Supreme Court: In case of personal injury claim, the minimum wages payable to a skilled workman in the concerned State has to be taken into consideration

 This Court in the case of Kajal (supra) has held that taking notional income is not the correct approach. Instead, the minimum wages payable to a skilled workman in the concerned State has to be taken into consideration because, that would be the minimum amount which she would have earned on becoming a major. In this case, the minimum wage payable to a skilled workman in the State of Delhi at the time of the accident, i.e., 2nd June 2009, was Rs. 4,358/- per month. {Para 29}

 In the Supreme Court of India

(Before B.R. Gavai and K.V. Viswanathan, JJ.)

Baby Sakshi Greola Vs  Manzoor Ahmad Simon and Another 

Civil Appeal No. of 2024 

Decided on December 11, 2024

Citation: 2024 INSC 963,2024 SCC OnLine SC 3692.

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Supreme Court: The tribunal should take liberal view in assessing the compensation in a case of 100% disability, especially where there is mental disability?

This Court has observed that it has to be borne in mind that while assessing compensation in a case like the present one, the claim can be awarded only once. It was observed that the claimant cannot come back to the court for enhancement at a later stage praying that something extra has been spent. This Court further observed that courts or tribunals assessing compensation in a case of 100% disability, especially where there is mental disability also, should take a liberal view of the mater when awarding compensation. It was observed that while awarding this amount, courts are not only taking into account physical disability but also mental disability and various other factors. {Para 36}

 In the Supreme Court of India

(Before B.R. Gavai and K.V. Viswanathan, JJ.)

Baby Sakshi Greola Vs  Manzoor Ahmad Simon and Another 

Civil Appeal No. of 2024 

Decided on December 11, 2024

Citation: 2024 INSC 963,2024 SCC OnLine SC 3692.

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Whether a person can recover compensation for emotional trauma unaccompanied by physical injury, including derivative losses stemming from injuries to family members?

 13.6 In the context of the United States, the most important piece of legal literature regarding ‘pain and suffering’ is an article titled Valuing Life and Limb in Tort : Scheduling Pain and Suffering, published in the year 1989. Relevant extracts thereof read as under:

“Pain and suffering and other intangible or non-economic losses are even more problematic. Physical pain and attendant suffering have for centuries being recognised as legitimate elements of damages, and “modern” tort law has seen a marked expansion of the rights to recover for forms of mental anguish. Some Courts have even permitted recovery for emotional trauma unaccompanied by physical injury, including derivative losses stemming from injuries to family members. The precise elements of compensable non-economic loss vary by jurisdiction. Pain and suffering may be used as a catch-all category for the jury's consideration of all non-pecuniary losses in a case of a non-fatal injury, subsuming other qualitative categories such as mental anguish and humiliation. More commonly, though, other non-economic elements - such as “loss of enjoyment of life” are accorded independent standing …”

In the Supreme Court of India

(Before C.T. Ravikumar and Sanjay Karol, JJ.)

K.S. Muralidhar Vs  R. Subbulakshmi and Another 

Civil Appeal No(s). 12993/2024 (Arising out of SLP(C) No. 18337/2021)

Decided on November 22, 2024

Citation: 2024 SCC OnLine SC 3385,2024 INSC 886.

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Supreme Court: What factors are to be considered while fixing compensation for pain and suffering in case of motor accident claim petition regarding personal injury?

14.2 This Judgment was recently referred to by this Court in Sidram v. United India Insurance Company Ltd.19 reference was also made to Karnataka SRTC v. Mahadeva Shetty20 (irrespective of the percentage of disability incurred, the observations are instructive), wherein it was observed:

“18. A person not only suffers injuries on account of accident but also suffers in mind and body on account of the accident through out his life and a feeling is developed that his no more a normal man and cannot enjoy the amenities of life as another normal person can. While fixing compensation for pain and suffering as also for loss of amenities, features like his age, marital status and unusual deprivation he has undertaken in his life have to be reckoned.” {Para 14}

 In the Supreme Court of India

(Before C.T. Ravikumar and Sanjay Karol, JJ.)

K.S. Muralidhar Vs  R. Subbulakshmi and Another 

Civil Appeal No(s). 12993/2024 (Arising out of SLP(C) No. 18337/2021)

Decided on November 22, 2024

Citation: 2024 SCC OnLine SC 3385,2024 INSC 886.

