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REPORTABLE        

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.  4816-4817             OF 2013 (Arising out of SLP (C) Nos. 15531-15532 of 2007)

S. Manickam                       .... Appellant (s)

Versus

Metropolitan Transport Corp. Ltd.                  .... Respondent(s)

J U D G M E N T  

P. Sathasivam, J.

1) Leave granted.

2) The important question which arise for consideration in  

these appeals is whether compensation in a motor vehicle  

accident case is payable to a claimant for both heads, viz.,  

loss  of  earning/earning  capacity  as  well  as  permanent  

disability.  

3) These  appeals  are  directed  against  the  common  

judgment and order dated 29.01.2007 passed by the High  

Court of Judicature at Madras in C.M.A. Nos. 82 and 150 of  

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2001 whereby the High Court partly allowed the appeal filed  

by the respondent-herein and dismissed the appeal preferred  

by the appellant-herein.   

4) Brief facts:

(a) On 27.01.1997, when the claimant/the appellant herein  

was  alighting  from  the  bus  owned  by  the  Metropolitan  

Transport  Corporation  Limited  (in  short  “the  Transport  

Corporation”) – respondent herein, the conductor of the bus  

blown the whistle without noticing him.  Due to the sudden  

movement of the bus, the appellant fell down and the rear  

wheel  of  the  bus  rammed  over  on  his  right  leg  and  he  

sustained severe injuries on his head, right hand and chest.  

After treatment, his right leg below the knee was amputated.  

At the time of accident, he was 45 years of age.  He made a  

claim  before  the  Motor  Accidents  Claims  Tribunal  (“the  

Tribunal”  for  short),  Chennai  in  O.P.  No.  1667  of  1997  

claiming a sum of Rs. 21,00,000/- as compensation.  

(b) The Tribunal, after holding that the accident was caused  

due to the negligence of the driver of the bus belonging to  

the  Transport  Corporation,  by  order  dated  30.11.2000,  

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awarded a sum of Rs. 9,42,822/- as total compensation by  

adopting the multiplier of 13 in terms of the second schedule  

to the Motor Vehicles Act, 1988 (hereinafter referred to as  

“the Act”).  

(c) Dis-satisfied  with  the  award  of  the  Tribunal,  the  

appellant preferred an appeal being CMA No. 150 of 2001  

before the High Court praying for higher compensation, on  

the other hand, the Transport Corporation also preferred an  

appeal  being  CMA  No.  82  of  2001  for  reduction  of  the  

compensation.  

(d) The High Court, by impugned common judgment dated  

29.01.2007, reduced the compensation from Rs. 9,42,822/-  

to  Rs.  6,72,822/-.   Aggrieved  by  the  reduction  in  the  

compensation  amount,  the  appellant  has  preferred  the  

present appeals by way of special leave for enhancement of  

the compensation.   

5) Heard  Mr.  P.B.  Suresh,  learned  counsel  for  the  

claimant/appellant and Mr. B. Balaji, learned counsel for the  

Respondent-Transport Corporation.  

Discussion:

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6) As  posed  at  the  first  instance,  mainly,  we  have  to  

consider whether the High Court is justified in disallowing the  

claim  under  the  head  permanent  disability  when  the  

appellant had sustained 85% permanent disability by way of  

amputation of his right leg below the knee.  Incidentally, this  

Court  has  to  consider  whether  the  High  Court  is  equally  

justified in reducing the multiplier from 13, as adopted by the  

Tribunal, to 10.  

7) Inasmuch as the present appeals are preferred by the  

victim/claimant for enhancement of the compensation, there  

is no need to traverse the facts leading to the accident.  In  

other words, the finding that the accident occurred due to  

the negligent driving of the driver of the bus belonging to the  

Transport Corporation has become final.  

8)  It is also not in dispute that based on the evidence of  

the claimant (PW-1), the evidence with regard to permanent  

disability of 85%, amputation of the right leg below the knee,  

his age and avocation, the Tribunal has awarded a sum of Rs.  

