NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.9014 OF 2011 (Arising out of S.L.P. (C) No.30556 of 2009)

Govind Yadav .......Appellant Versus

The New India Insurance Company Limited .......Respondents  

J U D G M E N T

G.S. Singhvi, J.

1. Leave granted.

2. The appellant has approached this Court because he is not fully satisfied  

with  the  enhancement  granted  by  the  High  Court  in  the  amount  of  

compensation  awarded  by  9th Additional  Motor  Accident  Claims  Tribunal,  

Jabalpur (for short, `the Tribunal’).

3. In the petition filed by him under Section 166 of the Motor Vehicles Act,  

1988 (for short, ‘the Act’), which came to be registered as MVC No.59 of 2005,  

the appellant prayed for award of compensation to the tune of Rs.10,70,000/-

with interest  @ 18%.  The appellant’s  claim was founded on the following  

assertions:

(i) That  he  had  suffered  grievous  injuries  in  an  accident  which  

occurred  on  14.11.2004  when  the  mini  bus  in  which  he  was  

working as Helper overturned due to rash and negligent driving by  

the driver Shri Abdul Ahmad Musalman.

(ii) That he was initially treated at Government Hospital, Seoni from  

where he was shifted to Nagpur Medical College.  He remained in  

the  hospital  from  14.11.2004  to  2.1.2005  and  15.2.2005  to  

20.3.2005.  Due to infection, his left leg was amputated above the  

knee.  Thereafter, he was treated at National Hospital, Jabalpur.

(iii) That at the time of accident his age was about 24 years and he was  

drawing monthly salary of Rs.4,000/-.

(iv) That on account of amputation of leg, he lost the job and his future  

was bleak.   

4. The owner and the driver of the vehicle did not contest the claim of the  

appellant,  but  the  respondent  insurance  company  did  so.  In  the  written  

statement filed on behalf of the respondent, it was pleaded that the accident was  

not caused due to rash and negligent driving of the mini bus and, in any case,  

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the insurer was not liable to pay compensation because the driver of the mini  

bus did not have valid driving licence.   

5. After considering the pleadings of the parties and evidence produced by  

them the Tribunal held that the accident was caused due to rash and negligent  

driving of the mini bus by its driver.  However, the Tribunal did not accept the  

appellant’s version that he was working as a Helper and was getting salary of  

Rs.4,000/- by observing that he had not produced any evidence to prove the  

factum of employment and monthly emoluments.  The Tribunal then referred to  

the Second Schedule of the Act and determined the amount of compensation by  

assuming the appellant’s income to be Rs.15,000/- per annum.  The Tribunal  

was of the view that due to 70% disability, the appellant would suffer loss of  

income to the tune of Rs.10,500/- per annum.  The Tribunal then applied the  

multiplier of 17 and held that the appellant is entitled to Rs.1,78,500/- towards  

loss of future income.  The compensation awarded by the Tribunal under other  

heads was as under:

1) Mental agony and physical pain caused due to   amputation of the leg and other injuries  Rs.25000/- 2) Medical expenses Rs. 3300/- 3) Expenditure incurred on nutritious food and  

transportation during treatment Rs.10000/- 4) Loss of earning due to accident and entertainment

from normal earning Rs.10000/- 5) Cost of artificial leg Rs.30000/-

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The Tribunal also awarded interest at the rate of 6% on the total compensation  

of Rs.2,56,800/-.  

6. The appeal preferred by the appellant against the award of the Tribunal  

was disposed of by the learned Single Judge of the High Court by granting an  

enhancement of Rs.50,000/-.  In the opinion of the learned Single Judge, the  

income of the appellant, who was working as Cleaner at the time of accident  

could be taken as Rs.2000/- per month i.e. Rs.24,000/- per annum and the loss  

of income due to 70% permanent disability would be Rs.16,800/- per annum.  

