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Supreme Court of India
Jithendran vs The New India Assurance Co. Ltd. on 27 October, 2021Author: Hrishikesh Roy
Bench: R. Subhash Reddy, Hrishikesh Roy
[REPORTABLE]
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6494 OF 2021
(Arising out of SLP (C) No.13213 OF 2019)
JITHENDRAN APPELLANT(S)
VERSUS
THE NEW INDIA ASSURANCE CO. LTD. & ANR RESPONDENT(S)
J U D G M E N T
Hrishikesh Roy, J.
1. Heard Mr. A. Karthik, learned counsel for the
appellant (claimant). Mr. JPN Shahi, learned counsel
appears for the insurance company (respondent no1).
2. Leave granted. This appeal arises out of a motor
accident claim following the serious injuries suffered
by the appellant on 13.4.2001 when the motor cycle
(where the appellant was riding pillion), was hit by a
car. Both riders were impacted, resulting in severe
head
Signature Not Verified
injuries to the appellant. He was bedridden,
Digitally signed by
Rajni Mukhi
Date: 2021.10.27
17:02:45 IST
Reason:
totally immobilized and initially, remained admitted in
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the hospital for 191 days. The appellant has also
suffered severe impairment of cognitive power with
hemiparesis and total aphasiaand the prognosis for him
is 69%permanent disability.
3. The claim filed by the pillion riding appellant was
analogously considered with other claimantsfrom the
same accident,by the Motor Accident Claims Tribunal,
Thrissur (hereinafter referred to as, ‘the Tribunal’
for short).The Presiding Officer noticed that the
severely impaired pillion rider needed support of two
persons,holding him from either side and because of his
diminished cognitive facilities, the claimant appeared
to be oblivious to his surroundings before the
Tribunal. He could only partially close his mouth and
consequently saliva dribbled from his mouth. The
Tribunal judge noted that the claimant was 21 years old
and was earning around Rs.4,500/- per month from
jewellery work when he suffered the accident.
Considering these factors and applying the multiplier
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of 17, the payable compensation for the pillion
riderwas determined as Rs.5,74,320/- by the Tribunal.
4. Dissatisfied with the awarded sum, the claimant
moved the High Court of Kerala for higher compensation.
With court’s permission, the claimant produced three
discharge summaries, 40 medical bills (totalling
Rs.68,196/-) and 3 medical reports issued by the
hospital where the partially disabled claimant received
further treatment.Those were consideredtogether with
the fact that Rs. 4,500/- p.m. was the earning of the
claimant as a jewellery worker for which, 40% as future
prospect needed to be added.The additional medical
expenses incurred for furthertreatment after the
initial 191 days of hospitalization was taken into
account and,towards future treatment,Rs.1,00,000/- was
added. The nature of permanent disability of 69% was
then factored in under the relevant head and the High
Court quantified a higher sum ofRs.9,38,952/- (instead
of Rs.2,81,520/-) as compensation.Thusadditional
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compensation for permanent disability to the tune of
Rs.8,57,432/- was quantified by the High Court, beyond
the Rs.5,74,320/- determined by the Tribunal for the
pillion rider.
5. The chart below would indicate the compensation
quantified by the Tribunal and the High Court, under
different heads:
Head Tribunal High Court
Loss of earning 12,000/- 12,000/-
Expense for transportation 10,000/- 10,000/-
Extra-nourishment 10,000/- 10,000/-
Damage to clothing 500/- 500/-
Expenses for treatment 1,40,300/- 1,40,300/-
Expense for bystander 50,000/- 50,000/-
Compensation for pain and 50,000/- 1,00,000/-
suffering
Compensation for permanent 2,81,500/- 9,38,952/-
disability
Loss for loss of amenities 20,000/- 70,000/-
Future medical expenses NIL 1,00,000/-
Total 5,74,320/- 14,31,752/-
6. The learned counsel Mr. A. Karthik for the
appellant underscores that the claimant has suffered
69% permanent disability and is unable to perform
everyday activities and he requires constant support
even for the confined life that he is leading.
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Accordingly earnest plea is made for adding expenses
for service of bystander/attendant for the severely
impaired claimant.
6.1 Since additional recurring medical exigencies are
necessitated and expenses are incurred for
regularmedical treatment even after the accident, based
upon the bills and hospital documents produced before
the High Court, the appellant’s counsel argues for
substantial enhancement of the sum awarded under the
head of future medical expenses.
