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Thursday, March 8, 2018

corporate laws – insurance laws- motor accident claims = Disability was not permanent - reduced the compensation = The Doctor admitted that the disability certificate indicated a tick mark on the word ‘permanent’ by mistake. He further stated that the disability in the present case was likely to improve. we find merit in the contention that the claim for compensation on the basis that the disability was permanent was clearly not established. There was no basis to award an amount of Rs. 20,75,700/-. The Tribunal has awarded an amount of Rs. 2,09,622/- towards medical expenses. We accept the figure of an annual loss of income of Rs. 79,877/-. The disability being of a temporary nature, we award compensation of Rs. 5 lakhs towards loss of income. We allow compensation of Rs. 2 lakhs towards trauma, pain and suffering. In addition, the claimant is entitled to medical expenses of Rs. 2,09,622. We are of the view that the endsof justice would be met by directing a payment of Rs. 9,10,000/- . The claimant shall be entitled to interest at the rate of 9 per cent per annum from the date of the filing of the petition. The insurer shall deposit the compensation along with interest before the Tribunal within twelve weeks which shall be disbursed to the claimant on proper identification.

1
REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 7181 OF 2015
ICICI LOMBARD GENERAL INSURANCE .....APPELLANT
CO. LTD.

 Versus
AJAY KUMAR MOHANTY & ANR. .....RESPONDENTS
WITH
CIVIL APPEAL No. 1879 OF 2016
J U D G M E N T
Dr D Y CHANDRACHUD, J

