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Saturday, February 4, 2017

In that case, after following the judgment in Kerala SRTC v. Susamma Thomas[7], the Court chose to apply multiplier of 18 keeping in view the age of the victim, who as 25 years at the time of the accident. In the instant case, the MACT had quantified the income of the appellant at ?10,000, i.e. ?1,20,000 per annum. Going by the age of the appellant at the time of the accident, multiplier of 17 would be admissible. Keeping in view that the permanent disability is 70%, the compensation under this head would be worked out at ?14,28,000. The MACT had awarded compensation of ?70,000 for permanent disability, which stands enhanced to ?14,28,000. For mental and physical agony and frustration and disappointment towards life, the MACT has awarded a sum of ?30,000, which we enhance to ?1,30,000. In this manner, the compensation that is payable to the appellant is worked out as under: |Head | |Awarded by MACT |Now Payable | | | |Amount (in Rs.) |Amount (in Rs.) | |Medical & Transport |- |3,10,227 |3,10,227 | |Expenses | | | | |Loss of Income |- |1,00,000 |1,00,000 | |Mental & Physical |- |30,000 |1,30,000 | |agony | | | | |Removal of rod |- |25,000 |25,000 | |inserted in right leg | | | | |Permanent disability |- |70,000 |14,28,000 | |to some extent | | | | |TOTAL |- |5,35,227 |19,93,227 | The appellant shall also be entitled to the interest, as awarded by the High Court, as well as costs of this appeal. The amount shall be paid to the appellant within two months after deducting the payments already made. The appeal is disposed of accordingly.


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 1329 OF 2017
                 (ARISING OUT OF SLP (C) NO. 22790 OF 2013)

|SANDEEP KHANUJA                            |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|ATUL DANDE & ANR.                          |.....RESPONDENT(S)           |

                               J U D G M E N T

                 Leave granted.

In a motor accident, the appellant herein suffered  physical  injuries.   It
happened on July 08, 2006 when the appellant was going on a scooter to  Gram
Pendri in the State of Chhattisgarh. When he reached  near  Gram  Pendri,  a
Hyundai Getz  car  bearing  Registration  No.  MH  12  CR  6917,  driven  by
respondent No.1, hit the scooter, as a result of which  the  appellant  fell
down and sustained fractures on both the legs, thereby  suffering  permanent
disability to some extent.  He filed  claim  for  compensation  against  the
respondents before the Motor Accidents Claims Tribunal (MACT),  Rajnandgaon,
Chhattisgarh.  The  MACT,  vide  award  dated  May  05,  2009,  granted  him
compensation in the sum of ?5,35,227, under the following heads:
|Head                          |   |Amount (in Rs.)|
|Medical & Transport Expenses  |-  |3,10,227       |
|Loss of Income                |-  |1,00,000       |
|Mental & Physical agony       |-  |30,000         |
|Removal of rod inserted in    |-  |25,000         |
|right leg                     |   |               |
|Permanent disability to some  |-  |70,000         |
|extent                        |   |               |
|TOTAL                         |-  |5,35,227       |

Not satisfied with the quantum of  compensation,  the  appellant  approached
the High Court by way of appeal under Section  173  of  the  Motor  Vehicles
Act, 1988 (for short,  the  'Act').   The  High  Court  has,  vide  impugned
judgment, enhanced the compensation to ?6,35,000.  The High  Court  has  not
awarded compensation under different heads  but  has  deemed  it  proper  to
award lump sum compensation in the aforesaid  amount.   Relevant  discussion
in this behalf can be traced to paras 8 and  9  of  the  impugned  judgment,
which reads as under:
“(8)  We have gone through the evidence  adduced  by  the  claimant  on  the
issue  of  injury  sustained  by  him.   In   our   opinion,   taking   into
consideration the nature of injury, the  permanent  disability  occurred  on
the body of the appellant (claimant) to some extent, as a  result  of  which
he claims to be not as fit as he was prior to  accident  in  his  day-to-day
work, resulting in reducing his capacity to do  some  extent  of  work,  the
expenditure incurred in receiving medical treatment in actual, the loss  and
mental pain suffered due to his  involvement  in  accident  we  consider  it
proper to enhance  in  lump  sum  the  compensation  from  Rs.5,35,227/-  to
Rs.6,35,000/-.  In other words, in our view, the claimant is  held  entitled
for a total sum of Rs.6,35,000/- by way of  compensation  for  the  injuries
sustained by him.

