Ramachanrappa vs Manager,Royal Sundaram Allian.Co.Ltd

(Arising out of Special Leave Petition (C) No. 15747 of 2010)

Sri Ramachandrappa ........... Appellant

versus

The Manager, Royal Sundaram

Alliance Insurance Company Limited .......... Respondent

J U D G M E N T

H.L. Dattu, J.

1. Leave granted.

2. This appeal is directed against the Judgment and Decree

passed by the High Court of Karnataka in MFA No. 10869 of 2006

dated 9th day of December, 2009, whereby the High Court has

partly allowed the appeal and enhanced the compensation awarded

by the Court of Small Causes, Bangalore (`Tribunal' for short) in

MVC Case No. 5124 of 2004 dated 25.03.2006. The Tribunal has

awarded a sum of `1,13,900/- with interest at 6% p.a. from the date

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of the claim petition till the date of deposit as against the claim of

the appellant for `5,50,000/-. The High Court, by its impugned

Judgment and order, has marginally increased the compensation

awarded by the Tribunal. The appellant, being aggrieved by the

compensation awarded by the Tribunal and the High Court, has

filed this appeal.

3. The facts of the present case are as follows :-

The appellant was working as a Coolie and earning `4500/-

per month. He was riding as pillion on a motorcycle with one

Hanumanthappa, when they met with an accident. Appellant

sustained grievous injuries. He was treated in a private nursing

home and his treatment continued for a long time. In the claim

petition, it was his case and claim that even after treatment, his

right hand is completely disabled and due to which, his work and

livelihood completely suffered. Appellant filed an application under

Section 166 of Motor Vehicles Act, 1988 for compensation of

`5,50,000/- by way of special and general damages on account of

injuries, pain, mental agony, loss of earning, physical disabilities,

shortening of expectation of life due to injuries sustained in the

accident and medical expenses incurred thereon.

Hanumanthappa, who was Respondent No. 1 in the Claim Petition,

though served with the notice of petition, did not appear before the

Court to oppose the relief sought in the claim petition. The

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Tribunal, after considering the evidence on record, has awarded a

compensation of `1,13,900/- with interest at 6% per annum from the

date of petition till the date of deposit as against the claim of the

appellant for `5,50,000/-.

4. Aggrieved by the inadequate compensation awarded, the

appellant preferred an appeal before the High Court of Karnataka.

The court, by its order dated 9th of December, 2009, has awarded

the compensation of `1,33,900/-, as against `1,13,900/- awarded by

the Tribunal, with interest at 6% per annum on the enhanced

compensation from the date of the petition till the date of

realization. The appellant, being dissatisfied with the compensation

awarded, is before us in this appeal.

5. We have heard the learned counsel for the parties to the lis

and perused the records.

6. Before the Tribunal, the appellant had examined himself

(PW-1) and one Dr. P.K.Raju, Asst. Professor in Orthopaedics

(PW-2) in support of his claim petition. The Doctor, in his evidence,

has stated that the appellant cannot work as a coolie by using his

right hand and cannot do any other manual work. Though, he was

cross-examined, nothing adverse to the claim of the appellant is

elicited.

3 7. The learned counsel for the appellant submits that due to the

injuries sustained by the appellant in the accident, the appellant is

permanently disabled, which would affect his future earning

capacity as a Coolie. Per contra, learned counsel for the Insurance

Company submits that since the appellant has suffered only 41% of

disability, the High Court was justified in restricting the claim

against the claim made by the appellant.

8. The compensation is usually based upon the loss of the

claimant's earnings or earning capacity, or upon the loss of

particular faculties or members or use of such members, ordinarily

in accordance with a definite schedule. The Courts have time and

again observed that the compensation to be awarded is not

measured by the nature, location or degree of the injury, but rather

by the extent or degree of the incapacity resulting from the injury.

The Tribunals are expected to make an award determining the

amount of compensation which should appear to be just, fair and

proper.

9. The term "disability", as so used, ordinarily means loss or

impairment of earning power and has been held not to mean loss of

a member of the body. If the physical efficiency because of the

injury has substantially impaired or if he is unable to perform the

same work with the same ease as before he was injured or is

unable to do heavy work which he was able to do previous to his

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injury, he will be entitled to suitable compensation. Disability

benefits are ordinarily graded on the basis of the character of the

disability as partial or total, and as temporary or permanent. No

definite rule can be established as to what constitutes partial

incapacity in cases not covered by a schedule or fixed liabilities,

since facts will differ in practically every case.