9,42,822/- as compensation with interest @ 12% p.a. on the  

said amount.  The High Court, while considering the appeals  

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of the Transport Corporation as well as the claimant, placed  

reliance  on  a  Full  Bench  decision  of  the  same  Court  in  

Cholan Roadways Corporation Limited, Kumbakonam  

vs. Ahmed Thambi and Others, 2006 (4) CTC 433 wherein  

it  was held  that  if  the  injured  is  compensated  for  loss  of  

earning and loss of earning capacity, compensation need not  

be awarded separately for permanent disability.  Based on  

the  said  principle  laid  down  in  the  Full  Bench  decision,  

learned Single Judge directed a reduction of Rs. 1,00,000/-,  

fixed under the head ‘permanent disability’, from the total  

award.  

9) This  Court,  in  Ramesh Chandra vs.  Randhir  Singh  

and Others, 1990 (3) SCC 723, has categorically held that  

compensation can be payable both for loss of earning as well  

as disability suffered by the claimant.  

10) In addition to the same, in B. Kothandapani vs. Tamil  

Nadu  State  Transport  Corporation  Limited,  (2011)  6  

SCC  420,  this  Court  (speaking  through  one  of  us)  after  

considering the Full Bench decision of the Madras High Court  

in Cholan Roadways (supra), disagreed with the said view  

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and  granted  separate  compensation  under  the  head  

permanent disability even after grant of compensation under  

loss of earning/earning capacity.  The following conclusion is  

relevant:

“14. In  Ramesh  Chandra v.  Randhir  Singh while  considering  award  of  compensation  for  permanent  disability  (right  foot  amputated)  caused by the  accident  under Section 110-B of the Motor Vehicles Act, 1939 which  is  similar  to  Section  168(1)  of  the  Motor  Vehicles  Act,  1988, this Court upheld the award of compensation under  the separate head of pain, suffering and loss of enjoyment  of  life,  apart  from  the  head  of  loss  of  earnings.  The  discussion and ultimate conclusion are relevant which read  as under:

“7.  With  regard  to  Ground  19  covering  the  question  that  the  sum awarded for  pain,  suffering  and loss  of  enjoyment  of  life,  etc.  termed  as  general  damages  should be taken to be covered by damages granted for  loss of earnings is concerned that too is misplaced and  without  any basis.  The pain and suffering and loss of  enjoyment of  life which is a resultant  and permanent  fact  occasioned by the nature  of  injuries  received by  the  claimant  and  the  ordeal  he  had  to  undergo.  If  money be any solace,  the grant  of  Rs.  20,000 to the  claimant  represents  that  solace.  Money  solace  is  the  answer discovered by the law of torts. No substitute has  yet been found to replace the element of money. This,  on the face of it appeals to us as a distinct head, quite  apart from the inability to earn livelihood on the basis  of incapacity or disability which is quite different. The  incapacity or disability to earn a livelihood would have  to  be  viewed  not  only  in  praesenti but  in  futuro on  reasonable  expectancies  and  taking  into  account  deprival of earnings of a conceivable period. This head  being totally  different  cannot  in  our  view overlap the  grant of compensation under the head of pain, suffering  and loss of enjoyment of life. One head relates to the  impairment  of  person’s  capacity  to  earn,  the  other  relates to the pain and suffering and loss of enjoyment  of life by the person himself. For these reasons, we are  

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of the considered view that the contentions raised by  the  truck  owner  appellant  in  that  behalf  must  be  negatived and we hereby negative them.”

