner to ignore such
admission and determine compensation on the basis of minimum wages. In the absence of any evidence to
the contrary, compensation was liable to be computed on the admitted monthly wages. [Paras 16 and 17]

Employees' Compensation Act, 1923 - Section 4 - Permanent physical disability - Functional
disability - Driver rendered incapable of driving - Loss of earning capacity.

HELD: Assessment of compensation cannot be based merely upon the percentage of physical disability. The
decisive consideration is the impact of the injury on the earning capacity of the injured workman. Although
the Medical Board assessed the claimant's permanent physical disability at 45% on account of right-side
2266 INDIAN LAW REPORTS ALLAHABAD SERIES
hemiplegia, the claimant, being employed as a driver, had become wholly incapable of driving any vehicle.
Consequently, he suffered 100% functional disability and complete loss of earning capacity, entitling him to
compensation on that basis. [Paras 18 to 22]

Employees' Compensation Act, 1923 - Sections 4 and 4A - Medical expenses - Reimbursement
- Interest - Liability.

HELD: Reimbursement of medical expenses awarded under the Employees' Compensation Act forms an
integral part of compensation. Consequently, interest under Section 4A is payable not only on the amount
awarded towards compensation for loss of earning capacity but also on the amount reimbursed towards
medical expenses. The claimant was entitled to interest at the rate of 12% per annum on both amounts from
the date of accident till actual payment. [Paras 23 to 26]

Employees' Compensation Act, 1923 - Section 30 - Appeals by insurer and claimant -
Modification of award.

HELD: Since the Commissioner applied an incorrect statutory factor, ignored the admitted wages of the
claimant, failed to assess functional disability in accordance with settled principles, and omitted to award
interest on medical reimbursement, the award required modification. The insurer's appeal lacked merit and
was liable to be dismissed, whereas the claimant was entitled to enhancement of compensation. [Paras 25 to
30]

Insurer's appeal dismissed. Claimant's appeal allowed. Impugned award modified. Insurance
company directed to deposit the enhanced compensation within two months after adjusting the
amount already deposited. (E-14)

Case Law Cited
Mamta Devi and Others v. The Reliance General Insurance Co. Ltd. and Another, 2023 INSC 566
- relied on; Raj Kumar v. Ajay Kumar and Another, (2011) 1 SCC 343 - relied on; Sarnam Singh
v. Sriram General Insurance Co. Ltd. and Others, (2023) 8 SCC 193 - relied on; Chandrasekaran
v. P. Marappan and Another, CMA No. 2581 of 2021 (Madras High Court, decided on 13.02.2024)
- relied on; K. Sivaraman and Others v. P. Sathishkumar and Others, 2020 ACJ 1361 - referred
to.

List of Acts / Statutes
Employees' Compensation Act, 1923.

List of Keywords
Employees' Compensation; Functional disability; Permanent disability; Loss of earning capacity; Driver;
Monthly wages; Admission; Relevant factor; Medical reimbursement; Interest; Hemiplegia.

Case Arising From
Order dated 24.10.2025 passed by the Employees' Compensation Commissioner/Deputy Labour
Commissioner, Moradabad in E.C.A. Case No. 01 of 2022, Taiyyab Alam v. Farooq and Another.

Appearance for Parties
For Appellant: Sri Anubhav Sinha
For Respondent: Sri Mohd. Asim Zulfiquar.

(Delivered by Hon'ble Sandeep Jain, J.)
4 All. The New India Assurance Comp. Ltd. Vs. Taiyyab Alam & Anr.
2267

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 appellantinsurance 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.
2268 INDIAN LAW REPORTS ALLAHABAD SERIES
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.
4 All. The New India Assurance Comp. Ltd. Vs. Taiyyab Alam & Anr.
2269
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:-
2270 INDIAN LAW REPORTS ALLAHABAD SERIES
 "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%.
4 All. The New India Assurance Comp. Ltd. Vs. Taiyyab Alam & Anr.
2271
 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:
2272 INDIAN LAW REPORTS ALLAHABAD SERIES
(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.
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(2026) 4 ILRA 2272
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.04.2026

BEFORE

THE HON'BLE ABDUL SHAHID, J.

First Appeal From Order No. 2226 of 2025

M/S Hapur Roller Flour Mills & Anr. ...Appellants
Versus
M/S Shri Vardhman Roller Flour Mills & Ors. ...Respondents

Issue for Consideration
(i) Whether the trial court was justified in exercising powers under Section 319 Cr.P.C. to summon the
unmarried sisters of the husband as additional accused on the basis of general allegations contained in the
F.I.R. and the depositions of prosecution witnesses?

(ii) Whether reiteration during trial of allegations already available before the Investigating Officer and found
insufficient for prosecution constitutes fresh evidence warranting exercise of powers under Section 319
Cr.P.C.?
(iii) Whether the trial court could invoke Section 319 Cr.P.C. by relying upon the F.I.R. and statements
recorded under Section 161 Cr.P.C. instead of the evidence adduced during trial?

Headnotes
Arbitration and Conciliation Act, 1996 - Section 8 - Reference to arbitration - Stage for
invoking arbitration agreement - Application filed beyond prescribed period for filing written
statement - Maintainability.