CHAPTER V

COMPENSATION SYSTEM FOR OCCUPATIONAL

INJURIES AND DISEASES

The Compensation System for Occupational diseases and injuries is the most vital
component of any Social Security Scheme for the working class. This chapter concentrates
on the procedure and adequacy of compensation awarded to the labouring population in
Faridabad.

THE ESIS COMPENSATION SYSTEM: AN OVERVIEW

The Workmen's Compensation Act (WCA) provided for a one time lump sum
compensation to be given by the principal employer to the employee in case of disability or
death due to an injury or disease sustained at the workplace. This was replaced by the ESI
Act 1948, in areas and industrial units notified by the State Governments. The ESI Act
provides for compensation in the form of periodic payments in case of Employment Injury
or death due to an occupational accident.

The disablement benefit is of two types viz Temporary and Permanent. Temporary
disablement is defined as a condition resulting from an employment injury which renders
an employee temporarily incapable of doing work. The compensation awarded during this
period is technically termed Temporary Disablement Benefit (TDB). Permanent
disablement is of two types viz partial or total. Permanent partial disablement is defined as
such disablement of a permanent nature that reduces the earning capacity of an employee in
every employment which he was capable of undertaking at the time of the accident
resulting in the disablement. Permanent total disablement is defined as disablement of a
permanent nature that incapacitates an employee for all work which he was capable of
performing at the time of the accident reSUlting in such disablement. The compensation
awarded for such injuries is technically termed Permanent Disablement Benefit (PDB).

The present rates of TDB are given in Appx 2. The PDB rate is decided after the
medical board, constituted by the ESIS, fixes a percentage of "loss of earning capacity"
after examining the worker and perusing his medical record. Thus, if the medical board
records the loss of earning capacity as 50%, the worker will get 50% of the TDB rate

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(Appx 2). Both the TDB and the PDB are given in the form of periodic monthly payments.
In 1989, a provision has been inserted in the Act for providing lump sum PDB payment to
workers, subject to the fact that the lump sum PDB does not exceed Rs 10,000 at the time of
commencement of final award of his permanent disability.

The ESI Act also provides for compensation to dependents of an insured person
who dies as a result of an employment injury. The benefit paid in this case is equivalent to
the TDB rate (Appx 2).

To provide the above benefits, the ESI Act and Rules framed therein provide for
creating a suitable infrastructure and lay down the procedure for the same. The ESI Local
Office Manual describes the guidelines to be followed for making such payments.
Accordingly, the ESIS has Regional Offices (functioning directly under the National office
located in New Delhi) in all States, headed by an officer of the rank of Regional Director.
These Regional offices are responsible for organising disbursement of all cash benefits in
the State. They have Local Offices at various industrial areas to assist them in the discharge
of their functions. Local Offices are headed by officers of the rank of Manager.

.
Whenever, a worker sustains an Employment Injury, the employer is bound by law
to inform the dependent Local Office and ESI dispensary. The LO Manager carries out
Investigation and confirms that the worker has sustained an Employment Injury. The
worker is then given TDB based on certification by the dispensary doctor. This payment
continues till the injury stabilises. After stabilisation, the worker is examined by an ESI
Medical Board, which decides his "loss of earning capacity". He accordingly gets PDB. In
the event of death due to Employment injury, the dependents are advised to apply for
Dependent Benefit, which is sanctioned by the RO.

In case a worker or dependent is aggrieved by any of the above decisions, he can

appeal before a Medical Tribunal/ Employees Insurance (EI) Court. This procedure is
discussed in detail in Chapter VI.

DEFINITION OF EMPLOYMENT INJURY

The original definition of Employment Injury as per the ESI Act is:

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" Employment Injury means a personal injury to an employee caused by accident or an
occupational disease arising out of and in the course his employment in factory or
establishment to which this Act applies, which injury or occupational disease would entitle
such employee to compensation under WCA, if he were a workman within the meaning of
the said Act."

In 1966, a new definition was added to replace the above which reads:
"Employment injury means a personal· injury to an employee caused by accident or an
occupational disease arising out of and in the course of his employment, being an insurable
employment, whether the accident occurs or the occupational disease is contracted within
or outside the territorial limits of India"

It is clear from the above, that previously the insured persons were kept at par with
the workmen within the meaning of WCA, and the circumstances in which the insured
person could claim benefit under the ESI Act, were similar to the circumstances in which a
workman under the WCA could claim compensation for Employment Injury under Section
3 of the WCA. By inserting this new clause, the Legislature intended that the ESI Act
would lay down provision of its own so that the spirit of social insurance would be
inculcated in the Act for industrial workers in this country as has been done in England by
the National Insurance (Industrial Injuries) Act 1946 (Mallick, 1995). However, in practice
it is observed that apart from a cosinetic change in definition, there is absolutely no extra
benefit accrued to the worker as a result of this legislative amendment.

When we examine the Second Schedule which lays down guidelines on which the

.
Medical Board is expected to award compensation for certain Occupational Injuries under
the ESIS (Appx 1) we find that it is a verbatim copy of Schedule I of the WCA (Akalank
Publications, 1997). This in effect means that the quantum of compensation given under
the two Acts remains the same. While fixing similar levels of compensation, the ESI
scheme has ignored the following pertinent points:
1) Under the WCA, a large oile time lump sum payment was given for a permanent
disablement, whereas under the ESI a small fixed monthly pension is given for the
same. This in effect means that the ESIS gives the worker much less than even the

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 interest (he would have earned on the lumpsum given under WCA), while retaining the
capital permanently.
2) Under the WCA, the liability to pay compensation was totally that of the employer,
unlike the ESIS, where the worker is also a financial contributor.
3) In the ESIS, the monthly disability pension is only admissible till the death of the
worker and after his death (if the death is not due to Employment Injury), his family
has to fend for itself. In other words, premature death due to non occupational reasons,
after an Employment Injury results in financial savings to the Corporation. Under the
WCA, since a lumpsum was awarded to the worker at the time of accident itself, his
family can continue to enjoy the benefits of interest accrued on the lumpsum even after
his death.

To illustrate the inadequacy of the present ESI compensation procedure, we present

the Case Report ofa 100% disabled young worker of Faridabad. Kamal Bharadwaj, son of
Chandra Mohan, aged 22 years migrated from Lansdowne (Uttar Pradesh) and started
working in Raj Enterprises 16/5 Old Faridabad in 1995. His factory is registered under the
Factories Act and covered by the ESIS. It is an SSI Unit employing only 12 workers. He
was assigned to perform job work as an unskilled worker on the boring machine. He was
paid only Rs 1100 per month, though he was made to sign on forms which showed that the
employer was paying him minimum wages fixed by the Haryana Government. On
20/10/97, he sustained a serious injury in a major accident when his shirt got stuck in the
machine and he got dragged on to it. Timely intervention by his colleagues saved his life
but the accident rendered him a cripple. He was rushed to ESI NH 3 Hospital. His father
told us that the doctors in the hospital kept on telling him that his son is a road traffic
accident case and not an employment injury. The matter was sorted out by the intervention
of the employer who testified it to be an occupational accident.

Nonetheless, ESI doctors informed them that he is too serious to be handled by the
ESI Hospital and the Casualty Medical Officer referred him to Safdmjung Hospital New
Delhi. At Safdurjung, an Magnetic Radio Imaging (MRI) was done costing Rs 5000 (paid
by individual's father). He was diagnosed as Traumatic Fracture with Posterior subluxation
at Cervical 7 vertebra (C7) with mild extradural compression with cord contusion with
Paraplegia on 21110/97. He remained admitted in the Delhi hospital for a fortnight and was

191
then discharged for further care at home. His father brought him to his residence which is
located in a closed down factory. The father is employed as a chowkidar in this factory for
Rs 1400 per month, but officially his wages are being shown as Rs 2000. The ESI Hospital
now states that they cannot do anything more for him. His father has bought a mattress for
Rs 1300 and the employer has 'donated' a wheel chair for the boy. The boy is bedridden,
has bedsores and urinary and ~tool incontinence. He cannot sit on the wheel chair due to his
bedsores. All expenditure for treatment is borne by his father and he has not got a penny as
reimbursement despite applying for the same. The father says that the ESIS keeps on
making him run in circles from the LO to the RO to the ESI Hospital to Safdurjung for
documentation. He has finally given up any hope of getting any medical' reimbursement.
The boy urgently needs a cervical collar as advised by the referral hospital but ESIS refuses
to take any action on the matter. No ESIS official has ever visited the boy in his home,
though there is provision for domicilliary visits under this Scheme. It is pertinent to point
out that under Section 103 B of the ESI Act this boy is entitled to medical benefit from the
ESIS till life, even if he leaves insurable employment. But the attitude of the ESI doctors
has rendered this clause non operational in his case. It is a paradoxical situation where on
one hand, the ESIS has extended its medical benefit scheme to even retired employees and
on the other hand it is unable to provide adequate care to even serving workers. Moreover,
nobody has spared a thought for the Rehabilitation of the boy though Rehabilitation Benefit
is one of the benefits under the ESI Scheme.

As long as his injury was not stabilised he got TDB @ Rs 39.24 per day (21110/97
to 21/9/98) from the ESIS. This stopped the moment the dispensary doctor certified his
injury as 'stable'. He then applied for medical board. Meanwhile, he also requested the LO
Manager for some interim advance payment till finalisation of the Board but the LO
Manager told him there is no such procedure. As per official records he was sent a letter at
his residence asking him to appear before the medical board but the same was not received
by the worker. His father then approached the RO and after repeated visits was informed
that his son should be brought for the medical board on 8/1/99. The father requested that in
view of the medical condition of his son, the medical board should examine him at his
house itself, but he was shooed away on the ground that there is no such system in vogue.

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 The medical board at Faridabad held on 8/1/99 was attended by us. The boy w~s

brought to the RO in an autorickshaw by his father at 0900 hrs. However, it was difficult to
carry him to the first floor (venue of the medical board) and so he lay on a stretcher on the
ground itself. The father of the boy made repeated requests through the clerical staff of the
RO that the boy may be examined first in view of his condition. But the Board decided to
see him only after examining all other patients. Finally at around 1130 the boy was seen by
the Surgeon and the Orthopaedic Surgeon. They awarded him a disability of 100%.
However, it took another 9 weeks for the accounts branch to finalise his compensation
(PDB) at Rs 39.24 per day for life. This was despite repeated visits by the father of the
disabled boy, to the RO, requesting them to have mercy on his son.

This young lad has not received any salary from his employer after the accident. He
is not in a position to perform his original or for that matter any other work for the rest of
his life. The employer has dismissed him from service. He needs a permanent assistant to
look after him for the rest of his life. He also has to incur expenditure for his future
treatment. As a result of his disability he will never get married. Thus, a compensation of
Rs 39.24 per day (Rs 1177 per month) is grossly inadequate for this boy. It is pertinent to
point out that as per WCA this boy is entitled to a one time lumpsum compensation of Rs
2, 15,000. The interest earned on investing this sum @ 12% interest works out to Rs 2150
per month. So in effect the ESI is paying him only about 50% of what he would have got
under WCA, while permanently retaining the principal.

All the executives of the ESIC whom we met during our Study, tried to justify
periodic payments under ESI as against lumpsum payments under WCA on the grounds
that the former also provided Medicare services, while the latter did not do so. The Case
Report of Kamal Bharadwaj illustrates that the quality of medical care provided by the
ESIS, at the cost of holding on to his entitled capital under WCA, is nothing short of
exploitation of the working class. When we explained the economics of the WCA and the
ESIS in their specific case to the Bharadwaj family, the entire family was of the unanimous
opinion that given a choice they would jettison the medical care services of the ESIS in
favour of a composite lumpsum payment under the WCA. Therefore, to do justice to the
working class, the ESI scheme should logically give higher percentages of compensation
than that given under WCA, or allow all workers the option of taking a lumpsum payment.

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 It was also expected that the Corporation would frame a separate schedule to guide
the Medical Board for assessment of non schedule injuries. These are injuries which are not
included in the Second Schedule (Appx 1) such as shortening of limb due to fracture, non
union of fracture, partial auditory deafness, etc. However, despite the scheme having been
in existence for over 40 years, the Corporation has not come out with any guidelines on
compensation for non schedule injuries. This has been left to the discretion of the members
of the medical board and hence can be highly subjective.

OCCUPATIONAL INJURIES
Technically, the term 'Employment Injury' includes both Occupational Diseases
and Injuries caused by industrial accidents. While the latter is mostly apparent,
Occupational diseases due to their insidious nature require dedicated medical expertise for
proper diagnosis and compensation. The ESIS offers both types of benefits viz Disability
Benefit for the injured worker and Dependent Benefit for the family of a deceased worker,
in case they satisfy the following conditions (DGESIC, 1988):
1) It must be a personal injury to an employee,
2) It must be caused by an accident or by an occupational disease,
3) It must have arisen out of employment of the employee in a covered factory or
establishment, and
4) It must arise in the course of his employment in a covered factory or establishment.

There is no minimum period of employment for claiming either disability or

dependent benefit, for example, if a worker sustains employment injury even within
minutes of taking up a new job, he would be entitled to one of these benefits. Further,
Disability Benefit is of two types; Temporary Disablement Benefit and Permanent
Disablement Benefit.

Temporary Disability Benefit

This consists of periodical payments during the period when the mJury is not
stabilized, and it amounts to approximately 70 % of the normal wages of the worker. The
current rates are given in Appx 2. As soon as a worker sustains an injury due to his
employment, his employer is to fill an accident report form (Form 16) and send the same to

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theESI Local office and dispensary. On receipt of the Form the local Office Manager (ESI)
will confirm the existence of the Employment Injury by visiting the factory and perusing
the medical certificate given by the dispensary doctor. He will then make payment of
Temporary Disablement Benefit (TDB). It is important to note that TDB is given only for
the period that the employee does not attend to his work. The worker does not get any
wages during this period, a fact that denies all logic ofpermanent employment. By giving
only 70 % of his normal wage as TDB, the ESIS does not even give the injured worker full
compensation for loss of wages, while completely absolving the employer from all his
liabilities. Contrast this with the Maternity Benefit. When a woman worker is pregnant, she
is given full wages for the prescribed period of confinement (Appx 2). Similarly, a person
on Enhanced sickness benefit due to a Family Planning operation is given full wages for
absence from work in the ESIS (ESIC, 1997a). This shows that the Family Welfare
Programme with its stress on 'Safe Motherhood' has had a profound influence even on this
Occupational Health Scheme.

One is not for a moment suggesting that the Maternity Benefit rate be lowered. But
it is not illogical to expect that in an occupational social security legislation, the rate for
compensation for an employment injury should be atleast equal, if not more than the
compensation given for an essentially physiological condition like pregnancy. The idea of
giving the above illustration is to highlight the priorities of the ESIS.

On an average, 5139 and 2014 workers have received TDB in Haryana and
Faridabad respectively in the last 5 years (Table 5.l). Thus, Faridabad accounts for 39% of
all cases given TDB in Haryana.

