Factual Matrix
The appellant, a 20-year-old data entry operator (educated up to 12th standard) incurred permanent disability, i.e. loss of his right hand (which was amputated). The disability was assessed to be 89%. However, the tribunal and the High Court re-assessed the disability to be only 45%, on the assumption that the assessment for compensation was to be on a different basis, as the injury entailed loss of only one arm.
Arguments on behalf of the appellant
The appellant urged that the High Court misread and created a distinct category of cases where addition in income towards “future prospects” can only be given in case of death, and not for injury, which cannot be the intention of this court as no such observation is made. It was also contended that the High Court erred in applying the ratio of this Court in the cases of National Insurance Company Ltd. v. Pranay Sethi & Ors. and Jagdish v. Mohan & Ors., which had ruled that the benefit of future prospects should not be confined only to those who have a permanent job and would extend to self-employed individuals, and in case of self- employed persons an addition of 40% of established income should be made where the age of the victim at the time of the accident was below 40 years.
Further the Counsel submitted that that the Hight Court erred in assessment of physical permanent disability of injured as 45%, even though it was 100% and that the monthly income should not have been reduced by way of reducing the ‘loss of future earning capacity’.
Arguments forwarded to contest the claims of the appellant
The counsel, representing the insurance company, submitted that the assessment of compensation was made by the High Court in conformity with this Court’s decisions in as much as the Court had held that the permanent disability of loss of one arm, cannot lead to loss of earning capacity of up to 90% and consequently, the assessment of compensation on the head of loss of earning capacity was correctly fixed at 45%. Further, the counsel submitted that there was no proof of payment of income tax to support the claim that the appellant earned ₹ 12,000/- per month and the PAN card ipso facto did not establish the level of income claimed by the appellant.
Observations of the Court
The Supreme Court referred to a catena of its judgments which dealt with the quantum of compensation in the motor-vehicle accident cases.
The Court reiterated the two conditions which have been laid down in various cases for measuring the compensation in MV accidents cases:
- Whether in cases of permanent disablement incurred as a result of a motor accident, the claimant can seek, apart from compensation for future loss of income, amounts for future prospects too.
- The extent of disability.
The Court remarked that although the HC had rightly held that the Pranay Sethi involved the assessment of compensation in a case where the victim died, however, it was justified for the HC to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement, while reading the previous rulings of this Court(SC). The Court went on to regard the observations of the HC as illogical, because it denies altogether the possibility of the living victim progressing further in life in accident cases and admits such possibility of future prospects, in case of the victim’s death.
The Court relied on several judgments to come to a conclusion with respect to the present case. Some of the relevant observations made by this Court with reference to such cases have been produced here:
Santosh Devi v. National Insurance Company Limited-
“The wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life. it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he / she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation.”
Jagdish v. Mohan and Ors. –
“The benefit of future prospects should not be confined only to those who have a permanent job and would extend to self-employed individuals. In the case of a self-employed person, an addition of 40% of the established income should be made where the age of the victim at the time of the accident was below 40 years.”
Parminder Singh v. New India Assurance Co. Ltd –
The victim could not continue to work as a labourer or do any agricultural work. The victim had sustained 75% permanent disability on account of which he was awarded and additional 50% of his income as the ‘future prospect’ to increase his total income from Rs. 10,000 to Rs. 15,000.
Kajal v. Jagdish Chand –
The Court while referring to this recent case reiterated that in addition to loss of earnings, compensation for future prospects too could be factored in, and observed that:
“ ...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;
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:
- Medical attendance;
- Loss of earning of profit up to the date of trial;
- Other material loss.
So far as non-pecuniary damages are concerned, they may include :
- Damages for mental and physical shock, pain and suffering, already suffered or likely to be suffered in the future;
- 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;
- Damages for loss of expectation of life i.e. on account of injury the normal longevity of the person concerned is shortened;
- Inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.”
In light of the observations made on the basis of the judgments produced above, the Court held that the High Court clearly erred in holding that compensation for loss of future prospects could not be awarded. That in addition to loss of future earnings (based on a determination of the income at the time of accident), the appellant is also entitled to compensation for loss of future prospects, @ 40% (following the Pranay Sethi principle).
The Court also observed that the approach of the tribunal and the High Court to re-assess the disability to be only 45%, on the assumption that the assessment for compensation was to be on a different basis, as the injury entailed loss of only one arm was ‘completely mechanical and entirely ignores realities’.
The Court propounded that whilst it is true that assessment of injury of one limb or to one part may not entail permanent injury to the whole body, the inquiry which the court has to conduct is the resultant loss which the injury entails to the earning or income generating capacity of the claimant. In other words, the impact of the disability caused to the victim on his ability to carry out his vocational work needs to perused by considering the overall facts and circumstances of each case. To corroborate the same, the Court relied upon Anthony Alias Anthony Swamy v. Managing Director, K.S.R.T.C, wherein the Court had held that,
“...the extent of physical functional disability, in the facts of the case has to be considered in a manner so as to grant just and proper compensation to the appellant towards loss of future earning... Compensation for loss of future earning, therefore has to be proper and just to enable him to live a life of dignity and not compensation which is elusive.”
Furthermore, the Court highlighted that any scaling down of the compensation should require something more tangible than a hypothetical conjecture that notwithstanding the disability, the victim could make up for the loss of income by changing his vocation or by adopting another means of livelihood.
The Court observed that the Courts should not adopt a stereotypical or myopic approach, but instead, view the matter taking into account the realities of life, both in the assessment of the extent of disabilities, and compensation under various heads. That the Courts should be mindful that a serious injury not only permanently imposes physical limitations and disabilities but too often inflicts deep mental and emotional scars upon the victim. The attendant trauma of the victim’s having to live in a world entirely different from the one she or he is born into, as an invalid, and with degrees of dependence on others, robbed of complete personal choice or autonomy, should forever be in the judge's mind, whenever tasked to adjudge compensation claims. Severe limitations inflicted due to such injuries undermine the dignity (which is now recognized as an intrinsic component of the right to life under Article 21) of the individual, thus depriving the person of the essence of the right to a wholesome life which she or he had lived, hitherto. If courts nit-pick and award niggardly amounts oblivious of these circumstances, there is resultant affront to the injured victim.
On carefully examining the arguments presented from both the sides and considering the cases dicussed above, the Court held that in the present case, the loss of an arm, in the opinion of the court, resulted in severe income earning impairment upon the appellant. As a typist/data entry operator, full functioning of his hands was essential to his livelihood. The extent of his permanent disablement was assessed at 89%; however, the High Court halved it to 45% on an entirely wrong application of some ‘proportionate’ principle, which was illogical and is unsupportable in law.
In view of the above conclusions, the Court while considering the enhancement towards loss of earning capacity and future prospects modified the impugned order of the High Court and substituted the sum of ₹19,65,600/- in place of the amount of ₹7,77,600/-,
Case details:
Case Name: Pappu Dev Yadav v. Naresh Kumar and ors.
Case Number: CIVIL APPEAL NO. 2567 OF 2020
Court: Supreme Court of India
Coram: Justice L. NAGESWARA RAO, Justice KRISHNA MURARI and Justice S. RAVINDRA BHAT
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