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Yadava Kumar v. Divisional Manager, National Insurance Company Limited And Another
Factual and Procedural Background
The appellant, a 30-year-old professional painter, was injured on 24-3-2003 when a speeding tempo (No. KA-04-C-6030) struck him as he stood on Nagavara Ring Road, Bangalore. He sustained multiple fractures to both wrists, was treated at Al-Habeeb Hospital, and filed a claim petition on 3-2-2006. The Motor Accident Claims Tribunal awarded Rs 52,000. Upon appeal, the Karnataka High Court enhanced the amount to Rs 72,000 with 8% interest but declined compensation for loss of future earnings. Dissatisfied, the appellant sought further enhancement before the Supreme Court.
Legal Issues Presented
- Whether the appellant is entitled to compensation for loss of future earning capacity resulting from a 20% permanent disability to the whole body.
- Whether the High Court erred in refusing such compensation on the ground that no documentary proof of income loss was produced.
Arguments of the Parties
Appellant's Arguments
- The medical evidence (testimony of PW-2, Dr. S. Ranjanna) established permanent disability (33% right upper limb, 21% left upper limb, 20% whole body) that prevents continuation in the painting profession.
- Under Note 5 of the Second Schedule to the Motor Vehicles Act, 1988 and established precedent, compensation for loss of future earnings should be calculated using the multiplier method.
Respondent/Insurer's Position as Adopted by the High Court
- The appellant produced no documentary evidence (“not an iota of document”) to substantiate actual loss of earnings; hence no award under this head is justified.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sunil Kumar v. Ram Singh Gaud (2007) 14 SCC 61 | Multiplier method permissible for assessing loss of future earnings in injury cases. | Relied upon to justify applying the multiplier formula to the appellant’s disability. |
| Priya Vasant Kalgutkar v. Murad Shaikh (2009) 15 SCC 54 | Affirmed Sunil Kumar on multiplier use for permanent disablement. | Cited to reinforce the legality of the multiplier approach. |
| Mukesh Kumar Sharma v. Ramdutt (2006) 3 ACJ 1792 (MP) | Multiplier applied after adjusting for percentage reduction in earning capacity. | Referenced as an example of calculating compensation proportionate to disability. |
| Syed Nisar Ahmed v. Bangalore Metropolitan Transport Corpn (2003) 5 Kant LJ 186 | Division Bench used multiplier for partial disablement cases. | Cited to illustrate consistent application of the method within Karnataka. |
| Helen C. Rebello v. Maharashtra SRTC (1999) 1 SCC 90 | Compensation must be “just,” adopting a broad and equitable approach. | Invoked to criticise the High Court’s narrow view and stress a compassionate assessment. |
| Hardeo Kaur v. Rajasthan State Transport Corpn (1992) 2 SCC 567 | Courts should be liberal, not niggardly, in valuing life and limb. | Used to support a generous, rather than restrictive, compensation award. |
Court's Reasoning and Analysis
The Supreme Court noted that both the Tribunal and the High Court acknowledged a 20% whole-body disability yet awarded nothing for future earnings. Relying on Note 5 of the Second Schedule to the Motor Vehicles Act and a line of authority endorsing the multiplier method, the Court emphasised that “just compensation” requires a broad, equitable assessment rather than mathematical rigidity.
A.K. Ganguly, J. criticised the High Court’s insistence on documentary proof when medical evidence clearly demonstrated diminished earning capacity. Applying the structured formula:
- Monthly income accepted by the High Court: Rs 3,000 (annual Rs 36,000).
- Multiplier for age 30: 17.
- Total potential earnings: Rs 36,000 × 17 = Rs 6,12,000.
- Applying 20% disability: Rs 6,12,000 × 20% = Rs 1,22,400.
Adding this figure to the pre-existing Rs 72,000 produced Rs 1,94,400. Using Article 142 to avoid further delay, the Court rounded the amount to a lump-sum Rs 2,00,000 with 8% interest, thereby delivering complete justice without remand.
Holding and Implications
Appeal Allowed; Compensation Enhanced to Rs 2,00,000 with 8% Interest.
Direct Effect: The appellant receives an additional award for loss of future earning capacity. Broader Implication: The judgment reiterates that courts must apply the multiplier method in injury cases where permanent disability affects livelihood, and must adopt a liberal, compassionate view when determining “just compensation.”
A.K Ganguly, J.— Delay condoned. Leave granted.
