REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6481 OF 2011
(Arising out of Special Leave Petition (C) No. 15747 of 2010)
Sri Ramachandrappa ........... Appellant
versus
The Manager, Royal Sundaram
Alliance Insurance Company Limited .......... Respondent
J U D G M E N T
H.L. Dattu, J.
1. Leave granted.
2. This appeal is directed against the Judgment and Decree
passed by the High Court of Karnataka in MFA No. 10869 of 2006
dated 9th day of December, 2009, whereby the High Court has
partly allowed the appeal and enhanced the compensation awarded
by the Court of Small Causes, Bangalore (`Tribunal' for short) in
MVC Case No. 5124 of 2004 dated 25.03.2006. The Tribunal has
awarded a sum of `1,13,900/- with interest at 6% p.a. from the date
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of the claim petition till the date of deposit as against the claim of
the appellant for `5,50,000/-. The High Court, by its impugned
Judgment and order, has marginally increased the compensation
awarded by the Tribunal. The appellant, being aggrieved by the
compensation awarded by the Tribunal and the High Court, has
filed this appeal.
3. The facts of the present case are as follows :-
The appellant was working as a Coolie and earning `4500/-
per month. He was riding as pillion on a motorcycle with one
Hanumanthappa, when they met with an accident. Appellant
sustained grievous injuries. He was treated in a private nursing
home and his treatment continued for a long time. In the claim
petition, it was his case and claim that even after treatment, his
right hand is completely disabled and due to which, his work and
livelihood completely suffered. Appellant filed an application under
Section 166 of Motor Vehicles Act, 1988 for compensation of
`5,50,000/- by way of special and general damages on account of
injuries, pain, mental agony, loss of earning, physical disabilities,
shortening of expectation of life due to injuries sustained in the
accident and medical expenses incurred thereon.
Hanumanthappa, who was Respondent No. 1 in the Claim Petition,
though served with the notice of petition, did not appear before the
Court to oppose the relief sought in the claim petition. The
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Tribunal, after considering the evidence on record, has awarded a
compensation of `1,13,900/- with interest at 6% per annum from the
date of petition till the date of deposit as against the claim of the
appellant for `5,50,000/-.
4. Aggrieved by the inadequate compensation awarded, the
appellant preferred an appeal before the High Court of Karnataka.
The court, by its order dated 9th of December, 2009, has awarded
the compensation of `1,33,900/-, as against `1,13,900/- awarded by
the Tribunal, with interest at 6% per annum on the enhanced
compensation from the date of the petition till the date of
realization. The appellant, being dissatisfied with the compensation
awarded, is before us in this appeal.
5. We have heard the learned counsel for the parties to the lis
and perused the records.
6. Before the Tribunal, the appellant had examined himself
(PW-1) and one Dr. P.K.Raju, Asst. Professor in Orthopaedics
(PW-2) in support of his claim petition. The Doctor, in his evidence,
has stated that the appellant cannot work as a coolie by using his
right hand and cannot do any other manual work. Though, he was
cross-examined, nothing adverse to the claim of the appellant is
elicited.
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7. The learned counsel for the appellant submits that due to the
injuries sustained by the appellant in the accident, the appellant is
permanently disabled, which would affect his future earning
capacity as a Coolie. Per contra, learned counsel for the Insurance
Company submits that since the appellant has suffered only 41% of
disability, the High Court was justified in restricting the claim
against the claim made by the appellant.
8. The compensation is usually based upon the loss of the
claimant's earnings or earning capacity, or upon the loss of
particular faculties or members or use of such members, ordinarily
in accordance with a definite schedule. The Courts have time and
again observed that the compensation to be awarded is not
measured by the nature, location or degree of the injury, but rather
by the extent or degree of the incapacity resulting from the injury.
The Tribunals are expected to make an award determining the
amount of compensation which should appear to be just, fair and
proper.
