Non-reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 9013 OF  2011 (Arising out of  S.L.P. (C)  No. 8983 of  2010)

Sanjay Batham .......Appellant Versus

Munnalal Parihar and others .......Respondents  

J U D G M E N T

G. S. Singhvi, J.

1. Leave granted.  

2. Feeling dissatisfied with the enhancement granted by the Madhya Pradesh  

High Court in the amount of compensation awarded to him by 8 th Motor Accident  

Claims Tribunal, Gwalior (for short, `the Tribunal’), the appellant has filed this  

appeal.

3. The appellant, who sustained grievous injuries on the head, right shoulder,  

back bone and other parts of the body in an accident which occurred on 9.5.1996,  

filed a petition under Section 166 of the Motor Vehicles Act, 1988 (for short, `the  

Act’) for award of compensation of  Rs. 4,20,000/- with interest.   The claim of the  

appellant was founded on the following assertions:  

(i) That  the  accident  occurred  when  the  scooter  on  

which he was travelling along with his friend Sunil was hit by  

truck  No.  MKH-7787  near  Sikaria  Workshop  at  AB  Road,  

Gwalior.

(ii) That  the  accident  was  caused  due  to  rash  and  

negligent  driving  of  the  truck  by  respondent  No.  1-Munnalal  

Parihar.

(iii) That  he  was  rushed  to  Madhav  Dispensary  from  

where he was shifted to J.A.H. Hospital.   He was operated for  

fracture on his head, broken piece of the bone was removed and  

22 stitches were given on his head.  

(iv) That due to injury on the head, left part of his body  

was paralyzed and he was not able to do the work which he was  

doing prior to accident.  

(v) That  the  prospects  of  his  marriage  had  been  

considerably reduced and he will not be able to lead normal life.

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4. The owner and the driver of the truck did not contest the claim petition.  In  

the reply filed on behalf of respondent No. 3-the National Insurance Co. Ltd., all  

possible objections were raised and it was pleaded that the accident was not caused  

due to rash and negligent driving of the truck and, in any case, the insurer was not  

liable to pay compensation because the driver of the truck did not have a valid  

driving licence.

5. After  considering the pleadings and evidence of the parties,  the Tribunal  

held that the accident was caused due to rash and negligent driving of the truck by  

respondent No. 1.  The Tribunal then considered the evidence of Dr. N. D. Vayas,  

Head of Neurosurgery Department of J.A.H. Hospital and the disability certificate  

Ex. P-20, which revealed that the appellant had suffered 45% temporary disability  

in his left hand and proceeded to award compensation under the following heads:

1. Loss of earning Rs. 5,000/-         2. Medical expenses Rs.10,000/- 3. Pain and suffering Rs.5,000/- 4 Special diet                    Rs.5,000/-  

The Tribunal also awarded interest at the rate of 9% per annum from the date of  

filing the claim petition till realisation.

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6. On an appeal filed by the appellant, the learned Single Judge of the High  

Court  re-appreciated  the  evidence  produced  by  the  parties  and determined  the  

amount of compensation by taking the appellant’s income to be Rs.  1500/- per  

month.  He assessed the disability of appellant to be 50% and held that loss of  

earning would be Rs.  750/-  per  month.   The learned Single Judge applied the  

multiplier  of 16 and concluded that the appellant  was entitled to a sum of Rs.  

1,44,000/- in lieu of the loss of earning.  The learned Single Judge also awarded  

Rs.  50,000/-  for  treatment  and Rs.  56,000/-  for  pain and suffering and loss  of  

marriage prospects.  However, the rate of interest was reduced from 9% to 7% per  

annum.   

7. We have heard learned counsel  for  the parties  and carefully  perused the  

record.   In  last  two  decades,  this  Court  has  decided  large  number  of  cases  

involving claim of compensation by the victims of accidents and/or their families.  

It will be useful to notice some of the judgments in which  general principles have  

been laid down for the guidance of the Tribunals and the Courts.   

8.  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  

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

Volume 12 (page 446) and observed:

“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.”

9. 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:

“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)

10. 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:

“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  

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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.  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)

11. 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  

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suffered 70% disability 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)

12. Recently, a two Judge Bench of this Court again considered the matter in  

detail in Raj Kumar  vs.  Ajay Kumar (2011) 1 SCC 343 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  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.  [See  C.K.  Subramania  Iyer v.  T.  Kunhikuttan  Nair  

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(1969) 3 SCC 64,  R.D. Hattangadi v.  Pest Control (India) (P) Ltd.   (1995) 1 SCC 551 and Baker v. Willoughby 1970 AC 467.]