He also applied the multiplier of 17 and held that the appellant is entitled to  

compensation  of  Rs.2,85,600/-  towards  future  loss  of  income.   The learned  

Single Judge added Rs.20,400/- towards conveyance charges, special diet and  

medical  expenses  and  concluded  that  the  appellant  is  entitled  to  total  

compensation of Rs.3,06,000/- with interest at the rate of 7% per annum from  

the date of application.                    

7. Shri Rajnish K. Singh, learned counsel for the appellant, argued that the  

compensation awarded by the Tribunal was wholly inadequate and the High  

Court  committed  serious  error  by  not  granting  appropriate  enhancement  

keeping in view the fact that on account of the permanent disability suffered by  

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him, the appellant will not be able to get suitable employment and lead normal  

life.  He further argued that the Tribunal and the High Court gravely erred in  

not awarding just and reasonable compensation for future treatment including  

cost of artificial leg which will require periodical replacement.   

8. Shri  S.L.  Gupta,  learned  counsel  for  the  respondent,  supported  the  

impugned judgment and argued that the appellant has failed to make out a case  

for further enhancement in amount of compensation.

9. We have considered respective submissions.  This  Court  has,  from time  

to time, expressed concern over the increasing number of motor accidents and  

pendency of large number of cases involving adjudication of claims made by  

the legal representatives of the deceased and also by those who suffer injuries  

and disabilities of various types as a result of accidents. The statistics compiled  

by Transport  Research Wing of Ministry  of  Road Transport  and Highways,  

New Delhi show that between 2004 and 2008, more than 5,00,000 people lost  

their lives and about 22,60,000 people were injured.  The table containing the  

details of road accidents in India (2004-2008) as published in the report titled  

“Accidental Deaths and Suicides in India, 2008” by National Crime Records  

Bureau, Ministry of Home Affairs is reproduced below:

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Sl. No

Year Road  Accidents (in  thousand)

%  variation  over  previous  year

Persons  injured  (in  thousands)

%  variation  over  previous  year

Persons  killed  (in  nos.)

%  variation  over  previous  year

No.  of  vehicles  (in  thousands)

%  variation  over  previous  year

Rate of  Deaths Per Thousand Vehicles (Col.7/ Col.9)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

1 2004 361.3 7.4 413.9 8.1 91,376 8.2 66,289* – 1.4

2 2005 390.4 8.0 447.9 8.2 98,254 7.5 66,289* – 1.5

3 2006 394.4 1.0 452.9 1.1 1,05,725 7.6 72,718@ 9.7 1.5

4 2007 418.6 6.1 465.3 2.7 1,14,590 8.4 72,718# – 1.6

5 2008 415.8 –6.7 469.1 0.8 1,18,239 3.2 89,618@ 23.2 1.3

The  above  noted  figures  do  not  include  the  accidents  which  are  not  

reported to the police and other governmental agencies.

10. The  personal  sufferings  of  the  survivors  and  disabled  persons  are  

manifold.  Some time they can be measured in terms of money but most of the  

times it is not possible to do so.  If an individual is permanently disabled in an  

accident, the cost of his medical treatment and care is likely to be very high.  In  

cases involving total or partial disablement, the term ‘compensation’ used in  

Section  166  of  the  Motor  Vehicles  Act,  1988  (for  short,  ‘the  Act’)  would  

include not only the expenses incurred for immediate treatment, but also the  

amount likely to be incurred for future medical treatment/care necessary for a  

particular injury or disability caused by an accident.   A very large number of  

people  involved  in  motor  accidents  are  pedestrians,  children,  women  and  

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illiterate persons.  Majority of them cannot, due to sheer ignorance, poverty and  

other  disabilities,  engage  competent  lawyers  for  proving  negligence  of  the  

wrongdoer  in  adequate  measure.  The  insurance  companies  with  whom  the  

vehicles involved in the accident are insured usually have battery of lawyers on  

their panel.  They contest the claim petitions by raising all possible technical  

objections for ensuring that their clients are either completely absolved or their  

liabilities  minimized.   This  results  in  prolonging the proceedings  before the  

