NON-REPORTABLE
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
A.K. SIKRI, J.
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
words:
“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
compensation.
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.
.............................................J.
(A.K. SIKRI)
.............................................J.
(R.K. AGRAWAL)
NEW DELHI;
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