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Bombay HC: Multiplier method is to be used to quantify the loss of income as a result of death or permanent disability suffered in an accident.

  A useful reference in this context can be made in the Judgment of the Supreme Court in the case of Sandeep Khanuja V. Atul Dande and Another MANU/SC/0108/2017 : 2017, SCC 351wherein the Supreme Court, after adverting to the previous pronouncements, observed that it is now well settled principle repeatedly stated and re-stated time and again by the Supreme Court that in awarding compensation the multiplier method is logically sound and legally well established. This method, known as "principle of multiplier" has been evolved to quantify the loss of income as a result of death or permanent disability suffered in an accident. {Para 17}

IN THE HIGH COURT OF BOMBAY

First Appeal No. 2144 of 2011

Decided On: 04.01.2022

Hareshwar Harischandra Mistry Vs. Pravin B. Nayak and Ors.

Hon'ble Judges/Coram:

N.J. Jamadar, J.

Citation:  MANU/MH/0012/2022.

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Bombay HC: Claimant Entitled to compensation for Future Loss Of Income Proportionate To Extent Of Disability Though There Is No Total Loss Of Income

13. B] Loss of future earnings:-

The tribunal was of the view that since the Income Tax return for the period ending 31st March, 1997 (Exh. 45) indicated that there was no loss of income reported, despite disability, the applicant did not suffer any loss of income. Opining that mere disability was not sufficient, the tribunal proceeded to award a sum of Rs. 50,000/- towards the disability. Whether this approach of the tribunal is justifiable?

14. First and foremost, the tribunal seems to have committed an error in appreciating the facts. The accident had occurred on 27th December, 1996. The income tax return was filed for the period of 1st April 1996 to 31st March, 1997. Almost 9 months income was reported by the applicant. In that view of the matter, the claim of the applicant could not have been discarded on the ground that no loss of income was reported as the applicant could earn for the substantial part of the financial year.

15. Secondly, from the perusal of the deposition of the applicant, it becomes evident that the claim of the applicant that on account of the injuries sustained in the accident he was unable to squat, run, sit cross legged, and the movements of his right leg were restricted, went unchallenged. The applicant further affirmed that he was doing the business of fabrication and civil contractor. Post accident, he could not do the said business and was forced to seek employment at a salary of Rs. 6,500/- per month. This claim of the applicant was also not traversed during the course of the cross examination.

16. It is true that the applicant did not claim that he suffered total loss of income. Nor the applicant claimed that he was incapacitated to perform any work. In the face of the material on record to indicate that the applicant had filed income tax return for the financial year 1996-97, it could not have been disputed that the applicant was gainfully self employed. In such circumstances, even assuming the notional income at Rs. 5,000/- per month, the 20% permanent disability suffered by the applicant, would have entailed, in the minimum, corresponding 20% loss of income, resulting in the loss of Rs. 12,000/- per annum. Once, the annual loss of income is determined, the appropriate method to arrive at just compensation is multiplying the said multiplicand with appropriate multiplier, depending upon the age of the claimant.

IN THE HIGH COURT OF BOMBAY

First Appeal No. 2144 of 2011

Decided On: 04.01.2022

Hareshwar Harischandra Mistry Vs. Pravin B. Nayak and Ors.

Hon'ble Judges/Coram:

N.J. Jamadar, J.

Citation:  MANU/MH/0012/2022.

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Supreme Court: How to ascertain the effect of the permanent disability on the actual earning capacity?

 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 disability (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. {Para 13}

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 8598-8599 of 2022.

Decided On: 18.11.2022

T.J. Parameshwarappa Vs. The Branch Manager, New India Assurance Co. Ltd. and Ors.

Hon'ble Judges/Coram:

B.R. Gavai and B.V. Nagarathna, JJ.

Author: B.V. Nagarathna, J.

Citation: 2022 INSC 1218, MANU/SC/1510/2022.

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What is duty of Motor accident claim tribunal while recording evidence of doctor in motor accident claim petition regarding personal injury?