TABLE 5.1: NUMBER OF NEW CASES OF TEMPORARY DISABLEMENT BENEFIT ADMITTED IN

HARYANA AND FARIDABAD
YEAR HARYANA* FARIDABAD# Percentage(Faridabad of Haryana)
1993-94 4903 1196 24.39
1994-95 5880 2661 45.25
1995-96 5642 2442 43.28
1"996-97 5248 2281 43.46
1997-98 4022 1490 37.05
AVERAGE 5139 20140 39.19
..
Source: *Annual StatIstical Abstracts (ESI CorporatIOn)
# Compiled from Master Ledger of Monthly Statistics (RO ESI Faridabad)

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 The significant drop in number of accidents compensated in 1997-98 does not mean
that industrial accidents have decreased. ESI officials pointed out that this has come about
due to a landmark decision of the Supreme Court in Oct 96 which has redefined the
concept of admissibility of commuting accidents (from home to workplace and back) as
Occupational Accidents. Since Faridabad is an Industrial Township located on both sides
of the National Highway (Mathura Road), it is an area where Road Traffic Accidents are
common. Due to the Supreme Court judgement, these Road Traffic Accidents are not
admitted as Employment Injury since 1997-98.

According to the policy of the ESI Corporation, commuting accidents were treated .
as Employment Injury in the State of Haryana and the workers given compensation for
such accidents ti111996 (DGESIC, 1988). Senior executives of the Corporation pointed out
that there was however, considerable debate among the ESI Staff and the labour ministry
regarding admissibility of such accidents as occupational or otherwise. In Kerala one IP,
Francis D' Costa who got injured in a Road Traffic Accident in 1971 while commuting to
his factory was denied compensation by the Local Office on the grounds that the same was
not an Employment Injury. The individual appealed to the local EI Court who set aside the
order of the Local Office and directed the ESI to pay him compensation. The ESI
Corporation filed an appeal in the Kerala High Court who rejected the same on 25 Nov 77.
However, the Corporation filed a Special Leave petition before the Supreme Court. This
was heard by a two judge bench who rendered conflicting decisions on the matter and
therefore the issue was referred to a larger three judge bench of the Supreme Court (1993
Supp (4) SCC 100). The 3 Judge Bench in its decision dated 11 Sep 96 held that a personal
injury sustained by an employee in a commuting accident is neither out of nor in the course
of Employment (1996 (74) FLR 2326 (SC)). The plea put forward by the Counsel for the
worker was that since the worker was commuting to his place of employment when the
accident occurred; hence as per the theory of notional extension, the accident occurred out
of and in the course of employment. The Court while rejecting this plea gave the following
interpretation of the concept of notional extension:
1) Road accident is not 'incidental to' or 'arising out of employment': The injury must be
caused by an accident which had its origin in the employment. A road accident, while
an employee is merely on his way to his place of employment cannot be said to have
origin in his employment in the factory. A road accident may happen anywhere and at

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 any time. But such accidents cannot be said to have arisen out of employment unless it
can be established that the employee was doing something incidental to his
employment. In view of this, such commuting accidents are not incidental to his
employment.
2) Road accident does not occur 'in the course of employment': An employee is not 'in
the course of his employment' from the moment he leaves his home and is on his way
to work. He certainly is in the course of his employment ifhe reaches the place of work
or a point or an area which comes within the theory of notional extension of employer's
premises.

Acting quickly, the ESI Corporation promptly issued a circular on 31 Oct 96 to all
its Regional Offices not to give compensation in the case of such commuting accidents
(ESIC, 1996a). Therefore, all such accidents are now denied Disability/ Dependent
Benefits not only in Faridabad but in the entire country. As a consequence, the low paid
labourers had to bear the costs for accidents that occurred while commuting to and fro
work. This did restrict the spirit of 'Social Security'. Workers leave the safety of their
village and hearth to earn a living in the Industrial Townships, thus getting exposed to
Road Traffic Accidents. There is no obligation on the part of the employer to provide
housing facilities to him. This forces them to stay in dingy, unhygienic and unauthorised
colonies (Jhuggis), where the basic necessities of life are a luxury. It is only his
employment which forces him to stay there, so that he can be near his place of
employment. His exposure to road traffic hazards while going to or returning from work
has therefore necessarily arisen 'out of ' and 'in the course' of employment. It would
perhaps be a more liberal interpretation of the law to not deny him compensation by a pure
technical interpretation of the theory of notional extension. Social Justice demands that due
consideration be given to the inherent pressures to which the working class is exposed to,
while such landmark decisions in the realm of 'Social Security' are being made. Subsection
51 C of the ESI Act states that 'accidents while travelling in employers transport shall be
presumed to have arisen out of and in the course of employment'. Only senior officials of
the company have the privilege of travelling in company transport from their home to
factory and back. It is ironic that due to this subsection, these officials will continue to get
compensation for commuting accidents whereas, the ordinary worker who cycles down to
work or takes a bus due to his meagre earnings, is denied compensation.

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 In Faridabad district, it was observed that the least paid, unskilled, casual and
contract labourers were most affected by this decision while the foremanl clerical and
skilled workers remained untouched. Once a commuting accident takes place, the workers
are at the mercy of the management. It is upto them to show the accident as commuting or
otherwise. The higher paid skilled workers and clerical staff are close to the management.
ESI staff pointed out that whenever any such worker is injured in a commuting accident,
the management shows them as being on duty. They are shownby the management as
being directed to bring an item for the factory from a shop enroute or delivering a message
to any industrial unit while returning home. The accident thus becomes an occupational
accident and the worker gets his compensation. Thus, Ram Kumar, a clerk in Mis Polar
Auto and Engineering (Pvt) Ltd, 132 DLF Industrial Area got his Road Traffic Injury
(sustained on 8/2/99 while driving his own motorcycle) admitted as a case of Employment
Injury. But when a low paid casual worker meets the same fate, the management denies
even the knowledge of any accident, let alone attempt to cover up the worker. The case of a
deceased contract labourer of Faridabad will illustrate this point.

Late Ram Rattan son of Hari Dutt was employed with MIs Fixo Pan Machine (Pvt)
Ltd, Plot No. 102, Sector 25, Ballabgarh, Faridabad. He had been working in this factory
for the last one year. His factory was covered by the ESIS. After completing his work on
16/4/97, he left the factory premises for his home on his cycle at around 8 pm, when he was
run over by a vehicle and died on the spot. A (First Information Report) FIR was registered
with the local police station by a colleague immediately. The errant vehicle could not
however be traced. The management did not report the accident to the LO ESI even after
the individual's wife informed them of the same. They did not extend any help to the
bereaved family on the pretext that the individual was a contract labourer and as his
contractor is his principal employer, the latter is only required to complete all formalities.
Nobody guided the aggrieved illiterate widow on the future course of action even on
humanitarian grounds. Based on wrong legal advice she engaged a Counsel, who filed a
suit under WCA in the Office of the Labour Officer. Summons were issued to the
management by the Labour Officer. The management in its reply denied total knowledge of
any accident and also stated that WCA was not attracted in this case as they were covered
by the ESI Act. The case was dismissed after 18 months.

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 Thereafter, she made a desperate appeal to the RO Faridabad for compensation on
2111198. She received a prompt reply that in view of the Supreme Court judgement in ESI
(RD) vs Francis D Costa, her husband did not sustain Employment Injury, and hence she
was not entitled to any Dependent Benefit. Disillusioned, she left for her native place to
fend for herself and her 4 minor children. This Case Report highlights the implications of
the Supreme Court interpretation of Employment Injury in the instant case, to the labouring
class. It is also interesting to note that though the Supreme Court rejected the plea of
Francis De Costa (the worker injured in the road accident while commuting to work), but
obviously moved by his plight, they allowed him to retain his full compensation received
from the ESI Corporation. They also awarded him the costs of the litigation even though he
had lost the case. This shows that the Supreme Court showed 'human sensitivity' in the
case of Francis De Costa as the individual was· 'seen' by them. Sadly, however, their
judgement conferred a statutory right on the ESI Corporation to be insensitive to the misery
of subsequent Francis De Costa's or widows of Ram Rattan's.

The Supreme Court's decision has tremendously emboldened the Regional Office
(RO) Faridabad to treat even non-commuting road traffic accidents as commuting
accidents. The theory of notional extension is invariably held against the poor worker to
deny him his legitimate dues. Karan Singh, a fitter in Mis KG Khosla Company CPvt) Ltd
Faridabad, sustained multiple injuries on his face along with fracture of the right hand,
while travelling in a bus from Faridabad to Delhi to deposit his Provident Form with the
office of the Provident Commissioner. He was however denied compensation by RO ESI
Faridabad on the grounds that "Deposit of PF Form is work of a personal nature and hence
cannot be construed as Employment Injury". The RO Faridabad thought it convenient to
ignore the fact that the contribution to PF Scheme 'arose out of and 'only' in the course of
Employment, as an unemployed worker would never go to the office of the Provident
Commissioner to submit a Form. Exasperated, by this ridiculous interpretation of
Employment Injury, the poor worker filed an appeal in the EI Court on 1113/95. The case is
still pending.

'"''
Permanent Disablement Benefit
This benefit is given as per Section 51 of the ESI Act which states that a person
who sustains permanent disablement whether total or partial shall be entitled to periodical
payments by way of compensation (DGESIC, 1988). The amount is given as a percentage
of the TDB rate (Appx 2). For example if a persons disability is assessed at 20 % by the
medical board, then the individual will be paid 20 % of the TDB rate on a monthly basis till
his death. This in effect means that this individual will be paid 14 % of his wages as
compensation.

As soon as an individual's injury gets stabilized (as certified by the treating ESI
doctor) he is required to make an application to the Local Office (LO) for convening a
Medical Board. The LO processes the documents and then infoims the worker about the
venue and date of the Medical Board. The Medical Board examines the worker and
communicates its decision to the individual after final processing of the papers by the
accounts branch at the Regional Office (RO). In case either party feels aggrieved by the
decision of the Medical Board they can appeal before a Medical Appellate Tribunal (MAT)
or before an EI Court. The decision of the latter is final and a further appeal to the High
Court can only be made on points ofLaw and not on facts.

The Medical Board for Faridabad comprises ESI doctors from Delhi. They include
the Medical Supdt (Chairman), Orthopaedic Surgeon, General Surgeon and the Eye
Specialist of ESI Hospital Jhilmil, Delhi. These doctors are from the Centralized ·cadre of
the ESI as the ESI Medicare Scheme is run directly by the Corporation in Delhi and
NOIDA. The Medical Board examines the cases in the conference hall of the RO
Faridabad. The Deputy Director (Benefits) and the Regional Director Faridabad pointed out
that local ESI doctors are not chosen for the Medical board (despite ESI having 2 hospitals
and 17 dispensaries in Faridabad), as they are under the control of the State Government
and not directly under the· ESI .Corporation. Choosing doctors from Delhi, according to
these ESI executives, ensured an "objective and corruption free" assessment of disabilities.

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TABLE 5.2: NUMBER OF WORKERS GRANTED PERMANENT DISABILITY BENEFIT BY THE ESI
MEDICAL BOARD FARIDABAD
YEAR No. OF WORKERS No. OF INJURED PERCENTAGE OF INJURED
GRANTEDPDB WORKERS * WORKERS GRANTED PDB
93-94 282 1196 24
94-95 324 2661 12
95-96 412 2442 17
96-97 342 2281 15
97-98 507 1490 34
AVERAGE 373.4 2014 19
..
*assummg that all workers granted TDB (Table 5.1) are the accident incidence statistics
Source: Compiled from Master Ledger of Monthly Statistics (RO ESI Faridabad)

TABLE 53'.. NUMBER OF MEDICAL BOARDS HELD IN ESIS FARIDABAD

YEAR NUMBER OF MEDICAL BOARDS HELD
93-94 11
94-95 10
95-96 12
96-97 10
97-98 10
AVERAGE 10.6
..
Source: Compiled from Permanent Dlsablltty RegIster (RO ESI Fandabad)

An average of 373.4 workers were granted compensation annually for permanent

disabilities by this Medical Board in the last five years (Table 5.2). If we had the yearly
accident incidence figures of Faridabad from the Factory Inspectorate, then it would have
been easy to work out the percentage of cases granted PDB. However, we have already
seen in the last Chapter that there is gross underreporting of industrial accidents to the
Factory Inspectorate in Faridabad. This anomaly becomes even more apparent when we
compare Table 5.2 (that gives the number of workers granted PDB in Faridabad) with
Table 4.10 (that gives the number of occupational accidents reported to the Factory
Inspectorate in Faridabad). While a total of only 945 industrial accidents (Table 4.10) were
reported in Faridabad in the last 5 years, the number of workers granted permanent
disability during the same period is 1867 (Table 5.2). This clearly indicates that
managements in Faridabad get away lightly despite not reporting industrial accidents to the
Factory Inspectorate. Therefore, for the purpose of calculations we are forced to rely on the
incidence ofTDB cases in Faridabad during the same period as given in Table 5.1. We can
safely assume that these figures are a fair reflection of the number of industrial accidents
(among ESI covered workers) in Faridabad in the last 5 years, as all workers who suffer an
accident report to their local dispensary and it is the dispensary doctor who initiates the
process for claiming TDB. By this assumption, we find that on an average 19% of injured
workers in the last 5 years have been granted PDB in Faridabad (Table 5.2).

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 .The Medical Boards are held regularly in Faridabad (Table 5.3). This is a
significant achievement as the ESI Scheme has often faced a lot of flak for not holding
Medical Boards in time (PRIA, 1996, page 70; 1992.).

TABLE 5.4: INDICATORS OF SPEED (AVERAGES OF LAST FIVE YEARS) OF COMPENSATION IN

FARIDABAD
Time taken between stabilization of injury and Time taken between holding of Medical Board
holding of Medical Board and finalisation of payment
No. of Days No. of cases No. of days No. of cases
30-40 56 10-20 185
41-50 100 21-30 237
51-60 273 31-40 395
61-70 514 41-50 791
71-80 454 51-60 395
81-90 400 61-70 211
91-100 360 71-80 135
101-110 180 81~90 129
111-120 173 91-100 77
121-130 93 >101 81
>131 33
AVERAGE 77.6 AVERAGE 49.2
..
Source: CompIled from Permanent DIsabIlIty RegIster (RO ESI Fandabad)

We calculated the indicators of speed of compensation in Faridabad based on the

data available in the PDB register of RO Faridabad (Table 5.4). The average time taken
between stabilization of injury and holding of medical board is 77.6 days. Thus, on an
average it takes 4 months for a worker to get his compensation amount, from the time his
injury has stabilised. This is a crucial period that causes misery to the cash starved worker
and his family for the following reasons:
1) The moment his Injury is certified as stabilised, the TDB payment stops. Further
payment will only be given once the accounts branch clears his payment after holding
of the Medical Board.
2) We have already discussed in Chapter III that ESI hospitals and dispensaries are short
of drugs and that the quality of medical care is not satisfactory. The procedure for
obtaining medical reimbursement for expenses is also cumbersome. The case of Kamal
Bharadwaj (the 100% disabled worker who's Case Report has been presented earlier) is
a case in point. Our User Survey also brought out that workers have to continue to
spend money on treatment due to inherent problems in the functioning of the ESI
Health Service System.
3) In the case of serious injuries, stabilisation takes more than 6 months. As the worker
has been getting TDB for more than six months, he no longer gets protection from

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 dismissal from service by the employer. Employers take recourse to ESI General
Regulations 98 that empower them to dismiss an employee who has taken TDB for
more than six months. Though this regulation is contradictory to Section 19 of the ESI
Act (which stipulates that the Corporation has powers to introduce schemes for
rehabilitation and redeployment of the disabled worker), but the Supreme Court has
upheld the right of an employee to. dismiss a worker after termination of TDB (AIR
1964 (SC) 1272). Most employers have taken advantage of this judicial interpretation
and are not willing to keep a disabled person even if he is partially disabled or to even
give him a light job as recommended by a doctor (Mallick, 1995). The Senior Factory
Inspector, Regional Director ESI Faridabad and workers were unanimous in their
opinion that the managements treat the worker as a commodity which is to be disposed
off as scrap when uneconomical to them. While the skilled workers may be retained
despite their disability as managements find it difficult to get a replacement, the
unskilled and the casuaV contract labourer is invariably shown the door after six
months of TDB/ stabilisation of his injury. Ram Kewal, Kamal Bharadwaj, Rajdev
Yadav, Mahabir Prasad, Tasduk and Ram Snehi Pande are some unskilled seriously
disabled workers in Faridabad. They have all been dismissed by the employers taking
advantage of ESI General Regulation 98, six months after they sustained the
Occupational Injury. Ironically, except for Kamal Bharadwaj, the rest have been
granted negligible "loss of earning capacity" by the medical board. A Case Report of
one such worker is presented to illustrate this point.

