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Thursday, January 1, 2015



                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 9393 OF 2014
               (ARISING OUT OF SLP (CIVIL) NO. 33883 OF 2013)

|BASAPPA S/O SANGANABASAPPA BAHVIKATTI    |                               |
|                                         |.....APPELLANT(S)              |
|VERSUS                                   |                               |
|T RAMESH S/O TANGAVELU & ANR.            |.....RESPONDENT(S)             |

                                  O R D E R

            Leave granted.

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, 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,
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 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

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 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 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 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
impleaded respondent No.1 herein, who was the  driver  of  the  vehicle  and
respondent No.2, Manager, Reliance General 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  produced  copy   of
Disability Certificate dated 11.02.2009 and  other  medical  records.    The
respondents also led their evidence.  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   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:

|       |                                 |    |Amount (Rs.)     |
|1.     |Pain and sufferings              |:   |10,000/-         |
|2.     |Medical expenses                 |:   |35,000/-         |
|3.     |Loss of future income            |:   |46,800/-         |
|4.     |Loss of amenities, diet,         |:   |2,000/-          |
|       |nutrition and attendant charges  |    |                 |
|       |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. 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

|       |                                 |    |Amount (Rs.)     |
|1.     |Pain and suffering               |:   |25,000/-         |
|2.     |Incidental expenses              |:   |10,000/-         |
|3.     |Medical expenses                 |:   |35,000/-         |
|4.     |Loss of income during laid up    |:   |12,000/-         |
|       |period                           |    |                 |
|5.     |Loss of amenities                |:   |20,000/-         |
|6.     |Loss of future income            |:   |1,57,500/-       |
|       |Total                            |:   |2,59,500/-       |

6)    Still not satisfied, the present appeal  has  been  preferred  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  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 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   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, to Rs.25,000/-.  In  so  far  as  reimbursement  of
medical expenses 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  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 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 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  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
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  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 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
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
general weakness as well.  This would lead us to  the  conclusion  that  the
appellant  suffers  85%  functional  disability.   On   arriving   at   this
conclusion, we are bolstered by the judgment of this Court in  the  case  of
Raj Kumar v. Ajay Kumar & Another, (2011) 1 SCC 343 wherein this  aspect  is
lucidly explained with  impeccable  erudition,  as  is  discerned  from  the
following passages  of  the  said  judgment,  reading  whereof  would  amply
demonstrate that the nuances are so  exhaustively  dealt  with,  leaving  no
scope for restating, much less refuting or refining:
8. 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 [pic]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.

                                    X X X

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  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

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, [pic]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.  (See  for  example,   the
decisions of this Court in Arvind Kumar Mishra v. New  India  Assurance  Co.
Ltd., (2010) 10 SCC 254 and Yadava Kumar v.  National  Insurance  Co.  Ltd.,
(2010) 10 SCC 341)

12. Therefore, the Tribunal  has  to  first  decide  whether  there  is  any
permanent disability and, if so, the extent of  such  permanent  disability.
This means that the Tribunal should consider and decide  with  reference  to
the evidence:
(i) whether the disablement is permanent or temporary;
(ii) 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 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 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 or will affect his earning capacity.

13. Ascertainment of the effect of the permanent disability  on  the  actual
earning capacity involves three steps. The Tribunal has to  first  ascertain
what activities the claimant 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 accident,  as  also  his  age.  The
third step is to find out whether (i) the claimant is totally disabled  from
earning any kind of livelihood, or (ii) whether in spite  of  the  permanent
disability, the claimant could still effectively  carry  on  the  activities
and functions, which he was earlier carrying on, 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
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
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  may
therefore be shifted to some other suitable  but  lesser  post  with  lesser
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

19. We may now summarise the principles discussed above:
(i) All injuries (or permanent disabilities arising from injuries),  do  not
result in loss of earning capacity.
(ii) The percentage of permanent 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  examined  him
subsequently to assess the extent  of  his  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  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  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  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 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 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 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  brought  in
the 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 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  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  calculating  the  compensation,  the  formula
contained in Note (5) of 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

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

Plus either of the following:

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

(b)   In  case  of  permanent  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  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).   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  date  of  claim  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 SCC 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 interest at the rate of 9%  per
annum on the aforesaid amount from the date of claim petition till the  date
of payment.

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

                                                            (J. CHELAMESWAR)

                                                                (A.K. SIKRI)

OCTOBER 10, 2014.

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