Kerala High Court Emphasises Adherence to Binding Precedents in ESI Act Appeals
The Kerala High Court recently held that the failure of an Employees' Insurance (EI) Court to follow binding judicial precedents gives rise to a substantial question of law in appeals filed under the Employees' State Insurance (ESI) Act. Justice S. Manu, while considering an appeal, underscored that judgments of EI Courts that do not align with established legal principles cannot be sustained.
The observation came during the hearing of an appeal, ESI Corporation v. Mohandas (Ins.App No. 13 of 2021), filed by the Employees' State Insurance Corporation. The Corporation challenged a judgment rendered by the EI Court, which had ruled in favour of an insured toddy tapper. The respondent, a toddy tapper, had sustained an employment injury diagnosed as a 'Stable Compression Fracture L2' and required inpatient treatment for over a week. Subsequently, the Medical Board assessed his loss of earning capacity at 20%.
Dissatisfied with this assessment, the respondent approached the EI Court, contending that his loss of earning capacity should have been fixed at 100%. The ESI Corporation, in response, argued that the Medical Board was the competent authority to determine the loss of earning capacity, and its decision was consistent with the provisions of the ESI Act, Rules, and Regulations. However, the EI Court, referencing a medical certificate from the Medical Board of General Hospital that certified a 100% loss of earning capacity, concluded that the ESI Medical Board's finding was unrealistic. Consequently, the EI Court ruled in favour of the respondent, holding him entitled to Permanent Disability Benefit (PDB) for 100% disability.
High Court's Examination of Precedents and Legal Rationale
Aggrieved by the EI Court's judgment, the ESI Corporation appealed to the High Court. The Corporation contended that the EI Court had failed to adhere to binding precedents while adjudicating the case. Specifically, it cited the decisions in E.S.I Corporation v. Pushkaran [1993 (2) KLT 187] and another recent judgment in Ins.Appeal No. 27/2020. The Corporation further argued that, based on the available medical evidence, the respondent was not entirely incapacitated from performing any work, but rather had become disabled only from undertaking the specific job he was performing at the time of the employment injury.
In response, the respondent submitted that the Corporation had not made any efforts to cross-examine him or to adduce evidence demonstrating his capacity to perform other forms of work. The respondent's counsel sought to distinguish the precedents cited by the Corporation on this ground.
After hearing arguments from both parties, the High Court meticulously examined the judgments referred to by the ESI Corporation, including E.S.I Corporation v. Pushkaran, and a Full Bench decision in Vanajakshan v. Joseph [2003 (2) KLT 462]. The Full Bench in Vanajakshan v. Joseph had established that compensation must be determined by considering both the loss of earning capacity and the specific loss of ability to perform the job the individual was engaged in at the time of the accident. The High Court determined that the EI Court had not adequately considered the legal principles laid down in these aforementioned decisions while arriving at its conclusion. The bench held that this failure to follow binding judgments constituted a substantial question of law, necessitating interference with the impugned judgment.
Disposition and Remittal for Fresh Consideration
Considering the circumstances, the respondent requested an opportunity to adduce additional evidence to demonstrate that he had, in fact, become incapable of performing any physical labour. Taking into account all aspects of the case, the High Court concluded that the matter warranted remittal to the EI Court for fresh consideration. Accordingly, the High Court set aside the impugned judgment of the EI Court. The EI Court was directed to pass fresh orders within a period of six months from the date the parties appear before it, ensuring a thorough re-evaluation in light of the established legal precedents.