  The Tribunal should not be a silent spectator when medical evidence is tendered in regard to the injuries and their effect, in particular the extent of permanent disability. Sections 168 and 169 of the Act make it evident that the Tribunal does not function as a neutral umpire as in a civil suit, but as an active explorer and seeker of truth who is required to 'hold an enquiry into the claim' for determining the 'just compensation'. The Tribunal should therefore take an active role to ascertain the true and correct position so that it can assess the 'just compensation'. While dealing with personal injury cases, the Tribunal should preferably equip itself with a Medical Dictionary and a Handbook for evaluation of permanent physical impairment (for example the Manual for Evaluation of Permanent Physical Impairment for Orthopedic Surgeons, prepared by American Academy of Orthopedic Surgeons or its Indian equivalent or other authorized texts) for understanding the medical evidence and assessing the physical and functional disability. The Tribunal may also keep in view the first schedule to the Workmen's Compensation Act, 1923 which gives some indication about the extent of permanent disability in different types of injuries, in the case of workmen. {Para 11}

If a Doctor giving evidence uses technical medical terms, the Tribunal should instruct him to state in addition, in simple non-medical terms, the nature and the effect of the injury. If a doctor gives evidence about the percentage of permanent disability, the Tribunal has to seek clarification as to whether such percentage of disability is the functional disability with reference to the whole body or whether it is only with reference to a limb. If the percentage of permanent disability is stated with reference to a limb, the Tribunal will have to seek the doctor's opinion as to whether it is possible to deduce the corresponding functional permanent disability with reference to the whole body and if so the percentage.

12. The Tribunal should also act with caution, if it proposed to accept the expert evidence of doctors who did not treat the injured but who give 'ready to use' disability certificates, without proper medical assessment. There are several instances of unscrupulous doctors who without treating the injured, readily giving liberal disability certificates to help the claimants. But where the disability certificates are given by duly constituted Medical Boards, they may be accepted subject to evidence regarding the genuineness of such certificates. The Tribunal may invariably make it a point to require the evidence of the Doctor who treated the injured or who assessed the permanent disability. Mere production of a disability certificate or Discharge Certificate will not be proof of the extent of disability stated therein unless the Doctor who treated the claimant or who medically examined and assessed the extent of disability of claimant, is tendered for cross-examination with reference to the certificate. If the Tribunal is not satisfied with the medical evidence produced by the claimant, it can constitute a Medical Board (from a panel maintained by it in consultation with reputed local Hospitals/Medical Colleges) and refer the claimant to such Medical Board for assessment of the disability.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8981 of 2010.

Decided On: 18.10.2010

Raj Kumar Vs. Ajay Kumar and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran and H.L. Gokhale, JJ.

Author: R.V. Raveendran, J.

Citation: MANU/SC/1018/2010 : (2011) 1 SCC 343.

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Supreme court judgment for determining compensation for disability in case of fatal or non-fatal accidents

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.

14. The assessment of loss of future earnings is explained below with reference to the following illustrations:

Illustration 'A': The injured, a workman, was aged 30 years and earning Rs. 3000/- per month at the time of accident. As per Doctor's evidence, the permanent disability of the limb as a consequence of the injury was 60% and the consequential permanent disability to the person was quantified at 30%. The loss of earning capacity is however assessed by the Tribunal as 15% on the basis of evidence, because the claimant is continued in employment, but in a lower grade. Calculation of compensation will be as follows:

Illustration 'B': The injured was a driver aged 30 years, earning Rs. 3000/-per month. His hand is amputated and his permanent disability is assessed at 60%. He was terminated from his job as he could no longer drive. His chances of getting any other employment was bleak and even if he got any job, the salary was likely to be a pittance. The Tribunal therefore assessed his loss of future earning capacity as 75%. Calculation of compensation will be as follows:

Illustration 'C': The injured was 25 years and a final year Engineering student. As a result of the accident, he was in coma for two months, his right hand was amputated and vision was affected. The permanent disablement was assessed as 70%. As the injured was incapacitated to pursue his chosen career and as he required the assistance of a servant throughout his life, the loss of future earning capacity was also assessed as 70%. The calculation of compensation will be as follows:

[Note: The figures adopted in illustrations (A) and (B) are hypothetical. The figures in Illustration (C) however are based on actuals taken from the decision in Arvind Kumar Mishra (supra)].