15. It  is  true  that  the  compensation  for  loss  of  earning  power/capacity  has  to  be  determined  based  on  various  aspects including permanent injury/disability. At the same  time, it cannot be construed that compensation cannot be  granted  for  permanent  disability  of  any  nature.  For  example,  take  the  case  of  a  non-earning  member  of  a  family who has been injured in an accident and sustained  permanent disability due to amputation of leg or hand, it  cannot be construed that no amount needs to be granted  for permanent disability. It cannot be disputed that apart  from  the  fact  that  the  permanent  disability  affects  the  earning  capacity  of  the  person  concerned,  undoubtedly,  one has to forego other personal  comforts  and even for  normal avocation they have to depend on others.

After laying down the above ratio regarding merits of that  

case, it was concluded:  

“16. In the case on hand, two doctors had explained the  nature  of  injuries,  treatment  received  and  the  disability  suffered due to partial loss of eyesight and amputation of  middle  finger  of  the  right  hand  and  we  have  already  adverted to the avocation, namely, at the time of accident,  he was working as foreman in M/s Armstrong Hydraulics  Ltd.  Taking  note  of  his  nature  of  work,  partial  loss  in  eyesight and loss of middle finger of the right hand, not  only  affect  his  earning  capacity  but  also  affect  normal  avocation and day-to-day work. In such circumstance, we  are  of  the  view  that  the  Tribunal  was  fully  justified  in  granting  a  sum  of  Rs.  1,50,000  towards  permanent  disability.”

The above decision makes it clear that the ratio laid down by  

the  Full  Bench  of  the  Madras  High  Court  in  Cholan  

Roadways (supra) has not been accepted by this Court.  

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11) Following the ratio in B. Kothandapani (supra) in the  

subsequent  decision,  viz.,  K.  Suresh vs.  New  India  

Assurance  Co.  Ltd.  and  Another,  2012  (10)  JT  484,  

another Bench of this Court, awarded separate amount for  

permanent disability apart from fixing compensation under  

the head ‘loss of earning’ or ‘earning capacity’.  

12) In  matters  of  determination  of  compensation,  

particularly, under the Motor Vehicles Act, both the tribunals  

and  the  High  Courts  are  statutorily  charged  with  a  

responsibility of fixing a “just compensation”.  It is true that  

determination of “just compensation” cannot be equated to a  

bonanza.   On  the  other  hand,  the  concept  of  “just  

compensation”  suggests  application  of  fair  and  equitable  

principles  and  a  reasonable  approach  on  the  part  of  the  

tribunals and the courts.  We hold that the determination of  

quantum in motor accidents cases and compensation under  

the  Workmen’s  Compensation  Act,  1923  must  be  liberal  

since the law values life and limb in free country in generous  

scales.   The  adjudicating  authority,  while  determining  the  

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quantum of compensation, has to take note of 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.  

While computing compensation, the approach of the tribunal  

or a court has to be broad based and sometimes it would  

involve  some  guesswork  as  there  cannot  be  any  precise  

formula to determine the quantum of compensation.  

13) Keeping  the  above  principles  in  mind,  there  is  no  

difficulty in holding that the High Court has committed an  

error  in  setting aside  the  award  amount  of Rs.  1,00,000/-  

under  the  head  ‘permanent  disability’  on the  ground that  

substantial amount had been fixed under the head ‘loss of  

earning’ and ‘loss of earning capacity’.  It is not in dispute  

that  at  the  time  of  the  accident,  the  appellant  was  aged  

about  45  years  and  he  was  the  proprietor  of  Parvathy  

Furniture  Mart  and  15  persons  were  working  under  him.  

Based  on  the  evidence,  the  Tribunal  has  determined  his  

income as Rs. 8,000/- per month.   

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14) It is borne out from the records that the claimant was  

treated as an inpatient in Pavithra Hospital from 27.01.1997  

to  26.02.1997,  and  thereafter,  he  was  treated  as  an  

outpatient vide Exh. P-1, which is the Discharge Summary.  