10. In Ramesh Chandra Vs. Randhir Singh (1990) 3 SCC 723,

this Court drawing distinction between the compensation for future

loss and pain and enjoyment of life, has observed as under :

"... The incapacity or disability to earn a

livelihood would have to be viewed not only in

presenti but in futuro on reasonable

expectancies and taking into account deprival of

earnings of a conceivable period. This head

being totally different cannot in our view overlap

the grant of compensation under the head of

pain, suffering and loss of enjoyment of life. One

head relates to the impairment of person's

capacity to earn, the other relates to the pain

and suffering and loss of enjoyment of life by the

person himself."

11. In K.G. Poovaiah (Dr) v. G.M./Managing Director, Karnataka

KSRTC, (2001) 9 SCC 167, the appellant was a Medical

Practitioner and was aged about 36 years and had met with an

accident in which his hand was crushed. This Court, while

considering the nature of his profession and income, has enhanced

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the amount of compensation for loss of future earnings. This Court

observed :

"There is no reason to doubt the testimony of the

appellant so far as his monthly income is

concerned. Being a medical man aged about 36

years on the date of the accident, the monthly

salary received by him cannot be said to be

exaggerated. He has candidly admitted that he was

not assessed to tax. A salary of Rs 3000 per month

to a medical practitioner cannot be said to be on the

higher side. We, therefore, accept his statement in

this behalf. We also accept the assessment at Rs

40,000 for pain and suffering. However, the

assessment of compensation under the head of loss

of earning capacity is very much on the lower side.

The injury to the right hand, which has left a

permanent disability and which has affected the

functioning of the limb and in particular the fingers,

is a serious handicap to a medical practitioner.

Patients would be reluctant to go to him for

treatment and, therefore, the loss of earning

capacity would be substantial. Even if we were to

assume that it would reduce his earning capacity by

50% and even if we go by his earnings at the date

of the accident, the monthly loss would come to Rs

1500 i.e. Rs 18,000 per annum. If this monthly loss

of earning is multiplied by 10 years purchase factor

the compensation would work out to Rs 1,80,000.

To that must be added the compensation allowed

under certain other heads, namely, pain and

suffering, loss of amenities, medical expenses, etc.

The total amount comes to Rs 2,38,000."

12. In Kapil Kumar v. Kudrat Ali, (2002) 4 SCC 337, a student

suffered injuries on his hand and the disability of 20% was

assessed by the Doctors. This Court, while upholding the High

Court's observation in relation to compensation for loss of future

earnings, has held:

6 "However, the disability sustained was assessed at 20

per cent. As rightly observed by the High Court, the

loss of earning capacity on account of permanent

partial disability suffered by the appellant cannot be

calculated in terms of percentage only. It will have

serious repercussions on his studies and prospects of

earning. He will have to face other handicaps in life.

Though the High Court did realise the need to enhance

the compensation, we feel that the extent of

enhancement is still inadequate. The increase of Rs

5000 is only marginal. Taking inter alia the table in the

Second Schedule as the guiding factor, we are of the

view that the compensation on account of disability

incurred by the appellant should be enhanced by Rs

20,000 more; that means, he will get Rs 40,000 instead

of Rs 20,000 awarded by the High Court under the first

head."

13. In Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, this Court,

while considering the award of compensation to the victim of motor

accident for loss of future earning due to some permanent physical

disability, has observed :

"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

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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. (See for example, the

decisions of this Court in Arvind Kumar Mishra v. New

India Assurance Co. Ltd.4 and Yadava Kumar v.

National Insurance Co. Ltd.5)

Therefore, the Tribunal has to first decide whether

there is any permanent disability and, if so, the extent

of such permanent disability. This means that the

Tribunal should consider and decide with reference to

the evidence:

(i) whether the disablement is permanent or

temporary;

(ii) if the disablement is permanent, whether it is

permanent total disablement or permanent partial

disablement;

(iii) if the disablement percentage is expressed with

reference to any specific limb, then the effect of such

disablement of the limb on the functioning of the

entire body, that is, the permanent disability suffered

by the person.

