Arvind Kumar Mishra vs New India Assurance Co. Ltd. & Anr

New India Assurance Co. Ltd. and Anr. ...... Respondents

JUDGMENT

R.M. LODHA, J.

The present appeal, by special leave, raises the issue,

indeed the only issue, of assessment of loss of earnings in respect

of the victim of a motor accident who was certified 70% permanent

disablement.

1

2. Arvind Kumar Mishra - appellant - a student of

engineering final year at Birla Institute of Technology, Mesra (B.I.T.)

at the time of accident was seriously injured as a result of a truck

bearing registration No. DEG 3291 being negligently driven on June

23, 1993. The truck coming from the opposite direction hit the

motorcycle and the appellant riding the motorcycle was thrown on

the road. He sustained multiple injuries; diffused multifocal damage

of brain with interventricular hemorrhage; optic atrophy in right eye

and 3+ relative afferent papillary in left eye; amputation of right hand

distal to carpometacarpal joint level; compound fracture of shaft of

tibia (left); total bronchial plexus palsy; blocking of anterior wall of the

trachea at the level of the 3rd and 4th cartilaginous rings and

disfiguration. He was treated by several doctors at various hospitals

namely, R.M.C.H, Ranchi, C.C.L .Hospital, Gandhinagar, Christian

Medical College and Hospital, Vellore and Shankar Netralaya,

Madras. He had to undergo few surgical operations. After a little

recovery, he made an application under Section 166 of the Motor

Vehicles Act, 1988 (`the 1988 Act') claiming total compensation in

the sum of Rs. 22 lakhs which included the expenditure already

incurred by him up to that time to the extent of Rs. 1,50,000/- for his

2 treatment.

3. The offending vehicle was insured with the New India

Assurance Company Ltd. (`the insurer'). The owner as well as

insurer contested the claim petition. The appellant passed out

Bachelor of Engineering during the pendency of the claim petition.

He examined himself and tendered some of the doctors who treated

him in evidence. The vouchers of the expenditure incurred by him on

his treatment at various hospitals were also produced.

4. The Motor Vehicle Accident Claims Tribunal, Ranchi (for

short `the Tribunal') in its award dated December 19, 2002 held that

the accident occurred due to rash and negligent driving of the truck

bearing registration No. DEG 3291. It also held that the owner of

the vehicle and the insurer were liable to pay the compensation to the

appellant. As regards quantum of compensation, the Tribunal

allowed the total compensation of Rs. 2,50,000/- along with the

interest @ 9% per annum from August 7, 2002 by considering the

matter as follows:

".......under the head of pecuniary damages the amount which has been amended (sic) by the claimant in his treatment including medical expenditure other material loss, a total lump sum compensation amount of Rs. 1,50,000/- (Rupees one lac and fifty thousand only)

3 is being granted to the claimant. So far as non-

pecuniary damages are concerned from the evidence itself it is very much clear that injured was a brilliant student of engineering Final year at B.I.T. Mesra, and due to said accident he has lost his future career. He has also suffered from mental and physical shock and has to be suffered in future. There is also damages and the loss of expectation of life on account of the injuries sustained by him. He has to face inconvenience, hardship, discomfort disappointment and mental stress till his life, therefore, a lump sum compensation amount of Rs. 1,00,000/- (Rupees one lac only) is being granted to the claimant. The total compensation came to Rs. 2,50,000/- (Rupees two lac and fifty thousand only) which the claimant is entitled with interest @ 9% per annum."

5. The claimant, dissatisfied with the assessment of

compensation by the Tribunal, approached the High Court of

Jharkhand, Ranchi. The High Court increased the amount of

compensation from Rs. 2,50,000/- to Rs. 3,50,000/- having

considered the matter thus:

"On an application under Section 166 of the Motor Vehicles Act, 1988 vide Compensation Case No. 183 of 1993 the Motor Vehicles Accident Claims Tribunal, Ranchi, assessed a sum of Rs. 1,50,000/- to be paid to him under the head pecuniary damages i.e. the amount which was expended by him towards his treatment including the medical expenses and a sum of Rs. 1,00,000/- was granted towards non pecuniary damages. i.e. for his permanent disablement to the extent of 70% for the loss of right wrist and paralysis of right upper limb as also for loss of vision in his right eye.

4 Keeping into consideration the nature of disability the appellant had to sustain and loss of his future expectancy in life, we are of the view that he was entitled to a sum of Rs. 2,00,000/- on account of non pecuniary loss. Accordingly, we modify the impugned judgment and award to the extent that instead of total amount of Rs.2,50,000, the claimant is entitled to get Rs. 3,50,000/-. It is stated that the award amount with interest granted by the tribunal had already been paid. Hence, we make it clear that there will be no interest payable on the compensation amount if the said amount is deposited before the tribunal within six weeks, failing which the interest @9% per annum as granted by the tribunal shall be payable on the enhanced amount also from 07/08/2002."

6. It is not necessary to discuss the liability of the

respondents. That was disputed, but the matter has been

considered, and the Tribunal found that due to rash and negligent

driving by the driver of the truck (DEG 3291), the accident took place

in which the appellant sustained serious multiple injuries and,

therefore, owner and insurer were liable to him for the damage.

There was no appeal with regard to that matter before the High Court.

