Awarding Stingy Amounts to Accident Victims an Affront to Their Dignity: SC

In the instant case, the Supreme Court more than doubled the compensation payable to the victim, considering his earning capacity and future prospects.

New Delhi: In a judgment of considerable significance, the Supreme Court bench of Justices L. Nageswara Rao, Krishna Murari and S. Ravindra Bhat on Thursday underlined that courts should be mindful that a serious injury not only permanently imposes physical limitations and disabilities but too often inflicts deep mental and emotional scars upon the victim.

“The attendant trauma of the victim’s having to live in  a world entirely different from the one she or he is born into, as an invalid, and with degrees of dependence on others, robbed of complete personal choice or autonomy, should forever be in the judge’s mind, whenever tasked to adjudge compensation claims,” Justice Bhat, who authored the judgment, observed.

More importantly, Justice Bhat reminded judges of the high courts and the Supreme Court that severe limitations inflicted due to such injuries undermine the dignity (which is now recognised as an intrinsic component of the right to life under Article 21) of an individual, thus depriving the person of the essence of the right to a wholesome life which she or he had lived, hitherto.

“From the world of the able bodied, the victim is thrust into the world of the disabled, itself most discomfiting and unsettling. If courts nit-pick and award niggardly amounts oblivious of these circumstances, there is resultant affront to the injured victim,” Justice Bhat observed on behalf of the bench.

In the instant case, Pappu Deo Yadav v Naresh Kumar and Others, the appellant was injured in a motor accident while travelling to Hapur as a passenger in a bus in 2012. At the time of the accident, he was aged 20 years, and was employed as a data entry operator. He had suffered permanent disability, that is, loss of his right hand (which was amputated). He claimed compensation, impleading the owner, the driver of the vehicle, and the insurer. The disability report showed that he suffered 89% disability. He claimed compensation of Rs 50 lakh with interest at the rate of 12% per annum.

The Motor Accident Claims Tribunal awarded compensation of Rs 14,25,400 out of which Rs 11,66,400 was for loss of future earning capacity/income. The Tribunal assessed his physical disability to be 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.

The Delhi high court, on appeal, revised the compensation by doing away with the addition of 50% towards future prospects on a misreading of Supreme Court’s judgments, which in its view, applied only to compensation for future loss of income. The high court reassessed the compensation for loss of earning capacity as Rs 7,77,600, and the total compensation was reassessed to be Rs 14,36,600. The high court didn’t alter the Tribunal’s assessment of extent of his physical disability.

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The high court found that a Supreme Court’s decision, delivered by a three-judge bench, that did not award compensation for future prospects to a victim who suffered permanent disability, was binding.

The high court read the Supreme Court’s judgment in Pranay Sethi as applicable only to cases where the victim died. In Pranay Sethi, the Supreme Court allowed compensation for “future prospects”. However, since the victim in that case had died as a result of the accident, the high court assumed that it was applicable only to cases where the victim died.

The Supreme Court, on Thursday, found such a narrow reading of Pranay Sethi as illogical, because it denies altogether the possibility of the living victim progressing further in life in accident cases – and admits such possibility of future prospects, in case of the victim’s death.

“Whilst no amount of money or other material compensation can erase the trauma, pain and suffering that a victim undergoes after a serious accident, (or replace the loss of a loved one), monetary compensation is the manner known to law, whereby society assures some measure of restitution to those who survive, and the victims who have to face their lives,” the bench reasoned.

The bench held that in view of the decisive rulings of the apex court, the high court clearly erred in holding that compensation for loss of future prospects could not be awarded. Thus in addition to loss of future earnings (based on a determination of the income at the time of accident), the appellant is also entitled to compensation for loss of future prospects, at 40% (following the Pranay Sethi principle).

The Supreme Court also found fault with the Tribunal’s and the high court’s assessment of his physical disability to be 45%. Calling it completely mechanical and ignoring realities, the bench observed:

“While 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.”

The bench emphasised that individual factors are of 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. For 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, the bench elaborated, adding, if the age of the victim is beyond 40, the scope of rehabilitation too diminishes.

The Supreme Court assessed the extent of physical disability of the victim in this case at 65%. The bench found that the courts below needlessly discounted the evidence presented by him in respect of his income as Rs 12,000, to the extent of bringing it down to Rs 8,000 per month. Adding future prospects at 40%, the Supreme Court assessed his income as Rs 14,000 per month for the purpose of calculation of compensation. Thus, it found the compensation payable to him as Rs 19,65,600 towards loss of earning capacity and future prospects.

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The Supreme Court, however, did not interfere with the high court’s assessment of amounts payable to him under other heads, such as compensation for medical expenses, for pain and suffering, for special diet and attendant, conveyance charges, loss of amenities and enjoyment of life, disfigurement and loss of income during treatment.

In another case, decided by another bench on the same day,  the Supreme Court has reached similar conclusion that the high court went wrong in not awarding any sum under the head of loss of future prospects. In this case, the victim was a skilled labourer in a building construction project. Considering that the degree of his disability is 100%, the bench assessed his loss of future earning as Rs 9,40,800.

The bench rejected the insurance company’s plea for making any deduction towards personal living expenses, and awarded fresh compensation for expenses for a caregiver, as his family members must have performed that role by diverting their own time from any form of gainful employment. The bench thus awarded Rs 7 lakh as lumpsum for medical attendant charges and future medical treatment of the victim. In traumatic times after his accident, his family was unlikely to maintain detailed records of the expenses incurred, the bench reasoned.

The bench also raised the compensation for pain and suffering from Rs 10,000 to Rs 3 lakh, but reduced the sum awarded by the high court for loss of amenities from Rs 40,000 to Rs 10,000, relying on a precedent.