(9)  In our considered opinion, due to injuries in both legs which  is  also
duly proved in evidence by the claimant and his  doctor,  he  cannot  freely
move and attend to his duties.  His movements  are  restricted  to  a  large
extent and that too in young age.  It is for  all  these  reasons,  we  feel
that the Tribunal had awarded  a  less  compensation  under  this  head  and
hence, some enhancement under the head of pain and suffering and also  under
the head of permanent partial disability and loss  of  earning  capacity  is
called  for.   This  enhancement  figure   is   arrived   at   taking   into
consideration all relevant factors.”

The appellant is not satisfied with the aforesaid approach  and  the  manner
in which the compensation is awarded.   According  to  him,  had  the  Court
applied proper provision  and  principles  laid  down  under  the  Act,  the
appellant would have been entitled to much more compensation.

We may state, at the outset, that the MACT recorded a specific finding  that
the accident took place  due  to  rash  and  negligent  driving  of  car  by
respondent No.1 which hit the scooter of  the  appellant.   Respondent  No.1
did not challenge the finding of the MACT and, therefore,  this  aspect  has
attained  finality  and  we  need  not  go  into  the  same.   The  dispute,
therefore, pertains only to the quantum of the compensation that has  to  be
awarded.  Few facts relevant for resolving the dispute, which appear on  the
record, are as under:

At the time of the accident, the appellant was aged about 30 years.  He  was
working as a Chartered Accountant.  The appellant had produced  evidence  to
the effect that  he  had  worked  as  a  Chartered  Accountant  for  various
institutions for which he  was  paid  professional  fee.   He  had  produced
statements in this behalf (Exhibits P-195 to P-208) and  on  that  basis  he
claimed that his monthly income was ?34,600.  He also proved on  record  the
income tax return for the year 2006-2007 (Exhibit P-194).  The  certificates
which were produced by the appellant showing the professional fee  which  he
had received was not accepted by the MACT on the ground that he had  started
the business in the month of March 2006 and there  was  enough  professional
competition  in  the  said  field.   Moreover,  the   person   issuing   the
certificate had not been produced.  On this  basis,  the  Tribunal  assessed
the monthly income of the appellant at ?10,000.

Insofar as injuries suffered by the  appellant  in  the  said  accident  are
concerned, he had stated that his health had impaired drastically and  lungs
infected because of which he was admitted in the Intensive Care Unit and  he
was kept on ventilator and was operated thrice.  He had problem in  climbing
stairs, running, trouble of back while sleeping, etc.  A rod is  planted  in
his leg.  Because of all this he  has  suffered  70%  permanent  disability,
apart from mental and physical agony and the said  disability  is  going  to
give him frustration and disappointment towards life.  He pleaded that  this
disability has affected his efficiency in work as well resulting in loss  of
future income as well.

As already noticed above, the MACT granted him compensation  by  reimbursing
expenses incurred towards treatment  and  transportation,  loss  of  income,
mental and physical agony and expenses for removing the rod planted  in  his
leg.  The appellant contends that compensation awarded for mental agony  and
physical suffering is too less.  That apart,  his  main  grievance  is  that
only a  paltry  sum  of  ?70,000  is  awarded  by  the  MACT  for  permanent
disability suffered by him, which is too inadequate.

We may note in this behalf that the  MACT,  though  accepted  the  aforesaid
injuries and physical incapacity suffered  by  the  appellant,  was  of  the
opinion that even when it was not possible for  the  appellant  to  do  work
like a healthy person, looking to the nature of the said  injuries,  insofar
as work of a Chartered Accountant is concerned, he could  still  perform  it
properly and there was no impairment therein.  For  this  reason,  the  MACT
refused to award compensation to the appellant by applying the principle  of
multiplier based on permanent disability and granted a lump  sum  amount  of
?70,000.  The High Court has not gone into this aspect specifically.

In this conspectus, the only argument advanced by the  learned  counsel  for
the appellant was that the appellant was entitled  to  the  compensation  on
the basis of multiplier, as per the provisions of  the  Act,  fur  suffering
permanent disability to the extent of 70% and there was  no  reason  not  to
apply the said multiplier.

Learned counsel for the respondent, on the other hand, made an endeavour  to
justify the approach of the MACT with the submission that when the  injuries
suffered by him, even resulting in 70% permanent disability, had no  adverse
affect on the working of the appellant, who was a Chartered  Accountant,  he
was  not  entitled  to  have  the  compensation  computed  by  invoking  the
principle of multiplier.

