Supreme Court Enhances Compensation for Amputated Painter in Motor Accident Case

Date of the Judgment: 10 June 2020

Citation: 2020 INSC 425

Judges: R.F. Nariman, Navin Sinha, B.R. Gavai, JJ.

Can a court reduce the disability percentage of a person who has suffered amputation? The Supreme Court addressed this question in a case where a painter’s leg was amputated due to a motor accident. The court considered whether the High Court was correct in reducing the disability percentage and if the compensation awarded was adequate. The Supreme Court bench comprised Justices R.F. Nariman, Navin Sinha, and B.R. Gavai, with the judgment authored by Justice Navin Sinha.

Case Background

On 19th February 2010, the appellant, Sri Anthony, was traveling in a bus owned by the Karnataka State Road Transport Corporation (KSRTC) when the bus driver negligently collided with a lorry from behind. As a result of the accident, Sri Anthony suffered severe injuries, leading to the amputation of his left leg. The Motor Accident Claims Tribunal initially awarded him a compensation of Rs. 4,08,850. On appeal, the High Court of Karnataka enhanced the compensation to Rs. 5,10,350, while dismissing the appeal by KSRTC.

Timeline:

Course of Proceedings

The Motor Accident Claims Tribunal initially awarded a compensation of Rs. 4,08,850. The High Court of Karnataka, in appeal, enhanced the compensation to Rs. 5,10,350. The High Court dismissed the appeal filed by the KSRTC. The appellant, dissatisfied with the enhanced compensation, approached the Supreme Court.

Legal Framework

The case primarily revolves around the principles for determining compensation in motor accident cases, particularly concerning permanent disability. The Supreme Court referred to the case of *Raj Kumar vs. Ajay Kumar and another, 2011 (1) SCC 343*, which established guidelines for assessing compensation for loss of future earnings due to permanent disability. The court also considered the functional disability of the appellant.

Arguments

Appellant’s Submissions:

• The compensation awarded by the High Court was inadequate given the severity of the injuries.
• The appellant, a painter, had a monthly income of Rs. 9,000, supported by his employer’s testimony (PW.2), which was wrongly rejected.
• The permanent disability was wrongly assessed at 25% of the whole body, contrary to the treating doctor’s (PW.3) assessment and without proper reasoning.
• The appellant’s functional disability and its impact on his future earnings were not adequately considered.

Respondent’s Submissions:

• The High Court had reasonably enhanced the compensation.
• The appellant failed to provide substantial evidence to support his claimed income.
• The extent of disability was adequately assessed.
• The evidence of the employer and the treating doctor were adequately considered.

Submissions of Parties

Issues Framed by the Supreme Court

1. Whether the compensation awarded by the High Court was adequate considering the nature of injuries suffered by the appellant?
2. Whether the High Court was correct in assessing the permanent disability at 25% of the whole body?
3. Whether the loss of future earnings was adequately compensated?

Treatment of the Issue by the Court

Authorities

Cases Relied Upon:

• Raj Kumar vs. Ajay Kumar and another, 2011 (1) SCC 343, Supreme Court of India: This case set out the principles for granting compensation in cases of permanent physical functional disability, emphasizing that the percentage of disability should not be mechanically applied as the percentage of economic loss. The court highlighted that the effect of the disability on the earning capacity of the injured needs to be assessed.
• Nagarajappa vs. Divisional Manager, Oriental Insurance Company Limited, 2011 (13) SCC 323, Supreme Court of India: The court considered the functional disability of the appellant, who was a manual laborer, and held that the disability should be taken as 68% and not 20% as assessed by the Tribunal and the High Court.

Legal Provisions Considered:

• The judgment does not specify any particular section of any statute but discusses the principles of assessing compensation in motor accident cases.

Authorities Considered by the Court

Judgment

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

How each authority was viewed by the Court?

• The court followed the principles laid down in *Raj Kumar vs. Ajay Kumar and another, 2011 (1) SCC 343*, emphasizing that the percentage of disability should not be mechanically applied as the percentage of economic loss.
• The court relied on *Nagarajappa vs. Divisional Manager, Oriental Insurance Company Limited, 2011 (13) SCC 323*, to hold that if the disability prevents the injured from performing their occupation, the disability percentage should be considered as the basis for compensation.

What weighed in the mind of the Court?

The Supreme Court was primarily concerned with ensuring that the compensation awarded to the appellant was just and adequate, considering the severe and permanent nature of his disability. The court emphasized that the functional disability and its impact on the appellant’s earning capacity should be the primary considerations. The court was critical of the High Court’s reduction of the disability percentage without proper reasoning and its failure to adequately consider the appellant’s inability to work as a painter.

