IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 9013 OF 2011
(Arising out of S.L.P. (C) No. 8983 of 2010)
Sanjay Batham .......Appellant
Versus
Munnalal Parihar and others .......Respondents
J U D G M E N T
G. S. Singhvi, J.
1. Leave granted.
2. Feeling dissatisfied with the enhancement granted by the Madhya Pradesh
High Court in the amount of compensation awarded to him by 8th Motor Accident
Claims Tribunal, Gwalior (for short, `the Tribunal'), the appellant has filed this
appeal.
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3. The appellant, who sustained grievous injuries on the head, right shoulder,
back bone and other parts of the body in an accident which occurred on 9.5.1996,
filed a petition under Section 166 of the Motor Vehicles Act, 1988 (for short, `the
Act') for award of compensation of Rs. 4,20,000/- with interest. The claim of the
appellant was founded on the following assertions:
(i) That the accident occurred when the scooter on
which he was travelling along with his friend Sunil was hit by
truck No. MKH-7787 near Sikaria Workshop at AB Road,
Gwalior.
(ii) That the accident was caused due to rash and
negligent driving of the truck by respondent No. 1-Munnalal
Parihar.
(iii) That he was rushed to Madhav Dispensary from
where he was shifted to J.A.H. Hospital. He was operated for
fracture on his head, broken piece of the bone was removed and
22 stitches were given on his head.
(iv) That due to injury on the head, left part of his body
was paralyzed and he was not able to do the work which he was
doing prior to accident.
(v) That the prospects of his marriage had been
considerably reduced and he will not be able to lead normal life.
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4. The owner and the driver of the truck did not contest the claim petition. In
the reply filed on behalf of respondent No. 3-the National Insurance Co. Ltd., all
possible objections were raised and it was pleaded that the accident was not caused
due to rash and negligent driving of the truck and, in any case, the insurer was not
liable to pay compensation because the driver of the truck did not have a valid
driving licence.
5. After considering the pleadings and evidence of the parties, the Tribunal
held that the accident was caused due to rash and negligent driving of the truck by
respondent No. 1. The Tribunal then considered the evidence of Dr. N. D. Vayas,
Head of Neurosurgery Department of J.A.H. Hospital and the disability certificate
Ex. P-20, which revealed that the appellant had suffered 45% temporary disability
in his left hand and proceeded to award compensation under the following heads:
1. Loss of earning Rs. 5,000/-
2. Medical expenses Rs.10,000/-
3. Pain and suffering Rs.5,000/-
4 Special diet Rs.5,000/-
The Tribunal also awarded interest at the rate of 9% per annum from the date of
filing the claim petition till realisation.
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6. On an appeal filed by the appellant, the learned Single Judge of the High
Court re-appreciated the evidence produced by the parties and determined the
amount of compensation by taking the appellant's income to be Rs. 1500/- per
month. He assessed the disability of appellant to be 50% and held that loss of
earning would be Rs. 750/- per month. The learned Single Judge applied the
multiplier of 16 and concluded that the appellant was entitled to a sum of Rs.
1,44,000/- in lieu of the loss of earning. The learned Single Judge also awarded
Rs. 50,000/- for treatment and Rs. 56,000/- for pain and suffering and loss of
marriage prospects. However, the rate of interest was reduced from 9% to 7% per
annum.
7. We have heard learned counsel for the parties and carefully perused the
record. In last two decades, this Court has decided large number of cases
involving claim of compensation by the victims of accidents and/or their families.
It will be useful to notice some of the judgments in which general principles have
been laid down for the guidance of the Tribunals and the Courts.
8. In R. D. Hattangadi v. Pest Control (India) Private Limited (1995) 1 SCC
551, this Court while dealing with a case involving claim of compensation under
the Motor Vehicles Act, 1939, referred to the judgment of the Court of Appeal in
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Ward v. James (1965) 1 All ER 563, Halsbury's Laws of England, 4th Edition,
Volume 12 (page 446) and observed:
"Broadly speaking while fixing an amount of compensation payable
to a victim of an accident, the damages have to be assessed separately
as pecuniary damages and special damages. Pecuniary damages are
those which the victim has actually incurred and which are capable of
being calculated in terms of money; whereas non-pecuniary damages
are those which are incapable of being assessed by arithmetical
calculations. In order to appreciate two concepts pecuniary damages
may include expenses incurred by the claimant: (i) medical
attendance; (ii) loss of earning of profit up to the date of trial; (iii)
other material loss. So far non-pecuniary damages are concerned, they
may include (i) damages for mental and physical shock, pain and
suffering, already suffered or likely to be suffered in future; (ii)
damages to compensate for the loss of amenities of life which may
include a variety of matters i.e. on account of injury the claimant may
not be able to walk, run or sit; (iii) damages for the loss of expectation
of life, i.e., on account of injury the normal longevity of the person
concerned is shortened; (iv) inconvenience, hardship, discomfort,
disappointment, frustration and mental stress in life."