We may observe at the outset that it is now a settled principle,  repeatedly
stated and  restated  time  and  again  by  this  Court,  that  in  awarding
compensation the multiplier method  is  logically  sound  and  legally  well
established.  This method, known as  'principle  of  multiplier',  has  been
evolved to quantify the loss of income as a result  of  death  or  permanent
disability suffered in an  accident.   Recognition  to  this  principle  was
given for the first  time  in  the  year  1966  in  the  case  of  Municipal
Corporation of Delhi v. Subhagwanti &  Ors.[1]   Again,  in  Madhya  Pradesh
State Road Transport Corporation, Bairagarh, Bhopal v. Sudhakar  &  Ors.[2],
the Court referred to an English decision while emphasising  the  import  of
this principle in the following manner:
“4. A method of assessing damages, usually followed in England,  as  appears
from Mallet v. McMonagle[3], is to calculate the net pecuniary loss upon  an
annual basis and to “arrive at the total award  by  multiplying  the  figure
assessed as the amount of the annual ‘dependency’ by  a  number  of  ‘year's
purchase’  that is the number of years the benefit  was  expected  to  last,
taking into consideration the imponderable  factors  in  fixing  either  the
multiplier or the multiplicand...”

While applying the multiplier method, future  prospects  on  advancement  in
life and career  are  taken  into  consideration.   In  a  proceeding  under
Section 166 of the Act relating to death of the  victim,  multiplier  method
is applied after taking into consideration the loss of income to the  family
of the deceased that resulted due to the said demise.  Thus, the  multiplier
method  involves  the  ascertainment  of  the  loss  of  dependency  or  the
multiplicand  having  regard  to  the  circumstances   of   the   case   and
capitalising the multiplicand by an appropriate multiplier.  The  choice  of
the multiplier is determined by the age of  the  deceased  or  that  of  the
claimant, as the case may be.  In  injury  cases,  the  description  of  the
nature of injury and the permanent disablement are the relevant factors  and
it has to be seen as to what would be the impact of such  injury/disablement
on the earning capacity of the injured.  This Court, in  the  case  of  U.P.
State Road  Transport  Corporation  &  Ors.  v.  Trilok  Chandra  &  Ors.[4]
justified the application of multiplier method in the following manner:
“13. It was rightly clarified that there should be  no  departure  from  the
multiplier method on the ground that  Section  110-B,  Motor  Vehicles  Act,
1939 (corresponding to the present provision of Section 168, Motor  Vehicles
Act, 1988) envisaged payment of ‘just’  compensation  since  the  multiplier
method is the accepted method for determining and ensuring payment  of  just
compensation and is expected  to  bring  uniformity  and  certainty  of  the
awards made all over the country.”

            The multiplier  system  is,  thus,  based  on  the  doctrine  of
equity, equality and necessity.  A departure therefrom is to  be  done  only
in rare and exceptional cases.

In the last few years, law in this aspect  has  been  straightened  by  this
Court by removing certain cobwebs that had  been  created  because  of  some
divergent views on certain aspects.  It is not even necessary  to  refer  to
all  these  cases.   We  find  that  the  principle  of   determination   of
compensation  in  the  case  of  permanent/partial  disablement   has   been
exhaustively dealt with after referring to the  relevant  case  law  on  the
subject in the case of Raj Kumar v. Ajay Kumar & Ors.[5]  in  the  following
“Assessment of future loss of earnings due to permanent disability

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 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.

9. 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 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%.

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, 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.”

