REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3203 OF 2011
(Arising out of Special Leave Petition (C) No.6128/2010)
Sri Nagarajappa ...Appellant(s)
- Versus -
The Divisional Manager, ...Respondent(s)
The Oriental Insurance Co. Ltd.
J U D G M E N T
GANGULY, J.
1. Leave granted.
2. On 13.08.2004 at about 6 p.m., the appellant was
crossing the road carefully when a BMTC bus (bearing
registration No.KA-05-B-5245) came in a rash and
negligent manner and dashed against the appellant
1
whereupon he was admitted in hospital for treatment as
he had sustained multiple injuries.
3. The appellant filed a claim petition under Section
166 of the Motor Vehicles Act, 1988 claiming
compensation of Rs.5,00,000/-. The appellant was
working as a coolie and claimed that he was earning a
monthly income of Rs.4,500/- p.m.
4. The Tribunal concluded that the accident occurred
for the rash and negligent driving of the bus driver as
a result of which the appellant had sustained injuries
in the accident. On perusal of evidence it was found
that the appellant had sustained injuries of compound
fracture of ulnar styloid process of the left hand and
subluxation of the left wrist. The doctor assessed
disability at 23% of the whole body. Therefore, it
awarded Rs.20,000/- for loss of amenities, Rs.30,000/-
for pain and suffering, Rs.30,000/- for medical
expenses and conveyance and Rs.2,000/- for future
medical treatment. For loss of income during the period
of treatment, the Tribunal found that due to the nature
of the disability the appellant was unable to work as a
2
coolie or do other manual work. It also added that only
the left hand was injured, so the right hand was free
to work. The appellant was an indoor patient for 55
days. Thus, the Tribunal presumed that the appellant
was unable to work for 3 months. Further, though the
appellant claimed to be earning Rs.4,500/- p.m., it was
not supported by documentary evidence. Hence, the
Tribunal presumed his income to be Rs.3000/- p.m. and
awarded Rs.9,000/- for loss of income during the period
of treatment. For computation of loss of future income
due to disability, the Tribunal took into consideration
that disability of the whole body of the appellant had
been assessed at 23%, however, his right hand was still
free to work. Thus, it assessed disability at 20%.
Medical evidence showed that the appellant was around
55 years at the time of the accident, for which a
multiplier of 11 was adopted. Accordingly, loss of
future income was calculated to be Rs.79,200/- (Rs.3000
X 12 X 11 X 20/100). The Tribunal fastened liability on
the insurance company. Thus, total compensation was
Rs.1,70,200/- payable to the appellant jointly and
severally, with interest @ 6% from date of the claim
petition till realization.
3
5. On appeal, the High Court enhanced compensation for
pain and suffering, medical expenses, future medical
expenses, loss of amenities and loss of future income
as against the amount awarded by the Tribunal. For loss
of future income, the High Court concluded that from
material on record, the age of the claimant was between
45 to 55 years. Thus, it took 50 years as the safe age
and adopted a multiplier of 13, income was taken as
Rs.3000/- p.m. and disability @ 20%. Accordingly, loss
of future income was calculated at Rs.93,600/- (Rs.3000
X 12 X 13 X 20/100). Compensation was thus enhanced and
awarded as follows:
Pain and suffering -Rs.40,000/-
Medical expenses, nourishment, attendant
Charges and other incidental expenses -Rs.40,000/-
Loss of income during treatment -Rs.9,000/-
Loss of future income -Rs.93,600/-
Loss of amenities -Rs.30,000/-
Future medical expenses -Rs.10,000/-
TOTAL -Rs.2,22,600/-
4
6. Being still aggrieved by the compensation
awarded, the appellant approached this Court by filing
an Special Leave Petition praying for further
enhancement of compensation.
7. Having gone through the records, we are of the
opinion that Rs.2,22,600/- awarded by the High Court is
inadequate considering the nature of injuries suffered
by the appellant and the consequent adverse effect it
has on the performance of his avocation.
8. In reaching our decision, we are drawn to, if
we may so, a very well-considered judgment of this
Court in Raj Kumar v. Ajay Kumar & Anr. [(2011) 1 SCC
343], wherein the Bench, comprising of Hon’ble
Raveendran and Gokhale, JJ., has propounded the law on
compensation in motor accidents claims cases resulting
in disability in a comprehensive manner. The relevant
portions of the judgment are extracted below:
“10. Where the claimant suffers a permanent
disability as a result of injuries, the
assessment of compensation under the head of
loss of future earnings, would depend upon the
effect and impact of such permanent disability
on his earning capacity. The Tribunal should
5
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. … …”
11. What requires to be assessed by the
Tribunal is the effect of the permanent
disability on the earning capacity of the
injured; and after assessing the loss of
earning capacity in terms of a percentage of
the income, it has to be quantified in terns
of money, to arrive at the future loss of
earnings (by applying the standard multiplier
method used to determine loss of dependency).
We may however note that in some cases, on
appreciation of evidence and assessment, the
Tribunal may find that the percentage of loss
of earning capacity as a result of the
permanent disability, is approximately the
same as the percentage of permanent disability
in which case, of course, the Tribunal will
adopt the said percentage for determination of
compensation (See for example, the decisions
of this Court in Arvind Kumar Mishra v. New
India Assurance Co. Ltd. [2010 (10) SCC 254]
and Yadava Kumar v. National Insurance Co.
Ltd. [2010 (10) SCC 341].
