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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9393 OF 2014 (ARISING OUT OF SLP (CIVIL) NO. 33883 OF 2013)

BASAPPA S/O SANGANABASAPPA  BAHVIKATTI .....APPELLANT(S)

VERSUS

T RAMESH S/O TANGAVELU & ANR. .....RESPONDENT(S)

O R D E R

Leave granted.

2) Unwrapping the events, which have led to the filing of the instant  

appeal, depict the following scenario:

On  23.09.2007,  the  appellant  after  completion  of  his  Goundi  

(working at building construction sites) work, was returning from  

Navanagar,  Karnataka on his  Motorcycle  bearing Reg.  No.  KA  

29/J – 731.  He was driving slowly and cautiously on the left side  

of  the road.  At  that  time a bus bearing Reg. No. KA 29/6967  

came from opposite direction in a high speed and in rash and  

negligent  manner  as  to  endanger  human life,  dashed into  the  

Motorcycle  of  the appellant.   This  happened near  the Simikeri  

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Bypass Cross on Gaddanakeri Hubli Road at about 20:30 hours.  

Due to the said accident, the appellant sustained grievous injuries  

on his head and all over his body.  He was immediately admitted  

to  District  Government  Hospital,  Bagalkot  where  he  got  

preliminary  treatment,  whereafter  he  was shifted  to  the  S.H.K.  

Hospital,  Bagalkot  for  further  treatment.   After  getting  some  

treatment  in  the  said  hospital,  the  appellant  had  to  be  shifted  

again to Dr. Kerudi Hospital, Bagalkot because of grievous head  

injuries  and  there  he  was  treated  by  Dr.  Mohan  Wamaske,  

Neurologist.   He  underwent  a  surgical  operation  in  the  said  

hospital  where  he  remained  as  indoor  patient  for  10  days.  

Notwithstanding  this  treatment,  the  appellant  could  not  be  

completely cured and has suffered permanent disability of 58% to  

the whole body.   

3) We may record at this stage that the aforesaid facts pertaining to  

accident caused due to rash and negligent driving of the bus and  

the nature and extent of injuries suffered by the appellant stand  

established before the Motor Accident Claims Tribunal (for short  

'MACT').  It would also be worthwhile to mention that against the  

Driver  of  the Bus,  a case under  Sections 279 and 334 of  the  

Indian  Penal  Code  was  also  registered  at  the  Kaladgi  Police  

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Station.  After completing the investigation, even the chargesheet  

has been filed against the Driver, though the outcome of the said  

case is not known from the records.

4) Being a victim of the said accident resulting into aforesaid serious  

injuries and incapacitation of his body, the appellant filed the claim  

petition  under  Section  166  of  Motor  Vehicle  Act  claiming  

compensation  of  Rs.15,00,000/-.   This  petition  filed  before  the  

MACT at Bagalkot was registered as M.V.C. No.296/2002.  In this  

petition,  the  appellant  had  impleaded  respondent  No.1  herein,  

who was the driver of the vehicle and respondent No.2, Manager,  

Reliance  General  Insurance  Co.  Ltd.,  which  had  insured  the  

offending vehicle.  The appellant examined himself as PW-1 and  

narrated  the  details  of  the  incident.   Another  significant  and  

material  witness produced by him was Dr. Sanjeev S Kalasoor  

(PW-3), who deposed about the injuries suffered by the appellant  

and produced copy of Disability Certificate dated 11.02.2009 and  

other medical records.   The respondents also led their evidence.  

Arguments were heard.  The said case culminated in the decision  

dated 25.11.2010 that  was rendered by the MACT recording a  

categorical and definite finding to the effect that the accident in  

question was caused due to the rash and negligent act  of  the  

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driver.   The Tribunal,  thus,  allowed the petition but  awarded a  

compensation of Rs.93,800/- with interest at the rate of 6% p.a.  

from the date  of  accident  till  the date  of  realisation.   Different  

heads under which the said compensation was awarded, thereby  

arriving at a aforesaid figure of Rs.93,800/- are as under:

Amount (Rs.) 1. Pain and sufferings : 10,000/- 2. Medical expenses : 35,000/- 3. Loss of future income : 46,800/- 4. Loss of amenities, diet, nutrition and  

attendant charges : 2,000/-

Total : 93,800/-

5) The  appellant  was  not  satisfied  with  the  poor  amount  of  

compensation  and,  thus,  approached  the  High  Court  of  

Karnataka,  Dharwad  Bench  by  filing  appeal  i.e.  MFA  No.  

21150/2011  (MV).   The  High  Court  has  enhanced  the  

compensation to Rs.2,59,500/- vide judgment dated 11.03.2013.  

