Supreme Court Enhances Compensation for Accident Victims: Rahul Ganpatrao Sable vs. Laxman Maruti Jadhav (2023)

Date of the Judgment: July 5, 2023
Citation: 2023 INSC 608
Judges: B.R. Gavai, J., Vikram Nath, J.
Can a severely injured accident victim, rendered permanently disabled, receive compensation that truly reflects their loss of earning capacity and future needs? The Supreme Court of India addressed this critical question in a recent judgment, significantly enhancing the compensation awarded to an accident victim. This case highlights the importance of considering the long-term impact of disabilities on an individual’s life and earning potential. The judgment was delivered by a two-judge bench comprising Justice B.R. Gavai and Justice Vikram Nath, with Justice Vikram Nath authoring the opinion.

Case Background

This case involves two appeals arising from motor accident claims. The first appeal was filed by Rahul Ganpatrao Sable, who sustained severe injuries in an accident on April 27, 1994, resulting in permanent disabilities. The second appeal was filed by the dependents of Ganpatrao Sakharam Sable, who died in the same accident. Both appeals challenged the compensation awarded by the High Court, seeking further enhancements under various heads.

Rahul Ganpatrao Sable suffered compression fractures of seven cervical vertebrae, paraplegia, loss of bladder function, loss of erection of the penis, and loss of bowel control. The High Court determined his disability to be 60%, while under the Right to Disability Act, 2016, it was declared to be 85%. The dependents of Ganpatrao Sakharam Sable included his wife and children, who sought compensation for his death in the same accident.

Timeline:

Course of Proceedings

The Motor Accident Claims Tribunal initially awarded Rs. 7,21,895 to Rahul Ganpatrao Sable and Rs. 5,82,628 to the dependents of Ganpatrao Sakharam Sable. The High Court enhanced the compensation for Rahul to Rs. 15,88,682 and for the dependents to Rs. 9,29,474. Both parties, dissatisfied with the High Court’s awards, appealed to the Supreme Court.

Legal Framework

The Supreme Court considered the following legal principles in its judgment:

• The principle that even if a victim survives an accident, the nature of the disability may result in a 100% loss of earning capacity.
• The principle that the multiplier used in calculating compensation already accounts for uncertainties of life, and therefore, no further deductions should be made on that account.
• The principle that in cases of injury, where the claim is made by the survivor, there should be no deduction for personal expenses.
• The application of appropriate multipliers based on the age of the victim at the time of the accident, as laid down in Sarla Verma vs. Delhi Transport Corporation [(2009) 6 SCC 121] and approved in National Insurance Company Ltd. vs. Pranay Sethi [(2017) 16 SCC 680].
• The principle of awarding compensation for attendant charges, future medical expenses, and loss of marriage prospects in cases of severe disabilities, as established in Chaus Tausif Almiya etc. vs. Memon Mohammad Umar Anwarbhai and others (Civil Appeal Nos.1241 -1242 of 2023).
• The principle of awarding compensation for loss of consortium to each dependent, as laid down in Janabai vs. ICICI Lombard Insurance Co. Ltd. [(2022) 10 SCC 512], which further relied on the Constitution Bench judgment in Pranay Sethi (supra).

Arguments

Arguments on behalf of Rahul Ganpatrao Sable:

• The High Court erred in deducting 50% towards loss of income, arguing that his 60% disability resulted in a 100% loss of earning capacity. He cited Lalan D. vs. Oriental Insurance Company Ltd. [(2020) 9 SCC 805] to support this claim.

• The High Court incorrectly reduced his income to Rs. 15,000 per month, arguing that his merit would have allowed him to earn Rs. 25,000 per month. He cited Leela Gupta vs. State [(2010) 12 SCC 37] and Ashivinbhai Jayantilal Modi vs. Ramkaran Ram [(2015) 2 SCC 180] to support this.

• The High Court wrongly deducted 50% towards personal expenses, as this was not a death case. He again cited Lalan D. (supra).

• The High Court incorrectly applied a multiplier of 17 instead of 18, as per Sarla Verma (supra) and Pranay Sethi (supra).

• He claimed compensation for attendant charges, future medical expenses, and loss of marriage prospects, relying on Chaus Tausif Almiya (supra).

• The amount of Rs. 1 lakh awarded for pain and suffering was too low.