Heera Lal was working as a manual labourer in Mis Perfect Pack Ltd, Plot No. 134,
Sector 24, Faridabad when he sustained right hand crush injury while removing corrugated
sheets from punching machine as it got in between plates and casting die. The accident
took place on 10/5/97. As his factory was covered by the ESIS, he got treated at ESI
Hospital sector 8 for 75 days. On his Form B.1.1.(a), the treating doctor wrote on 14/8/97,
"Crush injury right hand and palm with fracture base of 2nd metacarpal; restriction of
movement marked along with pain and numbness". But the medical board held on 28/10/97
awarded him "Nil" disability. The employer dismissed him from his job on the date he
stopped getting TDB viz 8/8/97, on the plea that the left hand is non functional and
deformed, and since both hands are required to do the job of lifting weights, the worker can
no longer perfoim the duties of a manual labourer. Under these circumstances, the worker

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has no option but to approach the EI Court and he has accordingly filed a suit. The same is
pending.

It is a sad commentary on the Indian legislative and judicial system that a plethora
of legislation have failed to address this crucial issue. Permitting dismissal of a worker who
sustains an Employment Injury is not only morally incorrect but also against the spirit of
Social Security. It in effect permits managements to take advantage of their own wrong
(violation of safety and health regulations resulting in injury to the worker).

From the time of stabilisation of injury to the time of final payment all workers live
in a state of 'penury' and 'want'. The ESI Corporation does have regulations to tide over
this crisis, albeit temporarily, in respect of seriously injured workers. The First ESI Review
Committee recommended that in cases where the estimated permanent disablement was
expected to be more than 25%, advance payment of PDB could be made and the same
could be adjusted later upon finalisation of compensation by the accounts department of the
RO (ESI, 1966, page 9). This suggestion was accepted by the ESIS and this led to
relaxation of Regulation 76 of the ESI, making provision to pay advance payment in the
case of 'Scheduled Injuries'. The Medical Referee, who is a Corporation employee located
at every RO, was empowered to certify such payments (DGESIC, 1988). In Faridabad
however, we observed that this was not being implemented. Non~ of thePDB cases have
ever been given any advance payment and the Medical Referee confirmed that no s~ch case
has ever been. referred to him for certification. The LO Managers and clerical staff
interviewed were not even aware of any such procedure in the ESI Regulations. The
Executive Officers had correct knowledge of the Regulations but stated that they preferred
not to implement this clause. One official remarked, "Even if there is provision in the rules
for advance payment, how will we recover the advance in case the medical board certifies a
lesser disability than the certificate given by the Medical Referee? We do not want to
attract audit objections on this score." This bureaucratic approach and red tapism
contributes to the Financial Health of the Corporation by way of interest on 'delayed
payments', while it pushes the severely disabled worker and his family on to the precipice
of starvation.

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 Admittedly, the period between stabilisation of injury and holding of Medical
Board in Faridabad may be difficult to reduce further. However, the average period of 49.2
days from holding of medical board to finalisation of payment appears excessive (Table
5.4). No efforts have been made to reduce it. The complete documents regarding
entitlement, TDB rate, medical certificates, etc are thoroughly processed prior to holding of
Medical Board. The opinion of the Medical Board on 'Loss of earning capacity' is
indicated as a mathematical percentage of the TDB rate. The Law stipulates that the same
cannot be altered even by the DGESI or the Labour Minister or for that matter by the
President of India (Mallick, 1995). So, there appears to be no reason why the disabled
worker cannot be given his PDB certificate within minutes of the Medical Board recording
its opinion. The Corporation however, does not encourage this single window clearance
system which will remarkably speed up the compensation process. The delay places the
worker at the mercy of the dealing 'babus' in the ROlLO. Letters sent by the Corporation
often do not reach the workers due to their 'unauthorised' residences and employers rarely
bother to deliver letters of contract/casual labourers to the addresses. A worker in urgent
need of money has to make repeated visits during working hours to his LOIRO only to be
told that "the file is under process and you will be informed as soon as a decision is
finalised". The Employer promptly deducts the. wages of the disabled worker for this
absence from work. The case of Kamal Bharadwaj (the 100% disabled worker whose Case
Report has already been presented before) illustrates this point. His father had to make
repeated visits to the RO Faridabad and doggedly request the clerical staff to have mercy
on his son. Only then could he succeed in getting compensation. In this particular case it
took 9 weeks after holding of the medical board for the accounts office to finalise his case.
The employer did not pay any wages at all to the worker during this period.

REASONS FOR LOW PERCENTAGE OF DISABILITY GRANTS

On analysis of 500 individual medical board files, we found that 84% of the
workers had injuries pertaining to the upper extremity and 5% had eye injuries. 68% of the
workers who had injuries to the upper limb had amputation of a part of one or more fingers,
whereas 30% comprised those workers who had sustained dislocations or fractures.
However, only in 10% of the cases studied by us we found that the disability assessment by
the medical board was satisfactory. In 90% cases we observed that the board had
recommended a lower disability than the entitlement of the worker.

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TABLE 5.5: PERMANENT DISABILITY AWARDED TO WORKERS BY MEDICAL BOARD FARIDABAD IN LAST FIVE YEARS

PERCENTAGE NIL 1-2 3-7 8-12 13-17 18-22 23-27 28-42 43-57 60 70 80 90 100 TOTAL
OF DISABILITY
AWARDED
NUMBER OF 769 382 520 294 162 138 48 218 30 6 67 1 0 1 2636
WORKERS
PERCENTAGE 29.17 14.49 19.7 11.15 6.15 5.24 1.83 8.28 1.14 0.23 2.54 0.04 0 0.04
TO TOTAL

Source: PDB Register & Nil Register (RO Faridabad)

 In addition, the PDB and the Nil Registers present at the RO Faridabad were
statistically analysed to find out the percentage of disability awarded by the medical boards
to workers sustaining occupational injuries in Faridabad in the last 5 years (Table 5.5).30%
of the 2636 workers who appeared before the medical boards in the last 5 yea~s have not
been awarded any compensation. Infact 86% of the injured workers have been awarded less
than 22% disability while only 3% workers have been given more than 60% "loss of
earning capacity" by the medical board.

Based on our study of 500 files of medical board cases, observing the conduct of
the medical board and interaction with medical board members, ESI executives and
disabled workers, the reasons for this significant observation are discussed below.

Attitude ofESI Comoration Staff towards disabled workers

Medical Boards in Faridabadare conducted with utter disregard to common
courtesies and this shows the insensitivity of the ESI System towards the disabled workers.
On the day of the Medical Board all the workers are lined up and herded like cattle an hour
prior to the arrival of the Medical Board members from Delhi. During this time
documentation is finalised by the ESI clerks. There is no place for sitting down and those
who cannot stand due to pain from their disability are forced to squat on the ground. The
room for holding the board is located on the first floor thus, making disabled workers bear
the agony of climbing staircases. Severely disabled workers however keep on lying down
on the ground floor itself but are examined at the end by the Medical Board.

The Medical Board generally arrives at 1030 hours and starts examining the
workers from 1100 hours. It finishes its work by 1200 hours. Only the concerned specialist
examines the worker. The other doctors remain mute spectators and simply sign on the
Board papers. The orthopaedic surgeon always remains the busiest as almost 90% cases
pertain to his speciality (amputees and fractures). Even in our 500 cases studied, we found
that 89% of the workers were orthopaedic cases. The contribution of the Chairman is
negligible as she is not a specialist. The medical board members are of the unanimous
opinion that most workers will try to malinger (by feigning pain and stiffness) to extract the
maximum disability from the Board. They feel that it is their duty to view all IP's with
suspicion so that the Corporation (who is their employer) does not suffer excess financial

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loss. The doctors therefore examine the workers ruthlessly with disregard to medical ethics.
This was apparent from the heart rending shrieks emanating from the workers examined in
front of us (during the medical boards observed by us) whenever their disabled limbs are
twisted by the examining doctor. A classical example witnessed by us illustrates this point.

One worker appeared before the medical board in Jan 99, with an injury to the ankle
sustained in an accident at the Factory. The ankle was covered by a Crepe Bandage on the
advise of the treating ESI doctor. The impatient medical board member remarked to the
patient in anger, "Why have you not removed this· crepe bandage before entering this
room? Stupid fellow! You are only wasting my time". Another member remarked jokingly,
"He is probably feeling very cold". The entire room reverberates with the laughter of the
medical board members while the hapless and crestfallen worker hurriedly removes his
bandage and in the process falls down on the ground. The doctor then proceeds to twist his
ankle though the worker appears to be in obvious pain due to his injury. There was
swelling and tenderness along with restriction of movement at the ankle joint. The worker
was asked to leave the room. To our utter surprise the examining doctor recorded the
following finding on the medical board papers, "Right Ankle - Recovered Completely.
Disability - Nil".

Ouality of Opinion given by Medical Board Members

The treating ESI Dispensary doctor issues a report "For information of the Medical
Board", after stabilisation of the worker's injury. This report is filled up on a statutorily
prescribed proforma called 'Form B.l.l.(a) (Appx 3) . On this report the treating ESI
doctor records vital information which includes the treatment history and present clinical
condition of the patient. The ESI Corporation Local Office Manual lays down that all
documents pertaining to the worker including this report and medical investigation records
are to be sent to the Chairman of the Medical Board so as to reach him! her atleast 3 days
prior to the meeting of the medical board (DGESIC, 1988). This is to enable the medical
board members to peruse the papers in advance so that they are in a good position to
express their opinion after examining the worker on the appointed day. In Faridabad, we
observed that these papers are never sent in advance. The files containing these papers are
put up to them only when they start examining the patient. As a result the board does not
even make a passing glance at this most vital document viz the treating doctors report made

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specifically for the information of the medical board (Appx 3). It spends less than a minut(
to examine the worker and then records the diagnosis and percentage of disability on th(
file.

The board is expected to follow the Second Schedule while recording its disability
in respect of injuries which are mentioned in the Schedule (Appx 1). While giving the
mathematical percentages fixed in the schedule mechanically, we observed that the board
ignored the important note given below the Second Schedule which reads:
"Complete and permanent loss of the use of any limb or member (part of the limb) referred
to in this Schedule shall be deemed to be equivalent to the loss of that limb or member. "

This means that if an IP has a contracture of the thumb of the left hand due to loss
of the terminal phalanx the disability should be assessed at 30% (Item No 11 of the
Schedule) as the individual has lost complete and permanent use of the Thumb. However
the Medical Board will give its assessment only as 20 % (Item No 16 A of the Schedule) if
it ignores the note below the second schedule. In such a case the board has failed to
consider that consequent to the stiffness as a result of the contracture of the hand, the IP has
lost the functioning of the entire thumb. While examining the selected 500 individual PDB
case files in Faridabad, we came across 389 cases in which the workers had a severe
disability (resulting in permanent loss of use) of a part of a limb without actual loss or
amputation of that limb. In 376 of such cases we observed that the medical board had not
applied the note below the Second Schedule while assessing the disability. As a result, 97%
of such cases were awarded disability lower than their legal entitlement. In addition in 84%
cases we found that, the medical board had not taken into account the opinion expressed by
the treating ESI doctor on the statutory form B.l.l. (a) (Appx 3). In other words, the
medical board viewed 84% of the workers as malingerers since it gave no Weightage to
symptoms like pain, stiffness, partial loss of mobility, etc as recorded by the treating
physician. A few cases observed while examining the selected 500 individual PDB case
files are reproduced below to illustrate this point.
• Narain Bahadur, sustained accidental injury in MIs Krishna Industries on 30/8/98. On
his Form B.l.l.(a) the treating ESI Insurance Medical Officer (IMO) recorded (on
29/9/98): "Nail of right thumb cracked in the middle, restriction and pain on movement
at interphalangeal joint, movement of right thumb restricted especially at

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 metacarpophalangeal joint. The medical board on 20111/98 however recorded "Right
Thumb recovered comp1ete1y- Disability Nil". The nature of injuries described by the
IMO indicates that the individual has totally lost the function of the right thumb. Hence
as per Entry No 30, of the Second Schedule he is entitled to 30% disability .
.Rajbir Singh, sustained accidental injury on 4/4/98. On his Form B. 1. 1. (a) (Appx 3) the
treating ESI doctor (IMO) recorded (on 9/9/98): "Amputated right middle finger above
proximal interphalangeal joint, fixed and tender right index finger". The medical board
on 16/10/98 however recorded "Right ring finger recovered completely, right middle
finger- loss of distal 2 phalanges, Disability 9%". The nature of injuries described by
the IMO indicates that the individual has totally lost the function of the right ring
finger, besides loss of two phalanges of the middle finger. Hence as per Entry No. 38
and 41, of the Second Schedule he is entitled to 16% disability.
In the case of Surendra Kumar, the IMO recorded on his Form B.l.l.(a): "Permanent
disability of left hand leading to marked restriction of movement of entire hand". The
medical board however recorded, "Left index finger and middle finger- complete loss,
left ring. finger- loss of distal part of distal phalanx with stiff deformed proximal
interphalangeal and distal interphalangeal joint, Disability 26%". In this case the
worker has lost complete use of his entire right hand. Hence as per Entry No. 10 of the
Second Schedule he is entitled to 60% disability.
In the case of Dhani Ram, the IMO recorded on his Foim B.1.l.(a): "Contracture and
part amputation of terminal phalanx of right index finger". The medical board however
recorded, "Right index finger - guillotine amputation of tip- Disability 5%". In this
case the worker has lost complete use of his right index finger due to the contracture.
Hence as per Entry No 33 of the Second Schedule he is entitled to 14% disability.
In the case of Veer Singh, the IMO recorded on his Form B.l.1.(a) (on 28/8/98): "Pain
and swelling· of right index finger, unable to press a switch". The medical board
however recorded (on 16/10/98), "Right index finger - partial loss of pu1p- Disability
2%". In this case the worker has lost complete use of his right index finger since he
cannot even perform the function of pressing a switch. Hence as per Entry No. 33 of the
Second Schedule he is entitled to 14% disability.
• In the case of Bhagat Ram, the IMO recorded on his Form B.l.l.(a): "Marked stiffness
in left hand due to loss of phalanges of left index finger and left middle finger and
injury to left ring finger ". The medical board however recorded (on 11/9/98), "Left