The breakup of compensation awarded by the High Court under  

different heads is as follows:

Amount (Rs.) 1. Pain and suffering : 25,000/- 2. Incidental expenses : 10,000/- 3. Medical expenses : 35,000/- 4. Loss of income during laid up period : 12,000/-

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5. Loss of amenities : 20,000/- 6. Loss of future income : 1,57,500/-

Total : 2,59,500/-

6) Still not satisfied, the present appeal has been preferred by the  

appellant in this Court for enhancement of compensation.

7) From  the  perusal  of  the  judgment  of  the  High  Court,  it  gets  

revealed that the Tribunal as well as the High  Court has accepted  

the injuries certificate produced by the doctor.  On going through  

this Certificate along with Disability Certificate, CT Scan Reports,  

Medical Bills and Case-Sheets etc., which were produced by the  

appellant  on  record,  the  High  Court  has  recorded  that  the  

appellant has sustained grievous injuries in his head and all over  

the face.  As per the testimony of the doctor (PW-3), CT Brain  

reveals  acute  subdural  left  front  temporal  hemorrhagic  with  

midline shift and mass effect.  The doctor examined the appellant  

as late as on 11.02.2009 and found that the appellant's medical  

condition of on and off headache, giddiness and vertigo impaired  

memory, altered speed and imbalance while walking continuous  

to persist.  He had operative scar left side of scalp (head) motor  

aphasia and positive Romberg's.   The Courts below have also  

accepted the fact that the appellant is suffering from permanent  

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8) Having regard to the aforesaid injuries suffered by the appellant in  

the said accident and the number of days for which the appellant  

was  treated  and  underwent  physical  and  mental  pain  and  

suffering, the High Court enhanced the compensation under this  

head  from  Rs.10,000/-,  as  awarded  by  the  Tribunal,  to  

Rs.25,000/-.  In so far as reimbursement of medical expenses is  

concerned, it is maintained at Rs.35,000/- inasmuch as that is the  

actual amount spent by the appellant, which is evident from the  

medical  bills  produced by him.   However,  considering  that  the  

appellant was indoor patient in a private hospital for more than 10  

days,  Rs.10,000/-  is  awarded  for  incidental  expenses  such  as  

conveyance,  nourishment  and  attendant  charges.   As  regards  

loss of income during laid up period, the amount of Rs.12,000/-  

has been awarded on the ground that  the appellant  had been  

earning Rs.125/- per day i.e. Rs.3,750/- per month and as he was  

under treatment and rest for about three months, loss of income  

was to the tune of Rs.12,000/-.

9) In  so  far  as  compensation  in  respect  of  loss  of  amenities  is  

concerned, the High Court has enhanced the compensation from  

Rs.2,000/- to Rs.20,000/- considering the disability reflected in the  

evidence produced by the  appellant,  as  according to  the High  

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Court,  the  appellant  will  have  to  undergo  discomfort  and  

unhappiness in his future life because of the said accident.

10) Major head of compensation is loss of future income.  Here, the  

High Court has observed that though the doctor has assessed  

permanent  disability  at  58% to  the  whole  body,  it  may  be  an  

exaggeration and justice would be met if  functional  disability is  

taken at 25%.  On this basis, multiplier of 14 is applied, keeping in  

view of  the age of  the appellant,  and loss of  future income is  

assessed  at  Rs.1,57,500/-  and  this  figure  is  worked  out  by  

applying the following formula:

Rs.3,750/- x 25% x 12 x 14

11) The learned counsel  for  the appellant  made grievance only on  

three counts.  In the first instance, he pleaded for increasing the  

amount of physical and mental pain and suffering.  His vehement  

submission  was  that  loss  of  future  income  is  not  assessed  

appropriately by the High Court.  He pointed out that when the  

permanent disability was 58%, for the purposes of calculating the  

loss of future income, it had to be taken at 100%. Another plea of  

the appellant was that interest should have been granted at the  

rate of 9% instead of 6%.  We find force in the submissions of the  

learned counsel on all these aspects.