Tribunal.  Sometimes the delay and litigation expenses’ make the award passed  

by the Tribunal and even by the High Court (in appeal) meaningless.   It is,  

therefore, imperative that the officers,  who preside over the Motor Accident  

Claims Tribunal adopt a proactive approach and ensure that the claims filed  

under  Sections  166  of  the  Act  are  disposed  of  with  required  urgency  and  

compensation  is  awarded  to  the  victims  of  the  accident  and/or  their  legal  

representatives  in  adequate  measure.   The amount  of  compensation  in  such  

cases should invariably include pecuniary and non-pecuniary damages. In R.D.  

Hattangadi v. Pest Control (India) Private Limited (1995) 1 SCC 551, this Court  

while dealing with a case involving claim of compensation under the Motor  

Vehicles Act, 1939, referred to the judgment of the Court of Appeal in Ward  v.  

James (1965) 1 All ER 563, Halsbury’s Laws of England, 4 th Edition, Volume  

12 (page 446) and observed:

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“Broadly  speaking  while  fixing  an  amount  of  compensation  payable  to  a  victim of  an  accident,  the  damages  have  to  be  assessed separately as pecuniary damages and special damages.  Pecuniary  damages  are  those  which  the  victim  has  actually  incurred and which are capable of being calculated in terms of  money;  whereas  non-pecuniary  damages  are  those  which are  incapable  of  being  assessed  by  arithmetical  calculations.  In  order  to  appreciate  two  concepts  pecuniary  damages  may  include  expenses  incurred  by  the  claimant:  (i)  medical  attendance; (ii) loss of earning of profit up to the date of trial;  (iii)  other  material  loss.  So  far  non-pecuniary  damages  are  concerned,  they  may  include  (i)  damages  for  mental  and  physical shock, pain and suffering, already suffered or likely to  be suffered in future; (ii) damages to compensate for the loss of  amenities of life which may include a variety of matters i.e. on  account of injury the claimant may not be able to walk, run or  sit;  (iii)  damages  for  the  loss  of  expectation  of  life,  i.e.,  on  account of injury the normal longevity of the person concerned  is  shortened;  (iv)  inconvenience,  hardship,  discomfort,  disappointment, frustration and mental stress in life.”

In the same case, the Court further observed:

“In its very nature whenever a tribunal or a court is required to  fix the amount of compensation in cases of accident, it involves  some  guesswork,  some  hypothetical  consideration,  some  amount  of  sympathy  linked with  the  nature  of  the  disability  caused. But all the aforesaid elements have to be viewed with  objective standards.”

11. In Nizam’s Institute of Medical Sciences v.  Prasanth S. Dhananka (2009) 6  

SCC  1,   the  three-Judge  Bench  was  dealing  with  a  case  arising  out  of  the  

complaint filed under the Consumer Protection Act, 1986.  While enhancing the  

compensation awarded by the National Consumer Disputes Redressal Commission  

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from Rs.15 lakhs to Rs.1 crore, the Bench made the following observations which  

can appropriately be applied for deciding the petitions filed under Section 166 of  

the Act:

“We must emphasise that the court has to strike a balance between the  inflated  and  unreasonable  demands  of  a  victim  and  the  equally  untenable claim of the opposite party saying that nothing is payable.  Sympathy for the victim does not, and should not, come in the way of  making a correct assessment, but if a case is made out, the court must  not  be  chary  of  awarding  adequate  compensation.  The  “adequate  compensation” that we speak of, must to some extent, be a rule of  thumb measure, and as a balance has to be struck, it would be difficult  to satisfy all the parties concerned.

At the same time we often find that a person injured in an accident  leaves his family in greater distress vis-à-vis a family in a case of  death. In the latter case, the initial shock gives way to a feeling of  resignation and acceptance, and in time, compels the family to move  on.  The case of  an injured and disabled person is,  however,  more  pitiable  and  the  feeling  of  hurt,  helplessness,  despair  and  often  destitution enures every day. The support that is needed by a severely  handicapped person comes at an enormous price, physical, financial  and emotional, not only on the victim but even more so on his family  and  attendants  and  the  stress  saps  their  energy  and  destroys  their  equanimity.”