2. Assailing the Division Bench judgment of the Karnataka High Court dated 12-8-2009, whereby compensation of Rs. 52,000 granted by the Tribunal was enhanced to Rs. 72,000, this appeal claiming higher compensation was filed by the appellant.
3. The Hon'ble High Court has awarded compensation under the following heads:
1. Towards pain and suffering: Rs. 20,000
2. Loss of income from the period of treatment: Rs. 9000
3. Towards medical expenses, conveyance, nourishing food and attendant charges: Rs. 8000
4. Towards loss of amenities: Rs. 35,000
Total: Rs. 72,000 + 8% p.a interest from the date of the petition till realisation.
4. The material facts of the case are that, the appellant, a painter by profession, was 30 years old at the time of sustaining the injury in a road accident which took place on 24-3-2003 while the appellant was standing on the side of Nagavara Ring Road to cross it from south to north. The offending tempo bearing No. KA 04 C 6030 came at a great speed from west to east and hit the appellant as a result of which he fell down and sustained several injuries. The appellant was rushed to Al-Habeeb Hospital where he was treated. The claim petition was filed on 3-2-2006.
5. About the nature of the injury sustained by the appellant, the evidence of PW 2, Dr. S. Ranjanna, Orthopaedic Surgeon, Bowring & Lady Curzon Hospital, Bangalore is very crucial. PW 2 examined the appellant on 26-11-2005. As per the wound certificate and x-ray report of Al-Habeeb Hospital, Bangalore, PW 2 noted that the appellant sustained the following injuries:
“(1) Fracture of distal end of left radius with fracture of left ulnar styloid process.
(2) Fracture of distal end of right radius with mild diastasis in radio-ulnar joint and soft tissue swelling around wrist joint.”
6. Even on examination on 26-11-2005, which is after two-and-a-half years after the date of incident, PW 2 found the following injuries on the appellant:
(1) Deformity of right wrist.
(2) Limitation of right wrist movements by 40%.
(3) Limitation of right forearm movements by 30%.
(4) Wasting of right forearm muscles by 3 cm.
(5) Weak right hand grip.
(6) Limitation of left wrist movement by 25%.
(7) Tenderness over left wrist.
(8) Instability of left in favour of radio-ulnar joint.
(9) Weakness of left hand.
7. PW 2 opined that in view of the injuries the appellant cannot perform any hard work, cannot lift any weight and cannot perform any work smoothly and after referring to various guidelines in the manual PW 2 opined that the appellant has disability of 33% of right upper limb and 21% to left upper limb and 20% total disability of the whole body. In view of such disability, the appellant cannot work as a painter and cannot do any other manual work also. In cross-examination also PW 2 admitted that even if the appellant continues his old vocation as a painter, he has to do it with difficulty.
8. Both the Tribunal and the High Court have failed to incorporate anything by way of compensation in the category of “loss of future earnings” in spite of recognising the fact that there is disability of 33% in the right upper limb, 21% in the left upper limb and 20% in respect of the whole body, which does not allow the appellant to paint as he did earlier.
9. The Second Schedule under Section 163-A of the Motor Vehicles Act, 1988 gives a structured formula for the calculation of compensation in accident cases. Note 5 of the Schedule deals with disability in non-fatal accidents and reads as follows:
“5. Disability in non-fatal accidents
The following compensation shall be payable in case of disability to the victim arising out of non-fatal accidents:
Loss of income, if any, for actual period of disablement not exceeding fifty-two weeks.
PLUS either of the following—
(a) In case of permanent total disablement the amount payable shall be arrived at by multiplying the annual loss of income by the multiplier applicable to the age on the date of determining the compensation, or
(b) In case of permanent partial disablement such percentage of compensation which would have been payable in the case of permanent total disablement as specified under Item (a) above.
Injuries deemed to result in permanent total disablement/permanent partial disablement and percentage of loss of earning capacity shall be as per Schedule I under Workmen's Compensation Act, 1923.”
Thus, the multiplier method is to be applied in cases of injuries also and it has been applied in a number of accident cases by the High Courts and this Court.
10. This Court in Sunil Kumar v. Ram Singh Gaud (2007) 14 SCC 61, (2008) 1 ACJ 9, awarded compensation in case of injury for loss of future earnings and applied the multiplier method for calculation of the same. The same principle was recognised by this Court in Priya Vasant Kalgutkar v. Murad Shaikh (2009) 15 SCC 54, AIR 2010 SC 40.