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.

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.  Decisions  of  this  Court  and  the  High  Courts  contain  

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necessary guidelines for award under these heads, if necessary. What  usually poses some difficulty is the assessment of the loss of future  earnings  on  account  of  permanent  disability—Item (ii)(a).  We  are  concerned with that assessment in this case.

Assessment of future loss of earnings due to permanent disability  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.

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  

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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%.

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 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.

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.”  

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13. In the light of the above, we shall now consider whether the compensation  

awarded by the High Court is just and reasonable or the appellant is entitled to  

higher compensation.   

14. It is not in dispute that at the time of accident, the appellant was earning  

Rs.50/- per day by doing the work as an unskilled labourer with Raj Gas Agency.  

It is also not in dispute that as a result of accident, the appellant suffered injuries  

on different parts of body including the head and after operation left portion of his  

body, i.e. left hand and left leg got paralyzed and as a result of that he will not be  

in  a  position  to  do the  work which he  was doing before  the accident.   In  his  

deposition, Dr. N.D. Vayas, Head of Neurosurgery Department, J.A.H. Hospital,  

who treated the appellant before and after the operation, stated that left portion of  

the  appellant’s  body  was  paralyzed  but  after  treatment  there  was  slight  

improvement in his condition.  Dr. Vayas then gave out that the appellant will  

require further treatment for paralysis.   The learned Single Judge, who had the  

occasion to see the appellant in the Court, found that he was not in a position to  

move his left hand and left leg.  He assessed the disability to be 50% and enhanced  

the compensation awarded by the Tribunal.  However, he committed an error by  

applying the multiplier of 16 ignoring that at the time of accident, the appellant’s  

age was only 20 years.  In Sarla Verma  v.  Delhi Transport Corporation (2009) 6  

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SCC 121, this Court  has considered several  issues including the application of  

correct multiplier and held :

“We  therefore  hold  that  the  multiplier  to  be  used  should  be  as  mentioned in Column (4) of the table above (prepared by applying  Susamma Thomas, Trilok Chandra and Charlie), which starts with an  operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25  years), reduced by one unit for every five years, that is M-17 for 26 to  30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for  41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units  for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60  years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”

In view of the above noted judgment, we hold that multiplier of 18 deserves to be  

applied for the purpose of determining the compensation payable to the appellant  

in lieu of the loss of earning.  Thus, under this head the appellant will be entitled to  

a sum of Rs.1,62,000/- .  

15. Although, the appellant had suffered temporary disablement, the evidence of  

the doctor shows that he will require treatment in future.  The Tribunal and the  

High Court have not awarded any compensation for future treatment, which would  

necessarily  include  doctor’s  fee,  cost  of  medicine,  transportation,  diet,  etc.  

Keeping  in  view  the  high  cost  of  living, we  feel  that  ends  of  justice  will   

be served by awarding a lump sum amount of Rs. 2 lacs for future treatment.

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16. The award made by the High Court for pain, suffering and trauma and  in  

lieu of loss of the prospects of marriage is wholly inadequate.  The appellant, who  

suffered paralysis on left part of the body will neither be able to work as a labourer  

nor  he will be able to lead a normal life.   His marriage prospects are also bleak.  

A  normal  girl  will,  in  all  probability,  not  like  to  marry  a  disabled  person.  

Therefore,  it  is  apposite  to  award  reasonable  and  just  compensation  to  the  

appellant for pain, suffering and trauma caused due to the accident and loss of  

amenities and enjoyment of life which, in our view, should be Rs.2 lacs.

17. It is true that in the petition filed by him under Section 166 of the Act, the  

appellant  had  claimed  compensation  of  Rs.  4,20,000/-  only,  but  as  held  in  

Nagappa  vs.  Gurudayal Singh (2003) 2 SCC 274, in the absence of any bar in the  

Act,  the Tribunal and for that reason any competent  Court is entitled to award  

higher compensation to the victim of an accident.  

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

it  is  declared  that  the  appellant  shall  be  entitled  to  total  compensation  of  

Rs.5,62,000/-.  He shall also be entitled to interest @ 9% per annum from the date  

of filing the claim petition till realization.  Respondent No.3 is directed to pay the  

enhanced amount of compensation to the appellant with interest @ 9% within a  

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

name.    

………………………………J. (G. S. Singhvi)

………………………………J. (Asok Kumar Ganguly)

New Delhi, November 01, 2011.

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