2007 JTR(SC) 1423
2008 ACJ 9 ; 2007 60 AIC 102 ; 2007 Supp AIR(SC) 1184 ; 2007 AIR(SCW) 7166 ; 2008 1 ALD(SC) 114 ; 2007 69 AllLR 920 ; 2008 1 AllMR(SC) 413 ; 2008 1 ApexCJ(SC) 242 ; 2008 1 AWC 106 ; 2008 1 CalLJ(SC) 79 ; 2008 1 CivLJ 832 ; 2007 DNJ 1087 ; 2007 12 JT 648 ; 2008 2 MLJ 865 ; 2008 1 MPWN 127 ; 2008 1 PLR(SC) 313 ; 2007 4 RCR(Civ) 794 ; 2007 12 Scale 792 ; 2007 14 SCC 61 ; 2009 1 SCC(Cri) 771 ; 2007 11 SCR 876 ; 2008 1 WLC 325 ; 2007 KHC 4146 ; 2007 7 Supreme 450
2007(7) Supreme 450
Supreme Court of india
Ashok Bhan & D.K. Jain, JJ.
Sunil Kumar — Petitioner
versus
Ram Singh Gaud & Ors. — Respondents
Appeal (civil) 5108 of 2007
Decided on : 02-11-2007
Important point
Where tribunal as well as High Court erred in not awarding any compensation towards loss of future income to appellant who suffered permanent disability to extend of 45 percent then in that case it was held that appellant was required to be compensated for loss of earning due to injuries suffered by him in accident.
Act Referred :MOTOR VEHICLES ACT : S.166, S.163(a)
(A) The Motor Vehicles Act, 1998, Section 166 and Section 163(a) form the statutory basis for adjudicating compensation claims arising from road accidents. Section 166 governs liability in cases where death or personal injury results from the rash or negligent driving of a motor vehicle, while Section 163(a) empowers the Motor Accident Claims Tribunal to award compensation for bodily injury, including permanent disability. In this matter, these provisions apply directly to determine the quantum of compensation payable to the victim of a collision caused by the negligent driver of a truck dumper, where the appellant sustained grievous injuries leading to permanent disability. The Act mandates that compensation must cover not only immediate medical expenses and pain and suffering but also the loss of future earning capacity caused by the disability.
(B) Key legal principles include: compensation for permanent disability must be assessed based on the percentage of disability; loss of future earning capacity is an essential head of damage and must be independently calculated using a multiplier; and the award of compensation must reflect the diminished earning capacity of the victim, taking into account their pre-accident income, age, and the duration over which the loss is expected to occur.
Facts of the case:
On 10th July, 2003, the appellant was driving his mini truck when he was struck by a truck dumper coming from the opposite direction. The dumper was being driven in a rash and negligent manner, causing the appellant to sustain grievous injuries, including three fractures, with a medically assessed permanent disability of 45%. At the time of the accident, the appellant was 29 years old and employed as a driver earning Rs.4,000 per month. A claim was filed under Section 166 of the Act before the Motor Accident Claims Tribunal, seeking compensation for disability, medical expenses, and pain and suffering. The Tribunal awarded a total compensation of Rs.72,000, comprising amounts for disability, treatment, and pain and agony, but did not provide any compensation for loss of future income. The High Court dismissed the appellants appeal, leading the appellant to challenge the orders on the ground that no compensation was awarded for the loss of his earning capacity.
Findings of Court:
The court found that the Tribunal and the High Court committed an error in not awarding compensation for the loss of future earning capacity arising from the injuries. The permanent disability of 45% was accepted, and it was held that the injuries would likely prevent the appellant from continuing his vocation as a driver. Even if he were to pursue an alternate vocation, his earning capacity would be substantially reduced. The court observed that the appellants present monthly income was Rs.4,000, and his future earning capacity was diminished by approximately Rs.1,800 per month after accounting for miscellaneous expenses. Based on a multiplier of 18 as specified in the Second Schedule to Section 163A of the Act, the total loss of income was calculated at Rs.2,59,200.
Issues:
Whether compensation for loss of future earning capacity is mandated under the Motor Vehicles Act when a victim sustains permanent disability due to a rash and negligent act of another road user.
Ratio Decidendi:
The court held that compensation under the Motor Vehicles Act must comprehensively address both immediate and prospective losses caused by the accident. In cases of permanent disability, the reduction in future earning capacity forms an integral part of the victims damages and must be independently calculated using the statutory multiplier, ensuring that the victim is adequately compensated for the economic impact of the disability.
Result:
The appeal is allowed. The orders of the Tribunal and the High Court are modified by enhancing the compensation by adding Rs.2,59,200 for loss of future income, in addition to the amount already awarded, along with interest at 6% per annum from the date of the claim petition.
(A) The Motor Vehicles Act, 1998, Section 166 and Section 163(a) form the statutory basis for adjudicating compensation claims arising from road accidents. Section 166 governs liability in cases where death or personal injury results from the rash or negligent driving of a motor vehicle, while Section 163(a) empowers the Motor Accident Claims Tribunal to award compensation for bodily injury, including permanent disability. In this matter, these provisions apply directly to determine the quantum of compensation payable to the victim of a collision caused by the negligent driver of a truck dumper, where the appellant sustained grievous injuries leading to permanent disability. The Act mandates that compensation must cover not only immediate medical expenses and pain and suffering but also the loss of future earning capacity caused by the disability.
(B) Key legal principles include: compensation for permanent disability must be assessed based on the percentage of disability; loss of future earning capacity is an essential head of damage and must be independently calculated using a multiplier; and the award of compensation must reflect the diminished earning capacity of the victim, taking into account their pre-accident income, age, and the duration over which the loss is expected to occur.