11. In Mukesh Kumar Sharma v. Ramdutt (2006) 3 ACJ 1792 (MP), the Madhya Pradesh High Court applied the multiplier method keeping in mind the percentage by which the injured person's earning capacity was reduced. A similar calculation was made by the Division Bench of the Karnataka High Court in Syed Nisar Ahmed v. Bangalore Metropolitan Transport Corpn. (2003) 5 Kant LJ 186 (Kant)
12. In the instant case, the appellant has sustained a fracture of distal end of left radius with fracture of left ulnar styloid process and fracture of distal end of right radius with mild diastasis and soft tissues swelling around the wrist joint. The doctor has assessed the disability at 33% in respect of the right upper limb and 21% towards left upper limb and 20% in respect of the whole body, which prevents the appellant from painting in view of multiple injuries sustained by him.
13. The Hon'ble High Court while granting compensation refused to award any amount towards loss of future earning. Though that point was specifically urged before the Hon'ble High Court, the Hon'ble High Court refused any compensation towards loss of future earning by, inter alia, holding that:
“We are of the view that the said submission has no force for the reason that the appellant has not produced an iota of document to substantiate his stand.”
We are unable to agree with the aforesaid view of the High Court.
14. While assessing compensation in accident cases, the High Court or the Tribunal must take a reasonably compassionate view of things. It cannot be disputed that the appellant being a painter has to earn his livelihood by virtue of physical work. The nature of injuries which he admittedly suffered, and about which the evidence of PW 2 is quite adequate, amply demonstrate that carrying those injuries he is bound to suffer loss of earning capacity as a painter and a consequential loss of income is the natural outcome.
15. It goes without saying that in matters of determination of compensation both the tribunal and the court are statutorily charged with a responsibility of fixing a “just compensation”. It is obviously true that determination of a just compensation cannot be equated to a bonanza. At the same time the concept of “just compensation” obviously suggests application of fair and equitable principles and a reasonable approach on the part of the tribunals and the courts. This reasonableness on the part of the tribunal and the court must be on a large peripheral field. Both the courts and the tribunals in the matter of this exercise should be guided by principles of good conscience so that the ultimate result becomes just and equitable (see Helen C. Rebello v. Maharashtra SRTC (1999) 1 SCC 90, AIR 1998 SC 3191).
16. This Court also held that in the determination of the quantum of compensation, the court must be liberal and not niggardly inasmuch as in a free country law must value life and limb on a generous scale (see Hardeo Kaur v. Rajasthan State Transport Corpn. (1992) 2 SCC 567).
17. The High Court and the Tribunal must realise that there is a distinction between compensation and damages. The expression compensation may include a claim for damages but compensation is more comprehensive. Normally damages are given for an injury which is suffered, whereas compensation stands on a slightly higher footing. It is given for the atonement of injury caused and the intention behind grant of compensation is to put back the injured party as far as possible in the same position, as if the injury has not taken place, by way of grant of pecuniary relief. Thus, in the matter of computation of compensation, the approach will be slightly more broad based than what is done in the matter of assessment of damages. At the same time it is true that there cannot be any rigid or mathematical precision in the matter of determination of compensation.
18. Going by these principles, as we must, this Court is constrained to observe that in this case the approach of the High Court in totally refusing to grant any compensation for loss of future earning is not a correct one.
19. This Court could have remanded the matter to the High Court for assessment of compensation on the aforesaid lines but the accident took place in March 2003 and a remand to the High Court for determination of compensation will further delay the matter. Therefore, to shorten the litigation, and having regard to this Court's power under Article 142 of the Constitution to do complete justice between the parties, this Court itself assesses the compensation as follows:
“Therefore, in the present case, the loss of future income may be calculated using the multiplier method as follows:
Income of the appellant (as accepted by the High Court) is Rs. 3000 p.m Therefore, the yearly income is Rs. 36,000.
Multiplier according to age (30 years) as per Schedule is 17. Thus, the total comes to:
Rs. 36,000 × 17 = Rs. 6,12,000.
Percentage of disablement is 20%. Therefore, loss of future earnings would come to Rs. 1,22,400.”
If this is added to the compensation provided by the High Court in other categories, the total compensation comes to Rs. 1,22,400 + Rs. 72,000, that is, Rs. 1,94,400.
20. This Court, therefore, grants a lump sum of rupees two lakhs by way of compensation plus 8% interest as granted by the High Court. The appeal is allowed to the extent indicated above. There will be no order as to costs.
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