210
index finger- loss of distal 2 phalanges, left middle finger- complete loss, left ring
finger- Stiff proximal interphalangeal joint, Disability 24%". In this case the worker has
lost complete use of his entire right hand due to the severe nature of his multiple .
injuries. Hence as per Entry No. 10 of the Second Schedule he is entitled to 60%
disability.
In the case of Sukhi Ram, the IMO recorded on his Form B.l.l.(a) : "Terminal phalanx
of the right index finger is amputated due to which he will find it-difficult to work
later". The medical board however recorded, "Right index finger - loss of distal
phalanx- Disability 9%". In this case the worker has lost complete use of his right index
finger and the IMO has specifically recorded that the damage is so severe that he will
be unable to perform any job in future. Hence as per Entry No. 33 of the Second
Schedule he is entitled to 14% disability.
In the case of Haveli Ram the medical board recorded, "Left wrist - functional loss of
thumb and index finger due to tendon and nerve injury, Disability-25%". Since the
individual has lost the complete use of the thumb and the index finger, as per Entry 11
and 33 of the Second Schedule he is entitled to 44% disability.
Gobind Singh, Son of Jagat Singh aged 50 years has been working as a nibbling and
rebound operator since 1/8/62 in Autopin (India) Ltd, Faridabad. He resides at I-H/46,
NIT Faridabad. The worker is deaf and dumb. On 3/2 92, his right index and middle
fingers got injured by the moving fan blade in the factory. He was treated at ESI
Dispensary No 1 and ESI NH3 Hospital for several months. During this period he also
got sickness benefit for his period of absence from duty due to the injury. Nobody (the
management, the dispensary doctor, the ESI Hospital nor the LO) advised him that he is
entitled to compensation for his disability. In case of any occupational accident it is the
duty of the management to inform the local office and the Factory Inspectorate. Though
the management insisted that it had done so but records of the LO and the Factory
Inspectorate show that this was not done. Similarly, the treating dispensary doctor is to
render a medical certificate in such cases to enable the worker to claim Temporary
Disablement Benefit. The dispensary doctor did render a certificate but the same
showed the injury to be non occupational and hence the LO gave the worker only
sickness benefit and not Temporary Disablement benefit. The worker only came to
know of his entitlement in Feb 95, during casual interaction with his colleagues. He
immediately approached the LO for his claim of Permanent Disablement Benefit. The

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 LO refused to entertain his request on the grounds that his claim is time barred and that
no 'Occupational Accident Report' had been received by them at the time of the
accident. Distraught, .he complained to the RO. The RO got a Form 16 initiated from
the factory and then directed the LO to ensure presence of the worker before the
medical board. The medical board examined him in Apr 95 and wrote, "Right index
finger- recovered completely, right middle finger- loss through middle phalanx,
Disability- 8%". The worker has severe stiffness of the middle finger and cannot use it
at all. Therefore, as per the Second Schedule he is entitled to 12% loss of earning
capacity and not 8%." The worker is however not approaching the EI Court, as he
realises that even if he gets justice after 4-5 years, he would have spent more on
litigation, than the enhanced benefit admissible to him as a result of a favourable
judgement.

The above misapplication as already pointed out, stems from the 'internalised'
wrong belief by the members of the medical board that workers feign stiffness, pain,
contractures, loss of movement, etc to mislead the board with a view to derive maximum
benefit. A worker has to actually lose a limb or a member of the body completely to get his
correct entitlement. Alternatively, if he has the resources he will have to approach the EI
Court, where he may get justice after an agonisingly long waiting period as in the case of
Ram Bachan. The medical board had assessed his disability at 1%: He got justice after 3
years when the EI Court Faridabad in a speaking judgement upgraded his assessment to
44%.

The Medical Board at Faridabad is unaware of the fact that the MP High Court has
held that in view of the Note below the Second Schedule of the ESI Act, a worker need not
actually lose a limb to get the benefit of the dysfunctional limb (Appx 1). This
interpretation came up when an IP sustained an Employment Injury which rendered his
right hand useless. However there was no amputation of the right hand. The Medical Board
was referred the matter. The Board, even while accepting that there was appreciable
disablement of the right hand, had assessed the loss of earning capacity to 10%. The
employee challenged the said report before the Employee's Insurance Court. The Court
examined the question on the basis of the evidence produced. Medical evidence was laid.
One such doctor before the court opined very clearly that the right hand of the employee

212
had become useless and it was as bad as amputated. But the EI Court on the basis of the
recommendation of the Medical Board held that the loss of earning capacity was 10 % as
recommended by the Medical Board.

The employee appealed to the High Court. The judge held that evidence has clearly
established that there was total loss of function of the right hand and it was as good as
amputation and the employee was entitled to 60% loss of earning capacity. The judge
interpreted the definition of Section 2 (15A) of the ESI Act of the "permanent partial
disablement" read with item 10 of the Second Schedule with the "Note" appended to that
Schedule. The High Court has held that the question to be decided is to what extent the
earning capacity of the employee had been reduced as a result of the injury. For this one
has to consider whether or not he can take future employment which he could have taken in
any place had he not suffered the injury resulting in his disablement. In the instant case the
High Court held that though there was no loss of hand or amputation, the hand had yet
become useless for all practical purposes as the employee's earning capacity and general
capabilities in terms of Section 2 (15A) of the Act are concerned. The mere fact that there
was some movement of the fingers or that he is working in the same post in which he was
working prior to the Employment Injury or, that actual loss of earning did not take place
cannot take the case out of Item 10 of the Second Schedule. This is because, not the fingers
but the hand as a particular limb as a whole has become useless for all practical purposes
affecting his capabilities resulting in the potential loss of earning capacity. The learned
Judge therefore set aside the order of the EI Court rendered on the basis of the
recommendation of the medical board and has held that the employee is entitled to
compensation at the rate of 60% of the loss of earning capacity (1988 ACJ 932 MP).

It is a sad reflection on the level of sensitivity and knowledge of the medical board
members of Faridabad that despite this judgement delivered 10 years ago, they continue to
apply the Second Schedule in a pure mechanical, mathematical and inhuman manner.

In the case of non Schedule injuries the situation is no better. Non Schedule injuries
are those injuries which do not find mention in the Second Schedule. These include cases
of shortening of limbs, non united fractures, partial loss of hearing, injuries to internal
organs, etc. So obsessed is the Medical Board with the term 'Malingering' that so called

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sUbjective symptoms like pain, tenderness, stiffness, partial hearing loss, dyspnoea,
dyspepsia, etc which should be the guiding factors for deciding such cases, are given no
Weightage. A few illustrative cases that came to light while examining the selected 500
individual PDB case files in Faridabad and the case of Ram Khilawan who was examined
by the medical board in our presence are reproduced below to corroborate this point.
• Dharambir Sharma sustained injury on 13/1/98 on his left wrist and left hip while
working in High Polymer Laboratories, Faridabad. He was under treatment at ESI
Hospital NH3 from 13/1/98 to 4/7/98. The treating ESI doctor recorded on his Form
B.1.1.(a) (on 8/7/98), "Intertrochanteric fracture left hip with Colle's fracture of left
hand, condylar block plate applied and Open Reduction and Internal Fixation done, IP
walks with stick only, has pain in left hip and left wrist". His medical board was held
on 16/10/98 where the board recorded, "Left hip- 30% loss of dorsiflexion and flexion-
Disability- 18%." With the kind of injuries sustained by the individual, he has lost his
job. The medical board appears to have been very unfair to him as he has practically
lost the use of one leg. Even in the Second Schedule ESI, functional loss of one leg
entitles him to a disability of 90%.
• In the case of Madan Lal, the IMO recorded on his Form B.l.1.(a) : "Restricted
movements and reduced weight bearing capacity of left hand due to fracture of left
ulna". The medical board however recorded, "20% loss of flexion at the left elbow and
left forearm, Disability-6%". One can observe that a worker who has lost considerable
function of his left upper limb has been given only 6% disability.
• Vijay Kumar was injured while working in M/s Vishal Machine (Pvt) Ltd, Faridabad
on 26/5/98. He sustained injuries on the ring, middle and index fingers of his left hand
and was under treatment for the same from 26/5/98 to 31/7/98. The treating ESI doctor
recorded on his Form B.l.l.(a) , " Scar tender on ring finger left middle fingers of left
hand, poor sensation at the extremities of these fingers, restricted movements of these
fingers". The medical board however recorded, "Left hand (including fingers) -
recovered completely, Disability-Nil". The medical board totally disregarded the
statutory opinion of the IMO and also failed to appreciate symptoms of pain,
paraesthesia, stiffness and loss of movement. The worker thus got no compensation.
• Ram Khilawan was examined in front of us by the medical board on 8/1/99. This
worker had sustained penetrating injury of one lung while performing his duty. The
metal piece was surgically extracted,. The IP was grossly anaemic, complained of

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 breathlessness, severe cough off and on and continuous chest pain. He stated that this
prevented him from doing his normal work. The medical board does not carry a
stethoscope and no medical specialist is associated with the board. Hence no
auscultation could be done. The board did not even think it fit to record his respiratory
rate. A cursory glance was given by the Surgical Specialist to his X ray. The surgeon
commented that as the metal has been removed there is no disability. The total clinical
examination lasted for less than 30 seconds. The individual was accordingly denied any
compensation. The symptoms of this patient pertained to the speciality of medicine.
There are provisions in the ESI Regulations for the board to co-opt a medical specialist
in such cases. But the medical board did not think it fit in this case to recommend such
an action, as it appeared in a tearing hurry to dispose off the case. It also did not think it
fit to give the benefit of doubt to a worker, who was symptomatic and had lost his job,
after sustaining serious employment injury.

As a result of the above approach by the medical board, 90% of the cases awarded
"Nil' disability in Faridabad pertain to non Schedule injuries. Two Case Reports pertaining
to Faridabad, where though the medical board recorded total hearing loss in one ear, but
gave 'Nil' disability on the grounds that the individual can hear normally from the other ear
will amplify this point.

Rajdev Yadav Son of Chander Yadav, aged 46 years has been working with Thalani
Tools (Pvt) Ltd since 1951 and resides at T No 477, House No. 222, Jawahar Colony II,
NIT, Faridabad. His Factory is covered by ESIS. On 24/12/94 at 3.30 PM he sustained
Blunt Injury Ear (left) while tightening the bolt on the milling machine. As per his Form
16, the bolt bromen and the spanner hit on his sideface near the left ear leading to this
injury. He was initially under treatment of ESI NH3 Hospital and later referred to Rohtak
Medical College Hospital. The Rohtak Medical College Hospital issued him a medical
certificate which read, "Left ear- complete hearing loss, Right ear normal, Disability -
50%". On completion of his treatment, he applied for medical board. Two notices were
sent by the Corporation to him which, he did not receive. Finally, he got his medical board
arranged after visits to the RO. The medical board initially sent him for opinion of the ENT
Specialist at ESI Hospital, Thilmil, Delhi. The ENT Specialist certified total hearing loss of
left ear on 14/7/95. The medical board then examined the worker on 13/10/95. The worker

215
thereafter did not receive any communication from the ESI Corporation. Fed up with the
attitude of the Corporation, he engaged a lawyer who served a legal notice on the RO on
17/11/97. He received a prompt reply stating that the medical board had given the
following remarks after examining him, "Left ear complete hearing loss, right ear normal,
Disability- Nil". Accordingly, he was not entitled to any compensation. Distraught and
crestfallen, he approached a lawyer who gave him wrong legal advice. He accordingly filed
a case under WCA in the office of the Labour Officer. Notice was issued by the Labour
Officer to the RO. The RO challenged its maintainability as the factory was covered by
ESIS. The worker then withdrew his petition on 30/6/98. He filed a fresh case in the EI
Court on 1217/98, alleging injustice at the hands of the Corporation interalia on the
following grounds:
• "After his formal examination, the medical board stated that there is no disability, while
in the same intimation, they 'accepted that the workman suffers from complete hearing
loss in the left ear".
• The certificate from medical college Rohtak indicates a disability of 50%.
• He is totally unfit to carry out his normal day to day activities as his left ear is useless.
• He has lost his present job and is not going to get any other employment.

Notice was thereafter served on the RO. The ESI filed its reply, stating that the case
be dismissed as it is not bound by the medical certificate of Rohtak Medical College.
Moreover, the reply brought out that the certificate indicated disability percentage only and
not loss of earning capacity. These two things are different and the ESI Corporation takes a
decision on the "loss of earning capacity" and not on the "disability". It also stated that the
fact that the worker lost his job due to the injury is not relevant while deciding "loss of
earning capacity". This case was going on during our field work. The ESI Cou~sel, Shri
Ahuja and the Legal Inspector were of the opinion that the worker was justified in pursu"ing
this matter, and the medical board had not properly exercised its mind while deciding the
case. Accordingly, the ESI Counsel advised the Regional Director (RD) of RO Faridabad
to have the worker re-examined so that further infructuous litigation is avoided. The
medical board was requested to re-examine the case on 8/1/99 by the RD. The medical
board members discussed this case in our presence on this date. They were unanimous in
their opinion that they are correct and the case does not require re-examination by them.
The logic advanced by them for giving "Nil' disability in this case was, "Entry 6 of Second

216 ,
Schedule (Appx 1), gives 100% disability for absolute deafness only, and there is no
mention of one sided deafness in the Second Schedule. Since the individual can hear from
one ear, he is not absolutely deaf. Hence he is not entitled to any compensation." They
refused to examine the patient once again. The executives of the RO then took a typical
bureaucratic approach and closed the case with the remarks that "As the matter is
subjudice, it would be in order to wait for the Court directions before getting the worker re
examined". We then spoke to Shri Ahuja. He said that he has no option but to defend the
case in the EI court now as he is paid by the Corporation. Though the worker has a fool
proof case, but he has to be prepared for protracted litigation for another 3-4 years before
he can expect a positive outcome. For this, he may have to incur debts to not only feed his
family but also to pay his advocate.

The view taken by the medical board in this case is legally, ethically and morally
incorrect. It is admitted that total hearing loss in one ear due to injury is not listed in the
Second Schedule. But there is no bar on the Corporation on giving loss of earning capacity
to injuries not appearing in the Second Schedule. This injury therefore becomes. a non
scheduled injury and as per the medical college Rohtak deserves atleast 50% disability. The
listing of total deafness in the Second Schedule does not prevent the medical board from
treating partial or one sided hearing loss as a non scheduled injury. It is also pertinent to
point out that partial hearing loss due to noise is an occupational disease as per the Third
Schedule. When a worker who becomes hard of hearing due to excess noise at workplace
gets entitled to compensation, obviously the one who becomes totally deaf in one ear due to
injury can get compensation under the ESI Act (Appx 4).

There is another similar case that has been denied his legitimate dues by the
medical board. Baljeet Singh slipped on 13/11/95 while working in Amteep Machine Tools
(Pvt) Ltd, 1417 Mathura Road Faridabad and his right ear got injured. He was treated at ESI
NH3 Hospital and AIIMS New Delhi. His medical certificates reveal the following:
• Issued by ESI NH3 Hospital: Induced hearing loss right ear, Myringoplasty done, 30-40
db conductive hearing loss right ear, 30 db sensorineural hearing loss left ear,
Diagnosis: Central perforation of posterior part of tympanic membrane.
e Issued by AIIMS New Delhi: Audiogram reveals, permanent disablement due to right
ear mixed hearing loss and left ear semiloss of hearing.