If the Tribunal concludes that there is no permanent

disability then there is no question of proceeding

further and determining the loss of future earning

capacity. But if the Tribunal concludes that there is

permanent disability then it will proceed to ascertain

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its extent. After the Tribunal ascertains the actual

extent of permanent disability of the claimant based

on the medical evidence, it has to determine whether

such permanent disability has affected or will affect

his earning capacity."

14. In the instant case, it is not in dispute that the appellant was

aged about 35 years and was working as a Coolie and was earning

`4500/- per month at the time of accident. This claim is reduced by

the Tribunal to a sum of `3000/- only on the assumption that wages

of the labourer during the relevant period viz. in the year 2004, was

`100/- per day. This assumption in our view has no basis. Before

the Tribunal, though Insurance Company was served, it did not

choose to appear before the Court nor did it repudiated the claim of

the claimant. Therefore, there was no reason for the Tribunal to

have reduced the claim of the claimant and determined the monthly

earning a sum of `3000/- per month. Secondly, the appellant was

working as a Coolie and therefore, we cannot expect him to

produce any documentary evidence to substantiate his claim. In

the absence of any other evidence contrary to the claim made by

the claimant, in our view, in the facts of the present case, the

Tribunal should have accepted the claim of the claimant. We

hasten to add that in all cases and in all circumstances, the

Tribunal need not accept the claim of the claimant in the absence of

supporting material. It depends on the facts of each case. In a

given case, if the claim made is so exorbitant or if the claim made is

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contrary to ground realities, the Tribunal may not accept the claim

and may proceed to determine the possible income by resorting to

some guess work, which may include the ground realities prevailing

at the relevant point of time. In the present case, appellant was

working as a Coolie and in and around the date of the accident, the

wage of the labourer was between `100/- to 150/- per day or

`4500/- per month. In our view, the claim was honest and bonafide

and, therefore, there was no reason for the Tribunal to have

reduced the monthly earning of the appellant from `4500/- to

`3000/- per month. We, therefore, accept his statement that his

monthly earning was `4500/-.

15. The appellant, in so far as disability caused due to accident

is concerned, had stated in his evidence that he had sustained

severe bodily injuries which has resulted in permanent partial

disability, which would affect his future earning capacity as a

Coolie. The Doctor, who was examined as claimant's witness, has

stated that the appellant has sustained malunited fracture 2nd, 3rd,

4th, 5th MCB right and malunited fracture scapula right and in his

opinion, the appellant has suffered permanent physical disability of

41% to right upper limb and in view of the disability, the claimant

cannot work as a Coolie and cannot do any other manual work as a

Coolie. The Tribunal, while assessing the loss of income has taken

the disability to the whole body as 1/3rd of particular limb and has

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assessed the loss of income, at 1/3rd of 41% which comes to about

13.5%. So the loss of income taken at 13.5% of `3000/- and has

quantified the loss of future income at `72,900/-. We cannot accept

this quantification arrived at by the Tribunal, since the assessment

of compensation under the head of loss of earning capacity is

calculated abysmally on the lower side. On the question of

disability caused due to the accident, the Doctor, who has been

examined as claimant's witness, says that because of the injury

sustained by the claimant, he cannot work as a Coolie and cannot

do any other manual work. This part of the evidence is not

controverted by the insurance company by subjecting the claimant

to cross-examination. Therefore, we can safely conclude that

claimant has become permanently disabled and, therefore, has lost

the future earning capacity permanently. The claimant has also

suffered prolonged medical treatment and hospitalization. Looking

to the amount awarded by the Tribunal, we are of the view that the

same is too less and, therefore, we are inclined to enhance the

same. Taking into consideration the future economic loss, he

would suffer because of permanent partial disability, which would

not permit him to work as a Coolie or any other job, the medical

expenses incurred, pain and sufferings, loss of income during

treatment, period of loss of future amenities and discomfort, in our

view, interest of justice will be served if an additional amount of

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`2,00,000/- (Rupees Two Lakhs) is granted to the appellant by way

of compensation.

16. The respondent-Insurance company is directed to deposit

the enhanced compensation amount together with interest from the

date of petition till the date of deposit before the Tribunal within a

period of eight weeks from today. The enhanced compensation

amount with interest shall be paid to the claimant on such deposit.

17. The appeal is allowed to the extent indicated above. Costs

are made easy.

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

[ G. S. SINGHVI ]

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

[ H. L. DATTU ]

New Delhi,

August 09, 2011.

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