6.2 Becausethe appellant’searning capacity is reduced
to zero, (notwithstanding his 69% permanent
disability), the logic of restricting the compensation
to 69% under the head of permanent disabilityis
questioned and Mr. Karthik, the learned counsel submits
that the correct figure should be reached by treating
it as 100% loss of future earnings.
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6.3 Considering the fact that the injured appellant was
hospitalized for 191 days and was off work, the lower
quantification of his six months loss of earning at
Rs.12,000/-, when income is accepted as Rs. 4500/-, is
questioned by the appellant’s counsel and he argues
that the loss of earning should be quantified at
Rs.27,000/- (instead of Rs.12,000/-,) under the
relevant head.
7. On the other hand, Mr. JPN Shahi, the learned
counsel appearing for the Insurance Company submits
that when 69% percent permanent disability is suffered,
the sum quantified by the High Court at 69% level,
requires no enhancement.
7.1 It is further pointed out by the learned counsel
that the High Court has already awarded Rs.1,00,000/-
towards future medical expenses and the appellant is
disentitled to claim any further sum on the said count.
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7.2 Insofar as the claim for expenses for a
bystander/attendant, the learned counsel submits that
no material is produced by the claimant on the
actualexpenses incurred for service of attendant and
accordingly it is argued that no further claim is
merited under this head.
8. As earlier noted, the appellant has suffered
69%permanent disability and without assistance, cannot
perform everyday functions. The claimant with
seriously impaired cognitive and physical capabilities
would surely need full time assistance even for the
confined life that he is leading. In such
circumstances, the disabled claimant cannot be expected
to rely only upon gratuitous services of his well-
wishers and family members. Importantly, thepresiding
judge in the Tribunal himself noticed that the
claimant would require the assistance of a
bystander/attendant for all his movements.
Consequently, bearing in mind the need for assisted
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living and what was said in Kajal vs. Jagdish Chand and
Others1, it is found necessary to addthe expenses for
service of an attendant for the claimant. Since no
material is produced to quantify the expenses for the
attendant,making a conservativeestimate, Rs.5,000/- per
month appears to be thebareminimum. It is therefore
deemed appropriate to quantify the annual expenses at
Rs.60,000/- and applying the multiplier of 18, the
additional compensation payable under the bystander
head is quantified at Rs.10,80,000/-.
9. The appellant has produced adequate medical
documents before the High Court to show the recurring
needs for testing, treatment and further
hospitalisation for which, considerable expenses were
incurred even after the initial 191 days of
hospitalization. As a person suffering severe cognitive
impairment and 69% disability, recurring medical
treatment is inevitable and bearing in mind
theadditional expenses already incurred, we deem it
1(2020) 4 SCC 413
Page 8 of 20
appropriate to enhance the future medical expenses to
Rs.3,00,000/- (from Rs.1,00,000/-), since the sum
quantified by the High Court appears to be on the lower
side.
10.While the permanent disability as certified by the
doctors stands at 69%,the same by no means, adequately
reflects the travails the impaired claimant will have
to face all his life. The 21 year old’s youthful dreams
and future hopes were snuffedout by the serious
accident. The young man’s impaired condition has
certainly impacted his family members. Their resources
and strength are bound to be stressed by the need to
provide full time care to the claimant. For the
appellant to constantly rely on them for stimulation
and support is destined to cause emotional, physical
and financial fatigue for all stakeholders.
11. The Motor Vehicles Act is in the nature of social
welfare legislation and its provisions make it clear
that the compensation should be justlydetermined.
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Justice A.P. Misra in Helen C. Rebello and Others
v. Maharashtra SRTC and Anr.2, held the following on the
contours of ‘just’ compensation,
“The word “just”, as its nomenclature, denotes
equitability, fairness and reasonableness having a
large peripheral field. The largeness is, of
course, not arbitrary; it is restricted by the
conscience which is fair, reasonable and
equitable, if it exceeds; it is termed as unfair,
unreasonable, unequitable, not just.”
A person therefore is not only to be compensated
for the injury suffered due to the accident but also
for the loss suffered on account of the injury and his
inability to lead the life he led, prior to the life-
altering event. Justice D.Y. Chandrachud speaking for a
three judges’ bench in Jagdish Vs. Mohan and others3
makes the following relevant observation on the
intrinsic value of human life and dignity that is
attempted to be recognised, through such compensatory
awards,
“…the measure of compensation must reflect a
genuine attempt of the law to restore the dignity
2(1999) 1 SCC 90
3(2018) 4 SCC 571
Page 10 of 20
of the being. Our yardsticks of compensation
should not be so abysmal as to lead one to
question whether our law values human life. If it
does, as it must, it must provide a realistic
recompense for the pain of loss and the trauma of
suffering. Awards of compensation are not law’s
doles. In a discourse of rights, they constitute
entitlements under law.”