217
The medical board however on 19/4/96 gave him "Nil" loss of earning capacity. He has
filed an appeal in the EI Court on 20/6/96, which is pending.

Weightage given to opinion of treating doctors

We have already pointed out that the medical board does not even see the statutory .
report prepared by the treating ESI doctor. This is not the only medical opinion which is
disregarded. The ESIS has provisions to refer patients to non- ESI hospitals for treatment.
Accordingly, serious cases of Occupational Injuries are often referred by the ESI hospitals
in Faridabad to referral hospitals designated by the Dy Dir Medical ESI (Haryana). These
include reputed Government hospitals like Safdmjung hospital, AIIMS and Medical
College Rohtak. Many times these referral hospitals issue disability certificates to the
injured worker. But even these certificates of designated ESI referral hospitals are not
given any Weightage by the medical board. In our analysis of 500 medical board cases, we
found that in 36 cases the workers had produced certificates of assessment of disability
from referral hospitals. In all these 36 cases the ESI medical board had reduced the
percentage of disability (from that given by the referral hospital) while giving its final
aSsessment. The cases of Rajdev Yadav and Ba1jeet Singh presented above are illustrative
of this. Another poor carpenter suffered the same fate as the medical board refused to take
note of the disability certificate issued by the Civil Surgeon Faridabad (who incidentally is
the Head of all Medical and Health services in the district and writes the confidential
reports of the Medical Superintendents of both the ESI Hospitals located in Faridabad).
Madho La1 has been working as a carpenter in M/s Frick India Ltd, 13/3, Milestone,
Mathura Road, Faridabad since 18/8/72. He had an occupational accident on 31/1/78. He
was treated at ESI Hospital NH3 with marginal relief. The pain in his right leg however did
not subside despite repeated visits to the hospital. He was finally referred to Safdurjung
Hospital on 9111/90. He underwent surgery at this referral hospital. His discharge slip
showed, "4' apparent shortening of right leg and 20% flexion deformity of right hip even
after surgery". The Civil Surgeon Faridabad gave him a disability certificate that indicated
35% disability. He then asked for a medical board which was refused by the ESI. He sent a
legal notice on 18112/91. The RO replied on 17/1/92 stating, "It is not clear why he
remained silent for 13 years. We have no details of further aggravation". He then filed a
case in the EI Court on 24/2/92. The Corporation strongly contested the case on the
grounds of it being time barred. It filed a reply which specifically stated, "The earlier injury

218
was minor and had no loss of earning capacity as he got employment with the Company
thereafter. His present surgery is also not connected with. his old injury". The Court
however passed a speaking order directing the RO to hold a medical board. Its order was
also an indictment ofthe Corporation's attitude towards a disabled worker (Appx 7).

The worker's agony did not end here. The Corporation apparently sent notices to
the worker at his factory address but the worker did not receive them. As a result his case
was closed. The worker then filed a contempt petition in the same EI Court on 12110/94.
After proceedings that lasted more than a year, the Court directed the RO to hold a medical
board within 3 months. The medical board held on 12/1/96 recorded, "Non union right
neck of femur with 20% loss of flexion at hip and 2" shortening of limb; Disability ~ 18%".

The medical board has given disability much less than that awarded by the Civil
Surgeon Faridabad, and so the worker has a strong case in case he appeals before the EI
Court. But then he is so fed up with the litigations he has undergone to even get this 18%,
that he has been forced to accept injustice.

Kundan Lal, also had similar problems. He is working in Deepak Pneumatics as a

Turner. He sustained multiple injuries of the right hand, right leg and back with stiffness of
back on 24/6/93, when his cycle hit the gate of the factory while he was coming to duty. He
was treated at ESI Hospital NH 3 Faridabad. As his injury had taken place prior to the
decision of the Supreme Court in ESI (RD) vs Francis D Costa (1996 (74) FLR 2326 (SC»,
it was admitted as an Employment Injury by the ESIS. On his Form B.1.1.(a) the treating
ESI doctor gave the remarks (16/9/94), "Multiple injury back, right leg, right hand and
right arm; X Ray· shows fracture lateral malleolus right ankle; patient has pain in all
injuries". He also approached Deputy Commissioner Faridabad who directed the Civil
Surgeon to examine him. The Civil Surgeon examined him and gave hIm a certificate
quantifying his disability as 30%. The medical board ESI however, gave him "Nil"
disability on 21/10/94.

He has filed an appeal in the EI Court on 6/2/95, which is currently pending. The
ESI contested the case as being time bar, but the EI Court has condoned the delay in filing
the appeal.

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 The Medical Board members gave us interesting reasons for ignoring these
certificates. Firstly, they pointed out that such certificates can easily be bought for money.
Secondly, they stated that these certificates indicated 'Disability percentage' and not 'Loss
of earning capacity' and the medical board is supposed to judge the latter and not the
fonner. Certificates of these referral hospitals however, are accepted as valid proof for
availing 'sick leave' and 'medical reimbursement' in respect of not only Government
employees but also employees of the ESI Corporation itself. It appears then that the worker
is denied his legitimate dues on hypothetical assumptions by the medical board members.,

PREMATURE CLOSURE OF PERMANENT DISABILITY BENEFIT CASES

On studying the "Closed PDB Cases register" maintained at the Regional Office,
we found that in Faridabad 81 pennanent disability benefit cases have been closed in the
last five years as the disabled workers did not tum up for the Medical Board. This
constitutes 3% of the total PDB cases handled by the Regional Office (Table 5.5). 95% of
these pertained to temporary unskilled workers or contract labourers.

Once a worker applies for the Medical Board it appears strange that he will not tum
up for the same, if proper intimation reaches him. Just like Kamal Bharadwaj and Rajdev
Yadav (presented above) most of the above workers did not get intimation regarding the
holding of the Medical Board. The reasons for this are:
I) The ESI Local Office Manual lays down that notices of the date of medical board are to
be sent simultaneously by the RO to three addresses viz workers' home address, his
factory address and to his dependent ESI Dispensary (DGESIC, 1988). The idea is to
track down the worker so that he gets his legitimate dues. However the RO Faridabad
sends the notices to either the factory or the residential address and never to both. The
doctor at the ESI dispensary is also never given any intimation regarding the date of the
medical board.
2) Factory managements do not bother to infonn the casual! contract workers even if the
notices reach them .
. 3) The casual! contract labourers reside in 'unauthorised' colonies where their Jhuggis are
not given any number. Most of them are not visited by any postman. Even in those

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 localities where a postman does go, the letters are dumped in one central location and
are liable to be lost.

The clerical staff said that most of the notices come back undelivered with remarks
like, "addressee not available" or "address is incomplete". Most workers come to know the
date of the medical board after repeated personal visits to the RO. In the case of those who
do not do so, their cases are closed after they do not tum up for the Medical Board. The
ESI Corporation has not made any attempt to analyse the reasons for such closures, so that
corrective measures could be instituted, nor does it follow the guidelines of its Local Office
Manual to send notices simultaneously to the Residence, factory and dispensary of the
worker. Letters to all factories/ establishments and Trade Unions asking them to display the
next date of Medical Board on their notice boards were also not issued, nor displays at
prominent places in the city frequented by workers, were made. At the moment infact,
these notices are not even displayed on the notice boards of the ESI Regional Office/ Local
Offices/ Dispensaries or Hospitals. The fact that the ESI Corporation is not serious in the
matter can be gauged from the response given by a Senior ESI executive in Faridabad. He
said, "Most of these workers may be lying drunk in some gutter on the day of the Medical
Board. How can we possibly trace them? Ifhe is not interested in getting his compensation,
what can we do? You can take a horse to the water but, you can't make him drink it." The
persons responsible for the running of the ESI Scheme were largely oblivious of the ground
realities under which the Indian working class lives and dies.

DENIAL OF DISABILITY BENEFIT

We also observed that some workers in Faridabad do not reach the Medical Board
due to reluctance on the part of the managements to initiate Accident Injury Report (Form
16). This problem is compounded by the ignorance of the workers regarding their
legitimate compensation rights. As per law the management is to send an accident report to
both the ESI and the Factory Inspectorate. The ESI staff informed us that this reluctance on
the part of the management stems from fear of being prosecuted by the Factory
Inspectorate in case any safety violation is detected. There have been a number of
complaints to the Regional Director by workers regarding non reportIng of their
Occupational injury to the ESI. Whenever such complaints are received by the Corporation
it does put pressure on the managements concerned to initiate Form 16. However, it neither

221
crosschecks with the managements nor with the Factory Inspectorate as to whether a
similar report has been received by the latter. In such cases while the worker will get his
compensation, the mUltiplicity of authorities allows the management to escape its criminal
liability under the Factories Act. The Case Report of PreAsh Industries (Pvt) Ltd presented
earlier illustrates this fact. Though this is the real life ground situation, but ironically the
official policy of the Corporation calls upon its managers to initiate procedures to curb
'fake reporting' of Occupational Injuries (DGESIC, 1988). It is pertinent to point out that
the Corporation is only concerned with curtailing 'fake reporting' and not necessarily
encouraging 'correct reporting'.

COMMUTATION OF DISABILITY BENEFIT

Section 62 of the ESI Act states, "An insured person whose permanent disablement
has been assessed as final and who has been awarded permanent disablement benefit at a
rate not exceeding Rs 1.50 per day may apply for commutation of permanent disablement
benefit into a lumpsum, subject to the conditions that the total commuted value of the lump
sum permanent disablement benefit does not exceed Rs 10,000 at the time of
commencement of final award of his permanent disability." (Akalank Publications, 1998).

The ESIS thus allows only workers who have very low levels of disability to get
their benefit commuted. All Local Office Managers in Faridabad confirmed that every
worker who is entitled to get his benefit commuted has exercised this option in the last five
years. During our User Survey 100 % of the workers covered by the ESIS, informed us. that
given the option they would go for a lump sum benefit rather than the present periodic
payment system. This is conclusive evidence that, all workers desire lump sum payment as
was admissible under the WCA. However, workers preferences have not been considered
in the framing of the ESIS, on the grounds that workers will fritter away lumpsum benefits
on alcohol, etc (ILO, 1958, page 3). A Social Scientist and the present Chairman of The
Special Task Force set up by the Labour Ministry to suggest modalities for integration of
various social security schemes in the country, was also in agreement with this view and
wanted that the present system of periodical compensation (as followed in the ESIS) should
be continued. There is however no scientific study to confirm the fact that workers fritter.
away lump sum benefits on non essential needs. This shows that in our society the decision
regarding well being of the lower classes is taken by the upper class based on the latter's

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own perceptions with utter disregard of the desires andsocio-economic realities of the
former.

Dependent Benefit
Dependent Benefit consists of periodical payments to such dependents of an insured
person who dies as a result of an employment injury sustained as an employee under the
ESI Act. As in the case of Disability Benefit, there are no contributory conditions for
qualifying for this benefit (Mallick, 1995). The moment a fatal accident occurs due to an
Employment Injury, the management is to inform the LO, who after detailed investigation
will send the case to the RO for admitting the same as an Employment Injury. On analysing
the Dependent Benefit statistics in Faridabad for the last 5 years we found that it takes on
an average 4 months for the RO to give its decision after the occurrence of the fatality. This
period can easily be reduced if the RO tightens up its administrative machinery. After this
decision, the LO informs the Dependants of the deceased worker to fill up the claim form.

The full rate of dependent benefit is the same as the full rate of disablement benefit
viz the daily rate of TDB (Appx 2). In case the deceased is unmarried then his dependant
parentsl brothersl sisters are entitled to this benefit. The First Schedule of the Act
determines the share of the widow and the children of the deceased IP viz
1:l Widow- 3/5 of the full rate till her remarriage
1:l Each son! daughter- 2/5 of the full rate till they attain majority

However, this is subject to the rider that the total amount of Dependant Benefit
given in each individual case will not exceed the full rate of benefit. It is pertinent to note
that the above pattern of distribution helps the Corporation to retain with itself a share of
the benefits of the deceased. While in the case of a worker who is survived by a large
family, the rider restricts the payment to only the full benefit rate, but in case a deceased is
survived by only his wife, then his wife gets only 3/5 of the full benefit rate, We see here
that in the former case the Corporation does not pay anything extra, though in the latter
case it retains with itself 40% of the benefit of the deceased. Moreover, just as in the case
of TDB/PDB the periodic payments work out to be less than even the interest that the
dependants would have earned had they been given their dues in a lump sum (as was
admissible under WCA). This is discussed in detail in a separate Section below.

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DEPENDENT BENEFIT CASES IN FARIDABAD

TABLE 5.6: NUMBER OF DEPENDENT BENEFIT CASES ADMITTED IN HARYANA AND

FARIDABAD
YEAR HARYANA FARIDABAD
93-94 45 12
94-95 64 29
95-96 92 31
96-97 93 15
97-98 71 28
AVERAGE 73 23 .
Source: DB Cases RegIster (RO Fandabad)

An average of 23 DB cases have been admitted annually in Faridabad in the last 5

years (Table 5.6). 40 DB cases have been closed in the last 5 years as Dependants do not
claim this benefit (Table 5.7). This statistics is alarming as it indicates that as many as 26%
of deceased dependants do not get their entitled dues.

TABLE 57'.. NUMBER OF DEPENDENT BENEFIT CASES CLOSED IN FARIDABAD

YEAR TOTAL No. OF NUMBER OF DB PERCENTAGE OF DB CASES
DB CASES CASES CLOSED CLOSED AS OF TOTAL DB CASES
93-94 18 6 33
94-95 37 8 22
95-96 41 10 24
96-97 22 7 32
97-98 37 9 24
AVERAGE 31 8 26
Source: DB Cases RegIster (RO Fandabad)

Some ESI staff indicated that these are probably deceased workers who did not
have any surviving dependant. This is not correct. During analysis we found that all these
cases pertained to workers who are casual migrant labour. Migrant labour comes to
industrial townships to earn a living for their families. They are usually young and the only
bread winners having atleast one dependant back home. This was confirmed by examining
the ESI Declaration forms (filled and forwarded by employees to ESI Office immediately
on joining insured employment) of all deceased employees whose cases have been closed
by the RO. All of them had the name of atleast one dependant recorded on them. As per the
Local Office Manual, the Corporation is expected to make all efforts to trace out these
dependants viz pasting notices at last known address/ factory where the deceased was
working, advertising in the local newspapers where the dependants are expected to live, etc
(DGESIC, 1988). In Faridabad this was not being done. Only a simple letter is written to

224
the dependant's and in case no reply was received, it is assumed that there are no claimants
and the case is closed. The illiterate widow of a migrant labourer staying in a remote
village in Bihar, more often than not will not receive any such letter. Even if she does, she
may either not understand what to do or find the system too complicated, and with lack of
guidance would be unable to get the dues of her deceased husband.