7. 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 in so far as money can. Perfect

5 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. In some cases for personal

injury, the claim could be in respect of life time's earnings lost

because, though he will live, he cannot earn his living. In others, the

claim may be made for partial loss of earnings. Each case has to be

considered in the light of its own facts and at the end, one must ask

whether the sum awarded is a fair and reasonable sum. The

conventional basis of assessing compensation in personal injury

cases - and that is now recognized mode as to the proper measure

of compensation - is taking an appropriate multiplier of an

appropriate multiplicand.

8. In General Manager Kerala State Road Transport

Corporation, Trivandrum v.. Susamma Thomas (Mrs.) and Ors1., this

Court laid down the following principles:

"13. The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the 1 (1994) 2 SCC 176

6 deceased (or that of the claimants whichever is higher) and by the calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last."

17. The multiplier represents the number of years' purchase on which the loss of dependency is capitalised. Take for instance a case where annual loss of dependency is Rs 10,000. If a sum of Rs 1,00,000 is invested at 10% annual interest, the interest will take care of the dependency, perpetually. The multiplier in this case works out to 10. If the rate of interest is 5% per annum and not 10% then the multiplier needed to capitalise the loss of the annual dependency at Rs 10,000 would be 20. Then the multiplier, i.e., the number of years' purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last etc. Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependants, whichever is higher) goes up."

9. The principles laid down in Susamma Thomas1 still hold

the field; the only variation has been in respect of maximum

multiplier. In the present case the Tribunal as well as the High Court

seriously erred in not assessing the compensation for personal injury

to the appellant in accord with the recognized mode i.e., by taking an

appropriate multiplier of an appropriate multiplicand.

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10. The appellant at the time of accident was a final year

engineering (Mechanical) student in a reputed college. He was a

remarkably brilliant student having passed all his semester

examinations in distinction. Due to the said accident he suffered

grievous injuries and remained in coma for about two months. His

studies got interrupted as he was moved to different hospitals for

surgeries and other treatments. For many months his condition

remained serious; his right hand was amputated and vision seriously

affected. These multiple injuries ultimately led to 70% permanent

disablement. He has been rendered incapacitated and a career

ahead of him in his chosen line of mechanical engineering got

dashed for ever. He is now in a physical condition that he requires

domestic help throughout his life. He has been deprived of

pecuniary benefits which he could have reasonably acquired had

he not suffered permanent disablement to the extent of 70% in the

accident.

11. On completion of Bachelor of Engineering (Mechanical)

from the prestigious institute like B.I.T., it can be reasonably

assumed that he would have got a good job. The appellant has

stated in his evidence that in the campus interview he was selected

8 by Tata as well as Reliance Industries and was offered pay package

of Rs. 3,50,000/- per annum. Even if that is not accepted for want of

any evidence in support thereof, there would not have been any

difficulty for him in getting some decent job in the private sector.

Had he decided to join government service and got selected, he

would have been put in the pay scale for Assistant Engineer and

would have at least earned Rs. 60,000/- per annum. Wherever he

joined, he had a fair chance of some promotion and remote chance of

some high position. But uncertainties of life cannot be ignored taking

relevant factors into consideration. In our opinion, it is fair and

reasonable to assess his future earnings at Rs. 60,000/- per annum

taking the salary and allowances payable to an Assistant Engineer in

public employment as the basis. Since he suffered 70% permanent

disability, the future earnings may be discounted by 30% and,

accordingly, we estimate upon the facts that the multiplicand should

be Rs.42,000/- per annum. The appellant at the time of accident

was about 25 years. As per the decision of this Court in Sarla

Verma (Smt.) and Ors. v. Delhi Transport Corporation and Anr1. the

operative multiplier would be 18. The loss of future earnings by

multiplying the multiplicand of Rs. 42,000/- by a multiplier of 18 1 (2009) 6 SCC 121

9 comes to Rs. 7,56,000/-. The damages to compensate the

appellant towards loss of future earnings, in our considered

judgment, must be Rs. 7,56,000/-. The Tribunal awarded him Rs.

1,50,000/- towards treatment including the medical expenses. The

same is maintained as it is and, accordingly, the total amount of

compensation to which the appellant is entitled is Rs. 9,06,000/- .

12. Before we close, we must notice in all fairness to the

learned counsel for the insurer his submission that the appellant is

entitled to compensation in accordance with the Second Schedule

appended to the 1988 Act only. This submission overlooks the fact

that the appellant made his claim under Section 166 of the 1988 Act

and not under Section 163A. It is true that in Reshma Kumari & Ors.

v. Madan Mohan & Anr.,1 a two-Judge Bench of this Court has

referred the question whether multiplier specified in the Second

Schedule should be taken to be a guide for calculation of the amount

of compensation payable in a case falling under Section 166 to the

larger bench and the said question is not yet authoritatively decided.

However, in a case such as the present case, we find no justification

to await decision of the larger bench on the aforenoticed question as

there are already few decisions of this Court taking a view that the 1 (2009) 13 SCC 422

10 Second Schedule has no application to the claim petition made under

Section 166 of the 1988 Act.

13. In the result, the appeal is allowed in part and the

compensation awarded by the High Court in the sum of Rs.

3,50,000/- is enhanced to Rs. 9,06,000/-. The appellant shall be

entitled to 9% simple interest per annum on the enhanced amount

from August 7, 2002 until the date of actual payment. The appellant

shall also be entitled to the costs of this appeal which we quantify at

Rs. 15,000/-.

........................ J.

(Aftab Alam)

......................... J.

New Delhi, (R.M. Lodha) September 29, 2010

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