1 In a claim for compensation under Section 166 of the Motor Vehicles
Act, arising out of a disability sustained by the claimant as a result of a motor
accident, the Tribunal awarded an amount of Rs. 22,85,322/-. The High Court
in an appeal filed by the insurer reduced the compensation to Rs. 12,00,000/-
2
Interest was reduced from 7.5 per cent per annum to 7.0 per cent. The only
reasoning contained in support of the order of the High Court reads as
follows:
“Considering the grounds taken in appeal and the submissions
made by the learned counsel for the parties and keeping in view
the findings of the learned Tribunal given in the impugned award
with regard to the quantum of compensation amount awarded
and the basis on which the same has been arrived at, I feel, the
interest of justice would be best served, if the awarded
compensation amount of Rs. 22,85,322/- is modified and
reduced to Rs. 12,00,000/-. The award of interst @ 7.5% per
annum is also modified and reduced to 7% only. Accordingly, the
claimant is entitled to the modified compensation amount of Rs.
12,00,000/- along with interest @ 7% per annum from the date of
filing of the Claim application. The impugned award is modified
to the said extent.”
2 Ex-facie, there has been no application of mind by the High Court to the
evidence on the record and to the relevant facts and circumstances. The
above extract cannot be regarded as the expression of a reasoned view.
Ordinarily, we would have remitted the case back to the High Court for a fresh
determination. However, we are inclined not to do so in order to prevent a
miscarriage of justice which delay in itself is likely to occasion. The accident
took place on 25 April 2009 when the appellant was 32 years of age. The
judgment of the Tribunal was rendered on 26 February 2014. The High Court
delivered its judgment on 15 April 2015. Leave was granted by this Court on 25
February 2016. Hence, we have heard the learned counsel appearing on
behalf of the contesting parties on merits and proceed to resolve the dispute
so as to render finality to the case.
3
3 The accident in question took place on 25 April 2009 when the claimant
was proceeding from Keonjhar to Badbil. The vehicle fell over a bridge of NH
215. The claimant was rescued by the villagers and was shifted to hospital for
treatment. He suffered from a fracture to the left elbow and femur. The Tribunal
entered a finding of fact that the evidence of the claimant remained unshaken
and that the accident was caused by the rash and negligent act of the driver of
the vehicle. The vehicle was insured with ICICI Lombard General Insurance
Company Ltd. (the insurer).
4 While assessing the claim for compensation, the Tribunal noted the
evidence of PW2, the Doctor who had issued a disability certificate to the
claimant. The Doctor opined that the disability was temporary and not
permanent. It appears that an admission was elicited during the course of the
cross-examination to the effect that he had made certain interpolations in the
disability certificate without the consent or knowledge of the CDMO. The
Tribunal held that whether the disability was permanent or temporary, it was
duty bound to make an assessment. From the income tax returns of the
claimant for 2007, 2008 and 2009, the Tribunal observed that his annual
income would work out to Rs. 1,45,231/-. The Tribunal thereafter observed that
the annual income was Rs. 2,62,372/-. The Tribunal however accepted the
evidence of the claimant which placed his income at a lower amount of Rs.
2,22,000/- annually on the basis of the evidence of the claimant that as a BClass
contractor, he was earning Rs. 18,500/- per month. The Tribunal applied
4
a multiplier of 17 per cent. Treating the disability to be 55 per cent, on the basis
of the certificate of the District Medical Board, Bhadrak, the Tribunal computed
the compensation at Rs. 20,75,700/-. In addition, an amount of Rs. 2,09,622/-
was awarded on account of medical expenses. A total quantum of Rs.
22,85,322/- was awarded.
5 Learned counsel appearing on behalf of the insurer submits that the
order of the Tribunal is contradictory and contrary to the weight of the
evidence. The error has been compounded by the failure of the High Court to
attribute reasons. Counsel submits that the Tribunal proceeded on the
manifestly erroneous basis that the claimant suffered a permanent disability. It
was urged that the evidence of PW 2, the doctor, indicates that the disability
certificate was unauthorizedly interpolated by him. The admissions of the
doctor in the course of his evidence that the injury was of a temporary nature
and was likely to improve have been ignored. Moreover, it has been submitted
that the judgment of the Tribunal, especially paragraph 10, would indicate that
the Tribunal has committed serious and apparent errors of computation and
there is an internal inconsistency in its reasoning.
6 On the other hand, learned counsel appearing on behalf of the claimant
submits that while PW 2 admits having interpolated the disability certificate,
this should in fact weigh in favour of the claimant as the nature of the
interpolation would indicate. Like the insurer, the claimant also has a
5
grievance in regard to the fact that the order of the High Court is not reasoned.
However, what the claimant submits is that there was no justification for the
High Court to reduce the quantum of compensation awarded by the Tribunal.
7 On perusing the order of the Tribunal, we find merit in the contention of
the insurer that while calculating the income in paragraph 10 of its order, the
Tribunal has committed an error of computation. The Tribunal has on the basis
of the income tax returns for 2007, 2008 and 2009 arrived at an average
income of Rs. 1,45,231/-. However, the Tribunal has thereafter noted that the
average income comes to Rs. 2,62,372/-. Ultimately, the Tribunal proceeds on
the annual income of Rs. 2,22,000/- on the basis of the testimony of the
claimant that he was earning Rs. 18,500/- per month. This is contradictory. In
our view, on the basis of the finding of the Tribunal that the average income of
the claimant for the previous three years was Rs. 1,45,231/-, it would be
necessary to take into account the evidence of PW2 that the disability is to the
extent of 55 per cent. In other words, the loss of earning as a result of the
aforesaid disability would work out to Rs. 79,877/- per year.
8 In arriving at the quantification of compensation, we must be guided by
the well-settled principle that compensation can be granted both on account of
permanent disability as well as loss of future earnings, because one head
relates to the impairment of the person’s capacity and the other to the sphere
of pain and suffering on account of loss of enjoyment of life by the person
himself.
6
9 In Sri Laxman @ Laxman Mourya v Divisional Manager, Oriental
Insurance Co. Ltd1
, this Court held thus:
“The ratio of the above noted judgments is that if the victim of an
accident suffers permanent or temporary disability, then efforts
should always be made to award adequate compensation not
only for the physical injury and treatment, but also for the pain,
suffering and trauma caused due to accident, loss of earnings
and victim’s inability to lead a normal life and enjoy amenities,
which he would have enjoyed but for the disability caused due to
the accident.”