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12) We are of the opinion that once the High Court had itself accepted  

the evidence of PW-3 the doctor who had treated the appellant  

and issued the Disability Certificate as credible and reliable, there  

was no reason to treat the 'functional disability' at 25%.  The High  

Court should have acted upon the said Disability Certificate taking  

the permanent disability at 58% which is to the whole body.  It is  

to be borne in mind that before the incident, the appellant was hail  

and healthy who enjoyed robust health as it has emerged from  

the  record  that  he  was working  as  Goundi  i.e.  at  the  building  

construction sites.   Because of the permanent disability of the  

nature described above, PW-3 has very categorically stated in his  

testimony that the appellant is unable to walk and stand for a long  

time and is not capable of doing heavy work.  It is also testified  

that he is suffering general weakness as well.  This would lead us  

to  the  conclusion  that  the  appellant  suffers  85%  functional  

disability.  On arriving at this conclusion, we are bolstered by the  

judgment of this Court in the case of Raj Kumar v. Ajay Kumar &  

Another,  (2011)  1  SCC  343  wherein  this  aspect  is  lucidly  

explained  with  impeccable  erudition,  as  is  discerned  from  the  

following passages of the said judgment, reading whereof would  

amply demonstrate that  the nuances are so exhaustively  dealt  

with, leaving no scope for restating, much less refuting or refining:

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8. 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.

X X X

10. 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  

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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.

11. 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.  (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.  National  Insurance  Co.   Ltd., (2010) 10 SCC 341)

12. 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  

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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.

13. 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.

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  per  cent,  if  he  is  neither  able  to  drive  or  do  

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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  be  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.

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  

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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.

13) The   principle  laid  down in  the  aforesaid  judgment  is  recently  

followed  in  Syed  Sadiq  and  others  v.  Divisional  Manager,   

United India Insurance Company Limited,  (2014) 2 SCC 735.  

After quoting paras 11 and 13 from Raj Kumar (supra), the Court  

worked  out  the  compensation  treating  the  disability  at  85%,  

whereas the High Court  had determined the disability  at  65%.  

Following discussion ensued in this behalf:

“7.  Further, the appellant claims that he was  working as a vegetable vendor.  It is true that  a vegetable vendor might not require mobility  to the extent that he sells vegetables at one  place.  However, the occupation of vegetable  vending is not confined to selling vegetables  from a particular location.  It rather involves  procuring  vegetables  from  the  wholesale  market or the farmers and then selling it off in  the retail market.  This often involves selling  vegetables in the cart which requires 100%  mobility.  But even by conservative approach,  if we presume that the vegetable vending by  the  appellant  claimant  involved  selling  vegetables  from  one  place,  the  claimant  would require assistance with his mobility in  bringing vegetables to the marketplace which  otherwise would be extremely difficult for him  with an amputated leg.  We are required to  be sensitive while dealing with manual labour  

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cases where loss of limb is often equivalent  to loss of livelihood.  Yet, considering that the  appellant claimant is still capable to fend for  his  livelihood  once  he  is  brought  in  the  marketplace,  we  determine  the  disability  at  85% to determine the loss of income”

14) Applying the aforesaid test to the facts of the present case, as  

already pointed out above, the appellant was working as Goundi  

i.e. at the building construction sites.  Such a work requires good  

health and extreme fitness as it is a strenuous task which involves  

lot of physical activities.  The appellant has suffered permanent  

disability of 58% to the whole body.  It has also come on record  

he suffers from general  weakness and is not  capable of  doing  

heavy work.  He is even unable to walk and stand for a long time.  

For this reason, we have already mentioned that his functional  

disability is to be taken at 85% as was done in Syed Sadiq and  

others (supra).

15) For  the purposes of  calculating the compensation,  the formula  

contained  in  Note  (5)  of  the  Second  Schedule  to  the  Motor  

Vehicle Act, 1988 is to be applied which is as under:

“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:

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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  the  Workmen's Compensation Act, 1923.”

16) Applying the aforesaid formula, loss of future income would work  

out to Rs.5,35,500/- (Rs.3,750/- x 85% x 12 x 14).  Similarly, for  

pain  and suffering,  the amount  of  Rs.25,000/-  awarded by the  

High Court appears to be on lower side.  We increase this amount  

to Rs.60,000/-.

17) We are also of the view that the appellant should get interest at  

the rate of 9% per annum from the date of claim petition till the  

payment having regard to the ratio of the judgment in the case of  

Municipal  Corporation  of  Delhi,  Delhi  v.  Uphaar  Tragedy  

Victims Association and others, (2011) 14 SCC 481.

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18) In this manner, the total compensation which would be payable to  

the appellant  comes to Rs.6,72,000/-  as against  Rs.2,59,500/-,  

awarded  by  the  High  Court.   We  enhance  the  compensation  

accordingly  with  the  direction  that  the  appellant  shall  also  be  

entitled to interest at the rate of 9% per annum on the aforesaid  

amount from the date of claim petition till the date of payment.

19) Appeal  is  allowed  in  the  aforesaid  manner  with  cost  of  

Rs.25,000/-.

.............................................J. (J. CHELAMESWAR)

.............................................J. (A.K. SIKRI)

NEW DELHI; OCTOBER 10, 2014.

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