Supreme Court Enhances Compensation for Accident Victim with 100% Disability: Parminder Singh vs. New India Assurance Co. Ltd. (2019)

Date of the Judgment: July 1, 2019

Citation: (2019) INSC 681

Judges: Indu Malhotra, J., M.R. Shah, J.

Can a severely disabled accident victim receive adequate compensation that accounts for their loss of earning capacity, medical expenses, and the need for lifelong care? The Supreme Court of India addressed this critical question in a case involving a driver who sustained a 100% functional disability following a motor vehicle accident. This judgment underscores the judiciary’s role in ensuring that victims of such accidents receive just and fair compensation, reflecting the profound impact of their injuries. The bench was composed of Justice Indu Malhotra and Justice M.R. Shah.

Case Background

On March 29, 2009, Parminder Singh, the Appellant, was driving a car in which Captain Kanwaljit Singh, a Cabinet Minister, was a passenger. The car was struck by a truck traveling in the opposite direction near Village Khanpur. The accident was also contributed to by another truck parked wrongly on the road. Captain Kanwaljit Singh died the same day due to his injuries. Parminder Singh suffered grievous injuries, including a severe head injury, multiple fractures, and disfigurement. He underwent multiple surgeries and was left with a 75% permanent disability, later assessed as 100% in terms of earning capacity.

Timeline:

Course of Proceedings

The Motor Accident Claims Tribunal (MACT), Panchkula, initially awarded Parminder Singh Rs. 10,43,666, based on a notional income of Rs. 6,000 per month, and absolved the insurance company of liability, holding the owners and drivers of the trucks responsible. The Punjab & Haryana High Court partially allowed the appeal, enhancing the compensation to Rs. 21,06,000, recognizing a 100% disability concerning earning capacity. The High Court directed the Insurance Company to pay the compensation and recover it from the truck owners and drivers. Parminder Singh then appealed to the Supreme Court seeking further enhancement of compensation.

Legal Framework

The case revolves around the principles of compensation in motor accident claims, particularly concerning permanent disability. The Supreme Court referred to previous judgments to determine the appropriate compensation for loss of earning capacity, medical expenses, and the impact on the victim’s quality of life. The Court emphasized the need for a broad-based approach to ensure ‘just compensation’, considering the victim’s suffering and inability to lead a normal life.

Arguments

Appellant’s Submissions:

• The appellant argued that the compensation awarded by the High Court was insufficient, considering the severity of his disabilities and the impact on his life.
• He submitted that he was permanently disabled and requires a permanent attendant, which was not adequately compensated.
• The Appellant produced an affidavit from his employer stating that he was earning Rs. 10,000 per month at the time of the accident.

Respondent’s Submissions:

• The Insurance Company contended that the drivers of the offending trucks did not possess valid driving licenses.
• They argued that they should be absolved of the liability to pay compensation due to the invalid licenses.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed were:

1. What is the appropriate method for calculating compensation for a victim with 100% functional disability?
2. Whether the Insurance Company is liable to pay compensation when the drivers of the offending vehicles did not have valid driving licenses?
3. Whether the compensation awarded by the High Court was adequate considering the injuries and the impact on the victim’s life.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court relied on the following cases:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court followed the principles laid down in Govind Yadav v. The New India Insurance Company Ltd. [ (2011) 10 SCC 683 ]* which emphasized that compensation should be adequate for physical injury, treatment, loss of earning and inability to lead a normal life.
• The Court relied on K. Suresh v. New India Assurance Company Ltd. [ (2012) 12 SCC 274 ]* to highlight that compensation should consider the victim’s sufferings and inability to lead a full life.
• The Court applied the principles in Raj Kumar v. Ajay Kumar and Ors. [ (2011) 1 SCC 343 ]* to determine the impact of permanent disability on earning capacity.
• The Court applied the principle of ‘pay and recover’ as laid down in Shamanna & Ors. v. The Divisional Manager, The Oriental Insurance Co. Ltd. & Ors. [ (2018) 9 SCC 650 ]* where the driver of the offending vehicle did not possess a valid driving license.

What weighed in the mind of the Court?

The Supreme Court was deeply moved by the Appellant’s pitiable condition, noting the severe physical disfigurement and the 100% functional disability. The court emphasized that the victim had been deprived of a normal life, including the ability to marry and have a family. The Court also considered the fact that the Appellant would require constant medical attention and an attendant throughout his life. The court was also influenced by the fact that the drivers of the offending vehicles did not have valid driving licenses.

Logical Reasoning:

The Supreme Court rejected the argument that the insurance company should be absolved of liability. The Court applied the principle of ‘pay and recover’ based on the precedent in Shamanna & Ors. v. The Divisional Manager, The Oriental Insurance Co. Ltd. & Ors. [ (2018) 9 SCC 650 ]*. The court found that the previous compensation awarded by the High Court was insufficient, especially considering the Appellant’s severe condition and the long-term impact on his life. The Court enhanced the compensation to account for loss of future earnings, medical expenses, and the need for an attendant. The court also considered the fact that the Appellant was deprived of a normal married life.

The Court quoted from previous judgments to emphasize the need for a broad-based approach to ensure ‘just compensation’. The Court stated that,

“In determination of compensation the fundamental criterion of ‘just compensation’ should be inhered.”

The Court also noted,

“Sometimes the injured claimant may be continued in service, but may not found suitable for discharging the duties attached to the post or job which he was earlier holding, on account of his disability, and may therefore be shifted to some other suitable but lesser post with lesser emoluments, in which case there should be a limited award under the head of loss of future earning capacity, taking note of the reduced earning capacity.”

The Court also observed,

“Given the debilitated state of the Appellant, no amount of money can compensate him.”

The majority opinion was delivered by Justice Indu Malhotra, with Justice M.R. Shah concurring.

Key Takeaways

• Victims of motor accidents with permanent disabilities are entitled to comprehensive compensation that covers loss of earning capacity, medical expenses, and the need for lifelong care.
• The principle of ‘pay and recover’ can be applied to insurance companies when the drivers of offending vehicles do not possess valid driving licenses.
• Courts must adopt a broad-based approach to ensure ‘just compensation’ that reflects the profound impact of injuries on the victim’s life.

Directions

The Supreme Court directed the Respondent – Insurance Company to pay the enhanced compensation to the Appellant within 12 weeks from the date of the judgment. The Insurance Company was also granted the right to recover the amount from the owners and drivers of the two offending trucks.

Development of Law

The ratio decidendi of this case is that in cases of severe disability resulting from motor vehicle accidents, compensation must be comprehensive and account for all aspects of the victim’s life, including loss of earning capacity, medical expenses, and the need for an attendant. This case reinforces the principle of ‘pay and recover’ where the insurance company is liable to pay the victim and then recover from the owner of the offending vehicle if the driver did not have a valid license. This case also reiterates the importance of a broad-based approach to calculating compensation to ensure ‘just compensation’. There is no change in the previous position of law, but a reiteration of the principles.

Conclusion

The Supreme Court’s judgment in Parminder Singh vs. New India Assurance Co. Ltd. significantly enhanced the compensation awarded to a motor accident victim with a 100% functional disability. The Court’s decision underscores the judiciary’s commitment to ensuring that victims of such accidents receive just and fair compensation, reflecting the profound impact of their injuries. The judgment emphasizes the need for a comprehensive approach to compensation, considering not only the loss of earning capacity but also the medical expenses and the need for lifelong care. The Court also applied the principle of ‘pay and recover’ to ensure that the victim receives compensation promptly, while allowing the insurance company to recover from the responsible parties.