Fact:Law Ratio

The court’s decision was significantly influenced by the factual aspects of the case, particularly the severe nature of the appellant’s disability and its impact on his earning capacity. While legal principles were considered, the court’s focus was on ensuring that the compensation was commensurate with the appellant’s actual loss.

Logical Reasoning

Judgment

The Supreme Court held that the High Court erred in reducing the disability percentage to 25% without providing any reasoning. The court emphasized that the functional disability of the appellant, which rendered him incapable of working as a painter, should be the primary consideration. The court stated, *“If the 75% physical disability has rendered the appellant permanently disabled from pursuing his normal vocation or any similar work, it is difficult to comprehend the grant of compensation to him in ratio to the disability to the whole body.”*

The court relied on the treating doctor’s assessment of 75% physical functional disability of the left leg, which translates to 37.5% of the whole body. The court also referred to the case of *Raj Kumar vs. Ajay Kumar and another, 2011 (1) SCC 343*, which stated that the percentage of disability should not be mechanically applied as the percentage of economic loss. The court observed, *“The earning capacity of the appellant as on the date of the accident stands completely negated and not reduced.”*

The Supreme Court enhanced the compensation for loss of future earnings based on the 75% disability, recalculating it with a monthly income of Rs. 5,500 and a multiplier of 14, resulting in Rs. 6,93,000. The court also enhanced the compensation for future medical expenses to Rs. 2,50,000 and loss of amenities to Rs. 50,000. The court stated, *“Compensation for loss of future earning therefore has to be proper and just to enable him to live a life of dignity and not compensation which is elusive.”*

The final compensation awarded by the Supreme Court was Rs. 11,97,350, which included Rs. 1,00,000 for pain and suffering, Rs. 7,350 for medical expenses, Rs. 21,000 for attendant charges, Rs. 66,000 for loss of earnings during treatment, Rs. 10,000 for conveyance charges, Rs. 6,93,000 for loss of future earnings, Rs. 2,50,000 for future medical expenses, and Rs. 50,000 for loss of amenities.

Key Takeaways

• The percentage of physical disability should not be mechanically applied to determine the loss of earning capacity.
• The functional disability and its impact on the injured person’s earning capacity should be the primary consideration.
• Compensation for loss of future earnings should be just and adequate, enabling the injured person to live a life of dignity.
• Courts should provide clear reasoning when reducing the disability percentage assessed by the treating doctor.

Directions

The Supreme Court directed that the enhanced compensation of Rs. 11,97,350 should be paid along with interest at 6% per annum from the date of the petition until realization.

Development of Law

The ratio decidendi of this case is that the assessment of compensation in cases of permanent disability should primarily consider the functional disability and its impact on the earning capacity of the injured person. The court reiterated that the percentage of physical disability should not be mechanically applied as the percentage of economic loss. This case reinforces the principle that compensation should be just and adequate, enabling the injured person to live a life of dignity. This judgment clarifies that if a person’s earning capacity is completely negated due to a disability, the compensation should reflect this total loss, rather than a reduction based on a percentage of the whole body disability.

Conclusion

The Supreme Court allowed the appeal, holding that the High Court had erred in reducing the disability percentage and awarding inadequate compensation. The court enhanced the compensation to Rs. 11,97,350, emphasizing the need to consider the functional disability and its impact on the appellant’s earning capacity. This judgment underscores the importance of providing just and adequate compensation to individuals who suffer permanent disabilities due to motor accidents.

Category

Parent Category: Motor Accident Law

Child Category: Compensation for Permanent Disability

Child Category: Functional Disability Assessment

Child Category: Loss of Future Earnings

Parent Category: Motor Vehicles Act, 1988

Child Category: Section 166, Motor Vehicles Act, 1988

FAQ

Q: What is functional disability in the context of motor accident compensation?

A: Functional disability refers to the impact of a physical impairment on a person’s ability to perform daily activities and their occupation. It is a critical factor in determining the extent of loss of earning capacity.

Q: How should courts assess compensation for loss of future earnings in cases of permanent disability?

A: Courts should not mechanically apply the percentage of physical disability as the percentage of economic loss. They should assess the actual impact of the disability on the person’s earning capacity and ensure that the compensation is just and adequate.

Q: What did the Supreme Court say about the High Court’s reduction of the disability percentage?

A: The Supreme Court criticized the High Court for reducing the disability percentage without providing any reasoning and for not considering the functional disability of the appellant.

Q: What is the significance of the Raj Kumar vs. Ajay Kumar case in this judgment?

A: The Raj Kumar case laid down the principles for assessing compensation in cases of permanent disability, emphasizing that the percentage of disability should not be mechanically applied as the percentage of economic loss. The Supreme Court followed these principles in this case.

Q: What should be the basis for calculating compensation if a person is completely unable to work due to a disability?

A: In such cases, the compensation should be calculated based on the complete negation of their earning capacity, rather than a reduction based on a percentage of whole body disability.