Smt. Shobha Singh & Anr. vs Mandal Prabandhak,The Oriental ...
2013 Latest Caselaw 1733 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Court No.24
 

 
F.A.F.O. No. 141 of 2006
 

 
Smt. Shobha Singh and another 	........	     Appellants/claimants
 

 
Versus
 

 
Mandal Prabandhak, The Oriental 
 
Insurance Co. Ltd. and another 	.........      Respondents
 

 
******
 
Hon'ble Rajiv Sharma, J.,
 
Hon'ble Arvind Kumar Tripathi-II, J.

As per the report of Joint Registrar (Listing) dated 30.4.2013, service is sufficient on respondent No.2. Sri Ashok Mehrotra has filed his power on behalf of respondent No.1.

When the case called out, neither the respondents were present nor any one has put in appearance on their behalf. It has been reported that there is no slip/request for passing over or adjournment of the case.

Heard Sri Mukesh Singh, learned Counsel for the appellants/claimants and perused the records.

Appellant No.2/claimant No.2 (Sabhajeet Singh), victim of a motor vehicle accident has come to this Court making grievance about the inadequate amount of compensation awarded to him by the Motor Accident Claims Tribunal.

Appellant No.2 used to earn his livelihood as a farmer. On 25.11.2003, at about 5.00 pm, appellant No.2 was repairing his tractor at the shop of a Mistri (joiner) when he was hit by a truck, bearing registration No. 42-B/7094, which was being driven in a rash and negligent manner. In the accident, the left leg of the appellant No.2 was seriously injured and after operation of his feet, it has become 2 inch short. Appellant No.2 filed an application (Claim Case No.61/2004) before the Motor Accident Claims Tribunal/Additional District Judge, E.C.Act, Faizabad, claiming compensation for the injuries suffered by him under Section 166 of the Motor Vehicles Act, 1988. It was stated by him before the Tribunal that at the time of accident, his age was 39 years and due to the accident, his savings were lost upto Rs.50,000/-. As a result of the deformity of his leg, he was no longer in a position to walk without support and he was, therefore, rendered incapable of doing any work and to earn his livelihood.

The Tribunal found and held that the accident took place as a result of the negligent and rash driving by the truck driver. Coming to the extent of disability, the Tribunal referred to the disabled-person certificate given to the appellant No.2 in which his disability was shown as 50%. Having held that that his disability was 50%, fixed the amount of Rs.75000/- as compensation for loss of future earnings. In addition to this, the Tribunal gave to the appellant No.2 Rs.10,000/- for mental and physical agony due to permanent disability, Rs.6,000/- for traveling and Rs.75,000/- for medical expenses. Accordingly, the Tribunal, by its award dated 31.10.2005 held the appellant No.2 entitled to receive a total sum of Rs.1,66,000/- as compensation along with interest at the rate of 6% per annum from the date of filing of the claim petition on 16.3.2004 till the date of payment.

Hence the instant appeal.

In last two decades, the Apex Court as well as 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.

In R.D. Hattangadi v. Pest Control (India) Private Limited reported in (1995) 1 SCC 551, the Apex 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 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 above case, the Apex 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."

In Nizam's Institute of Medical Sciences v. Prasanth S. Dhananka reported in (2009) 6 SCC 1, the Three Judge Bench of the Apex Court 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 from Rs.15 lakhs to Rs.1 crore, the Apex Court 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)

In Reshma Kumari V. Madan Mohan reported in (2009) 13 SCC 422, the Apex 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 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 multiplicand this Court in Oriental Insurance Co. Ltd. v. Jashuben 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)

In Arvind Kumar Mishra V. New India Assurance Company Limited reported in (2010) 10 SCC 254, the Apex Court considered the plea for enhancement of compensation made by the appellant, who was a student of final year of engineering and had suffered 70% disability in a motor accident. After noticing factual matrix of the case, the Apex 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)

Recently, the Apex Court again considered the matter in detail in Raj Kumar vs. Ajay Kumar reported in (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 (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 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 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."

In the light of the above, we shall now consider whether the compensation awarded by the Tribunal is just and reasonable or claimant/appellant is entitled to get higher compensation.

According to the claimants/appellants, the Tribunal admitted the fact that left leg of the appellant was amputated/shortened due to injuries caused in the accident and also relied upon the disability certificate, the Tribunal assessed 50% disability but even then, the Tribunal has not applied the basic principle of computation of compensation on multiplier basis and awarded Rs.75,000/- as compensation for amputation/physical disability.

Although the appellant had suffered 50% disablement, the documentary evidence shows that he will require treatment in future. The Tribunal has 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.

The award made by the Tribunal for pain, suffering and trauma and in lieu of loss of the future prospects is wholly inadequate. The claimant will neither be able to work properly nor he will be able to lead a normal life. His future prospects are also bleak. 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.

It is true that in the petition filed by him under Section 166 of the Act, the appellant had claimed compensation of Rs. 9,75,000.00 only, but as held in Nagappa Vs. Gurudayal Singh reported in (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.

Admittedly, there is no evidence on record to establish the actual income of the injured/appellant No.2 and as such, compensation would be awarded on the basis of notional income of the injured. Hon'ble Supreme Court in the case of Laxmi Devi and others versus Mohammad Tabbar and another [2008 (2) TAC 394 (SC)] has held that notional income to be Rs.3,000/- per month after deduction of 1/3rd personal expenses, the annual income shall come to Rs.24,000/-.

From the perusal of the records, it reflects that the age of the injured/appellant No.2, at the time of accident, was about 39 years and as such, as per Second Schedule of Section 163 A of the Motor Vehicles Act, multiplier of 16 is to be applied. Accordingly, applying the multiplier of 16, the total income shall be Rs.3,84,000/-. In addition to the said amount, claimants are also entitled to Rs.2,00,000/- for future medical expenses and other expenses.

In the result, the impugned judgment and award dated 31.10.2005 is modified and it is declared that the claimants/appellants shall be entitled to total compensation of Rs.5,84,000.00. He shall also be entitled to interest @ 6% per annum from the date of filing the claim petition till realization. The Oriental Insurance Company Ltd. is directed to pay the enhanced amount of compensation to the claimant/appellant with interest @ 6% within a period of three months from today in the form of a Demand Draft prepared in their name.

The appeal is allowed partly, in above terms.

Order Date : 7.5.2013

Ajit/-