In the same case, the Court further observed:
"In its very nature whenever a tribunal or a court is required to fix the
amount of compensation in cases of accident, it involves some
guesswork, some hypothetical consideration, some amount of
sympathy linked with the nature of the disability caused. But all the
aforesaid elements have to be viewed with objective standards."
9. In Nizam's Institute of Medical Sciences v. Prasanth S. Dhananka (2009) 6
SCC 1, the three-Judge Bench was dealing with a case arising out of the
complaint filed under the Consumer Protection Act, 1986. While enhancing the
compensation awarded by the National Consumer Disputes Redressal Commission
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from Rs.15 lakhs to Rs.1 crore, the Bench made the following observations which
can appropriately be applied for deciding the petitions filed under Section 166 of
the Act:
"At the same time we often find that a person injured in an accident
leaves his family in greater distress vis-`-vis a family in a case of
death. In the latter case, the initial shock gives way to a feeling of
resignation and acceptance, and in time, compels the family to move
on. The case of an injured and disabled person is, however, more
pitiable and the feeling of hurt, helplessness, despair and often
destitution enures every day. The support that is needed by a severely
handicapped person comes at an enormous price, physical, financial
and emotional, not only on the victim but even more so on his family
and attendants and the stress saps their energy and destroys their
equanimity."
(emphasis supplied)
10. In Reshma Kumari v. Madan Mohan (2009) 13 SCC 422, this Court
reiterated that the compensation awarded under the Act should be just and also
identified the factors which should be kept in mind while determining the amount
of compensation. The relevant portions of the judgment are extracted below:
"The compensation which is required to be determined must be just.
While the claimants are required to be compensated for the loss of
their dependency, the same should not be considered to be a windfall.
Unjust enrichment should be discouraged. This Court cannot also lose
sight of the fact that in given cases, as for example death of the only
son to a mother, she can never be compensated in monetary terms.
The question as to the methodology required to be applied for
determination of compensation as regards prospective loss of future
earnings, however, as far as possible should be based on certain
principles. A person may have a bright future prospect; he might have
become eligible to promotion immediately; there might have been
7
chances of an immediate pay revision, whereas in another (sic
situation) the nature of employment was such that he might not have
continued in service; his chance of promotion, having regard to the
nature of employment may be distant or remote. It is, therefore,
difficult for any court to lay down rigid tests which should be applied
in all situations. There are divergent views. In some cases it has been
suggested that some sort of hypotheses or guess work may be
inevitable. That may be so.
In the Indian context several other factors should be taken into
consideration including education of the dependants and the nature of
job. In the wake of changed societal conditions and global scenario,
future prospects may have to be taken into consideration not only
having regard to the status of the employee, his educational
qualification; his past performance but also other relevant factors,
namely, the higher salaries and perks which are being offered by the
private companies these days. In fact while determining the
m
ultiplicand this Court in O
riental Insurance Co. Ltd. v. Jas
huben
held that even dearness allowance and perks with regard thereto from
which the family would have derived monthly benefit, must be taken
into consideration.
One of the incidental issues which has also to be taken into
consideration is inflation. Is the practice of taking inflation into
consideration wholly incorrect? Unfortunately, unlike other
developed countries in India there has been no scientific study. It is
expected that with the rising inflation the rate of interest would go up.
In India it does not happen. It, therefore, may be a relevant factor
which may be taken into consideration for determining the actual
ground reality. No hard-and-fast rule, however, can be laid down
therefor."
(emphasis supplied)
11. In Arvind Kumar Mishra v. New India Assurance Company Limited (2010)
10 SCC 254, the Court considered the plea for enhancement of compensation
made by the appellant, who was a student of final year of engineering and had
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suffered 70% disability in a motor accident. After noticing factual matrix of the
case, the Court observed:
"We do not intend to review in detail state of authorities in relation
to assessment of all damages for personal injury. Suffice it to say
that the basis of assessment of all damages for personal injury is
compensation. The whole idea is to put the claimant in the same
position as he was insofar as money can. Perfect compensation is
hardly possible but one has to keep in mind that the victim has done
no wrong; he has suffered at the hands of the wrongdoer and the
court must take care to give him full and fair compensation for that
he had suffered."