12. The Courts should strive to provide a realistic
recompense having regard to the realities of life, both
in terms of assessment of the extent of disabilities
and its impact including the income generating capacity
of the claimant. In cases of similar nature, wherein
the claimant is suffering severe cognitive dysfunction
and restricted mobility, the Courts should be mindful
of the fact that even though the physical disability is
assessed at 69%, the functional disability is 100% in
so far as claimant’s loss of earning capacity is
concerned.
13. The extent of economic loss arising from a
disability may not be measured in proportions to the
extent of permanent disability. This aspect was noticed
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in Raj Kumar Vs. Ajay Kumar and Anr.4, where Justice
R.V. Raveendran made the following apt observations:
“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 shows 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
4(2011)1 SCC 343
Page 12 of 20
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.”
14. The test for determining the effect of permanent
disability on future earning capacity involves the
following 3 steps as was laid down in Raj Kumar5 and
reiterated by Justice Indu Malhotra in Chanappa Nagappa
Muchalagoda vs.Divisional Manager, New India Insurance
Company Limited6.
“13. Ascertainment of the effect of the
permanent disability on the actual earning
capacity involves three steps. The Tribunal has to
first ascertain what activities the claimant could
carry on in spite of the permanent disability and
what he could not do as a result of the permanent
disability (this is also relevant for awarding
compensation under the head of loss of amenities
of life). The second step is to ascertain his
avocation, profession and nature of work before
the accident, as also his age. The third step is
to find out whether (i) the claimant is totally
disabled from earning any kind of livelihood, or
(ii) whether in spite of the permanent disability,
the claimant could still effectively carry on the
activities and functions, which he was earlier
carrying on, or (iii) whether he was prevented or
restricted from discharging his previous
activities and functions, but could carry on some
other or lesser scale of activities and functions
5Ibid
6(2020)1 SCC 796
Page 13 of 20
so that he continues to earn or can continue to
earn his livelihood.”
15. The above yardstick to be adopted in such
exigencies was reaffirmed by Justice S. Ravindra Bhat
in Pappu Deo Yadav vs. Naresh Kumar and others7. The
following was set out by the three Judges’ Bench:
“13. The factual narrative discloses that the
appellant, a 20-year-old data entry operator (who
had studied up to 12th standard) incurred permanent
disability, i.e. loss of his right hand (which was
amputated). The disability was assessed to be 89%.
However, the tribunal and the High Court re-
assessed the disability to be only 45%, on the
assumption that the assessment for compensation
was to be on a different basis, as the injury
entailed loss of only one arm. This approach, in
the opinion of this court, is completely
mechanical and entirely ignores realities. Whilst
it is true that assessment of injury of one limb
or to one part may not entail permanent injury to
the whole body, the inquiry which the court has to
conduct is the resultant loss which the injury
entails to the earning or income
generating capacity of the claimant. Thus, loss of
one leg to someone carrying on a vocation such as
driving or something that entails walking or
constant mobility, results in severe income
generating impairment or its extinguishment
altogether. Likewise, for one involved in a job
like a carpenter or hairdresser, or machinist, and
an experienced one at that, loss of an arm, (more
so a functional arm) leads to near extinction of
income generation. If the age of the victim is
beyond 40, the scope of rehabilitation too
diminishes. These individual factors are of
7(2020) SCC Online 752
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crucial importance which are to be borne in mind
while determining the extent of permanent
disablement, for the purpose of assessment of loss
of earning capacity.”
“20. Courts should not adopt a stereotypical or
myopic approach, but instead, view the matter
taking into account the realities of life, both in
the assessment of the extent of disabilities, and
compensation under various heads. In the present
case, the loss of an arm, in the opinion of the
court, resulted in severe income earning impairment
upon the appellant. As a typist/data entry
operator, full functioning of his hands was
essential to his livelihood. The extent of his
permanent disablement was assessed at 89%; however,
the High Court halved it to 45% on an entirely
wrong application of some ‘proportionate’
principle, which was illogical and is unsupportable
in law. What is to be seen, as emphasized by
decision after decision, is the impact of the
injury upon the income generating capacity of the
victim. The loss of a limb (a leg or arm) and its
severity on that account is to be judged in
relation to the profession, vocation or business of
the victim; there cannot be a blind arithmetic
formula for ready application. On an overview of
the principles outlined in the previous decisions,
it is apparent that the income generating capacity
of the appellant was undoubtedly severely affected.