(emphasis supplied)

12. In  Reshma  Kumari  v.  Madan  Mohan  (2009)  13  SCC  422,  this  Court  

reiterated that the compensation awarded under the Act should be just and also  

identified the factors which should be kept in mind while determining the amount  

of compensation.  The relevant portions of the judgment are extracted below:

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“The compensation which is required to be determined must be just.  While the claimants are required to be compensated for the loss of  their dependency, the same should not be considered to be a windfall.  Unjust enrichment should be discouraged. This Court cannot also lose  sight of the fact that in given cases, as for example death of the only  son to a mother, she can never be compensated in monetary terms.

The  question  as  to  the  methodology  required  to  be  applied  for  determination of compensation as regards prospective loss of future  earnings,  however,  as  far  as  possible  should  be  based  on  certain  principles. A person may have a bright future prospect; he might have  become  eligible  to  promotion  immediately;  there  might  have  been  chances  of  an  immediate  pay  revision,  whereas  in  another  (sic  situation) the nature of employment was such that he might not have  continued in service; his chance of promotion, having regard to the  nature  of  employment  may  be  distant  or  remote.  It  is,  therefore,  difficult for any court to lay down rigid tests which should be applied  in all situations. There are divergent views. In some cases it has been  suggested  that  some  sort  of  hypotheses  or  guess  work  may  be  inevitable. That may be so.

In  the  Indian  context  several  other  factors  should  be  taken  into  consideration including education of the dependants and the nature of  job. In the wake of changed societal conditions and global scenario,  future  prospects  may have  to  be taken into consideration not  only  having  regard  to  the  status  of  the  employee,  his  educational  qualification;  his  past  performance  but  also  other  relevant  factors,  namely, the higher salaries and perks which are being offered by the  private  companies  these  days.  In  fact  while  determining  the  multiplicand this Court in    Oriental Insurance Co. Ltd.   v.    Jashuben    held that even dearness allowance and perks with regard thereto from  which the family would have derived monthly benefit, must be taken  into consideration.

One  of  the  incidental  issues  which  has  also  to  be  taken  into  consideration  is  inflation.  Is  the  practice  of  taking  inflation  into  consideration  wholly  incorrect?  Unfortunately,  unlike  other  developed countries in India there has been no scientific study. It is  expected that with the rising inflation the rate of interest would go up.  

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In India it  does not happen. It,  therefore, may be a relevant factor  which  may  be  taken  into  consideration  for  determining  the  actual  ground  reality.  No  hard-and-fast  rule,  however,  can  be  laid  down  therefor.”

(emphasis supplied)

13. In Arvind Kumar Mishra v.  New India Assurance Company Limited (2010)  

10 SCC 254,  the  Court  considered the  plea  for  enhancement  of  compensation  

made by the appellant, who was a student of final year of engineering and had  

suffered 70% disablement in a motor accident.  After noticing factual matrix of the  

case, the Court observed:

“We do not intend to review in detail state of authorities in relation  to assessment of all damages for personal injury. Suffice it to say  that the basis of assessment of all damages for personal injury is  compensation.  The whole idea is to put the claimant in the same  position as he was insofar as money can. Perfect compensation is  hardly possible but one has to keep in mind that the victim has done  no wrong; he has suffered at the hands of the wrongdoer and the  court must take care to give him full and fair compensation for that  he had suffered.”

