SC on disability compensation: Victims of motor accidents deserve more than just minimum wages, Read Judgment

The appellant met with an accident on 03.06.2014 while riding his motorcycle when a car, bearing registration No. PB-03-X-0169, coming from the opposite direction, hit him. As a result of the accident, he suffered grievous injuries and was diagnosed with quadriplegia, leading to 100% disability. At the time of the accident, he was 21 years old and pursuing his studies to become a veterinary doctor.

A criminal case was registered against the driver of the car. The appellant filed a claim petition, incurring medical expenses of ₹2,66,000/-. The Motor Accident Claims Tribunal (MACT) awarded him a lump sum amount of ₹2,00,000/- for his 100% disability and assessed his total compensation at ₹5,16,000/-.

Dissatisfied with the award, the appellant filed an appeal before the High Court. The High Court increased the compensation to ₹15,25,600/- by considering his monthly income as ₹5,600/- and applying a multiplier of 18. The primary modification made by the High Court was under the ‘Loss of Income’ head, enhancing the amount from ₹2,00,000/- to ₹12,09,600/-. Still dissatisfied, the appellant has now approached this Court seeking further enhancement of compensation.

The learned counsel for the appellant argued that the High Court had undervalued his income and failed to consider future prospects while assessing the compensation. He emphasized that the appellant, a 21-year-old student aspiring to be a veterinary doctor, had a promising career ahead.

Additionally, the appellant was a State Level volleyball player and had completed various other courses. Due to his 100% disability, he now requires a special diet and an attendant for assistance throughout his life. The counsel contended that the compensation awarded did not adequately cover these additional lifelong expenses.

Contentions of the Respondent:

The learned counsel for the respondent, United India Insurance Co. Ltd., argued that the compensation granted by the High Court was reasonable and justified. While acknowledging the appellant’s disability, the counsel stated that no further enhancement was warranted.

It was further submitted that, in the absence of any concrete proof of income, the High Court had already been generous in assessing the appellant’s monthly earnings at ₹5,600/-. Given this, there was no valid reason to increase the compensation any further.

The Court noted that the appellant, a 21-year-old at the time of the accident, suffered 100% permanent disability (quadriplegia). It emphasized that he would require lifelong assistance, including an attendant and a special diet. Given his background as a sportsman and his technical qualifications, the Court found that the assessed monthly income of ₹5,600/- was too low, noting that it was even below the minimum wage for an unskilled worker at that time. It accordingly revised the income to ₹7,500/- per month.

The High Court’s application of a multiplier of 18 was upheld, but the Court found it had erred in not granting future prospects under ‘Loss of Income.’ The appellant was entitled to a 40% increase, making the final income ₹10,500/- per month. The Court also enhanced special diet expenses to ₹1,00,000/-, pain and suffering to ₹1,00,000/-, future medical expenses to ₹2,00,000/-, and loss of marriage prospects to ₹2,00,000/-. It awarded a lump sum of ₹5,00,000/- for an attendant and ₹50,000/- for physiotherapy. The total compensation was assessed at ₹36,84,000/- with interest.

The Insurance Company was directed to transfer the enhanced compensation directly into the appellant’s bank account within six weeks, ensuring no delays due to tribunal processes. The Court expressed concerns over delays in compensation disbursement, highlighting the inefficiencies in depositing funds with tribunals and the resulting loss of interest for claimants. It emphasized the need for direct digital transfers to claimant bank accounts to streamline payments, citing successful digital payment models like UPI and government direct benefit transfers.

Referring to Haryana State Industrial Development Corporation v. Pran Sukh, the Court noted that land compensation payments were directed to be directly transferred to beneficiaries' accounts. It recommended a similar system for motor accident claims, requiring claimants to submit bank details early in proceedings to avoid withdrawal delays. The Tribunals should ensure minor claimants’ compensation is placed in fixed deposits, with compliance monitored by banks. The Court stressed that direct bank transfers would ensure timely compensation, reducing litigation burdens and safeguarding claimants' rights.

Directions were issued for the bank transfer of compensation amounts in motor accident cases. However, it was stated that Courts and Tribunals could adopt this process in any case where payments were required between parties, ensuring proper compliance.

The Registry was directed to send a copy of the order to the Registrars General of all High Courts for placement before the Chief Justice of each High Court to facilitate further circulation and compliance by the concerned Tribunals and Courts. Additionally, the order was to be sent to the Directors of the National Judicial Academy and State Judicial Academies.

All pending interlocutory applications were disposed of.

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