Further, it is seen from his evidence that he lost his earnings  

during  the  period  of  treatment  from  28.01.1997  to  

31.12.1997,  and  because  of  severe  injuries,  his  right  leg  

below  the  knee  was  amputated.   Considering  his  age,  

avocation and the fact that he cannot do the same work as  

he was doing prior to the accident due to amputation of his  

right leg, we are of the view that the Tribunal is fully justified  

in  fixing a  sum of  Rs.  1,00,000/-  towards 85% permanent  

disability.   The  order  of  the  High  Court  setting  aside  the  

compensation  under  the  said  head  cannot  be  sustained.  

Accordingly,  in  addition to the  amount  determined by the  

High Court, we grant a sum of Rs. 1,00,000/-, as awarded by  

the Tribunal, towards 85% permanent disability.  

15) According  to  the  counsel  for  the  appellant,  while  

determining  future  loss  of  earning/earning  capacity,  the  

Tribunal rightly applied the multiplier of 13 as provided in the  

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second Schedule to the Act.  On the other hand, without any  

acceptable  reason/basis,  the  High  Court  reduced  the  

multiplier from 13 to 10.  

16) In para 16 of the impugned judgment, the High Court,  

while computing the loss of earning capacity,  without any  

acceptable reason, applied the multiplier of 10 and fixed a  

sum of Rs. 3,20,000 (Rs. 8000/- x 10x12x1/3 ) as against Rs.  

4,00,000/-  determined  by  the  Tribunal.   Learned  counsel  

appearing  for  the  appellant  submitted  that  even  for  

determining  just  and  fair  compensation  in  the  case  of  

injury/permanent disablement, the tribunal/courts are free to  

apply multiplier method for which he relied on a decision of  

the Madras High Court in United India Insurance Co. Ltd.  

vs. Veluchamy and Anr. 2005 (1) CTC 38.  While agreeing  

with the said decision, though multiplier method cannot be  

mechanically applied to ascertain the future loss of income  

or  earning  power,  depending  on  various  factors  such  as  

nature and extent of disablement, avocation of the injured  

whether  it  would affect  his  or  her  employment  or earning  

power, we are of the view that the loss of income or earnings  

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may be ascertained by applying the same as provided under  

the second Schedule to the Act.  Inasmuch as in the case on  

hand, the age of the claimant, i.e., 45 years, on the date of  

the  incident  has  not  been  disputed  by  the  Transport  

Corporation, we are of the view that the proper multiplier in  

terms of the second Schedule is 13 which was rightly applied  

by the Tribunal.  Accordingly, while modifying the quantum  

under the loss of earning capacity, namely, Rs. 3,20,000/- as  

fixed  by  the  High  Court,  we  restore  the  amount  to  Rs.  

4,00,000/- as determined by the Tribunal.  

17) Though,  learned  counsel  for  the  appellant  prayed for  

interest @ 12%, we are not inclined to accept the same, on  

the other hand, the rate of interest, namely, 9%, as fixed by  

the High Court, is reasonable and acceptable.

18) In  the  light  of  the  above discussion,  the  appellant  is  

entitled to the following additional amount:

a) Towards 85% permanent disability      … Rs. 1,00,000/- b) Towards loss of earning/earning capacity

by applying the multiplier 13              … Rs.   80,000/- (in addition to the amount of  Rs. 3,20,000/- fixed by the High Court)

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Accordingly, in addition to the amount awarded by the High  

Court,  the  claimant/the  appellant  herein  is  entitled  to  an  

additional  amount  of  Rs.  1,80,000/-.   Further,  we make  it  

clear  that  altogether  the  appellant  is  entitled  to  a  total  

compensation of Rs. 8,52,822/- with interest at the rate of  

9% from the date of claim petition till the date of deposit.   

19) The appeals filed by the claimant/appellant are allowed  

in part to the extent mentioned above with no order as to  

costs.   

...…………….…………………………J.               (P. SATHASIVAM)                       

 .…....…………………………………J.        (M. Y. EQBAL)                             

NEW DELHI; JULY 01, 2013.  

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