15. After the insertion of Section 163A in the Act (with effect from 14.11.1994), if a claim for compensation is made under that section by an injured alleging disability, and if the quantum of loss of future earning claimed, falls under the second schedule to the Act, the Tribunal may have to apply the following principles laid down in Note (5) of the Second Schedule to the Act to determine compensation:

5. Disability in non-fatal accidents:

The following compensation shall be payable in case of disability to the victim arising out of non-fatal accidents: -

Loss of income, if any, for actual period of disablement not exceeding fifty two weeks.

PLUS either of the following:

(a) In case of permanent total disablement the amount payable shall be arrived at by multiplying the annual loss of income by the Multiplier applicable to the age on the date of determining the compensation, or

(b) In case of permanent partial disablement such percentage of compensation which would have been payable in the case of permanent total disablement as specified under item (a) above.

Injuries deemed to result in Permanent Total Disablement/Permanent Partial Disablement and percentage of loss of earning capacity shall be as per Schedule I under Workmen's Compensation Act, 1923.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8981 of 2010.

Decided On: 18.10.2010

Raj Kumar Vs. Ajay Kumar and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran and H.L. Gokhale, JJ.

Author: R.V. Raveendran, J.

Citation: MANU/SC/1018/2010 : (2011) 1 SCC 343.

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Supreme Court guidelines for determining compensation to be granted to student if he suffers permanent disability due to motor accident

19. 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 the percentage of loss of earning capacity is the same as the 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 to 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.

23. From the conjoint reading of the aforesaid judgments, inter alia, following principles can be culled out which would be relevant for deciding the instant appeal:

(i) In those cases where the victim of the accident is not an earning person but a student, while assessing the compensation for loss of future earning, the focus of the examination would be the career prospect and the likely earning of such a person in future. For example, where the claimant is pursuing a particular professional course, the poser would be: what would have been his income had he joined a service commensurating with the said course. That can be the future earning.

(ii) There may be cases where the victim is not, at that stage, doing any such course to get a particular job. He or she may be studying in a school. In such a case, future career would depend upon multiple factors like the family background, choice/interest of the complainant to pursue a particular career, facilities available to him/her for adopting such a career, the favourable surrounding circumstances to see which would have enabled the claimant to successfully pick up the said career etc.

If the chosen field is employment, then the future earning can be taken on the basis of salary and allowances which are payable for such calling. In case, career is a particular profession, the future earning would depend on host of other factors on the basis of which chances to achieve success in such a profession can be ascertained.

(iii) There may be cases like Deo Patodi where even a student, the claimant would have made earnings on part-time basis or would have received offer for a particular job. In such cases, these factors would also assume relevance.

(iv) After ascertaining the likely earning of the victim in the aforesaid manner, the nature of injuries and disability suffered as a result thereof would be kept in mind while determining as to how much earning has been affected thereby. Here, impact of injuries on functional disability is to be seen. In case of death of victim, it would result in total loss of earning. In the case of injuries, the nature of disability becomes important. Such an exercise was undertaken in N. Manjegowda case.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 2476-2477 of 2019.

Decided On: 05.03.2019

M.R. Krishna Murthi Vs. The New India Assurance Co. Ltd. and Ors.

Hon'ble Judges/Coram:

A.K. Sikri and S. Abdul Nazeer, JJ.

Author: A.K. Sikri, J.

Citation: (2020) 15 SCC 493, MANU/SC/0321/2019.

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Supreme Court: Motor accident claim tribunal can not grant compensation under the head of pain and suffering by family members of the claimant

 It is perceptible that the High Court has deleted the amount awarded under the head of pain and suffering by family members of the claimant and the amount granted towards loss of marital life. There is no iota of evidence with regard to loss of marital life, hence, we do not find any error in the said deletion. As far as grant of compensation on the score of pain and suffering suffered by the family members of claimant is concerned, the same is not permissible and, accordingly, we hold that that has been correctly deleted. {Para 30}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

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Supreme Court: Motor accident claim tribunal can not grant compensation to claimant for his inability to participate in public functions

 The High Court has deleted an amount of Rs. 3,00,000/- and a sum of Rs. 2,00,000/- towards mental agony and inability on the part of the claimant to participate in public functions respectively. We have already determined Rs. 2,00,000/- under the heading of pain and suffering already suffered and to be suffered and Rs. 2,50,000/- under the heading of permanent disability and hence, no different sum need be awarded under the heading of mental agony. As far as participation in public functions is concerned, there is no evidence in that regard and, therefore, we are disposed to think that the finding of the High Court on that score is totally justified and does not call for any interference. {Para 31}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