In Govind Yadav v New India Insurance Company Limited2
, this Court after
referring to the pronouncements in R.D. Hattangadi v Pest Control (India)
(P) Ltd.3
 , Nizam’s Institute of Medical Sciences v Prasanth S. Dhananka4
,
Reshma Kumari v Madam Mohan5
, Arvind Kumar Mishra v New India
Assurance Co. Ltd.6
, Raj Kumar v Ajay Kumar7
 held thus:
“18. In our view, the principles laid down in Arvind Kumar
Mishra v. New India Assurance Co. Ltd. and Raj Kumar v. Ajay
Kumar must be followed by all the Tribunals and the High Courts
in determining the quantum of compensation payable to the
victims of accident, who are disabled either permanently or
temporarily. If the victim of the accident suffers permanent
disability, then efforts should always be made to award adequate
compensation not only for the physical injury and treatment, but
also for the loss of earning and his inability to lead a normal life
and enjoy amenities, which he would have enjoyed but for the
disability caused due to the accident.” (Id at page 693)
1 2011 (12) SCALE 658
2 (2011) 10 SCC 683
3 (1951) 1 SCC 551
4 (2009) 6 SCC 1
5 (2009) 13 SCC 422
6 (2010) 10 SCC 254
7 (2011) 1 SCC 343
7
These principles were reiterated in a judgment delivered by one of us (Justice
Dipak Misra, as the learned Chief Justice then was) in Subulaxmi v MD Tamil
Nadu State Transport Corporation8
.
10 In the present case, the evidence of PW2 Dr Umakanta Jena indicates
that he had initially, before issuing the disability certificate, examined the
shoulder joint, elbow joint and left femur as per the discharge certificate. The
discharge certificate indicated that the injuries sustained were grievous in
nature. The Doctor initially placed a tick mark over the word ‘permanent’.
However, subsequently he made an interpolation by cutting the word
‘permanent’ and “not likely to improve”. The evidence of the Doctor is
reproduced below, insofar as it is material:
“4) The disability is temporary but not permanent. The disability
is likely to improve. The disability certificate is the original one.
By mistake, I gave a tick mark on the word “permanent”. Per day
about one hundred disability certificates are issued. So, I
committed this wrong. I have not mentioned which documents I
verified prior to issuance of this disability certificate. There is
nothing in the certificate to show that there was nailing.
Particularly in this case, the disability may improve. Any fracture
of extremity will cause disability. I cannot give any authority to
the opinion of my above sentence.
5) It is not a fact that the percentage of disability has been made
by me being gained over by the injured and that there was no
disability. It is not a fact that being gained over by the injured I
gave this disability certificate.
TO COURT:-
Q. No. 1:- Whether the certificate issued by you is
creating confusion?
Ans; Yes.
Q. No. 2: Whether you will be paid T.A. and D.A.
from State Exchequer for your mistake?
Ans:, No, I should be paid.
8 (2012) 10 SCC 177
8
Q. No. 3:- Whether my attendance in the court is a
govt. duty or C.L.?
Ans: For my mistake I should take C.L.
Q. No. 4:- Can you explain why you interpolated
the certificate which was signed by 4
doctors including CDMO, Bhadrak?
Ans: I cannot explain.
Q. No. 5:- Was not it desirable to obtain the
consent of other three doctors before
cutting and putting tick mark and making
interpolation on an already prepared
public document?
Ans: I should have obtained the consent and
signature of all other signatories before
interpolating the document.”
11 The doctor has admitted to having made an interpolation in the disability
certificate. The above evidence indicates that the disability is temporary and
not permanent. The Doctor admitted that the disability certificate indicated a
tick mark on the word ‘permanent’ by mistake. He further stated that the
disability in the present case was likely to improve.
12 Having regard to all these facts and circumstances, we find merit in the
contention that the claim for compensation on the basis that the disability was
permanent was clearly not established. There was no basis to award an
amount of Rs. 20,75,700/-. The Tribunal has awarded an amount of Rs.
2,09,622/- towards medical expenses. We accept the figure of an annual loss
of income of Rs. 79,877/-. The disability being of a temporary nature, we award
compensation of Rs. 5 lakhs towards loss of income. We allow compensation
of Rs. 2 lakhs towards trauma, pain and suffering. In addition, the claimant is
entitled to medical expenses of Rs. 2,09,622. We are of the view that the ends
9
of justice would be met by directing a payment of Rs. 9,10,000/- . The claimant
shall be entitled to interest at the rate of 9 per cent per annum from the date of
the filing of the petition. The insurer shall deposit the compensation along with
interest before the Tribunal within twelve weeks which shall be disbursed to the
claimant on proper identification.
13 For the above reasons, we set aside the impugned judgment and order
of the High Court. Both the appeals are disposed of in terms of the directions
issued above. There shall be no order as to costs.
............................................CJI
 [DIPAK MISRA]
 ……......................................
...J
 [A M KHANWILKAR]

….............................................J
 [Dr D Y CHANDRACHUD]
New Delhi
March 06, 2018

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