Arguments on behalf of the dependents of Ganpatrao Sakharam Sable:

• The High Court incorrectly determined the deceased’s monthly salary to be Rs. 8,100, arguing that it should be Rs. 12,235 as per the evidence presented.

• The High Court failed to add 15% for future prospects, as per the judgment in Pranay Sethi (supra).

• The High Court wrongly deducted 1/3rd towards personal expenses, arguing that it should be 1/4th due to the number of dependents, citing Sarla Verma (supra) and Pranay Sethi (supra).

• The High Court awarded a meager consolidated amount of Rs. 70,000 under conventional heads, arguing that separate amounts should be awarded for loss of consortium to each dependent, loss of estate, and funeral expenses, citing Janabai (supra) and Pranay Sethi (supra).

Arguments on behalf of the Insurance Company:

• The High Court had correctly decided the appeals and enhanced the compensation after considering all questions, issues and material available on record.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the High Court was correct in deducting 50% towards loss of income considering the permanent disability of the appellant-Rahul Ganpatrao Sable.
2. Whether the High Court was justified in reducing the income of the appellant-Rahul Ganpatrao Sable to Rs. 15,000 per month.
3. Whether the High Court was correct in deducting 50% amount towards personal expenses in the case of the injured-Rahul Ganpatrao Sable.
4. Whether the High Court was correct in applying a multiplier of 17 instead of 18.
5. Whether the High Court was correct in not awarding compensation for attendant charges, future medical expenses, and loss of marriage prospects to the injured-Rahul Ganpatrao Sable.
6. Whether the High Court was correct in awarding a meager amount of Rs.1 lakh towards pain and suffering to the injured-Rahul Ganpatrao Sable.
7. Whether the High Court was correct in determining the monthly salary of the deceased-Ganpatrao Sakharam Sable at Rs.8100/-, and not considering the evidence of the Accountant of the Law College.
8. Whether the High Court was correct in not adding 15% towards future prospects.
9. Whether the High Court was correct in deducting 1/3rd amount towards personal expenses.
10. Whether the High Court was correct in awarding a consolidated amount of Rs.70,000/- under conventional heads, and not awarding separate amounts for loss of consortium, loss of estate and funeral expenses.

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 authorities:

Cases:

• Lalan D. vs. Oriental Insurance Company Ltd. [(2020) 9 SCC 805] – Supreme Court of India: Relied upon for the principle that disability may result in 100% loss of earning capacity and that no deduction should be made for personal expenses in injury cases.
• Leela Gupta vs. State [(2010) 12 SCC 37] – Supreme Court of India: Relied upon for the principle that the multiplier takes into account the uncertainties of life, and no further deductions should be made.
• Ashivinbhai Jayantilal Modi vs. Ramkaran Ram [(2015) 2 SCC 180] – Supreme Court of India: Relied upon for fixing the income of a 19-year-old medical student at Rs. 25,000 per month.
• Sarla Verma vs. Delhi Transport Corporation [(2009) 6 SCC 121] – Supreme Court of India: Relied upon for the appropriate multiplier to be applied based on the age of the victim and the principle of deduction of personal expenses based on the number of dependents.
• National Insurance Company Ltd. vs. Pranay Sethi [(2017) 16 SCC 680] – Supreme Court of India: Constitution Bench judgment, relied upon for the appropriate multiplier and the addition of future prospects.
• Chaus Tausif Almiya etc. vs. Memon Mohammad Umar Anwarbhai and others (Civil Appeal Nos.1241 -1242 of 2023) – Supreme Court of India: Relied upon for awarding compensation for attendant charges, future medical expenses, and loss of marriage prospects.
• Master Ayush Vs. The Branch Manager [2022 (7) SCC 738] – Supreme Court of India: Relied upon for awarding compensation for pain and suffering.
• Janabai vs. ICICI Lombard Insurance Co. Ltd. [(2022) 10 SCC 512] – Supreme Court of India: Relied upon for awarding separate amounts towards loss of consortium to each dependent.

Judgment

The Supreme Court allowed both appeals, enhancing the compensation awarded to Rahul Ganpatrao Sable and the dependents of Ganpatrao Sakharam Sable. The Court held that the High Court had erred in several aspects of its calculation.

How each authority was viewed by the Court?