The case of a young boy will illustrate this point. Feroze Ansari, a 4 year old boy
living in Uttar Pradesh was orphaned when his father died in an Occupational accident
while working as an unskilled worker in Souvenir Ceramics, Faridabad on 10/9/90. The
ESI Corporation closed the Dependant Benefit Case File after 30 days of receiving no reply
to their letter addressed to the boy. The boy had come for his father's funeral with a relative
to Faridabad but nobody informed them of his entitlement to Dependent Benefit. He
received his legitimate dues only in 1998, after another relative who happened to be a
lawyer threatened to sue the Corporation in the EI Court. Many orphans and widows are
not so lucky to have such helpful and educated relatives who can put pressure on the
Corporation to give them their legitimate dues.

The ESI Corporation has a network of Local Offices all over the country with
Managers and Inspectors. Instead of trusting the Inspectors with only revenue collection
duties, this staff can be augmented and given additional job of tracing out the dependants
and guiding them in filling the forms and claiming their dues. There has however been no
attempt to do so as the Corporation has not even conducted an analysis on the reasons for
such an alarming number of closed DB cases in Faridabad. The reason is not hard to guess.
Closed DB cases means revenue savings to the Corporation and collection of revenue is the
priority of the Corporation.

ABUSE OF PROVISIONS OF DEPENDENT BENEFIT

The ESI Regulations lay down that there is no minimum contributory period for
claiming Disability and Dependants Benefit. This provision was inserted with a view to
help the working class. This clause has however, been misused by certain clever
entrepreneurs in Faridabad to escape their liability under WCA. The modus operandi is
simple. Whenever a new contract/casual labourer joins such an establishment (covered by
ESI), his ESI Declaration form is filled up partially but not forwarded to the LO. By doing

225
so, the employer retains not only his own but also the employee's ESI contribution with
himself. In case a fatal accident takes place, the employer promptly shows the deceased
worker as having joined his establishment only a few days ago, completes the relevant
columns in the declaration form and forwards it to the LO. There is no way the LO can
reject this Form as General Regulations 14 of the ESI states, "an employer can send the
declaration form of a new employee to the LO within 10 days of the workman entering his
employment (Mallick, 1995)." The unscrupulous employer has had the best of both worlds.
If there is no accident, he does not pay any insurance premium, but if one does take place,
his employee gets the benefit of compensation from the ESI and he escapes his liability
under WCA. The Case Report of the largest industrial accident in Faridabad will clearly
illustrate this point.

In the case of the accident in PreAsh Industries (Pvt) Ltd (Case Report presented in
the previous Chapter) all the injured workers were contract labourers hailing from Bihar
and UP. As per ESI (General) Regulations 14, an employer can send the declaration form
of a new employee to the LO within 10 days of the workman entering his employment. The
PDBI Dependent Benefit can be given to the worker without any minimum contribution
period viz if an employee in a factory covered by the ESIS sustains injury on the first day
of employment, the ESIS will give him both these benefits provided his declaration form
reaches the LO within 10 days of his joining employment. In this particular case the
employers appear to have taken full advantage of this rule, so that they wash their hands off
the compensation under WCA. These workers have been shown as employed from 7/4/97
viz 7 days prior to the accident. Their declaration forms have been handed over on 14/4/97
and ESI contribution of Rs 269 deposited on the same day, after the accident. The ESIS
was thus bound to pay the workers compensation. 4 of the deceased workers got their
Dependent Benefit from ESIS. Two cases viz Ramdhari and Balram have been closed as no
dependent turned up to claim compensation as per ESI records. This appears strange as
their declaration forms show that they have dependents residing in Bihar. It is possible that
the intimation sent by ESIS has not been received by them. As regards the injured workers,
they were treated at the management's cost at Safdurjung Hospital, New Delhi. Thereafter,
they were despatched by the management to their native places. No compensation claim in
respect of them has been received by the LO. It was learnt from the LO Manager and the
workers of the factory that this unit like a lot of other units in Faridabad has a large number

226
of contract and casual labourers. Such workers are not taken on regular strength so that the
management does not have to pay them minimum wages under the Minimum Wages Act.
As a corollary, the managements save on their PF and ESI dues also. However, the ESI
declaration forms of these workers are filled up in advance without writing any date on
them. Should an accident take place the managements promptly show them as employed a
couple of days ago only and then deposit the ESI contributIon (which works out to be a
pittance). These forms are then sent to the LO. The ESI has no option but to register these
workers and then give them PDB/ Dependent Benefit. The Employer is absolved of his
liability under WCA as a result of this.

In the case of this accident, the compensation under WCA, would have worked out
to a minimum of Rs 2 lacs per head for the fatalities alone (Total Rs 12 lacs). This entire
cost would have to be paid by the management. But by taking advantage of the loopholes
in the ESI Regulations, the employer has washed his hands off the entire compensation
proceedings by depositing merely Rs 269 in the ESI account after the accident took place.

We also heard the proprietor of Sewa International, a large export house having
number of factories in Faridabad and Delhi bragging as to how he has been able to fool the
system by taking advantage of these regulations. The ESI executives while admitting that
such practices do take place, expressed helplessness at curbing them in view of the liberal
ESIS regulations. No wonder some NGO's have rechristened the ESI as an Employers'
State Insurance Scheme (PRIA, 1992).

OCCUPATIONAL DISEASES

Law pertaining to Compensation for Occupational Diseases

The Third Schedule of the ESI Act lists the Occupational diseases which can be
given disability/ dependent benefit under the ESIS (Appx 4). Section 52A of the ESI Act
reads:
" If an employee employed in any employment specified in Part A of the Third Schedule
contracts any disease specified therein as an occupational disease peculiar to that
employment, or if an employee employed in the employment specified in Part B of that
Schedule for a continuous period of not less than six months contracts any disease specified

227
therein as an occupational disease peculiar to that employment or if an employee employed
in any employment specified in Part C of that Schedule for such continuous period as the
Corporation may specify in respect of each such employment, contracts any disease
specified therein as an occupational disease peculiar to that employment, the contracting of
the disease shall, unless the contrary is proved, be deemed to be an 'employment Injury'
arising out of and in the course of employment."

Though the ESIS is hailed as an improvement to the WCA but, just as in the case of
Occupational Injuries, here also the Third Schedule of the ESIS is a verbatim copy of the
Third Schedule of the WCA (Akalank Publications, 1997). On the contrary, the ESIS has
excluded from its list certain diseases which were considered 'Occupational' under WCA.
These include:
o Snow Blindness in snow bound areas
o Diseases due the effect of heat in extreme hot climate
o Disease due to effect of cold in extreme cold climate

The data obtained during our User Survey in Faridabad discussed in Chapter VII,
shows that workers in furnaces, heat treatment plants and foundries often suffered from
heat exhaustion due the extremely hot temperatures on the Factory floor. Similarly, porters
of organised tour agencies accompanying mountaineering expeditions or workers
employed in cold storage industry can easily suffer from 'effects of cold'. While these
workers can claim compensation under WCA, they are denied the same if their
factory/establishment is covered by ESIS, since the ESIS refuses to even recognise the fact
that these diseases can originate in the workplace.

TABLE 5.8: PERIOD OF MINIMUM CONTINUOUS EMPLOYMENT FIXED BY ESIS FOR DISEASES
UNDER PART C OF THIRD SCHEDULE
SNO OCCUPATIONAL DISEASES PERIOD
1 Silicosis 6 months
2 Coal miner's Pneumoconiosis 7 years
3 Asbestosis 3 years
4 Bagassosis 7 years
5 Bysinossis 3 years
6 Farmers' Lung 7 years
7 Pneumoconiosis 7 years
8 Extrinsic allergic alveolitis caused by inhalation of organic dusts Not yet Fixed
9 Bronchopulmonary diseases caused by hard metals Not yet Fixed
Source: DOESJ: ESI Local Office Manual (1991), Second EditIon
..

228
 Let us now consider the diseases listed in Part C of the Third Schedule of the ESIS
(Appx 4). The ESI Corporation has ftxed minimum continuous employment for these
diseases to be considered for compensation as an Occupational Disease (Table 5.8). Like
most other aspects of Employment Injury, these periods too have been copied from the
WCA. Most doctors of the ESIS (including the Medical Commissioner, her deputies and
the Senior Consultant Medicine ESI and member of the Special Medical Board for
Occupational Diseases since the last 16 years) agreed that the Occupational Diseases listed
in Table 5.8 could occur even in shorter periods of time. They further opined that current
knowledge about Occupational Diseases has rendered the statutory ftxing of minimum
periods for contracting Occupational Diseases obsolete and the same should be done away
with.

There is also a fundamental difference regarding the rigidity of application of the

periods mentioned in Table 5.8 between the WCA and the ESI. In 1962, an amendment
was introduced in the WCA inserting Subsection 2A in Section 3 of the Act. According to
this a worker can get compensation for an Occupational Disease listed in Part C of the
Third Schedule even if he has worked for less than the periods specifted in Table 5.8 or
worked under more than one employee for these periods or even after cessation of
Employment. The ESIS however has introduced no such express provision in the Act, thus
forcing its Special Medical Boards to be ruthless in denying compensation. We shall
discuss more of this later. A large number of toxic substances encountered by workers in
factories, like Asbestos listed in the Third Schedule can cause Cancer. Occupational Cancer
has a long incubation period and it can manifest even after the worker ceases gainful
employment. While the WCA has made speciftc provisions for compensation of such
diseases even after retirement, the ESI which has been hailed as a signiftcant improvement
over the former, has failed to address this important issue. As a result, no claim for
Disability Compensation for Occupational Diseases (if at all diagnosed) after cessation of
service, is entertained by the ESI Corporation.

Mallick states that the list of Occupational Diseases in the Third Schedule is meagre
(Mallick, 1995). Let us consider the case of Tuberculosis which happens to be one of the
commonly prevalent diseases among the Indian working class. The ESIS does not
recognise it as an Occupational Disease. It is however, common scientiftc knowledge that

229
lowered lung resistance due to continuous inhalation of dust at the work place (Cotton dust,
coal dust, silica dust, asbestos fibres, carbon, etc) can predispose the worker to
Tuberculosis (Park, 1995, page 457). However, most workers are denied compensation for
Pneumoconiosis because: .
1) Silicosis, Asbestosis and Bysinossis are wrongly diagnosed as Tuberculosis by the
treating doctor.
2) Silico tuberculosis is listed as Occupational diseases in the Third Schedule. But there is
a rider to the effect that despite diagnosis of these conditions the Medical Board has to
be satisfied that silicosis is an essential factor in causing disability or death. It is next to
impossible to confirm whether it is the Tubercle bacilli or the silica dust which caused
the radiological changes in the lungs, in a case of Silico tuberculosis. There is thus the
possibility of the worker being denied compensation.

There is therefore a strong case to include Tuberculosis as an Occupational disease

in the Third Schedule of the ESI as has been done in the National Insurance (Industrial
Injuries) Act of England and in the Indian Armed Forces (Mallick, 1995; DGAFMS, 1980) ..
This will ensure that the Medical Boards give the Benefit of doubt to the worker. Similarly,
non infective dermatitis, inflammation of the upper respiratory passages or mouth,
papilloma of the bladder which are recognised diseases in Great Britain find no mention in
the Third Schedule (Mallick, 1995). It is pertinent to note that though the ESI Corporation
itself has come to the conclusion that 'Bronchiolitis' is a common occupational disease
prevalent in Indian industries, but its non inclusion in the Third Schedule denies workers'
their entitled compensation (ESI Corporation, 1997b). The Medical Commissioner ESI
while admitting that the Third Schedule needs exhaustive revision, however regretted that
no such exercise appears likely in the near future as her department is too occupied in
provisioning and monitoring medical care services, which she labelled as the 'backbone of
the ESIS'.

Occupational Diseases actually Compensated in the ESIS

The ESI Corporation does not compile statistics on the number of workers who had
applied for compensation for Occupational Diseases in the country. It however publishes
the figures of those who were finally awarded compensation by the Special Medical
Boards. The number of workers compensated for Occupational Diseases by the ESIS in the

230
entire country appears to be negligible (Table 5.9). The ESI Corporation also does not
publish any data on the diagnosis of these compensated occupational diseases. Infact,
neither administrative medical officers nor the executives working at the Headquarters
have any idea of the same as the Headquarters has fixed a reporting procedure which does
not call upon the ROs to report periodically even the diagnosis of such cases. The question
of carrying out an annual epidemiological analysis does not therefore arise.
TABLE 5~9: NUMBER OF WORKERS COMPENSATED FOR OCCUPATIONAL DISEASES UNDER
ESIS IN INDIA
YEAR NUMBER COMPENSATED
93-94 9
94-95 23
95-96 17
96-97 10
97-98 6
..
Source: ESI CorporatIOn: Annual StatIstIcal Abstracts

The situation in Faridabad is equally grim and dismal. Only 2 cases were referred
for compensation for Occupational diseases to the Special Medical Board in Faridabad (for
that matter the entire Haryana) in the last five years. While the first, Harpal Singh, a worker
in an Aluminium Cable unit got his compensation by sheer perseverance and courage, as he
refused to give up even after the initial rejection of his claim by the Special Medical Board;
the other, Late Pati Ram, a cotton mill worker was not so fortunate and he expired
immediately after the Special Medical Board, most inhumanely rejected his claim. The
Case Reports of these two workers are being presented below to enable one to understand
the complexities of the compensation procedure of the ESIS. These also give us an insight
into the working of the ESIS Health Service System and its linkages with the compensation
system.

Case Report-I
Harpal Singh, Son of Yad Ram is a 51 year old resident of House No 1767,
Dayanand Nagar, Faridabad. He has been working as a helper in Indian Aluminium Cables
Ltd (now renamed, Hindustan Vidyut Products Ltd), 1211, Mathura Road, Faridabad, since
411177. This is a Cable manufacturing unit, covered by ESIS, and presently having 537
employees.
In 1994, Harpal Singh, wellt to ESI Hospital NH 3 with complaints of severe
breathlessness and cough. Sputum examination revealed that he was AFB negative. He was
however diagnosed as a case of Pulmonary Tuberculosis based on his X Rays and the

'231
clinical findings of the Chest and TB Specialist. He received anti tubercular treatment for
18 months, without relief. He then requested for a referral to Safdurjung Hospital. The ESI
doctors obliged. After a Pulmonary Function test at the referral hospital, he was diagnosed
as "Pneumoconiosis leading to Interstitial Lung Disease" vide their certificate dated
24/7/96. The complete cost of treatment at Safdurjung was borne by the worker himself
and the same has not been reimbursed to him by the ESIS. He showed this certificate to his
dependent ESI LO Manager Sector 31. He was told, that he will continue to get sickness
benefit till the maximum period admissible under the rules and nothing after that. Nobody
at the LO bothered to check that the worker's medical certificate indicated an occupational
disease and so he is entitled to PDB and not merely sickness benefit. The Form 16 A which
is required to be filled up by the management for a worker to claim PDB in case of an
Occupational Disease was also not available with the LO. Infact, this Form is not available
even today in any of the LOs or even the RO at Faridabad.

Aggrieved, the worker complained to the RO, who referred him to the Medical
Referee. The medical referee perused his documents and told the worker that he will
attempt to get him compensation for his occupational disease. On 1110/96, the Medical
Referee spoke to the Chairman of the Special Medical Board (SMB) for Occupational
Diseases. The latter became the MS of the ESI Hospital cum ODC, New Delhi, later and is
presently the Medical Commissioner of the ESIS. He also sent all the medical documents
with a request for confirmation of the diagnosis at ODC, New Delhi (if necessary). The
Chairman replied, "Complete formalities like X Ray Chest, Pulmonary function Tests and
Sputum for Acid Fast Bacilli (AFB) and then the board will be held at RO Faridabad on
3/1/97 ".

