Sri Ramachandrappa Vs.
the Manager, Royal Sundaram Alliance Insurance Company Limited
J U D G M E N T
H.L. Dattu, J.
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 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.
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
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 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
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
have heard the learned counsel for the parties to the lis and perused the
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.
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.
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.
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 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.
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."
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 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."
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: "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
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."
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 7capacity 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 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."
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 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/-.
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 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
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 `2,00,000/- (Rupees Two Lakhs) is granted to the appellant by way of
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
appeal is allowed to the extent indicated above. Costs are made easy.
[ G. S. SINGHVI ]
[ H. L. DATTU ]