• Lalan D. vs. Oriental Insurance Company Ltd. [(2020) 9 SCC 805]*: The Court followed this authority to determine that a disability can result in 100% loss of earning capacity and that no deduction should be made for personal expenses in injury cases.
• Leela Gupta vs. State [(2010) 12 SCC 37]*: The Court relied on this authority to determine that the multiplier takes into account the uncertainties of life, and no further deductions should be made.
• Ashivinbhai Jayantilal Modi vs. Ramkaran Ram [(2015) 2 SCC 180]*: The Court relied on this authority for fixing the income of a 19-year-old medical student at Rs. 25,000 per month.
• Sarla Verma vs. Delhi Transport Corporation [(2009) 6 SCC 121]*: The Court followed this authority to determine the appropriate multiplier to be applied based on the age of the victim and the principle of deduction of personal expenses based on the number of dependents.
• National Insurance Company Ltd. vs. Pranay Sethi [(2017) 16 SCC 680]*: The Court relied on this Constitution Bench judgment for the appropriate multiplier and the addition of future prospects.
• Chaus Tausif Almiya etc. vs. Memon Mohammad Umar Anwarbhai and others (Civil Appeal Nos.1241 -1242 of 2023)*: The Court followed this authority to award compensation for attendant charges, future medical expenses, and loss of marriage prospects.
• Master Ayush Vs. The Branch Manager [2022 (7) SCC 738]*: The Court followed this authority to determine the compensation for pain and suffering.
• Janabai vs. ICICI Lombard Insurance Co. Ltd. [(2022) 10 SCC 512]*: The Court followed this authority to determine that separate amounts towards loss of consortium should be awarded to each dependent.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to provide just and fair compensation to the victims of the accident, considering the severe and permanent nature of the injuries suffered by Rahul Ganpatrao Sable and the loss of life of Ganpatrao Sakharam Sable. The Court emphasized the following points:

• The severe nature of the disabilities suffered by Rahul Ganpatrao Sable, which rendered him completely unfit for any gainful employment.
• The need to provide adequate compensation for the pain, suffering, and loss of amenities experienced by Rahul Ganpatrao Sable.
• The need to ensure that the dependents of Ganpatrao Sakharam Sable receive sufficient compensation to mitigate the loss of their primary breadwinner.
• The importance of adhering to established legal principles and precedents to ensure consistency and fairness in the award of compensation.
• The need to consider the evidence presented by the parties, particularly the evidence of the Accountant regarding the salary of the deceased.

Logical Reasoning

The Court rejected the High Court’s deductions for uncertainties of life, personal expenses, and the reduction of income for the injured appellant. The Court also rejected the consolidated award for conventional heads, emphasizing the need for separate awards for loss of consortium, loss of estate, and funeral expenses.

The Supreme Court’s decision was unanimous, with both Justices B.R. Gavai and Vikram Nath concurring. Justice Vikram Nath authored the judgment.

The court quoted, “The five injuries which are permanent in nature apparently make him unfit for any employment even though the disability may be 60% or 85%.”

The court further quoted, “Considering the nature of disability, loss of income is, thus, held to be 100% and not 50% as held by the High Court.”

The court also quoted, “Considering the same, an amount of Rs.40,000/- each is awarded to each of the four dependents towards loss of consortium.”

Key Takeaways

• Victims of accidents with severe disabilities may be entitled to 100% loss of earning capacity, even if the disability percentage is lower.
• No deduction should be made for personal expenses in cases where the claim is made by the injured survivor, not the dependents.
• The multiplier used for calculating compensation already accounts for uncertainties of life, and no further deductions should be made on that account.
• Compensation should be awarded for attendant charges, future medical expenses, and loss of marriage prospects in cases of severe disabilities.
• Dependents are entitled to separate compensation for loss of consortium, loss of estate, and funeral expenses.

Directions

The Supreme Court directed the Tribunal to recalculate the compensation amount within one month of the production of the order. The interest on the additional amount payable would be 7.5% from the date of filing the claim petition. The quantified amount was to be deposited within two months and paid to the dependents/appellants according to law.

Development of Law

The ratio decidendi of this case is that in cases of severe disabilities resulting from accidents, the compensation awarded should reflect the complete loss of earning capacity, and no deductions should be made for personal expenses in injury cases. The case reinforces the importance of considering the long-term impact of disabilities on an individual’s life and earning potential. Further, it underscores the principle that the multiplier already accounts for uncertainties of life and no further deductions should be made on that account. The judgment also reiterates the principle that the dependents are entitled to separate compensation for loss of consortium, loss of estate, and funeral expenses.