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Supreme court: While computing compensation, the approach of the Motor accident claim Tribunal should be broad-based

It is noteworthy to state that an adjudicating authority, while determining quantum of compensation, has to keep in view the sufferings of the injured person which would include his inability to lead a full life, his incapacity to enjoy the normal amenities which he would have enjoyed but for the injuries and his ability to earn as much as he used to earn or could have earned. Hence, while computing compensation the approach of the tribunal or a court has to be broad based. Needless to say, it would involve some guesswork as there cannot be any mathematical exactitude or a precise formula to determine the quantum of compensation. In determination of compensation the fundamental criterion of "just compensation" should be inhered. {Para 10}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

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What are Special Damages and General Damages under which compensation is awarded in motor accident cases?

 The heads under which compensation is awarded in personal injury cases are the following:

Pecuniary damages (Special Damages)

(i) Expenses relating to treatment, hospitalization, 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 disability. account of permanent

(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).

Recording that in routine personal injury cases, compensation will be awarded only under Head 1, 2-A and 4, but in serious cases of injury where there is specific medical evidence, corroboration the evidence of the claimant, that compensation will be granted under 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.

20. When a claimant suffers a disability as a result of such injuries and on ascertaining that the disability is of permanent nature, 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. It is expected that the mechanical formulae of calculating the loss of earning capacity depending upon the percentage of permanent disability, is not to be applied as in most of the cases, the percentage of economic loss i.e. the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability.

IN THE HIGH COURT OF BOMBAY

First Appeal ST No. 96999 of 2020, 

Decided On: 07.03.2022

Manager, National Insurance Co. Ltd. Vs. Nilesh Suresh Bhandari and Ors.

Hon'ble Judges/Coram:

Bharati H. Dangre, J.

Citation: MANU/MH/1455/2022.

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Whether shockingly inadequate compensation granted in motor accident claim petition can be upheld?

In Managing Director, Metropolitan Transport V. Ramarao MANU/TN/1420/2013 : (2013)5MLJ 715, learned Single Judge of the Madras High Court, after detailed consideration of the legal provisions as well as the precedents has held that it is the duty of the appeal court to award just compensation irrespective of whether or not the same may have been claimed by the claimants or not. In Ningamma and anr. v. United India Insurance Company Limited - MANU/SC/0802/2009 : (2009) 13 SCC 710, the Hon'ble Supreme Court at paragraph 34 has held that section 166 of the MV Act deals with "just compensation" and even if in the pleadings no specific claim was made, a party should not be deprived from getting "just compensation" in case the claimant is able to make out a case under any provision of law. Needless to say, the M.V. Act is beneficial and welfare legislation. In fact, the court is duty bound and entitled to award "just compensation" irrespective of the fact whether any plea was raised in respect of the claimant or not. Accordingly, even the third point of determination is liable to be decided against the appellants and in favour of the claimants.

25. In this case, the deceased Kailashchandra was an ex serviceman who had served the Indian Army for almost two decades prior to his unfortunate demise in the road accident. As noted earlier, the compensation amount awarded by the MACT was shockingly inadequate and therefore, cannot be styled as 'just compensation'. Kailashchandra's widow, lost her husband, at a relatively young age and yet, the MACT awarded only Rs. 5,000/- towards loss of consortium. The two children Dinesh and Sangita, lost their father, at a age when they required him the most and yet the MACT has awarded no compensation whatsoever towards loss of love and affection. Kailashchandra's mother was also awarded no compensation whatsoever for loss of love and affection. There was no award made towards loss of estate or towards funeral expenses. Upon due consideration of the material on record compensation of Rs. 9,75,000/-, together with interest thereon at the rate of 8% per annum has been determined.

IN THE HIGH COURT OF BOMBAY

First Appeal No. 103 of 2017 and Civil Application No. 2363 of 1996

Decided On: 15.03.2017

 The State of Maharashtra and Ors. Vs. Kamaladevi Kailashchandra Kaushal and Ors.

Hon'ble Judges/Coram:

M.S. Sonak, J.