(emphasis supplied)
12. Recently, a two Judge Bench of this Court again considered the matter in
detail in Raj Kumar vs. Ajay Kumar (2011) 1 SCC 343 and held :
"The provision of the Motor Vehicles Act, 1988 ("the Act", for short)
makes it clear that the award must be just, which means that
compensation should, to the extent possible, fully and adequately
restore the claimant to the position prior to the accident. The object of
awarding damages is to make good the loss suffered as a result of
wrong done as far as money can do so, in a fair, reasonable and
equitable manner. The court or the Tribunal shall have to assess the
damages objectively and exclude from consideration any speculation
or fancy, though some conjecture with reference to the nature of
disability and its consequences, is inevitable. A person is not only to
be compensated for the physical injury, but also for the loss which he
suffered as a result of such injury. This means that he is to be
compensated for his inability to lead a full life, his inability to enjoy
those normal amenities which he would have enjoyed but for the
injuries, and his inability to earn as much as he used to earn or could
have earned. [See C.K. Subramania Iyer v. T. Kunhikuttan Nair
9
(1969) 3 SCC 64, R.D. Hattangadi v. Pest Control (India) (P) Ltd.
(1995) 1 SCC 551 and Baker v. Willoughby 1970 AC 467.]
The heads under which compensation is awarded in personal injury
cases are the following:
Pecuniary damages (Special damages)
(i) Expenses relating to treatment, hospitalisation, medicines,
transportation, nourishing food, and miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the injured would have
made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(b) Loss of future earnings on account of permanent disability.
(iii) Future medical expenses.
Non-pecuniary damages (General damages)
(iv) Damages for pain, suffering and trauma as a consequence of the
injuries.
(v) Loss of amenities (and/or loss of prospects of marriage).
(vi) Loss of expectation of life (shortening of normal longevity).
In routine personal injury cases, compensation will be awarded only
under heads (i), (ii)(a) and (iv). It is only in serious cases of injury,
where there is specific medical evidence corroborating the evidence of
the claimant, that compensation will be granted under any of the heads
(ii)(b), (iii), (v) and (vi) relating to loss of future earnings on account
of permanent disability, future medical expenses, loss of amenities
(and/or loss of prospects of marriage) and loss of expectation of life.
Assessment of pecuniary damages under Item (i) and under Item (ii)
(a) do not pose much difficulty as they involve reimbursement of
actuals and are easily ascertainable from the evidence. Award under
the head of future medical expenses--Item (iii)--depends upon
specific medical evidence regarding need for further treatment and
cost thereof. Assessment of non-pecuniary damages--Items (iv), (v)
and (vi)--involves determination of lump sum amounts with reference
to circumstances such as age, nature of injury/deprivation/disability
suffered by the claimant and the effect thereof on the future life of the
claimant. Decisions of this Court and the High Courts contain
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necessary guidelines for award under these heads, if necessary. What
usually poses some difficulty is the assessment of the loss of future
earnings on account of permanent disability--Item (ii)(a). We are
concerned with that assessment in this case.
Assessment of future loss of earnings due to permanent disability
Disability refers to any restriction or lack of ability to perform an
activity in the manner considered normal for a human being.
Permanent disability refers to the residuary incapacity or loss of use of
some part of the body, found existing at the end of the period of
treatment and recuperation, after achieving the maximum bodily
improvement or recovery which is likely to remain for the remainder
life of the injured. Temporary disability refers to the incapacity or loss
of use of some part of the body on account of the injury, which will
cease to exist at the end of the period of treatment and recuperation.
Permanent disability can be either partial or total. Partial permanent
disability refers to a person's inability to perform all the duties and
bodily functions that he could perform before the accident, though he
is able to perform some of them and is still able to engage in some
gainful activity. Total permanent disability refers to a person's
inability to perform any avocation or employment related activities as
a result of the accident. The permanent disabilities that may arise from
motor accident injuries, are of a much wider range when compared to
the physical disabilities which are enumerated in the Persons with
Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995 ("the Disabilities Act", for short). But if any
of the disabilities enumerated in Section 2(i) of the Disabilities Act
are the result of injuries sustained in a motor accident, they can be
permanent disabilities for the purpose of claiming compensation.
The percentage of permanent disability is expressed by the doctors
with reference to the whole body, or more often than not, with
reference to a particular limb. When a disability certificate states that
the injured has suffered permanent disability to an extent of 45% of
the left lower limb, it is not the same as 45% permanent disability
with reference to the whole body. The extent of disability of a limb (or
part of the body) expressed in terms of a percentage of the total
functions of that limb, obviously cannot be assumed to be the extent
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of disability of the whole body. If there is 60% permanent disability of
the right hand and 80% permanent disability of left leg, it does not
mean that the extent of permanent disability with reference to the
whole body is 140% (that is 80% plus 60%). If different parts of the
body have suffered different percentages of disabilities, the sum total
thereof expressed in terms of the permanent disability with reference
to the whole body cannot obviously exceed 100%.
