Delhi High Court
New India Assurance Company Ltd vs Kalawati & Ors. on 18 July, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 18th July, 2012
+ MAC.APP. 347/2010
NEW INDIA ASSURANCE COMPANY LTD. .... Appellant
Through Mr. Abhishek Kumar, Adv.
versus
KALAWATI & ORS. ..... Respondents
Through Mr. S.N. Parashar, Adv. for
R-1.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appeal is for reduction of compensation of `15,10,049/-
awarded by the Motor Accident Claims Tribunal (the Claims
Tribunal) in favour of the First Respondent for having suffered
injuries in a motor vehicle accident resulting into grievous
injuries on her person including permanent disability to the
extent of 60% in relation to her right lower limb on account of
amputation of right leg below knee. This accident occurred on
12.03.2007.
2. The finding on negligence reached by the Claims Tribunal is
not disputed by the Appellant, the driver and owner of the
vehicle. Thus, the same has become final between the parties.
3. During the course of hearing, following contentions are raised
on behalf of the Appellant:-
(i) As per the First Respondent, she was working as a maid
servant. On account of amputation of her right leg below
knee and 60% permanent disability in respect of her right
lower limb she was not incapacitated to carry out the
work or in any case some alternative employment. It is
urged that she could have worked as a Baby sitter or
could have taken up any other job where active
involvement of the right leg was not required.
(ii) There was no evidence with regard to the First
Respondent's future prospects; the Claims Tribunal erred
in granting 50% increase in the minimum wages of an
unskilled worker on account of inflation.
(iii) In case, when compensation towards the loss of future
earning capacity to the extent of more than 50% is
granted, the First Respondent was not entitled to a
compensation of `1,50,000/- towards loss of amenities in
life, particularly, when she had been granted a
compensation of `1,00,000/- towards pain and suffering
and `50,000/- towards disfigurement separately.
4. On the other hand, learned counsel for the First Respondent
supports the award. He argues that a woman with no
qualification and who was working as a maid servant in
different houses would hardly get any alternative employment.
The job of a baby sitter also requires active involvement with a
small child and no parent would give employment to her. It is
urged that the Claims Tribunal was justified in awarding
compensation of 100% loss of future earning capacity as also
making an addition of 50% towards inflation. It is submitted
that the compensation of `1,50,000/- towards loss of amenities
cannot be said to be exorbitant and excessive.
5. Immediately after the accident, the first Respondent was
removed to Sanjay Gandhi Memorial (SGM) Hospital where
she remained admitted from 12.03.2007 to 21.03.2007. She
was shifted to Maharaja Agarsen Hospital on 21.03.2007 where
she remained admitted upto 14.04.2007. The First Respondent
had suffered compound fracture of femur and injury on right
foot and left leg. She was treated conservatively in SGM
Hospital and external fixation of right thigh was provided.
There was also fracture of right superior and inferior pubic rami
and fracture of left inferior public rami. The right leg of the first
Respondent could not be saved which was amputated in
Maharaja Agarsen Hospital. The First Respondent was again
admitted in Maharaja Agarsen Hospital from 23.07.2007 to
04.08.2007. It is, therefore, apparent that apart from amputation
of right leg below knee, there were other serious injuries and
fractures suffered by the First Respondent. The compensation
awarded by the Claims Tribunal under different heads is
tabulated hereunder:-
Sl. Compensation under various heads Awarded by
the Claims
No. Tribunal
1. Compensation for incurred medical `32,209/-
expenses
2. Compensation for conveyance charges ` 15,000/-
3. Compensation for Special Diet ` 15,000/-
4. Compensation for Attendant Charges ` 15,000/-
5. Compensation for Loss of Earning ` 8,74,440/-
Capacity
6. Compensation for Fitment of Endolite ` 74,400/-
below knee system
7. Compensation for Cost of Replacement ` 1,00,000/-
of Parts of Endolite below knee system
8. Compensation for Loss on account of ` 84,000/-
Conveyance (future expenses)
9. Compensation for Pain and Suffering ` 1,00,000/-
10. Compensation for Loss of Amenities of ` 1,50,000/-
Life
11. Compensation for Physical ` 50,000/-
Disfigurement due to Permanent
Disability
Total ` 15,10,049/-
6. In Raj Kumar v. Ajay Kumar & Anr., 2011 (1) SCC 343, the
Supreme Court brought out the difference between permanent
disability and functional disability resulting in the loss of
earning capacity. It was laid down that the compensation on
account of loss of earning capacity has to be granted in
accordance to the nature of job undertaken by the victim of
motor accident. Paras 11 and 14 of the report are extracted
hereunder:
"11. 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 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 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. 2010 (10) SCC
254 and Yadava Kumar v. D.M., National Insurance Co.