9. The term "disability", as so used, ordinarily means loss or
impairment of earning power and has been held not to mean loss of
a member of the body. If the physical efficiency because of the
injury has substantially impaired or if he is unable to perform the
same work with the same ease as before he was injured or is
unable to do heavy work which he was able to do previous to his
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injury, he will be entitled to suitable compensation. Disability
benefits are ordinarily graded on the basis of the character of the
disability as partial or total, and as temporary or permanent. No
definite rule can be established as to what constitutes partial
incapacity in cases not covered by a schedule or fixed liabilities,
since facts will differ in practically every case.
10. In Ramesh Chandra Vs. Randhir Singh (1990) 3 SCC 723,
this Court drawing distinction between the compensation for future
loss and pain and enjoyment of life, has observed as under :
"... The incapacity or disability to earn a
livelihood would have to be viewed not only in
presenti 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."
11. In K.G. Poovaiah (Dr) v. G.M./Managing Director, Karnataka
KSRTC, (2001) 9 SCC 167, the appellant was a Medical
Practitioner and was aged about 36 years and had met with an
accident in which his hand was crushed. This Court, while
considering the nature of his profession and income, has enhanced
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the amount of compensation for loss of future earnings. This Court
observed :
"There is no reason to doubt the testimony of the
appellant so far as his monthly income is
concerned. Being a medical man aged about 36
years on the date of the accident, the monthly
salary received by him cannot be said to be
exaggerated. He has candidly admitted that he was
not assessed to tax. A salary of Rs 3000 per month
to a medical practitioner cannot be said to be on the
higher side. We, therefore, accept his statement in
this behalf. We also accept the assessment at Rs
40,000 for pain and suffering. However, the
assessment of compensation under the head of loss
of earning capacity is very much on the lower side.
The injury to the right hand, which has left a
permanent disability and which has affected the
functioning of the limb and in particular the fingers,
is a serious handicap to a medical practitioner.
Patients would be reluctant to go to him for
treatment and, therefore, the loss of earning
capacity would be substantial. Even if we were to
assume that it would reduce his earning capacity by
50% and even if we go by his earnings at the date
of the accident, the monthly loss would come to Rs
1500 i.e. Rs 18,000 per annum. If this monthly loss
of earning is multiplied by 10 years purchase factor
the compensation would work out to Rs 1,80,000.
To that must be added the compensation allowed
under certain other heads, namely, pain and
suffering, loss of amenities, medical expenses, etc.
The total amount comes to Rs 2,38,000."
12. In Kapil Kumar v. Kudrat Ali, (2002) 4 SCC 337, a student
suffered injuries on his hand and the disability of 20% was
assessed by the Doctors. This Court, while upholding the High
Court's observation in relation to compensation for loss of future
earnings, has held:
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"However, the disability sustained was assessed at 20
per cent. As rightly observed by the High Court, the
loss of earning capacity on account of permanent
partial disability suffered by the appellant cannot be
calculated in terms of percentage only. It will have
serious repercussions on his studies and prospects of
earning. He will have to face other handicaps in life.
Though the High Court did realise the need to enhance
the compensation, we feel that the extent of
enhancement is still inadequate. The increase of Rs
5000 is only marginal. Taking inter alia the table in the
Second Schedule as the guiding factor, we are of the
view that the compensation on account of disability
incurred by the appellant should be enhanced by Rs
20,000 more; that means, he will get Rs 40,000 instead
of Rs 20,000 awarded by the High Court under the first
head."
13. In Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, this Court,
while considering the award of compensation to the victim of motor
accident for loss of future earning due to some permanent physical
disability, has observed :
"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
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capacity to the extent (percentage) of permanent
disability will result in award of either too low or too
high a compensation.
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. (See for example, the
decisions of this Court in Arvind Kumar Mishra v. New
India Assurance Co. Ltd.4 and Yadava Kumar v.
National Insurance Co. Ltd.5)
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
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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."