The crucial factor which has to be taken into  consideration,  thus,  is  to
assess as to whether the permanent disability has any adverse effect on  the
earning capacity of the injured.  In this sense,  the  MACT  approached  the
issue in right direction by taking into consideration  the  aforesaid  test.
However, we feel that the conclusion of the MACT, on the application of  the
aforesaid test, is erroneous.  A very myopic view is taken by  the  MACT  in
taking the view that 70% permanent  disability  suffered  by  the  appellant
would not impact the earning capacity of the appellant.   The  MACT  thought
that since the appellant is a Chartered Accountant, he  is  supposed  to  do
sitting work and, therefore, his working capacity is not impaired.   Such  a
conclusion was justified if the appellant was in the  employment  where  job
requirement could be to do sitting/table work  and  receive  monthly  salary
for the said work.  An important feature and aspect which is ignored by  the
MACT is that the appellant is a professional Chartered  Accountant.   To  do
this work efficiently and in  order  to  augment  his  income,  a  Chartered
Accountant is supposed to move around as well.  If  a  Chartered  Accountant
is doing taxation work, he has to appear before  the  assessing  authorities
and  appellate  authorities  under  the  Income  Tax  Act,  as  a  Chartered
Accountant is allowed to practice  up  to  Income  Tax  Appellate  Tribunal.
Many times Chartered Accountants are supposed  to  visit  their  clients  as
well.  In case a Chartered Accountant is primarily doing audit work,  he  is
not only required to visit his clients  but  various  authorities  as  well.
There  are  many  statutory  functions  under  various  statutes  which  the
Chartered Accountants perform.  Free movement is  involved  for  performance
of such functions.  A person who  is  engaged  and  cannot  freely  move  to
attend to his duties may not be able to  match  the  earning  in  comparison
with the one who is healthy and bodily abled.  Movements  of  the  appellant
have been restricted to a large extent and that too at a young age.   Though
the High Court  recognised  this,  it  did  not  go  forward  to  apply  the
principle of multiplier.  We are of the opinion that in  a  case  like  this
and having regard to the injuries suffered by  the  appellant,  there  is  a
definite loss of earning capacity and it calls  for  grant  of  compensation
with the adoption of multiplier method, as held  by  this  Court  in  Yadava
Kumar v. Divisional Manager, National Insurance Company Limited & Anr.[6]:
“9.  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.

10.  In some cases for personal injury, the claim could  be  in  respect  of
lifetime's earnings lost because, though he will live, he  cannot  earn  his
living. In others, the claim may be made for partial loss of earnings.  Each
case has to be considered in the light of its own facts and at the end,  one
must ask whether  the  sum  awarded  is  a  fair  and  reasonable  sum.  The
conventional basis of assessing compensation in  personal  injury  cases—and
that is now recognised mode as to  the  proper  measure  of  compensation—is
taking an appropriate multiplier of an appropriate multiplicand.”

In that case, after  following  the  judgment  in  Kerala  SRTC  v.  Susamma
Thomas[7], the Court chose to apply multiplier of 18  keeping  in  view  the
age of the victim, who as 25 years at the time of the accident.

In the instant case, the MACT had quantified the income of the appellant  at
?10,000, i.e. ?1,20,000 per annum.  Going by the age  of  the  appellant  at
the time of the accident, multiplier of 17 would be admissible.  Keeping  in
view that the permanent disability is 70%, the compensation under this  head
would be worked out at ?14,28,000.  The MACT  had  awarded  compensation  of
?70,000 for permanent disability, which stands enhanced to ?14,28,000.   For
mental and physical agony and frustration and disappointment  towards  life,
the MACT has awarded a sum of ?30,000, which we enhance  to  ?1,30,000.   In
this manner, the compensation that is payable to  the  appellant  is  worked
out as under:
|Head                  |  |Awarded by MACT    |Now Payable      |
|                      |  |Amount (in Rs.)    |Amount (in Rs.)  |
|Medical & Transport   |- |3,10,227           |3,10,227         |
|Expenses              |  |                   |                 |
|Loss of Income        |- |1,00,000           |1,00,000         |
|Mental & Physical     |- |30,000             |1,30,000         |
|agony                 |  |                   |                 |
|Removal of rod        |- |25,000             |25,000           |
|inserted in right leg |  |                   |                 |
|Permanent disability  |- |70,000             |14,28,000        |
|to some extent        |  |                   |                 |
|TOTAL                 |- |5,35,227           |19,93,227        |

            The appellant  shall  also  be  entitled  to  the  interest,  as
awarded by the High Court, as well as costs  of  this  appeal.   The  amount
shall be paid to  the  appellant  within  two  months  after  deducting  the
payments already made.

The appeal is disposed of accordingly.

                                                                (A.K. SIKRI)

                                                              (R.K. AGRAWAL)

FEBRUARY 02, 2017.
[1]   (1966) 3 SCR 649
[2]   (1977) 3 SCC 64
[3]   1969 ACJ 312 (HL. England)
[4]   (1996) 4 SCC 362
[5]   (2011) 1 SCC 343
[6]   (2010) 10 SCC 341
[7]   (1994) 2 SCC 176

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