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Supreme Court: Procedure to be followed by court for deposit of compensation amount in fixed deposit in motor accident claim petition

In a case of compensation for death it is appropriate that the Tribunals do keep in mind the principles enunciated by this Court in Union Carbide Corporation v. Union of India MANU/SC/0058/1992 : AIR1992SC248 in the matter of appropriate investments to safeguard the feed from being frittered away by the beneficiaries owing to ignorance, illiteracy and susceptibility to exploitation. In that case approving the judgment of the Gujarat High Court in Muljibhai Ajarambhai Harijan v. United India Insurance Co. Ltd. MANU/GJ/0141/1982 : (1982)1GLR756, this Court offered the following guidelines:--

(i) The Claims Tribunal should, in the case of minors, invariably order the amount of compensation awarded to the minor be invested in long term fixed deposits at least till the date of the minor attaining majority. The expenses incurred by the guardian or next friend may, however, be allowed to be withdrawn:

(ii) In the case of illiterate claimants also the Claims Tribunal should follow the procedure set out in (i) above, but if lump sum payment is required for effecting purchases of any movable or immovable property such as, agricultural implements, rickshaw, etc., to earn a living, the Tribunal may consider such a request after making sure that the amount is actually spent for the purpose and the demand is not a ruse to withdraw money;

(iii) In the case of semi-literate persons the Tribunal should ordinarily resort to the procedure set out at (i) above unless it is satisfied, for reasons to be stated in writing, that the whole or part of the amount is required for expanding and existing business or for purchasing some property as mentioned in (ii) above for earning his livelihood, in which case the Tribunal will ensure that the amount is invested for the purpose for which it is demanded and paid;

(iv) In the case of literate persons also the Tribunal may resort to the procedure indicated in (i) above, subject to the relaxation set out in (ii) and (iii) above, if having regard to the age, fiscal background and strata of society to which the claimant belongs and such other considerations, the Tribunal in the larger interest of the claimant and with a view to ensuring the safety of the compensation awarded to him thinks it necessary to do order;

(v) In the case of windows the Claims Tribunal should invariably follow the procedure set out in (i) above;

(vi) In personal injury cases if further treatment is necessary the Claims Tribunal on being satisfied about the same, which shall be recorded in writing, permit withdrawal of such amount as is necessary for incurring the expenses for such treatment;

(vii) In all cases in which investment in long term fixed deposits is made it should be on condition that the Bank will not permit any loan or advance on the fixed deposit and interest on the amount invested is paid monthly directly to the claimant or his guardian, as the case may be;

(viii) In all cases Tribunal should grant to the claimants liberty to apply for withdrawal in case of an emergency. To meet with such a contingency, if the amount awarded is substantial, the Claims Tribunal may invest it in more than one Fixed Deposit so that if need be one such F.D.R. can be liquidated."

30. Further, in Lilaben Udesing Gobel v. Oriental Insurance Co. Ltd. and Ors. MANU/SC/0420/1996 : [1996]3SCR450 the Court relied upon the said directions and further held that in Union Carbide Corporation's case (supra), this Court did not include the clause regarding literate persons' compensation and directed that it should be given the same treatment in case the Court found it necessary to do so to protect the compensation awarded to them. The Court further added one guideline as under:--

"We must add one further guideline to the effect that when the amount is invested in a fixed deposit, the bank should invariably be directed to affix a note on the fixed deposit receipt that no loan or advance should be granted on the strength of the said FDR without the express permission of the Court/Tribunal which ordered the deposit. This will eliminate the practice of taking loans which may be up to 80% of the amount invested and thereby defeating the very purpose of the order. We do hope that the Courts/Tribunal in the country will not succumb to the temptation of permitting huge withdrawals in the hope of disposing of the claim. We are sure that the Courts/Tribunals will realise their duty towards the victims of the accident so that a large part of the compensation amount is not lost to them. The very purpose of laying down the guidelines was to ensure the safety of the amount so that the claimants do not become victims of unscrupulous persons and unethical agreements or arrangements. We do hope our anxiety to protect the claimants from exploitation by such elements will be equally shared by the Courts Tribunals."

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7989 of 2002

Decided On: 03.12.2002

Nagappa Vs. Gurudayal Singh and Ors.

Hon'ble Judges/Coram:

M.B. Shah, B.P. Singh and H.K. Sema, JJ.

