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Saturday, July 13, 2013

M.V. ACT = 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. = 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, 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. = 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) 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.

published in http://judis.nic.in/supremecourt/imgs1.aspx?filename=40482
Page 1
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
1Page 2
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,
2Page 3
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:
3Page 4
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
4Page 5
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
5Page 6
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
6Page 7
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.
7Page 8
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
8Page 9
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.
9Page 10
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
10Page 11
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
11Page 12
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)
12Page 13
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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