Facts of the case:
On 10th July, 2003, the appellant was driving his mini truck when he was struck by a truck dumper coming from the opposite direction. The dumper was being driven in a rash and negligent manner, causing the appellant to sustain grievous injuries, including three fractures, with a medically assessed permanent disability of 45%. At the time of the accident, the appellant was 29 years old and employed as a driver earning Rs.4,000 per month. A claim was filed under Section 166 of the Act before the Motor Accident Claims Tribunal, seeking compensation for disability, medical expenses, and pain and suffering. The Tribunal awarded a total compensation of Rs.72,000, comprising amounts for disability, treatment, and pain and agony, but did not provide any compensation for loss of future income. The High Court dismissed the appellants appeal, leading the appellant to challenge the orders on the ground that no compensation was awarded for the loss of his earning capacity.
Findings of Court:
The court found that the Tribunal and the High Court committed an error in not awarding compensation for the loss of future earning capacity arising from the injuries. The permanent disability of 45% was accepted, and it was held that the injuries would likely prevent the appellant from continuing his vocation as a driver. Even if he were to pursue an alternate vocation, his earning capacity would be substantially reduced. The court observed that the appellants present monthly income was Rs.4,000, and his future earning capacity was diminished by approximately Rs.1,800 per month after accounting for miscellaneous expenses. Based on a multiplier of 18 as specified in the Second Schedule to Section 163A of the Act, the total loss of income was calculated at Rs.2,59,200.
Issues:
Whether compensation for loss of future earning capacity is mandated under the Motor Vehicles Act when a victim sustains permanent disability due to a rash and negligent act of another road user.
Ratio Decidendi:
The court held that compensation under the Motor Vehicles Act must comprehensively address both immediate and prospective losses caused by the accident. In cases of permanent disability, the reduction in future earning capacity forms an integral part of the victims damages and must be independently calculated using the statutory multiplier, ensuring that the victim is adequately compensated for the economic impact of the disability.
Result:
The appeal is allowed. The orders of the Tribunal and the High Court are modified by enhancing the compensation by adding Rs.2,59,200 for loss of future income, in addition to the amount already awarded, along with interest at 6% per annum from the date of the claim petition.
Order
1. Leave granted.
2. Factual background of the case is that on 10th July, 2003, appellant was driving his mini truck No.MP 20 G-7705 towards Bargi along with one Ramesh Prajapati. When the mini truck reached Chulha Gulhai, a truck dumper bearing No.MP 18-6392 came from the opposite side, which was being driven in rash and negligent manner and hit the mini truck of the appellant with the result that the appellant sustained grievous injuries on his leg. He suffered three fractures including one at tibia. He was examined by the Medical Board. After examining the injuries, Board came to the conclusion that the appellant had suffered 45% permanent disability. Appellant was 29 years of age at the time of accident and was working as a driver and earning Rs.4,000/- per month.
3. FIR was lodged. A claim was also filed against the owner of truck dumper as well as the insurance company before the Motor Accident Claims Tribunal (for short the Tribunal) for compensation under Section 166 of the Motor Vehicles Act, 1998 (for short the Act), inter alia, stating that in the accident, appellant suffered fracture in his tibia and two other places. Appellant claimed Rs.8,20,000/- by way of compensation.
4. Tribunal by its order dated 25th June, 2004 awarded a compensation of Rs.45,000/- for the 45% permanent disability suffered by the appellant; Rs.21,000/- towards the amount spent on the treatment and Rs.6,000/- for physical pain and mental agony suffered by the appellant. Thus, a total sum of Rs.72,000/- was awarded as compensation along with interest @ 6% per annum from the date of the claim petition till payment.
5. Being aggrieved, appellant filed an appeal in the High Court of Madhya Pradesh at Jabalpur which has been dismissed by the impugned order.
6.Learned counsel appearing for the appellant contends that as a result of the impact of injuries suffered by the appellant, the appellant cannot pursue his vocation of driving any longer and the Tribunal as well as the High Court have grossly erred in not awarding any compensation towards the loss of his earning capacity. That, keeping in view the injuries suffered by him, the compensation awarded is too low. Counsel appearing for the Oriental Insurance Company Limited, Respondent No.3, has supported the judgment and order passed by the courts below.
7. Learned counsels for the parties have been heard at length.
8. We find substance in the submission put forth by the counsel for the appellant. The Tribunal as well as the High Court have not awarded any compensation towards loss of future income. After the fracture of tibia, it is doubtful if the appellant can even drive again. Even if he pursues some other vocation, he would not be able to earn as much as he is earning now. The disability suffered by the appellant would surely reduce his earning capacity. Therefore, the appellant is required to be compensated for the loss of earning due to the injuries suffered by him in the accident.
9. Taking into consideration the present income of the appellant as Rs. 4,000/- per month; and the permanent disability of 45% suffered by him, we are of the view that the capacity of the appellant to earn in future would be reduced by Rs.1,800/- per month approximately. If 1/3rd is deducted towards miscellaneous expenses, the loss of income comes to Rs.1,200/- per month which, in turn, comes to Rs.14,400/- per annum. Appellant was 29 years of age at the time of accident. Taking the multiplier to be 18 [as per the Second Schedule to Section 163A of the Act], the total loss of income comes to Rs. 2,59,200/-.
10.For the reasons stated above, the loss of income is assessed at Rs.2,59,200/-. The appellant would be entitled to the aforesaid amount in addition to the sum already awarded by the Tribunal, which has been upheld by the High Court. The appellant would be entitled to interest at the same rate, i.e., 6% per annum on the enhanced amount as well from the date of filing of the claim petition till realization.
11. Accordingly, the appeal is accepted and the order passed by the Courts below stands modified to the extent indicated above.
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