Citation:  (2009) 13 SCC 710

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Leading judgment of Supreme court for Fixation Of Future Prospects for grant of compensation in Motor Accident Claim

Section 168 of the Act deals with the concept of “just
compensation” and the same has to be determined on the
foundation of fairness, reasonableness and equitability on
acceptable legal standard because such determination can never 
be in arithmetical exactitude. It can never be perfect. The aim is
to achieve an acceptable degree of proximity to arithmetical
precision on the basis of materials brought on record in an
individual case. The conception of “just compensation” has to be
viewed through the prism of fairness, reasonableness and nonviolation
of the principle of equitability. In a case of death, the
legal heirs of the claimants cannot expect a windfall.
Simultaneously, the compensation granted cannot be an apology
for compensation. It cannot be a pittance. Though the discretion
vested in the tribunal is quite wide, yet it is obligatory on the part
of the tribunal to be guided by the expression, that is, “just
compensation”. The determination has to be on the foundation of
evidence brought on record as regards the age and income of the
deceased and thereafter the apposite multiplier to be applied. The
formula relating to multiplier has been clearly stated in Sarla
Verma (supra) and it has been approved in Reshma Kumari
(supra). The age and income, as stated earlier, have to be
established by adducing evidence. The tribunal and the Courts
have to bear in mind that the basic principle lies in pragmatic
computation which is in proximity to reality. It is a well accepted
norm that money cannot substitute a life lost but an effort has to
be made for grant of just compensation having uniformity of 
approach. There has to be a balance between the two extremes,
that is, a windfall and the pittance, a bonanza and the modicum.
In such an adjudication, the duty of the tribunal and the Courts
is difficult and hence, an endeavour has been made by this Court
for standardization which in its ambit includes addition of future
prospects on the proven income at present. As far as future
prospects are concerned, there has been standardization keeping
in view the principle of certainty, stability and consistency. We
approve the principle of “standardization” so that a specific and
certain multiplicand is determined for applying the multiplier on
the basis of age.
58. The seminal issue is the fixation of future prospects
in cases of deceased who is self-employed or on a fixed salary.
Sarla Verma (supra) has carved out an exception permitting the
claimants to bring materials on record to get the benefit of
addition of future prospects. It has not, per se, allowed any future
prospects in respect of the said category.
59. Having bestowed our anxious consideration, we are
disposed to think when we accept the principle of
standardization, there is really no rationale not to apply the said
principle to the self-employed or a person who is on a fixed 
salary. To follow the doctrine of actual income at the time of
death and not to add any amount with regard to future prospects
to the income for the purpose of determination of multiplicand
would be unjust. The determination of income while computing
compensation has to include future prospects so that the method
will come within the ambit and sweep of just compensation as
postulated under Section 168 of the Act. In case of a deceased
who had held a permanent job with inbuilt grant of annual
increment, there is an acceptable certainty. But to state that the
legal representatives of a deceased who was on a fixed salary
would not be entitled to the benefit of future prospects for the
purpose of computation of compensation would be inapposite. It
is because the criterion of distinction between the two in that
event would be certainty on the one hand and staticness on the
other. One may perceive that the comparative measure is
certainty on the one hand and uncertainty on the other but such
a perception is fallacious. It is because the price rise does affect
a self-employed person; and that apart there is always an
incessant effort to enhance one’s income for sustenance. The
purchasing capacity of a salaried person on permanent job when
increases because of grant of increments and pay revision or for
some other change in service conditions, there is always a 
competing attitude in the private sector to enhance the salary to
get better efficiency from the employees. Similarly, a person who
is self-employed is bound to garner his resources and raise his
charges/fees so that he can live with same facilities. To have the
perception that he is likely to remain static and his income to
remain stagnant is contrary to the fundamental concept of
human attitude which always intends to live with dynamism and
move and change with the time. Though it may seem appropriate
that there cannot be certainty in addition of future prospects to
the existing income unlike in the case of a person having a
permanent job, yet the said perception does not really deserve
acceptance. We are inclined to think that there can be some
degree of difference as regards the percentage that is meant for or
applied to in respect of the legal representatives who claim on
behalf of the deceased who had a permanent job than a person
who is self-employed or on a fixed salary. But not to apply the
principle of standardization on the foundation of perceived lack of
certainty would tantamount to remaining oblivious to the
marrows of ground reality. And, therefore, degree-test is
imperative. Unless the degree-test is applied and left to the
parties to adduce evidence to establish, it would be unfair and
inequitable. The degree-test has to have the inbuilt concept of 
percentage. Taking into consideration the cumulative factors,
namely, passage of time, the changing society, escalation of price,
the change in price index, the human attitude to follow a
particular pattern of life, etc., an addition of 40% of the
established income of the deceased towards future prospects and
where the deceased was below 40 years an addition of 25% where
the deceased was between the age of 40 to 50 years would be
reasonable.
60. The controversy does not end here. The question still
remains whether there should be no addition where the age of the
deceased is more than 50 years. Sarla Verma thinks it
appropriate not to add any amount and the same has been
approved in Reshma Kumari. Judicial notice can be taken of the
fact that salary does not remain the same. When a person is in a
permanent job, there is always an enhancement due to one
reason or the other. To lay down as a thumb rule that there will
be no addition after 50 years will be an unacceptable concept.
We are disposed to think, there should be an addition of 15% if
the deceased is between the age of 50 to 60 years and there
should be no addition thereafter. Similarly, in case of selfemployed
or person on fixed salary, the addition should be 10% 47
between the age of 50 to 60 years. The aforesaid yardstick has
been fixed so that there can be consistency in the approach by
the tribunals and the courts.
61. In view of the aforesaid analysis, we proceed to record our
conclusions:-
(i) The two-Judge Bench in Santosh Devi should have been well
advised to refer the matter to a larger Bench as it was
taking a different view than what has been stated in Sarla
Verma, a judgment by a coordinate Bench. It is because a
coordinate Bench of the same strength cannot take a
contrary view than what has been held by another
coordinate Bench.
(ii) As Rajesh has not taken note of the decision in Reshma
Kumari, which was delivered at earlier point of time, the
decision in Rajesh is not a binding precedent.
(iii) While determining the income, an addition of 50% of actual
salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and
was below the age of 40 years, should be made. The
addition should be 30%, if the age of the deceased was 48
between 40 to 50 years. In case the deceased was between
the age of 50 to 60 years, the addition should be 15%.
Actual salary should be read as actual salary less tax.
(iv) In case the deceased was self-employed or on a fixed salary,
an addition of 40% of the established income should be the
warrant where the deceased was below the age of 40 years.
An addition of 25% where the deceased was between the age
of 40 to 50 years and 10% where the deceased was between
the age of 50 to 60 years should be regarded as the
necessary method of computation. The established income
means the income minus the tax component.
(v) For determination of the multiplicand, the deduction for
personal and living expenses, the tribunals and the courts
shall be guided by paragraphs 30 to 32 of Sarla Verma
which we have reproduced hereinbefore.
(vi) The selection of multiplier shall be as indicated in the Table
in Sarla Verma read with paragraph 42 of that judgment.
(vii) The age of the deceased should be the basis for applying the
multiplier.49
(viii) Reasonable figures on conventional heads, namely, loss of
estate, loss of consortium and funeral expenses should be
Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.
The aforesaid amounts should be enhanced at the rate of
10% in every three years.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELALTE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NO. 25590 OF 2014