Ltd. 2010 (10) SCC 341.
x x x x x x x
14.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."
7. The Claims Tribunal dealt with the issue of loss of future
earning capacity in Paras 34 and 35 of the impugned judgment
which are extracted hereunder:-
"34. The vocation of the petitioner as a maid servant
requires active and agile movement, going from her
home to her different places of work viz., residential
houses where she was engaged as maid servant, doing
such work there requiring walking, sitting, squatting,
climbing stairs and kneeling. Considering the condition
of the petitioner, since she suffered such amputation, I
am of the considered opinion that the petitioner not only
would face extreme hardship in doing such work of maid
servant but would also in fact be incapacitated or unable
to do such work. Since, for the work of part time maid
servant, the requirements of employers of such workers
would be qua demand of active and agile movement from
their such employee for performing such work speedily,
in time and actively. The permanent disability would
come in the way of the petitioner while discharging such
work of the maid servant and she would not at all be able
to do any such work in future.
35. The petitioner would accordingly face 100%
functional disability due to the suffered permanent
disability."
8. The reasoning given by the Claims Tribunal is inconsonance
with the law laid down in Raj Kumar (supra). The First
Respondent could not have carried out job of maid servant. She
could not get an employment of baby sitting as parents would
require the lady to be agile and very active. In the
circumstances, the Claims Tribunal was justified in taking the
functional disability to be 100%.
9. As far as addition of 50% on account of inflation is concerned,
the same was not justified. In Santosh Devi v. National
Insurance Company Ltd. & Ors., 2012 (4) SCALE 559; the
Supreme Court laid down that in case of self-employed and
persons having fixed income, an increase to the extent of 30%
could be given towards inflation. Para 14 of the report is
extracted hereunder:-
"14........In our view, it will be naive to say that 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. The rise in the cost
of living affects everyone across the board. It does not
make any distinction between rich and poor. As a matter
of fact, the effect of rise in prices which directly impacts
the cost of living is minimal on the rich and maximum on
those who are self- employed or who get fixed
income/emoluments. They are the worst affected people.
Therefore, they put extra efforts to generate additional
income necessary for sustaining their families. The
salaries of those employed under the Central and State
Governments and their agencies/instrumentalities have
been revised from time to time to provide a cushion
against the rising prices and provisions have been made
for providing security to the families of the deceased
employees. The salaries of those employed in private
sectors have also increased manifold. Till about two
decades ago, nobody could have imagined that salary of
Class IV employee of the Government would be in five
figures and total emoluments of those in higher echelons
of service will cross the figure of rupees one lac.
Although, the wages/income of those employed in
unorganized sectors has not registered a corresponding
increase and has not kept pace with the increase in the
salaries of the Government employees and those
employed in private sectors but it cannot be denied that
there has been incremental enhancement in the income of
those who are self-employed and even those engaged on
daily basis, monthly basis or even seasonal basis. We can
take judicial notice of the fact that with a view to meet
the challenges posed by high cost of living, the persons
falling in the latter category periodically increase the
cost of their labour. In this context, it may be useful to
give an example of a tailor who earns his livelihood by
stitching cloths. If the cost of living increases and the
prices of essentials go up, it is but natural for him to
increase the cost of his labour. So will be the cases of
ordinary skilled and unskilled labour, like, barber,
blacksmith, cobbler, mason etc. Therefore, we do not
think that while making the observations in the last three
lines of paragraph 24 of Sarla Verma's judgment, the
Court had intended to lay down an absolute rule that
there will be no addition in the income of a person who is
self-employed or who is paid fixed wages. Rather, 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."
10. The loss of future earning capacity thus comes to `7,57,848/-
(3470/- + 30% x 12 x 14) as against `8,74,440/- awarded by the
Claims Tribunal.
11. In Raj Kumar (supra) it was laid down that where any
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.
12. In this case, the Claims Tribunal apart from awarding
compensation of ` 1,00,000/- towards pain and suffering also
awarded a sum of `50,000/- towards disfigurement and
`1,50,000/- towards loss of amenities in life. Relying on Raj
Kumar (supra), I reduce the compensation towards loss of
amenities from `1,50,000/- to `25,000/-.
13. The overall compensation is reduced from `15,10,049/- to
`12,68,457/- (including the interim compensation of `25,000/-).
14. The excess amount of `2,41,592/- along with proportionate
interest and the interest accrued, if any, during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company.
15. The statutory deposit of `25,000/- be refunded to the Appellant
Insurance Company.
16. The Appeal is allowed in above terms.
17. Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
JULY 18, 2012
vk
