[2014] 12 S.C.R. 1132

BASAPPA S/O SANGANABASAPPA BAHVIKATTI

T. RAMESH S/O TANGAVELU AND ANR.

(Civil Appeal No. 9393 of 2014)

OCTOBER 10, 2014

[J. CHELAMESWAR AND A.K. SIKRI, JJ.]

Motor Vehicle Act, 1988 - Accident claim - Permanent disability - Loss of earning capacity - Assessment of - C Appellant sustained serious injuries due to rash and negligent driving of respondent No. 1 driver - Tribunal awarded compensation of Rs. 93, 800 with 6% interest - High Court enhanced compensation to Rs. 2,59,000 - On appeal, held: Appellant was working as Goundi i.e. at the building D construction sites - Such work required good health and extreme fitness as it was a strenuous task which involved lot of physical activities - Appellant suffered permanent disability of 58% to the whole body and was not capable of doing heavy work - He was even unable to walk and stand for a long time E - Hence, his functional disability to be taken at 85% - Applying formula contained in Note (5) of the Second

Schedule to the Act, loss of future income would work out to Rs.5,35,5001- - Similarly, for pain and suffering, amount of Rs.25,0001awarded by High Court increased to Rs.60,0001-

F - Appellant to get interest @ 9% per annum from the date of claim petition till payment - Total compensation payable to appellant coming to Rs. 6, 72, 0001as against Rs.2,59,5001-, awarded by High Court.

Raj Kumar v. Ajay Kumar & Another (2011) 1 SCC 343: G 2010 (13) SCR 179; Syed Sadiq and others v. Divisional Manager, United India Insurance Company Limited (2014) 2 SCC 735; Municipal Corporation of Delhi, Delhi v. Uphaar Tragedy Victims Association and others, (2011) 14 SCC 481: 2011 (16) SCR 1 - relied on.

H 1132

Case Law Reference:

2010 (13) SCR 179

(2014) 2 sec 735

2011 (16) SCR 1

relied on

relied on

relied on

Para 12

Para 13

Para 17

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9393 of 2014.

From the Judgment and Order dated 11-03-2013 of the High Court of Karnataka Circuit Bench at Dharwad in M.F.A. c No. 21150 of 2011. ·

Sharannagouda Patil, Supreeta Patil (for S. Legal Associates) for the Appellant.

Abhinav Mukerji for the Respondents.

The following Order of the Court was delivered

ORDER

1. 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, G dashed into the Motorcycle of the appellant. This happened near the Simikeri 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, H

A 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 B 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. c

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 D 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 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 E 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 F 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 impleade.d responqent No.1 herein, who was the driver of the vehicle and respondent No.2, Manager, Reliance General G 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 H produced copy of Disability Certificate dated 11.02.2009 and

BASAPPA S/O SANGANABASAPPA BAHVIKATII v. 1135

T. RAMESH S/O TANGAVELU

other medical records. The respondents also led their evidence.

A 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 driver. The Tribunal, thus, allowed the petition but B 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: c

Amount (Rs.)

Pain and sufferings 10,000/-

Medical expenses 35,000/- D

Loss of future income 46,800/-

Loss of amenities, diet, 2,000/- nutrition and attendant charges E

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.

F 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:

Pain and suffering

Incidental expenses

Amount (Rs.)

25,000/-

10,000/-

A 3.

Medical expenses 35,000/-

Loss of income during 12,000/- laid up period

Loss of amenities 20,000/- B 6.

Loss of future income 1,57,500/~

Total 2,59,500/-

6. Still not satisfied, the present appeal has been preferred C 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 D 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 E 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 F 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 disability of 58% to the whole body.

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,

BASAPPA S/O SANGANABASAPPA BAHVIKATII v. 1137

T. RAMESH S/O TANGAVELU

to Rs.25,000/-. In so far as reimbursement of medical expenses A 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 8 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 C 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 D according to the High 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 G 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 H

A 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.

12. We are of the opinion that once the High Court had 8 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 C 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 D 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 generc:1I weakness as well. This would lead us to the conciusion that the appellant suffers 85% E functional disability. On arriving at this conclusion, we are

bolstered by the judgment of this Court in the case of Raj Kumarv. Ajay Kumar& Another, (2011) 1SCC343 wherein this aspect is lucidly explained with impeccable erudition, as is discerned from the following passages of the said judgment, F reading whereof would amply demonstrate that the nuances are so exhaustively dealt with, leaving nc1 scope for restating, much less refuting or refining:

8. Disability refers to any restriction or lack of ability to perform an activity in the manrn!r 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 a'chieving the maximum bodily improvement or recovery which is likely to remain for the

remainder life of the injured. Temporary disability refers to A 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 s duties and bodily functions that he could perform before the accident. though he is able to perform some of thm and is stilt 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 c 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) D Act, 1995 ("the Disabilitie$ Act", for short). But if any of the disabilities enumerated in Section 2(1) 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. xxx

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 F 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 G 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 H

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 E!xtent (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 th1~ 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 ancl Yadava Kumar v. National Insurance Co. Ltd., (2010) 1 D SCC 341) .

12. Therefore, the Tribunal ha8 to first decide whether there is any permanent disability a11d, if so, the extent of such permanent disability. This means that the Tribunal should consider and decide with refelrence to the evidence:

(1) whether the disablement is. permanent or temporary;

(i1) if the disablement is permanent, whether it is permanent total disablement or permanent partial disablement;

(iii) if the disablement'percentage is expressed with reference to any specific limb, then the effect of such

disablement of the limb on the functioning of the entire A 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 8 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 c or will affect his earning capacity.

13. Ascertainment of the effect of the permanent disability on te actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant D 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 E accident, as also his age. The third step is to find out whether (1) the claimant is totally disabled from earning any kind of livelihood, or (it) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, F 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 H

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 m.ay therefore be shifted to some other suitable but lesser post with le::; ser 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:

(1) All injuries (or permanent disabilities arising from injuries), do not result in loss of earning capacity.

(ii) The percentage of permamnt 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

BASAPPA S/O SANGANABASAPPA BAHVIKATII v. 1143

T. RAMESH S/O TANGAVELU

examined him subsequently to assess the extent of his A permanent disability can give evidence only in regard to the extent of permanent disability. The loss of earning capacity is something that will have to be assessed by the Tribunal with reference to the evidence in entirety.

(iv) The same permanent disability may result in different B

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 c 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 D 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 E 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

F 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

G 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 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 brougt in the H

A 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

8 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 C 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 calGulating the compensation, the o formula contained in Note (5) c1f 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:

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

Plus either of the followin~1:

(a) In case of permanent total disablement the amount payable shall be arrived a.t by multiplying the annual loss of income by the multiplil3r applicable to the age on the date of determining the compensation, or

(b) In case of perman1:int 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 A .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). 8 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 d.ate of claim C 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 sec 481.

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 interet at the rate of 9% per annum E on the aforesaid amount from the date of claim petition till the date of paymnt.

19. Appeal is allowed in the aforesaid manner with cost of Rs.25,000/-.

Bibhuti Bhushan Bose Appeal allowed.