(emphasis supplied)

14. In Raj Kumar v.  Ajay Kumar (2011) 1 SCC 343, the Court considered some  

of the precedents and held:  

“The provision of the Motor Vehicles Act, 1988 (“the Act”, for short)  makes  it  clear  that  the  award  must  be  just,  which  means  that  compensation  should,  to  the  extent  possible,  fully  and  adequately  restore the claimant to the position prior to the accident. The object of  awarding damages is to make good the loss suffered as a result  of  

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wrong done  as  far  as  money  can do so,  in  a  fair,  reasonable  and  equitable manner. The court or the Tribunal shall have to assess the  damages objectively and exclude from consideration any speculation  or  fancy,  though  some  conjecture  with  reference  to  the  nature  of  disability and its consequences, is inevitable. A person is not only to  be compensated for the physical injury, but also for the loss which he  suffered  as  a  result  of  such  injury.  This  means  that  he  is  to  be  compensated for his inability to lead a full life, his inability to enjoy  those  normal  amenities  which  he  would  have  enjoyed  but  for  the  injuries, and his inability to earn as much as he used to earn or could  have earned.  

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

Pecuniary damages (Special damages)  (i)  Expenses  relating  to  treatment,  hospitalisation,  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.”

(emphasis supplied)

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15. In our view, the principles laid down in Arvind Kumar Mishra v. New  

India Assurance Company Ltd. (supra) and Raj Kumar v. Ajay Kumar (supra)  

must be followed by all the Tribunals and the High Courts in determining the  

quantum of compensation payable to the victims of accident, who are disabled  

either  permanently  or  temporarily.   If  the  victim  of  the  accident  suffers  

permanent  disability,  then efforts should always be made to award adequate  

compensation not only for the physical injury and treatment, but also for the  

loss of earning and his inability to lead a normal life and enjoy amenities, which  

he would have enjoyed but for the disability caused due to the accident.

16. We  shall  now  consider  whether  the  compensation  awarded  to  the  

appellant  is  just  and reasonable  or  he is  entitled  to  enhanced compensation  

under any of the following heads:

(i) Loss of earning and other gains due to the amputation of leg.

(ii) Loss of future earnings on account of permanent disability.

(iii) Future medical expenses.

(iv) Compensation for pain, suffering and trauma caused due to             the amputation of leg.

(v) Loss of amenities including loss of the prospects of marriage.  

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(vi) Loss of expectation of life.  

17. A brief recapitulation of the facts shows that in the petition filed by him  

for  award  of  compensation,  the  appellant  had  pleaded  that  at  the  time  of  

accident he was working as Helper and was getting salary of Rs.4,000/- per  

month.  The Tribunal discarded his claim on the premise that no evidence was  

produced by him to prove the factum of employment and payment of salary by  

the  employer.   The  Tribunal  then  proceeded  to  determine  the  amount  of  

compensation in lieu of loss of earning by assuming the appellant’s income to  

be Rs.15,000/- per annum.  On his part, the learned Single Judge of the High  

Court assumed that while working as a Cleaner, the appellant may have been  

earning Rs.2,000/- per month and accordingly assessed the compensation under  

the first head.  Unfortunately, both the Tribunal and the High Court overlooked  

that at the relevant time minimum wages payable to a worker were Rs.3,000/-  

per month.  Therefore, in the absence of other cogent evidence, the Tribunal  

and the High Court should have determined the amount of compensation in lieu  

of  loss  of  earning  by  taking  the  appellant’s  notional  annual  income  as  

Rs.36,000/- and the loss of earning on account of 70% permanent disability as  

Rs.25,200/- per annum.    

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The application of multiplier of 17 by the Tribunal, which was approved  

by the High Court will have to be treated as erroneous in view of the judgment  

in Sarla Verma  v. Delhi Transport Corporation (2009) 6 SCC 121.  In para 42  

of that judgment,  the Court has indicated that if the age of the victim of an  

accident is 24 years, then the appropriate multiplier would be 18.  By applying  

that multiplier, we hold that the compensation payable to the appellant in lieu of  

the loss of earning would be Rs.4,53,600/-.    