Where the claimant suffers a permanent disability as a result of
injuries, the assessment of compensation under the head of loss of
future earnings would depend upon the effect and impact of such
permanent disability on his earning capacity. The Tribunal should not
mechanically apply the percentage of permanent disability as the
percentage of economic loss or loss of earning capacity. In most of the
cases, the percentage of economic loss, that is, the percentage of loss
of earning capacity, arising from a permanent disability will be
different from the percentage of permanent disability. Some Tribunals
wrongly assume that in all cases, a particular extent (percentage) of
permanent disability would result in a corresponding loss of earning
capacity, and consequently, if the evidence produced show 45% as the
permanent disability, will hold that there is 45% loss of future earning
capacity. In most of the cases, equating the extent (percentage) of loss
of earning capacity to the extent (percentage) of permanent disability
will result in award of either too low or too high a compensation.
What requires to be assessed by the Tribunal is the effect of the
permanent disability on the earning capacity of the injured; and after
assessing the loss of earning capacity in terms of a percentage of the
income, it has to be quantified in terms of money, to arrive at the
future loss of earnings (by applying the standard multiplier method
used to determine loss of dependency). We may however note that in
some cases, on appreciation of evidence and assessment, the Tribunal
may find that the percentage of loss of earning capacity as a result of
the permanent disability, is approximately the same as the percentage
of permanent disability in which case, of course, the Tribunal will
adopt the said percentage for determination of compensation."
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13. In the light of the above, we shall now consider whether the compensation
awarded by the High Court is just and reasonable or the appellant is entitled to
higher compensation.
14. It is not in dispute that at the time of accident, the appellant was earning
Rs.50/- per day by doing the work as an unskilled labourer with Raj Gas Agency.
It is also not in dispute that as a result of accident, the appellant suffered injuries
on different parts of body including the head and after operation left portion of his
body, i.e. left hand and left leg got paralyzed and as a result of that he will not be
in a position to do the work which he was doing before the accident. In his
deposition, Dr. N.D. Vayas, Head of Neurosurgery Department, J.A.H. Hospital,
who treated the appellant before and after the operation, stated that left portion of
the appellant's body was paralyzed but after treatment there was slight
improvement in his condition. Dr. Vayas then gave out that the appellant will
require further treatment for paralysis. The learned Single Judge, who had the
occasion to see the appellant in the Court, found that he was not in a position to
move his left hand and left leg. He assessed the disability to be 50% and enhanced
the compensation awarded by the Tribunal. However, he committed an error by
applying the multiplier of 16 ignoring that at the time of accident, the appellant's
age was only 20 years. In Sarla Verma v. Delhi Transport Corporation (2009) 6
13
SCC 121, this Court has considered several issues including the application of
correct multiplier and held :
"We therefore hold that the multiplier to be used should be as
mentioned in Column (4) of the table above (prepared by applying
Susamma Thomas, Trilok Chandra and Charlie), which starts with an
operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17 for 26 to
30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for
41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units
for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70 years."
In view of the above noted judgment, we hold that multiplier of 18 deserves to be
applied for the purpose of determining the compensation payable to the appellant
in lieu of the loss of earning. Thus, under this head the appellant will be entitled to
a sum of Rs.1,62,000/- .
15. Although, the appellant had suffered temporary disablement, the evidence of
the doctor shows that he will require treatment in future. The Tribunal and the
High Court have not awarded any compensation for future treatment, which would
necessarily include doctor's fee, cost of medicine, transportation, diet, etc.
Keeping in view the high cost of living, we feel that ends of justice will
be served by awarding a lump sum amount of Rs. 2 lacs for future treatment.
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16. The award made by the High Court for pain, suffering and trauma and in
lieu of loss of the prospects of marriage is wholly inadequate. The appellant, who
suffered paralysis on left part of the body will neither be able to work as a labourer
nor he will be able to lead a normal life. His marriage prospects are also bleak.
A normal girl will, in all probability, not like to marry a disabled person.
Therefore, it is apposite to award reasonable and just compensation to the
appellant for pain, suffering and trauma caused due to the accident and loss of
amenities and enjoyment of life which, in our view, should be Rs.2 lacs.
17. It is true that in the petition filed by him under Section 166 of the Act, the
appellant had claimed compensation of Rs. 4,20,000/- only, but as held in
Nagappa vs. Gurudayal Singh (2003) 2 SCC 274, in the absence of any bar in the
Act, the Tribunal and for that reason any competent Court is entitled to award
higher compensation to the victim of an accident.
18. In the result, the appeal is allowed. The impugned judgment is modified and
it is declared that the appellant shall be entitled to total compensation of
Rs.5,62,000/-. He shall also be entitled to interest @ 9% per annum from the date
of filing the claim petition till realization. Respondent No.3 is directed to pay the
enhanced amount of compensation to the appellant with interest @ 9% within a
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period of three months from today in the form of a Demand Draft prepared in his
name.
....................................J.
(G. S. Singhvi)
....................................J.
(Asok Kumar Ganguly)
New Delhi,
November 01, 2011.