The medical board examined the worker on 3/1/97. Its findings were, "Working in .
Cable manufacturing industry for last 20 years, treated for Koch's for 11/2 years in 1994,
C/o of breathlessness and cough for last 2 years, on leave since 19/6/96, Weight- 55 Kgs,
Height- 172.5 cms, Respiratory system- Crepitations at bases, X Ray chest- Fibrotic lesion
both upper and middle zone, Averagely built, moderately nourished, Chest expansion- 5
cms, Bronchial Biopsy- Alveolar tissue shows interstitial fibrosis and focal lymphocytic
infiltration, Vital Capacity- 2.18 litres in Dec 96". Its decision was, "Diagnosis- Old healed
Koch's with Interstitial Fibrosis; No evidence of Occupational Disease (Bysinossis) - To be

232
reviewed after 6 months". It is important to note that this highly qualified and singular
Special Medical Board for Occupational Diseases was looking for Bysinossis in an
Aluminium Cable factory worker, when the latter can only occur in a worker exposed to
cotton dust.

The worker was informed about the rejection of his claim for compensation on
28/2/97, but the copy of the decision was not given to him. He could finally get a copy after
repeated visits to the RO only on 25/4/97. He agitated before the RD of the RO as his
condition continued to deteriorate. A fresh medical board was ordered on 25/6/97 which
was later postponed to 22/8/97. On both these dates Harpal turned up at the RO for his
medical board but the 5MB did not come. The worker again complained to the RO and the
medical board was finally held on 30/9/97.

The same medical board examined the worker again on 30/9/97 and wrote,
"Working in Cable manufacturing industry for last 20 years, treated for Koch's for 1112
years in 1994, Complains of breathlessness and cough for last 2 years, on leave since
19/6/96, Weight- 55 Kgs, Height- 172.5 cms, Respiratory system- Crepitations at bases, X
Ray chest- Fibrotic lesion both upper and middle zone, Averagely built, moderately
nourished, Chest expansion- 5 cms, Bronchial Biopsy- Alveolar tissue shows interstitial
fibrosis and focal lymphocytic infiltration, Vital Capacity- 2.18 litres in Dec 96 (40% of
normal), Investigated at Safdurjung Hospital and diagnosed as a case of Interstitial Lung
Disease". Its decision was, "Diagnosis- Bilateral Interstitial Fibrosis: Aluminium Induced;
35% Disability, final.

This was not the end of his mIsery. The audit authorities raised umpteen
clarifications from the LO. Finally, after a large number of appeals to the RO, the
individual got a letter dated 23/3/98 fixing his compensation (PDB) at 35% (Rs 21.56 per
day) with effect from 20/9/97 (date of ending 2nd spell of sickness benefit). Apparently,
even these belated decisions of the ESIS are flawed due to the following reasons:
• The Special Medical Board while recording that his Vital Capacity is 40% of normal
gave him only 35% disability. Even mathematically, he should have been given atleast
60% disability because that was his deviation from normal. Moreover, how can the
medical board make the assessment as "Final"? There is no permanent cure for

233
 Pulmonary Interstitial Fibrosis as the pathological process is irreversible. It can even
deteriorate despite treatment. Moreover, the worker will go back to work in the same
environment. So his disability can be aggravated. The board should have at best done a
provisional 2 year assessment which can be reviewed regularly.
The worker has been suffering from 1994, but has been given PDB only from 20/9/97.
Agreed, he got sickness benefit prior to this, but that was only for a limited period and
the rate of sickness benefit is only 50% of wages, whereas the TDB/ full PDB rate is 70
% of wages. The worker should have been given TDB from 1994 till date of starting
PDB.

Harpal also informed us that there are more workers suffering from the same
symptoms as he is, in his factory, but they have been diagnosed as Tuberculosis by the ESI
Hospitals. His own condition has worsened since the medical board and he is sure that he
will die due to this Occupational Disease only. He however cannot quit his present job as
nobody will give him another job in view of his disability.

Though under the Factories Act, the ESIS and the management is bound to inform
the Factory Inspectorate Faridabad that Harpal Singh has been detected to have an
Occupational Disease, but the same has not been done.

Case Report- II
Late Pati Ram, Son of Jyoti Prasad, resided at House No 63A (Kapda Colony), Air
Force Road, NIT, Faridabad. He had worked in East India Cotton Mills, Faridabad for 36
years and was aged 57 years at the time of his death. This factory is covered under ESIS. It
is presently under lockout with effect from Sep 96.
In the year 1969, he was diagnosed as a case of Tuberculosis by the ESI medical
institutions and advised Anti Tubercular Treatment (ATT) and rest at TB Hospital Kasauli.
He stayed at that hospital for 18 months. In 1990, he complained of severe cough with
breathlessness and fever off and on. He was referred to ESI NH 3 Hospital, Faridabad,
where the Chest and TB Physician diagnosed him as Pulmonary TB and put him on ATT
once again. His sputum for AFB was negative. He showed no improvement whatsoever.
Infact his condition deteriorated to· the extent that he had to undergo repeated
hospitalisation. Hospital discharge slips (ESI NH3) show his diagnosis as, "Chronic fever

234
with COPD on ATT", "COPD", "Old case of Pulmonary TB with COPD", etc. In
desperation, he wrote to the RO on 6/9/96,
"Since last 5 years I am under treatment of Dr Bhuyana (Chest and TB specialist ESI NH3
Hospital), I have been admitted to the TB ward of the hospital every 6-7 months for 20-25
days. But I have not been cured. On the contrary my problem has aggravated. Nobody tells
me clearly what I have been suffering from. When I go the LO Sector 31 for money, they
tell me to get it written from the treating doctor my exact diagnosis .. When I go to the
doctor he says that I don't have TB. But I get breathless on the slightest movement and
bring out blood on coughing. I feel I will collapse anytime. I cannot even walk properly or
do my duty. I cannot attend my work for even 15:-20 days. I am sure all my problems are
due to my work. Please get me checked up properly so that I am treated correctly".

This letter was treated by the RO as a complaint against the treating physician and
sent to the MS ESI Hospital NH3 for "necessary action". It was merely filed in the office of
the MS.

Pati Ram, thereafter went to the LO to find out the procedure for claiming
compensation for an occupational disease. He was advised to get Form 16 A filled up from
his employer. But the same was not available anywhere in Faridabad. He therefore made a.
plain application to the RO which read,
"I am being treated by Dr AN Bhuyana, Chest Physician in ESI Hospital for last 5 years
without relief. The reason is very clear. I work in the weaver department of East India
Cotton Mills, where a lot of cotton dust is present.. This dust has ruined my life. I am
suffering from an occupational disease. Please hold a medical board to give me
compensation, so that I can carry on further, because at the moment I am unable to carry
even the weight of my own body. Please take mercy on the balance of my life and give me
compensation" .

Meanwhile, he became critically ill and was admitted in the last week of Dec 1996
in the ESI Hospital. A senior specialist of the same hospital, relatives of the worker and
Shri Ram Sagar (a co worker), pleaded with the treating chest physician to give a certificate
to the effect that the worker is suffering from "Byssinosis". The Chest Physician informed
them that though he is convinced that the worker is suffering from "Byssinosis" and not

235
"TB", but he cannot put the same in writing as he does not want to become a "marked and
controversial man in the Hospital". Colleagues of Pati Ram remember clearly the doctor
telling them, "I cannot write it. I will lose my job". He told them that during their induction
training, they were told at the RO Faridabad that it is not their job to diagnose an
Employment Injury. This is the job of the executive authorities and not the medical
doctors". The diagnosis put down by him now read, "COPD" only.

On 3/1/97, Pati Ram was produced before the Special Medical Board for
Occupational Diseases at the RO Faridabad. His relatives were informed that the decision
of the medical board will be communicated to them shortly. They also cautioned the
relatives that Pati Ram is terminally ill and in all probability will die in 2 months. On
1111197, Pati Ram was however discharged from ESI NH 3 Hospital with the remarks, "A
case of COPD fit to join duty".

On 8/2/97, he became extremely serious and was rushed to the ESI Hospital. The
Casualty Medical Officer panicked on seeing his serious condition and after writing a
diagnosis of "Corpulmonale with TB with COPD with Acute Embolism? Relapse", advised
transfer to RBTB Hospital, New Delhi. However, before the ambulance which was to take
him to the referral hospital could arrive, Pati Ram breathed his last.

On 28/2/97, his widow received the decision of the Special Medical Board which
read, "Bilateral Pulmonary TB, not a case of occupational disease, hence no disability due
to Occupational Disease". Ram Sagar and a Union Leader of East India Cotton Mills
pointed out that a large number of workers in their mill have been diagnosed as TB by ESI
Hospital. Just like Pati Ram, they also show no improvement due to treatment. Workers are
convinced that this is due to a disease contracted at the work place, but nobody listens to
them.

East India Cotton Mills has been under lockout since Sep 1996. As a result workers
are now not entitled ESI benefits even. Though, Union Leaders allege that Courts of Law
have specifically directed the management to lift the lockout, yet the same is not being
done. The workers are on the verge of starvation as new jobs are hard to come by. Under
these circumstances, the Union is busy full time in trying to get the mill reopened so that

236
the workers and families can keep their body and soul together. Therefore, they are forced
to keep the issue of compensation for Occupational Diseases under wraps.

REASONS FOR LOW RATE OF COMPENSATION OF OCCUPATIONAL DISEASES

When we inquired from the administrative medical officers and executives the
reasons for such a negligible low rate of compensation of occupational diseases in
Faridabad, the following reasons were advanced:
1) Faridabad does not have any hazardous industry where Occupational Diseases can
occur.
2) Workers being illiterate are not aware of the symptoms of Occupational Diseases and
so do not inform the doctor of the same.
3) ESI doctors lack professional expertise in diagnosing Occupational Diseases.

Data held by the Factory Inspectorate in Faridabad (presented in Chapter IV) shows
that there are a large number of Hazardous Units in Faridabad where Occupational
Diseases can occur. Moreover, certain Occupational Diseases like Bysinossis, allergic
contact dermatitis, extrinsic allergic alveolitis, occupational cataract, auditory deafness, etc
need not be confined to the four walls of so called 'hazardous units' alone. There is an
abundance of chemical, cotton, heavy engineering units, stone crushers and brick kilns (to
name only a few) in Faridabad where such diseases do occur. Our User survey (discussed
in detail in Chapter VII) and the Case Reports of Harpal Singh and Pati Ram bring out that
workers are fully aware that the symptoms they suffer from are related to their occupation.
It would be naIve to expect a worker to rattle out names of Occupational diseases listed in
the Third Schedule of the ESI. Once he tells the ESI doctor that he has symptoms related to
his occupation, it is the system which is expected to take the matter to its logical
conclusion. This is unfortunately not being done. Details of the same have already been
discussed in Chapter III.

The ESI Corporation has consciously placed hurdles in compensation for

Occupational Diseases. While in the case of Occupational Injuries it has decentralised local
Medical Boards, but to award compensation for Occupational Diseases it has only one
centralised Medical Board christened 'Special Medical Board' for the entire country
(Mallick, 1995; ESIC, 1996b, page 12). This comprises a Chairman {Dy Medical

237
Commissioner ESI Headquarters), a physician (Dr KA Ramachandran, Consultant
Medicine and incharge Occupational Diseases Centre, ESI Hospital cum Occupational
Diseases Centre, Basaidarapur, New Delhi) and two Chest physicians. Whenever a case of
Occupational Disease is reported by a RO to the Headquarters, this Special Medical Board
is detailed to examine the worker. Being a centralised board its members are naturally
unaware of the specific local industrial hazards to which the diseased worker has been
exposed. Moreover, they never even visit the factory where the worker has allegedly
contracted the Occupational disease.

Our interviews and discussions with the Special Medical Board Members gave an
interesting overview of their approach to this vital issue. We were infonned as to how the
Board approached the compensation claims in a large group of elderly workers in an
industrial unit using Mercury in the production process. These workers had complained of
headaches, insomnia, and Psychiatric symptoms due to mercury poisoning and were
correctly diagnosed as "mad hatter syndrome" by the treating ESI doctors. Their claims
were however rejected on the ground that the mercury levels in the atmosphere of the
workplace was less than the pennissible limit under the Factories Act, as recorded by the
local Industrial Hygiene Laboratory. The 5MB ignored two significant considerations
while deciding this case. Firstly, such a large number of workers suffering at one point
from similar symptoms itself suggest that this is not a nonnal occurrence but is related to
their occupation only. Secondly, a finding of pennissible levels in the work environment
does not necessarily mean that a worker cannot suffer from the effects of toxicity. This is
because for a short period (when not being measured) the levels can suddenly shoot up
leading to toxicity among workers. Moreover, the atmospheric levels vary from one
department to another, whereas samples are usually collected from one place only. In the
instant case, there is no doubt that the workers were exposed to mercury. Therefore,
correlation with their clinical symptoms (confinned by a vigilant local ESI doctor as 'mad
hatter syndrome') is epidemiological proof that the workers are suffering from "Diseases
caused by mercury or its toxic compounds" which is listed at serial 2 of Part B of the Third
Schedule of the ESI as an Occupational Disease (Appx 4). As they had all also completed
the minimum statutory period of 6 months of continuous employment fixed under the ESI
Act for claiming compensation in respect of this disease, rejection of their claims was
unjust and unscientific.

238
 As already stated statistics on the total number of cases appearing for occupational
diseases before the medical boards are not compiled or published by the ESI Corporation.
In the absence of this, we have had to dig out available data from some publications of the
ESIS which is not necessarily comprehensive. These have been in the form of research
papers published by some individuals or one time statistics presented by some ESI
Hospitals.

Two ESI doctors Chander and Khokhar in their research paper entitled
"Occupational Health in Cities" have revealed that 161 cases of occupational diseases were
referred to the ESI Special Medical Board for compensation in 1992. They had been
diagnosed as Silicosis, Asbestosis, Bysinossis, Occupational Asthma and Chrome Induced
Disability by the treating ESI doctors (Chander, 1996, page 43-56). The ESI Statistical
Abstract (an annual official document published by the ESI Corporation) shows that only 9
cases got compensation for occupational diseases in the entire country in 1992-93 (ESIC,
1992-93). This shows that only 6% of cases which appeared before the medical board for
occupational diseases were fortunate enough to get compensation. The balance 94% were
apparently rejected and denied compensation, despite being diagnosed as occupational
diseases by the treating ESI doctors.

Similarly, ESI Occupational Diseases Centre, Chennai in one of its publications

confirms having diagnosed 321 cases of Occupational Diseases in the year 1997-98 in its
referral area alone. It also gives the breakdown of the diagnosis (Table 5.10). However, the
total number of such diseases compensated by the ESI in the entire country during the same
period was a measly 6 (Table 5.9). Armed with these statistics, we interacted with the ESI
functionaries as to why such a low percentage of cases (of which appear for compensation
before them) actually get compensated for occupational diseases. The reason put forth by
the 5MB members and the executives of the ESI Corporation for such low incidence of
compensation vis-ii-vis diagnosis of Occupational diseases was that mere diagnosis does
not guarantee compensation. Firstly, the disease concerned has to figure in the Third
Schedule of the ESI Act. Disease like Bronchitis, Pneumonitis, Bronchiectasis, Allergic
Rhinitis and Eczema though diagnosed as Occupational Diseases by the ESI ODC Chennai
(Table 5.10) do not figure in the Third Schedule. Secondly, in the case of those diseases

239
which do find mention in the said Schedule, the worker has to fulfil the minimum period
for continuous employment fixed statutorily by the Corporation. We have already
discussed the first reason before ..