Maybe, it is not to the extent of 89%, given that
he still has the use of one arm, is young and as
yet, hopefully training (and rehabilitating)
himself adequately for some other calling.
Nevertheless, the assessment of disability cannot
be 45%; it is assessed at 65% in the circumstances
of this case.”
16. As noted earlier, the impact on the earning
capacity for the claimant by virtue of his 69%
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disability must notbe measured as a proportionate loss
of his earning capacity. The earning life for
theappellant is over and as such his incomeloss has to
be quantified as 100%. There is no other way to assess
the earning loss since the appellant is incapacitated
for life and is confined to home. In such
circumstances, his loss of earning capacity must be
fixedat 100%.As his monthly incomewas Rs.4,500/-,
adding 40% future prospect thereto,the monthly loss of
earning is quantified as Rs.6,300/-. We therefore deem
it appropriate to quantify Rs.13,60,800/- (Rs.6,300 x
12 x 18) as compensation for 100% loss of earning for
the claimant. Accordingly, under this head, the amount
awarded by the High Court is enhanced proportionately.
17. Thelesser amount for 6 months earning loss during
hospitalization, must also be corrected. The claimant
was awarded Rs.12,000/- for his hospitalization in the
aftermath of the accident. But the lower figure does
not correctly correspond to six monthsloss, when the
Page 16 of 20
income was Rs. 4500/- p.m. Accordingly, the amount
under this head is corrected as Rs.27,000/- (Rs.4,500 x
6).
18. Following the above conclusion, additional
compensation is found merited for the appellant and the
same is ordered. The payableamount under the four
specific heads is indicated as under:
S No Head Amount claimed
1. Expense for bystander Rs.10,80,000/-
2. Future Medical Expenses Rs.3,00,000/-
3. Compensation for permanent Rs.13,60,800/-
disability and loss of earning
power
4. Loss of earning Rs. 27,000/-
5. Total Rs.27,67,800/-
The above quantified sum should be paid by the
first respondent, within six weeks from today. Any
amount paid earlier under these heads, may be adjusted
during payment to the appellant. It is ordered
accordingly.
19. Before parting, it needs emphasizing that in cases
such as this, the Tribunal and the Courts must be
conscious of the fact that the permanent disability
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suffered by the individual not only impairs his
cognitive abilities and his physical facilities but
there are multiple other non-quantifiable implications
for the victim. The very fact that a healthy person
turns into an invalid, being deprived of normal
companionship, and incapable of leading a productive
life, makes one suffer the loss of self-dignity. Such a
Claimant must not be viewed as a modern day Oliver
Twist, having to make entreaties as the boy in the
orphanage in Charles Dickens’s classic, “Please Sir, I
want some more”. The efforts must be to substantially
ameliorate the misery of the claimant and recognize his
actual needs by accounting for the ground realities.
The measures should however be in correct proportion.
As is aptly said by Justice R.V Raveendran, while
speaking for the Division Bench in Sarla Verma and
Others Vs. Delhi Transport Corporation and Another8,
just compensation is adequate compensation and the
Award must be just that- no less and no more. The plea
8 (2009)6 SCC 121
Page 18 of 20
of the victim suffering from a cruel twist of fate,
when asking for some more, is not extravagant but is
for seeking appropriate recompense to negotiate with
the unforeseeable and the fortuitous twists is his
impaired life. Therefore, while the money awarded by
Courts can hardly redress the actual sufferings of the
injured victim (who is deprived of the normal amenities
of life and suffers the unease of being a burden on
others), the courts can make a genuine attempt to help
restore the self-dignity of such claimant, by awarding
‘just compensation’.
20. With the above observation and enhancement of
compensation, the claimant’s appeal stands allowed. The
impugned judgment of the High Court stands modified to
the extent indicated above. The parties to bear their
respective cost.
………………………………………………………J.
[R. SUBHASH REDDY]
……………………………………………………J.
[HRISHIKESH ROY]
NEW DELHI
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OCTOBER 27, 2021
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