18. The award made by the Tribunal for future medical expenses was wholly  

inadequate.   In  Nagappa  v.  Gurudayal  Singh  (2003)  2  SCC  274,  this  Court  

considered whether it was permissible to award compensation in installments or  

recurring compensation to meet the future medical expenses of the victim.  After  

noticing  the  judgment  of  M.  Jagannadha  Rao,  J.  (as  he  then  was)  in  P.  

Satyanarayana v. I. Babu Rajendra Prasad 1988 ACJ 88 (AP), the judgment of the  

Division  Bench  of  the  Kerala  High  Court  in  Valiyakathodi  Mohd.  Koya  v.  

Ayyappankadu Ramamoorthi Mohan 1991 ACJ 140 (Kerala), this Court observed:

“In this view of the matter, in our view, it would be difficult to  hold that for future medical expenses which are required to be  incurred by a victim, fresh award could be passed. However, for  such medical treatment, the court has to arrive at a reasonable  estimate on the basis of the evidence brought on record. In the  present  case,  it  has  been  pointed  out  that  for  replacing  the  artificial leg every two to three years, the appellant would be  

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required to have some sort  of operation and also change the  artificial leg. At that time, the estimated expenses for this were  Rs 18,000 and the High Court has awarded the said amount. For  change  of  the  artificial  leg  every  two  or  three  years  no  compensation  is  awarded.  Considering this  aspect,  if  Rs  one  lakh is awarded as an additional  compensation,  the appellant  would  be  in  a  position  to  meet  the  said  expenses  from the  interest of the said amount.”

After  the aforesaid judgment,  the cost  of living as also the cost  of artificial  

limbs and expenses likely to be incurred for  periodical  replacement  of such  

limb has substantially increased.  Therefore, it will be just and proper to award  

a sum of Rs.2,00,000/- to the appellant for future treatment.  If this amount is  

deposited in fixed deposit, the interest accruing on it will take care of the cost of  

artificial limb, fees of the doctor and other ancillary expenses.

19. The  compensation  awarded  by  the  Tribunal  for  pain,  suffering  and  

trauma caused due to the amputation of leg was meager.  It is not in dispute that  

the appellant had remained in the hospital for a period of over three months.  It  

is not possible for the Tribunals and the Courts to make a precise assessment of  

the pain and trauma suffered by a person whose limb is amputated as a result of  

accident.   Even if the victim of accident gets artificial limb, he will suffer from  

different kinds of handicaps and social stigma throughout his life.  Therefore, in  

all such cases, the Tribunals and the Courts should make a broad guess for the  

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purpose  of  fixing the  amount  of  compensation.   Admittedly,  at  the time  of  

accident, the appellant was a young man of 24 years.  For the remaining life, he  

will suffer the trauma of not being able to do his normal work.  Therefore, we  

feel that ends of justice will be met by awarding him a sum of Rs.1,50,000/- in  

lieu of pain, suffering and trauma caused due to the amputation of leg.

20. The compensation awarded by the Tribunal for the loss of amenities was  

also meager.  It can only be a matter of imagination as to how the appellant will  

have to live for the rest of life with one artificial leg.  The appellant can be  

expected to live for at least 50 years.  During this period he will not be able to  

live  like  normal  human  being  and  will  not  be  able  to  enjoy  the  life.   The  

prospects of his marriage have considerably reduced.  Therefore, it would be  

just  and  reasonable  to  award  him  a  sum  of  Rs.1,50,000/-  for  the  loss  of  

amenities and enjoyment of life.   

21. In the result,  the appeal  is allowed.  The impugned judgment  and the  

award of the Tribunal are set aside.  It is declared that the appellant is entitled to  

total compensation of Rs.9,53,600/- with interest @ 7% per annum from the  

date of filing the claim petition till the date of realization.  The respondent is  

directed  to  pay  the  balance  amount  of  compensation  with  interest  within  a  

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period of three months from today in the form of a Bank Draft prepared in the  

name of the appellant.   

………………………………J. (G.S. Singhvi)

………………………………J. (Surinder Singh Nijjar)

New Delhi, November 01, 2011.

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