Manager, United India Insurance ... vs Anand Swaroop Medhavi & Others
2015 Latest Caselaw 669 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 

 
Reserved on 23-04-2015
 
   Delivered on 26- 05-2015
 

 

 
Case :- FIRST APPEAL FROM ORDER No. - 2327 of 2007
 

 
Appellant :- Manager, United India Insurance Company
 
Respondent :- Anand Swaroop Medhavi & Others
 
Counsel for Appellant :- Nripendra Mishra
 
Counsel for Respondent :- Aditya Prakash Mishra,Nitin Sharma,O.P. Rai,S.S. Mishra
 

 
Hon'ble Krishna Murari, J.

Hon'ble Pratyush Kumar, J.

(Delivered by Hon'ble Krishna Murari, J.)

This First Appeal From Order under Section 173 of the Motor Vehicles Act has been filed by the appellant Insurance Company challenging the award dated dated 23-05-2007 passed by the Motor Accident Claims Tribunal/Additional District Judge, Court No. 5, Meerut awarding a sum of Rs. 11,95,378/- as compensation.

We have heard Sri Nipendra Mishra, learned counsel for the appellant and Sri Nitin Sharma for the claimant-respondent no. 1

Facts giving rise to the dispute, in brief, are as under :

The claimant-respondent no. 1 was involved in an accident caused by a bus bearing no. UHN-1004 when he was going back to his home from Ghaziabad on motorcycle in which he sustained multiple fracture in his right leg. He was admitted in Shanti Nursing Home from where, on the same day, he was shifted to Kailash Nursing Home , Baghpat Road, Meerut and remained under treatment from 14-10-2004 to 16-10-2004 and was again admitted from 25-12-2004 to 27-12-2004 when his injured right leg was operated. He was confined to bed for five months and has become permanently disable unable to perform his daily rituals.

A sum of Rs.17,71,461/- was claimed as compensation. The proceedings were contested by the owner of the bus in question as well as the appellant Insurance Company by filing written statement denying the allegations.

The Tribunal after considering the evidence oral as well as documentary brought on record by the parties has returned a finding that the accident was caused by the offending bus in which the claimant suffered serious injuries and his motorcycle was badly damaged and there was no contributory negligence on his part. The Tribunal has further held that the driver of the bus was having a valid driving license as the same was renewed within five days of the accident for a period of three years from 19-10-2004 to 18-10-2007 and thus it cannot be said that on the date accident he was not having valid driving license in view of Section 15 of the Motor Vehciles Act. Similarly, the Tribunal has also held that the bus was duly insured with the appellant Insurance Company.

No challenge has been made by learned counsel for the appellant to the aforesaid findings and we also do not find any illegality in the aforesaid finding returned by the Tribunal.

The only argument advanced before us is in respect of award of Rs.10,84,842/- towards loss of future earning on account of disability suffered in the accident.

It is contended that on account of the disability caused in the accident, there was no future loss of earning and the Tribunal contrary to the evidence on record has awarded a huge sum of more than Rs.10 Lacs under the said head.

In reply, learned counsel for the claimant-respondent has tried to justify the impugned award. It has been contended that since the claimant suffered 60% disability in the accident, which was duly proved by medical evidence and the statement of P.W.3 Dr.Ravindra Singh, the Tribunal committed no illegality in awarding the aforesaid sum under the head of loss of future earning.

We have considered the argument advanced by learned counsel for the parties and perused the record.

The claimant at the time of accident was aged 52 years and was working as a clerk in Syndicate Bank drawing a monthly salary of Rs.16,437/-. A disability certificate was filed before the Tribunal certifying that he has suffered 60% disability in the right lower limb. The certificate was duly proved by producing Dr. Ravindra Singh who issued the disability certificate. The Tribunal on the basis of the documentary and oral testimony of P.W.3 returned a finding that the claimant suffered disability to the extent of 50%. It was pleaded before the Tribunal that on account of the disability suffered in the accident, the claimant was denied opportunity to a promotional post which carried a pay scale of Rs.14320/- and on account of that, he has suffered a lost of Rs.8000/- per month. The Tribunal proceeded on the presumption that the claimant has suffered future loss of earning as he was denied promotion on that basis and treating his disability to be 50%, he was incurring loss of Rs.98,522/- per year and applying a multiplier of 11 determined a sum of Rs.10,84,842/- towards compensation for loss of future earning.

The Hon'ble Apex Court in the case of Raj Kumar v. Ajay Kumar & another, 2011(1) TAC 785 has laid down the principles of assessment of future loss of earning due to permanent disability in the following words :

"6. 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 accidents 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 ('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.

7. 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%.

8. 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, 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 permanently 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 terns 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 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 (see for example, the decisions of this Court in Arvind Kumar Mishra v. New India Assurance Co. Ltd. MANU/SC/0777/2010 : 2010(10) SCALE 298 and Yadava Kumar v. D.M., National Insurance Co. Ltd. 2010 (8) SCALE 567.