14. In the instant case, it is not in dispute that the appellant was
aged about 35 years and was working as a Coolie and was earning
`4500/- per month at the time of accident. This claim is reduced by
the Tribunal to a sum of `3000/- only on the assumption that wages
of the labourer during the relevant period viz. in the year 2004, was
`100/- per day. This assumption in our view has no basis. Before
the Tribunal, though Insurance Company was served, it did not
choose to appear before the Court nor did it repudiated the claim of
the claimant. Therefore, there was no reason for the Tribunal to
have reduced the claim of the claimant and determined the monthly
earning a sum of `3000/- per month. Secondly, the appellant was
working as a Coolie and therefore, we cannot expect him to
produce any documentary evidence to substantiate his claim. In
the absence of any other evidence contrary to the claim made by
the claimant, in our view, in the facts of the present case, the
Tribunal should have accepted the claim of the claimant. We
hasten to add that in all cases and in all circumstances, the
Tribunal need not accept the claim of the claimant in the absence of
supporting material. It depends on the facts of each case. In a
given case, if the claim made is so exorbitant or if the claim made is
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contrary to ground realities, the Tribunal may not accept the claim
and may proceed to determine the possible income by resorting to
some guess work, which may include the ground realities prevailing
at the relevant point of time. In the present case, appellant was
working as a Coolie and in and around the date of the accident, the
wage of the labourer was between `100/- to 150/- per day or
`4500/- per month. In our view, the claim was honest and bonafide
and, therefore, there was no reason for the Tribunal to have
reduced the monthly earning of the appellant from `4500/- to
`3000/- per month. We, therefore, accept his statement that his
monthly earning was `4500/-.
15. The appellant, in so far as disability caused due to accident
is concerned, had stated in his evidence that he had sustained
severe bodily injuries which has resulted in permanent partial
disability, which would affect his future earning capacity as a
Coolie. The Doctor, who was examined as claimant's witness, has
stated that the appellant has sustained malunited fracture 2nd, 3rd,
4th, 5th MCB right and malunited fracture scapula right and in his
opinion, the appellant has suffered permanent physical disability of
41% to right upper limb and in view of the disability, the claimant
cannot work as a Coolie and cannot do any other manual work as a
Coolie. The Tribunal, while assessing the loss of income has taken
the disability to the whole body as 1/3rd of particular limb and has
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assessed the loss of income, at 1/3rd of 41% which comes to about
13.5%. So the loss of income taken at 13.5% of `3000/- and has
quantified the loss of future income at `72,900/-. We cannot accept
this quantification arrived at by the Tribunal, since the assessment
of compensation under the head of loss of earning capacity is
calculated abysmally on the lower side. On the question of
disability caused due to the accident, the Doctor, who has been
examined as claimant's witness, says that because of the injury
sustained by the claimant, he cannot work as a Coolie and cannot
do any other manual work. This part of the evidence is not
controverted by the insurance company by subjecting the claimant
to cross-examination. Therefore, we can safely conclude that
claimant has become permanently disabled and, therefore, has lost
the future earning capacity permanently. The claimant has also
suffered prolonged medical treatment and hospitalization. Looking
to the amount awarded by the Tribunal, we are of the view that the
same is too less and, therefore, we are inclined to enhance the
same. Taking into consideration the future economic loss, he
would suffer because of permanent partial disability, which would
not permit him to work as a Coolie or any other job, the medical
expenses incurred, pain and sufferings, loss of income during
treatment, period of loss of future amenities and discomfort, in our
view, interest of justice will be served if an additional amount of
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`2,00,000/- (Rupees Two Lakhs) is granted to the appellant by way
of compensation.
16. The respondent-Insurance company is directed to deposit
the enhanced compensation amount together with interest from the
date of petition till the date of deposit before the Tribunal within a
period of eight weeks from today. The enhanced compensation
amount with interest shall be paid to the claimant on such deposit.
17. The appeal is allowed to the extent indicated above. Costs
are made easy.
..............................J.
[ G. S. SINGHVI ]
..............................J.
[ H. L. DATTU ]
New Delhi,
August 09, 2011.
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