12. xxx xxx xxx
13. Ascertainment of the effect of the
permanent disability on the actual earning
capacity involves three steps. The Tribunal
has to first ascertain what activities the
claimant could carry on in spite of the
permanent disability and what he could not do
as a result of the permanent ability (this is
also relevant for awarding compensation under
the head of loss of amenities of life). The
second step is to ascertain his avocation,
6
profession and nature of work before the
accident, as also his age. The third step is
to find out whether (i) the claimant is
totally disabled from earning any kind of
livelihood, or (ii) whether in spite of the
permanent disability, the claimant could still
effectively carry on the activities and
functions, which he was earlier carrying on,
or (iii) whether he was prevented or
restricted from discharging his previous
activities and functions, but could carry on
some other or lesser scale of activities and
functions so that he continues to earn or can
continue to earn his livelihood.
14. For example, if the left hand of a
claimant is amputated, the permanent physical
or functional disablement may be assessed
around 60%. If the claimant was a driver or a
carpenter, the actual loss of earning capacity
may virtually be hundred percent, if he is
neither able to drive or do carpentry. On the
other hand, if the claimant was a clerk in
government service, the loss of his left hand
may not result in loss of employment and he
may still be continued as a clerk as he could
perform his clerical functions; and in that
event the loss of earning capacity will not be
100% as in the case of a driver or carpenter,
nor 60% which is the actual physical
disability, but far less. In fact, there may
not be any need to award any compensation
under the head of “loss of future earnings”,
if the claimant continues in government
service, though he may be awarded compensation
under the head of loss of amenities as a
consequence of losing his hand. Sometimes the
injured claimant may be continued in service,
but may not be found suitable for discharging
the duties attached to the post or job which
he was earlier holding, on account of his
disability, and may therefore be shifted to
some other suitable but lesser post with
lesser emoluments, in which case there should
be a limited award under the head of loss of
7
future earning capacity, taking note of the
reduced earning capacity.
15. xxx xxx xxx
16. … … Sections 168 and 169 of the Act make
it evident that the Tribunal does not function
as a neutral umpire as in a civil suit, but as
an active explorer and seeker of truth who is
required to “hold an enquiry into the claim”
for determining the “just compensation”. The
Tribunal should therefore take an active role
to ascertain the true and correct position so
that it can assess the “just compensation”.
While dealing with personal injury cases, the
Tribunal should preferably equip itself with a
Medical Dictionary and a Handbook for
evaluation of permanent physical impairment…”
9. We are in complete agreement with the
abovementioned judgment.
10. On perusal of the doctor’s evidence with
respect to the nature of injuries suffered by the
appellant, the appellant was found, inter alia, to be
suffering from the following disabilities as a result
of the accident- “gross deformity of the left forearm,
wrist and hand, wasting and weakness of the muscles of
the left upper limb and shortening of the left upper
limb by 1 c.m.” As a result, the doctor stated that the
appellant could not work as a coolie and could not also
8
do any other manual work. The doctor assessed permanent
residual physical disability of the upper limb at 68%
and 22-23% of the whole body.
11. The appellant is working as a manual labourer,
for which he requires the use of both his hands. The
fact that the accident has left him with one useless
hand will severely affect his ability to perform his
work as a coolie or any other manual work, and this has
also been certified by the doctor. Thus, while awarding
compensation it has to be kept in mind that the
appellant is to do manual work for the rest of his life
without full use of his left hand, and this is bound to
affect the quality of his work and also his ability to
find work considering his disability. Hence, while
computing loss of future income, disability should be
taken to be 68% and not 20%, as was done by the
Tribunal and the High Court. Our view is supported from
the ratio in Raj Kumar (supra) and from the fact that
the appellant is severely hampered and perhaps forever
handicapped from performing his occupation as a coolie.
9
12. Thus, loss of future income will amount to
Rs.3,18,240/- (Rs.3000 X 12 X 13 X 68/100). We also
enhance the amount awarded for loss of amenities to
Rs.40,000/-, as against Rs.30,000/- awarded by the High
Court. We also enhance the amount awarded for future
medical expenses to Rs.30,000/-, as against Rs.10,000/-
awarded by the High Court. We are satisfied by the
amount awarded under the remaining heads awarded by the
High Court and sustain the same.
13. The break-up of compensation is as follows:
Loss of future income – Rs.3,18,240/-
Loss of amenities - Rs.40,000/- Pain and suffering - Rs.40,000/- Future medical expenses - Rs.30,000/-
Medical expenses, nourishment, attendant
Charges and other incidental expenses-Rs.40,000/-
Loss of income during treatment -Rs.9,000/-
TOTAL -Rs.4,77,240/-
14. Accordingly, total compensation payable to the
appellant amounts to Rs.4,77,640/-, which we round off
to Rs.4,77,000/-. The same shall be payable at an
1
interest of 6% from the date of claim petition till
realization. We direct the respondent to calculate the
amount and deposit the same by way of bank or demand
draft in the Motor Accident Claims Tribunal, Bangalore
and the Presiding Officer of the Tribunal will deposit
the same in the bank account of the appellant. If there
is no such bank account one shall be opened in a
nationalized bank and the demand draft will be
deposited there.
15. Accordingly, the appeal is allowed.
16. No order as to costs.
…………………..J.
(G.S. SINGHVI)
…………………..J.
New Delhi (ASOK KUMAR GANGULY)
April 11, 2011
1