Sanjay Batham vs Munnalal Parihar & Ors

(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.

2

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.

3

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.

4

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

5

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

6

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

8

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

10

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

11

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."

12

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.

14

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

15

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.