National Insurance Company Limited  V Pranay Sethi and Ors. 

Hon'ble Judges/Coram:
Dipak Misra, C.J.I., A.K. Sikri, A.M. Khanwilkar, Dr. D.Y. Chandrachud and Ashok Bhushan, JJ.



Dated:October 31, 2017
Citation:2017 SCCONLINE SC 1270,AIR 2017 SC 5157,(2017) 16 SCC 680

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How to ascertain extent of permanent disability in case of motor accident?

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%.

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.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8981 of 2010.

Decided On: 18.10.2010

 Raj Kumar Vs. Ajay Kumar and Anr.

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Heads under which compensation is awarded in personal injury cases

The heads under which compensation is awarded in personal injury cases are the following:

Pecuniary damages (Special Damages)

(i) Expenses relating to treatment, hospitalization, 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. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8981 of 2010.

Decided On: 18.10.2010

 Raj Kumar Vs. Ajay Kumar and Anr.

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How to ascertain effect of permanent disability on actual earning capacity of claimant in case of motor accident?

 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.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8981 of 2010.

Decided On: 18.10.2010

 Raj Kumar Vs. Ajay Kumar and Anr.

Hon'ble Judges/Coram:

R.V. Raveendran and H.L. Gokhale, JJ.

Citation:(2011) 1 SCC 343

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