9. Therefore, the Tribunal has to first decide whether there is any permanent disability and if so the extent of such permanent disability. This means that the tribunal should consider and decide with reference to the evidence: (i) whether the disablement is permanent or temporary; (ii) if the disablement is permanent, whether it is permanent total disablement or permanent partial disablement, (iii) if the disablement percentage is expressed with reference to any specific limb, then the effect of such disablement of the limb on the functioning of the entire body, that is the permanent disability suffered by the person. If the Tribunal concludes that there is no permanent disability then there is no question of proceeding further and determining the loss of future earning capacity. But if the Tribunal concludes that there is permanent disability then it will proceed to ascertain its extent. After the Tribunal ascertains the actual extent of permanent disability of the claimant based on the medical evidence, it has to determine whether such permanent disability has affected or will affect his earning capacity.

10. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent ability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood. For example, if the left hand of a claimant is amputated, the permanent physical or functional disablement may be assessed around 60%. If the claimant was a driver or a carpenter, the actual loss of earning capacity may virtually be hundred percent, if he is neither able to drive or do carpentry. On the other hand, if the claimant was a clerk in government service, the loss of his left hand may not result in loss of employment and he may still be continued as a clerk as he could perform his clerical functions; and in that event the loss of earning capacity will not be 100% as in the case of a driver or carpenter, nor 60% which is the actual physical disability, but far less. In fact, there may not be any need to award any compensation under the head of 'loss of future earnings', if the claimant continues in government service, though he may be awarded compensation under the head of loss of amenities as a consequence of losing his hand. Sometimes the injured claimant may be continued in service, but may not found suitable for discharging the duties attached to the post or job which he was earlier holding, on account of his disability, and may therefore be shifted to some other suitable but lesser post with lesser emoluments, in which case there should be a limited award under the head of loss of future earning capacity, taking note of the reduced earning capacity. It may be noted that when compensation is awarded by treating the loss of future earning capacity as 100% (or even anything more than 50%), the need to award compensation separately under the head of loss of amenities or loss of expectation of life may disappear and as a result, only a token or nominal amount may have to be awarded under the head of loss of amenities or loss of expectation of life, as otherwise there may be a duplication in the award of compensation. Be that as it may.

13. We may now summarise the principles discussed above:

(i) All injuries (or permanent disabilities arising from injuries), do not result in loss of earning capacity.

(ii) The percentage of permanent disability with reference to the whole body of a person, cannot be assumed to be the percentage of loss of earning capacity. To put it differently, the percentage of loss of earning capacity is not the same as the percentage of permanent disability (except in a few cases, where the Tribunal on the basis of evidence, concludes that percentage of loss of earning capacity is the same as percentage of permanent disability).

(iii) The doctor who treated an injured-claimant or who examined him subsequently to assess the extent of his permanent disability can give evidence only in regard the extent of permanent disability. The loss of earning capacity is something that will have to be assessed by the Tribunal with reference to the evidence in entirety.

(iv) The same permanent disability may result in different percentages of loss of earning capacity in different persons, depending upon the nature of profession, occupation or job, age, education and other factors."

In the case in hand, admittedly, the claimant continued in his employment drawing the same salary and there was no effect of disability incurred by him on account of the accident. It was claimed that on account of the disability, he could not be promoted and thus suffered loss of future earning on the basis of which the Tribunal proceeded to determine the compensation for loss of future earning. The claimant in his cross-examination himself stated that he can appear in the departmental promotion test but he was not called by the department for the same. It has neither been pleaded nor even suggested that he was not called in the departmental promotion examination on account of the disability. He may not have been called for in the departmental promotion test for variety of reasons which may not have any concern with the disability or the accident. The Tribunal failed to consider this aspect of the matter and simply proceeded on the assumption that he has suffered loss of future earning on account of being deprived of promotion by taking difference of present salary being drawn by him and the salary admissible to the promotional post.

We are afraid that the methodology adopted by the Tribunal is not in accordance with the principles laid down by the Hon'ble Apex Court in the case of Raj Kumar (Supra). Admittedly, denial of promotion cannot be attributed to the disability caused by the accident. The earning capacity has not been shown to have been affected in any manner by the disability suffered in the accident. The Tribunal proceeded on a wrong presumption that permanent disability of the claimant was 50% and loss of his future earning capacity was also 50%. The Tribunal overlooked the said fact that the disability certificate referred to 50% disability with respect to lower limb and not with regard to entire body. The same permanent disability may result in different percentage of loss of earning capacity. It depends upon the nature of job or profession being carried out by the claimant, his age and such other factors. The situation would be different in case a person is a driver or daily labourer, where the functional percentage of loss of earning capacity would be different and as a matter of fact, much higher from percentage of permanent disability.

In the case in hand, the extent of permanent disability of the limb could not be considered to be functional disability of the body nor could it be assumed to result in a corresponding extent of loss of earning capacity as the disability did not prevent the claimant from carrying on his vocation as a clerk in the bank. More so, there was no evidence to demonstrate that denial to a promotional post was on account of the disability caused due to accident. Thus the Tribunal cannot be said to be justified in awarding a sum of Rs. 10,84,842/- towards loss of future earning.

In so far as the award made by the Tribunal with regard to the medical expenses, we do not find any error in the same.

In view of the aforesaid facts and discussions, we are constrained to delete the award made by the Tribunal for Rs.10,84,842/- under the head of loss of earning capacity and the award stands modified to that extent.

Appeal stands allowed partly.

Dt. 26-05-2015

nd.