Supreme Court in the case titled as Erudhaya Priya v. State Express Transport Corporation Ltd. allowed the appeal for enhancement of compensation to Rs. 41,69,831/- along with simple interest at the rate of 9% per annum.
The judgement was delivered on 27th July by the Supreme Court bench comprising of Justice(s) Sanjay Kishan Kaul, Justice Ajay Rastogi and Justice Aniruddha Bose.
Facts of the Case
The Appellant was travelling on 16th August 2011 from Chennai to Bangalore in a bus owned by the respondent State Corporation. The bus at around 5:40 am ran into a stationary lorry and the collision resulted in multiple injuries to numerous passengers including the appellant, and caused death of the bus conductor on the spot.
The appellant was rushed to hospital and remain admitted for 8 months. The appellant suffered grievous injuries including fractures in the arms and legs and she suffered a disability of 31.1% of the whole body.
Later, appellant filed a claim petition before the Motor Accident Claims Tribunal (“MACT”), Madurai under Section 166 of the Motor Vehicles Act, 1988 (“MV Act”) read with Rule 3(1) of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 claiming a compensation of Rupees One Crore for injuries sustained in the accident.
The decision of Motor Accident Claims Tribunal, Madurai
The MACT, on a perusal of the documents and oral testimonies, including the rough sketch and the charge-sheet, came to the conclusion that the accident occurred due to the rash and negligent manner of driving of the bus driver of the bus owned by the respondent State Corporation and, thus, held the respondent liable to pay compensation to the appellant.
The MACT opined that the permanent disability of 31.1% would have to be considered and applied the multiplier method to calculate the loss of earning power. Since the appellant was 23 years of age, multiplier of 17 was applied on the monthly salary of the appellant as a software engineer and the compensation was worked out for loss of earning power to Rs. 9,27,424/.
The compensation was also attributed under various heads of extra nourishment, medical expenses, physiotherapy, loss of matrimonial aspects, loss of comfort and amenities, mental agony, and pain and suffering. The total quantification of the compensation by the MACT was of Rs. 35,24,288/- to be paid by the respondent State Corporation along with interest @ 7.5% p.a.
Appeal to the High Court
In subsequent appeal by the respondent State Corporation before the High Court, it confirmed the findings of the negligence of the bus driver, but reduced the compensation to Rs. 25,00,000/- primarily on the ground that the multiplier method for quantifying loss of earning power has been wrongly applied as it had not come on record as to how the injuries suffered by the appellant would have a bearing on her earning capacity as a software engineer.
The decision of the Supreme Court
In present appeal, before the Supreme Court, the appellant claimed that she is entitled to enhancement of compensation even over and above what was granted by the MACT and has quantified the same as Rs. 41,69,831/- under various heads along with claiming a revised interest rate @ 12% per annum.
The Apex Court based its decision on three aspects-
- The application of multiplier of ‘17’ instead of ‘18’;
The Supreme Court relying on the judgement in National Insurance Company Limited v. Pranay Sethi and Others held that in the age group of 15- 25 years, the multiplier has to be ‘18’ along with factoring in the extent of disability.
- Loss of earning capacity of the appellant with permanent disability of 31.1%
The Court on examination of disability certificate observed that it showed the hospitalization on 8 occasions for various number of days over 1 1⁄2 years from August 2011 to January 2013.
The Court relied on the judgement in National Insurance Co. ltd v. Pranay Sethi and Others for quantification of the compensation for disability and on considering the age of the appellant, it held that 50% of the actual salary was appropriate in the present case.
- The interest rate claimed as 12%
The appellant in view of the judgement in Jagdish v. Mohan & ors. watered down the interest to 9% and it was affirmed by the court as no dispute was raised by the respondent’s counsel with respect it.
The Supreme Court hence, allowed the appeal and held appellant entitled to the compensation of Rs. 41,69,831/- as claimed along with simple interest at the rate of 9% per annum from the date of application till the date of payment.
Read Judgment @Latestlaws.com