TABLE 5.10: NUMBER OF CASES OF OCCUPATIONAL DISEASES DIAGNOSED BY ESJ

OCCUPATIONAL DISEASES CENTRE , CHENNAI IN 1997 98 -
DIAGNOSIS NUMBER OF CASES
Asthma 83
Bronchitis 82
Pneumonitis 19
Bronchiectasis 12
Bysinossis 5
Allergic Rhinitis 11
Noise Induced deafness 2
Eczema 11
Others 96
Source: ESI CorporatIOn (1998): Status Paper on ESI Hospital Bapu Nagar Ahmedabad, Ernakulum,
Hospital cum Occupational Diseases Centre KK Nagar Chennai and MGM Hospital cum Occupational
Diseases Centre Parel Mumbai for Presentation to the Standing Committee of Parliament (Ministry of
Labour), Sep 1998, pp 30.

As regards the second reason, it must be noted that India has a vast majority of
migrant and casual labour whose terms of employment are as per the desires of the
employer. They are thus forced to migrate from one employer to another or to be lai? off in
the lean season or given a day's break periodically on the muster roll So that the employer
can escape application of various Labour Laws to his Industrial Unit. In case tht;: 5MB
applies the 'minimum periods of continuous employment' clause so rigidly, then these
hapless workers are bound to get no tangible benefit in case of contracting an Occupational
Disease. Fortunately, the Law courts have not taken kindly to this approach by the
Corporation. A landmark judgement has been delivered by the MP High Court in the case
of ESI Corporation vs Smt Siyara on 10 Aug 98 which interprets Section 52A of the ESI
Act (dealing with Occupational Diseases) (JG Chitre, MP (HC), Indian Factories Journal
and Factories Journal Reports, Vol 94, PT 8, 19/2/99, page 122). Siyara, a labourer who
had been working in a Slate Pencil Factory inMandsaur for 12 years was diagnosed as a
case of 'Silicosis' by the doctors of the local ESI dispensary/hospital. Silicosis is rampant
among the workers employed in these Slate Pencil Factories (Rashtriya Sahara, New Delhi,
23/2/94; Navbharat, New Delhi, 11/3/94). However her case for compensation was rejected
by the 5MB on the grounds that since she had had a 7 day break in employment in the last
6 months prior to her contracting Silicosis, she did not meet the criteria of minimum 6
months continuous employment fixed by the ESIS for entitlement to compensation of

240
Silicosis. She went in appeal to the local EI Court against this decision which allowed the
same. The RO ESI (MP) bent on harassing the ailing impoverished slate pencil worker
went in appeal to the MP High Court. The ESIS Counsel reiterated the plea that Siyara
should have been in work continuously for six monthsfor all the days before the date she
noticed that she had contracted Silicosis. The Court while rejecting the plea of the
Corporation came down heavily on the latter for attempting to defeat the spirit Of this
Social Security legislation. It reminded the Corporation that it had been created for the
purpose of giving benefit to such hapless employees and should therefore not come up with
such technical objections. The Court added, "It is pertinent to note at this juncture that a
sentence has been used in Section 52A (of the ESI Act) which needs to be specially marked
viz unless the contrary is proved, be deemed to be an employment injury arising out of and
in the course of employment. What was the need of using this sentence in Section 52A if
the intention was otherwise than which has been indicated in this judgement? In this era of
benevolent enactments, and thinking of welfare state and an assurance of fundamental
rights to citizens, all benevolent enactments have to be interpreted with a broader outlook.
If anything is to be interpreted, if anything needs to be interpreted from the codified
section, the interpretation should be always in favour of beneficiaries for whom the
enactments have been indicated. The indicator of the interpretation should be always
pointing towards the hapless, weaker sections of the society who are thrown in hazardous
occupation. " It is pertinent to point out that Siyara would have been saved the agony of
this litigation and a lot of other workers covered by ESI would have got their legitimate
compensation if Subsection 2A of Section 3 of the WCA (discussed earlier) had been
incorporated inSection 52A of the ESI Act.

None of the 5MB members interviewed were aware of this judgement and nor has
the ESI Corporation thought it fit to give directions to its officials to implement the
judgement in letter and spirit while deciding future compensation cases. There is also no
proposal pending with the Corporation to initiate the necessary amendments in the Act in
line with Subsection 2A of Section 3 of the WCA. As a result, the benefit of Siyara's
protracted fight for justice is not going to accrue to other workers covered by ESIS. The
5MB will continue to deny compensation on mere technicalities, allowing the Corporation
to amass wealth at the cost of the workers health.

241
Dependent Benefit
The ESI Corporation does not publish figures of number of workers granted
Dependent Benefit for Occupational diseases, but officials admit that the number is
negligible. In Faridabad (and Haryana) no worker has been granted this benefit in the last
five years. We have already seen that the. Corporation grudgingly gives disability benefit
for Occupational diseases during the lifetime of the individual. So one can imagine how
difficult it is for a widow to convince the Corporation that her deceased husband died due
to an Occupational disease. The Case Report of Late Vma Shanker will illustrate this point.

Late Vma Shanker was aged 38 years at the time of his death. He was employed at
Mis Sandhu Auto (Pvt) Ltd Plot No 228, Sector 24, Faridabad, a factory covered by the
ESIS. As per records he has been on their roll with effect from 1/5/93, though the widow
insists that he has been working since 1991, but was regularised only after 2 years. The
widow resides with her two minor children at Village Sihi, Sector 8, Faridabad.

Vma Shanker had been working on the wire tanning machine, where chemically
treated rubber/plastic was drawn on the cable wire and so he inhaled many chemicals while
working. In 1995, he complained of breathlessness and was referred to ESI Hospital sector
8, Faridabad, He was diagnosed as "Pleural effusion" according to his MRE maintained at
ESI Dispensary Sector 7. He was put on antibiotics and given 3 spells of sickness benefit
viz for 2 weeks from 24/4/95, for 3 weeks from 19/5/95 and for 2 weeks again from
12/6/95. Since he showed no improvement he went on his own accord to AIIMS, New
Delhi where he was diagnosed as a case of Carcinoma Liver. Doctors at AIIMS did not
hold out much hope of his survival and so he went to a private Hospital viz Dharamshila
Cancer Hospital, New Delhi, for palliative terminal care. He died here as a case of
Carcinoma Liver with respiratory failure with renal failure on 3/7/95. His widow was
denied medical reimbursement by the ESIS on the grounds that her husband was not
referred by the ESIS to AIIMS/ Dharamshila Cancer Hospital.

His widow filed a claim for Dependent Benefit on the grounds that as Vma Shanker
was constantly exposed to rubber fumes at his. workplace, and rubber is a known
carcinogen, her husband had died of an occupational disease. She received no reply from

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the ESIS. Therefore, an appeal was filed in the local EI Court on her behalf on 23/12/95.
The ESIS replied in the court on 29/3/96 that she can only get funeral benefit as her
husband did not sustain Employment Injury. They stated that as per their records Uma
Shanker had died due to 'Pleural effusion' and the same is riot listed as an occupational
disease in the Third Schedule ESI (Appx 4). The case is pending till date.

It is important to highlight that 'Pleural effusion' is merely a pathological diagnosis

and does not indicate aetiology. Even the ESI Corporation's own booklet on Occupational
Diseases circulated to all MO's records that Pleural effusion could be an outcome of an
occupational disease (ESI Corporation, 1990). So the ESI Corporation is wrong in insisting
that Pleural effusion is not an occupational disease, merely because it is not listed in their
Third Schedule. The Pleural effusion· in this case was due to the secondaries in the lungs as
a result of malignancy of the liver. Rubber is a known carcinogen and has been implicated
as a causative agent in occupational cancer (Park, 1995). The possibility of rubber exposure
at workplace leading to Carcinoma Liver cannot be ruled out in this case. Admitted, that it
cannot be confirmed that the malignancy to Uma Shanker was caused by an occupational
carcinogen alone. But as the involvement of the same cannot be ruled out in this case, the
benefit of doubt should go the deceased, especially as the ESIS is a Social Security
Scheme, supposedly wedded to workers welfare. Even the WHO admits that there is no
internationally accepted definition for the term, "Occupational Disease". It simply means a
disease arising out of or in the course of employment. Any grouping of Employment
Injuries is therefore done only for the sake of convenience (Park, 1995). The Third
Schedule ESI is no exception.

Harpal Singh (the only worker to be compensated for an occupational disease) is

extremely apprehensive as to whether his wife will get Dependent Benefit after his death.
His fears are not unfounded. Since he continues to work in the same environment where he
contracted the disease and as there is no definitive cure for his ailment he could die due to
complications of 'Alumin~um Induced Pulmonary Interstitial Fibrosis', either during his
service or even after retirement. Under these circumstances his dependents will have to run
from pillar to post to get Dependent Benefit. The Local Office Manual states, "The chances
of the IP dying on account of the Occupational Disease cannot however be ruled out, even
though such chances may be remote in most of the cases unless other complications set in ".

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The letters marked in italics indicate the intention of the Corporation to make things
difficult for such cases.

The Corporation impresses upon its lower offices that the death certificates and the
post-mortem reports should unequivocally indicate that the cause of death was an
Occupational Disease, before forwarding such cases for approval to the DGESI (who alone
is empowered to sanction Dependent Benefit for Occupational Diseases). In Chapter III we
bring out that ESI doctors do not even record correct diagnosis of routine patients. Pati
Ram though suffering from Byssinosis was repeatedly diagnosed as Tuberculosis. It is also
common knowledge that doctors in India often issue death certificates indicating cause of
death as, 'Cardio pulmonary arrest' which is a diagnosis that means nothing. Under these
circumstances only a very 'lucky' deceased person will get a diagnosis of Occupational
Disease recorded both on his death certificate and post mortem report. ESI Corporation
officials admitted that due to want of complete documents or discrepancy in diagnosis
between treatment papers, post mortem report and death certificate, rejection of dependent
Benefit claims by the DGESI is the rule. A few officials expressed anguish over this but
expressed helplessness in the matter due to procedures framed by the Corporation with
utter disregard to the actual method in which medical documentation is done in the country
and the socio":economic circumstances of an Indian widow.

FINANCIAL ASPECTS OF DISABILITY COMPENSATION

During our discussions and interviews we .found that a few ESI executives
expressed the fear that increasing rates of disability compensation or giving lumpsum
payment (as in WCA) or even liberalising procedures for payment of DisabilitylDept::ndent
Benefit will render the Scheme financially nonviable. We therefore discuss the impact of
the current disability compensation procedure on the financial Health of the ESI
Corporation.

The Permanent Disability Benefit and Dependent Benefit payments made by the
Corporation are given in Tables 5.11 and 5.12. Let us consider the case of 97-98 as an
example. In this year the Corporation made provisions for new payments of Rs
1,485,043,000 and Rs 686,983,000 for PDB and DB claims respectively. This figure is
based on the assumption that the Corporation was to make lumpsum payments, (as in

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TABLE 5.11: PERMANENT DISABILITY BENEFIT RESERVE FUND (IN Rs) OF ESI CORPORATION

YEAR BALANCE(AS ON PROVISIONS/CREDITS INTEREST ON PAYMENT/ADJUSTMENTS BALANCE AS

BEGINNING OF YEAR) DURING THE YEAR INVESTMENT MADE DURING THE YEAR ON YEAR END
94-95 3285782865 364387000 392761147 241357176 3801573836
95-96 3801573836 . 417147000 452411764 258092543 4413040057
96-97 4413040057 417777000 532679803 295269013 5068227847
97-98 5068227847 1485043000 647963446 303478599 6897755694

Source: ESI Corporation: Annual Reports

TABLE 5.12: DEPENDENT BENEFIT RESERVE FUND (IN Rs) OF ESI CORPORATION

YEAR BALANCE(AS ON PROVISIONS/CREDITS INTEREST ON PA YMENT/ADJUSTMENTS BALANCE AS

BEGINNING OF YEAR) DURING THE YEAR INVESTMENT MADE DURING THE YEAR ON YEAR END
94-95 . 1794664290 187674000 214521995 143969538 2052890747
95-96 2052890747 236961000 244306382 157504880 2376653249
96-97 2376653249 183491000 286874911 183188404 2663830756
97-98 2663830756 686983000 340564552 187647996 3503730312

Source: ESI Corporation: Annual Reports

WCA- called 'Capitalised value' in ESI vocabulary)), then this is the amount it would have
paid to the beneficiaries during this current year. However, as the Corporation actually
pays only in small monthly instalments, the amounts given to all individuals (old and new)
during the current year are Rs 303,478,599 and 187,647,996 respectively. It is apparent that
these amounts are less than even the interest that the Corporation earns on the capitalised
(one time payment) value. In other words under the ESIS, the Corporation not only
permanently holds on to the principal but even does not give the full interest to the worker
as a result of investing his principal. In contrast to this the Permanent Disability Reserve
Fund and the Dependent Benefit Reserve Fund has been showing a steady increase over the
last 4 years (Tables 5.11 and 5.12).

The Corporation can thus easily afford to liberalise the compensation procedures so
that all workers get their entitled dues. On the contrary, we observe that the Corporation
has been filling its coffers and has therefore become a source of money for the Union
Ministry of Labour (Table 5.13).

TABLE 5 13- TOTAL FUNDS WITH THE ESI CORPORAnON

DATE FUNDS WITH THE ESIS(Rs LACS)
31.3.95 238452.59
31.3.96 268250.19
31.3.97 304262.69
31.3.98 399867.25
Source: ESI CorporatIOn: Annual Reports

When the latest Task Force to Study modalities for Integration of various Social
Security Schemes was set up, the ESIS was directed to bear all the expenditure for the
functioning of the Task Force. In 1998, Mr Dias (a Union Leader and member of the
Standing Committee ESIS) strongly objected to this unilateral financial burden on the
Corporation. He also pointed out that the Task Force had no Labour representative (ESIC,
1998). His objection was overruled by the majority comprising representatives of the·
Corporation, The Government and the Employees on the ground that since the DGESI is a
member of the Task Force, the workers interests are protected. This is strange logic when:-
a Career Bureaucrat on deputation to the ESIC and aspiring to move out on promotion to
the rank of Secretary (lAS), is nominated as a representative of the workers! Further, the
ESIS, whose primary objective is to provide benefits in cash and kind to workers, becomes
the only one to finance such 'Task Forces'! The Union Ministry of Labour who does not

246
contribute a penny towards the running of the Scheme, barely funds the umpteen numbers
of Committees it sets up. The problem does not stop here. Senior executives of the
Corporation pointed out that most of the Conferences on Labour and Social Security hosted
by India have also to be funded by the ESIS, in view of its solid financial reserves. We thus
see that though the ESIS has no shortage of funds, its priorities appear to be misplaced.

247
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