Supreme Court Enhances Compensation for Scrap Dealer in Motor Accident Case: Mohd. Sabeer @ Shabir Hussain vs. Regional Manager, U.P. State Road Transport Corporation (2022) INSC 1047 (09 December 2022)

Date of the Judgment: 09 December 2022
Citation: (2022) INSC 1047
Judges: Krishna Murari, J. and S. Ravindra Bhat, J.
Can a court enhance the compensation awarded to a motor accident victim, especially when the victim has suffered a permanent disability? The Supreme Court of India recently addressed this question in a case involving a scrap dealer who suffered severe injuries in a bus accident. The court enhanced the compensation awarded to the appellant, emphasizing the need to consider the socio-economic background of the claimants and ensure they are restored to their pre-accident position as much as possible. The judgment was delivered by a two-judge bench comprising Justice Krishna Murari and Justice S. Ravindra Bhat.

Case Background

The appellant, a scrap dealer, was traveling in a bus on 12 June 2009, when the bus driver hit a parked tempo due to rash and negligent driving. The accident occurred near the Jindal Pipe Factory in Ghaziabad, around 12:30 AM. As a result, the appellant sustained severe injuries, including the amputation of his right lower limb. At the time of the accident, the appellant was 37 years old and earned approximately Rs. 10,000 per month. A disability certificate assessed his permanent disability at 70%.

Timeline

Course of Proceedings

Initially, the Motor Accident Claims Tribunal (MACT) awarded the appellant a compensation of Rs. 15,76,465, along with 7.5% interest per annum, holding the bus driver responsible for the accident. Dissatisfied with the compensation, the appellant appealed to the High Court of Delhi. The High Court modified the award, enhancing the compensation to Rs. 16,70,932 with 9% interest per annum, but did not grant future prospects. The appellant then filed a review petition seeking further enhancement of the compensation to Rs. 20,00,000, which was dismissed by the High Court. Aggrieved by the dismissal of the review petition, the appellant approached the Supreme Court of India.

Legal Framework

The case primarily revolves around the assessment of compensation in motor accident claims, particularly concerning permanent disabilities. The Supreme Court considered the principles of “just compensation” and the need to restore the injured to their pre-accident position as much as possible. The Court also considered the impact of permanent disability on the earning capacity of the injured, and the principles laid down in previous judgments.

The Court referred to the following cases:

• Sandeep Khanuja Vs. Atul Dande and Anr. (2017) 3 SCC 351: This case emphasized that the crucial factor is to assess whether the permanent disability has an adverse effect on the earning capacity of the injured.
• Raj Kumar Vs Ajay Kumar and Anr. (2011) 1 SCC 343: This case highlighted that the assessment of compensation for loss of future earnings depends on the impact of the permanent disability on the earning capacity, and the tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss.
• Anant son of Sidheshwar Dukre Vs. Pratap son of Zhamnnappa Lamzane & Anr. (Civil Appeal No. 8420 of 2018): This case reiterated that the purpose of fair compensation is to restore the injured to the position he was in prior to the accident as best as possible.
• National Insurance Company Limited v. Pranay Sethi & Others (2017) 16 SCC 680: This case provided guidelines for determining future prospects in compensation cases.
• R.D. Hattangadi v. Pest Control (India) (P) Ltd. (1995) 1 SCC 551: This case differentiated between pecuniary and non-pecuniary damages in injury cases.

Arguments

Arguments on behalf of the Appellant:

• The High Court incorrectly assessed the appellant’s loss of income due to disability at only 35%, whereas the medical board had assessed the permanent disability at 70%. The appellant’s inability to drive and lift heavy weights severely impacts his earning capacity.
• The appellant should have been awarded future prospects to the extent of 50% since his income was assessed based on documentary evidence.
• The compensation for the artificial limb’s repair, purchase, and maintenance is inadequate, given the limb’s cost, limited lifespan, and the appellant’s young age.
• The compensation awarded under the heads of “Pain and Agony” and “loss due to disability and disfigurement” (Rs. 1,00,000 each) is insufficient.

Arguments on behalf of the Respondents:

• The High Court correctly assessed the functional disability as 35% for the amputation of the lower limb. The High Court had already increased the compensation for future loss of income and conveyance.
• The High Court rightly did not grant future prospects, as the appellant’s Income Tax Returns showed an increase in income despite the disability.
• The appellant, being a scrap dealer, does not require much movement to carry out his work, so his disability does not significantly affect his earning capacity.
• The appellant had already filed a review petition in the High Court, which was rightfully dismissed.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. What is the appropriate quantum of compensation to be awarded to the appellant?

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:

Judgment

The Supreme Court allowed the appeal and enhanced the compensation awarded to the appellant. The Court held that the High Court had erred in assessing the functional disability at 35%, and the loss of future earning capacity should be calculated at 60%. The Court also held that the appellant was entitled to future prospects at 40%.

How each authority was viewed by the Court:

• Sandeep Khanuja Vs. Atul Dande and Anr. (2017) 3 SCC 351: The Court relied on this case to emphasize that the crucial factor is to assess whether the permanent disability has an adverse effect on the earning capacity of the injured.
• Raj Kumar Vs Ajay Kumar and Anr. (2011) 1 SCC 343: The Court relied on this case to reiterate that the assessment of compensation for loss of future earnings depends on the impact of the permanent disability on the earning capacity, and the tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss.
• Anant son of Sidheshwar Dukre Vs. Pratap son of Zhamnnappa Lamzane & Anr. (Civil Appeal No. 8420 of 2018): The Court relied on this case to emphasize that the purpose of fair compensation is to restore the injured to the position he was in prior to the accident as best as possible.
• National Insurance Company Limited v. Pranay Sethi & Others (2017) 16 SCC 680: The Court relied on this case to determine the applicable 40% addition of future prospects.
• R.D. Hattangadi v. Pest Control (India) (P) Ltd. (1995) 1 SCC 551: The Court relied on this case to differentiate between pecuniary and non-pecuniary damages in injury cases.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to provide “just compensation” to the appellant, considering his socio-economic background and the severe impact of the permanent disability on his life. The Court emphasized that compensation should aim to restore the injured to their pre-accident position as much as possible. The Court also considered the fact that the appellant was from an economically weaker section of society and that persons from marginalized backgrounds often face additional discrimination due to bodily disabilities.

The Court’s reasoning can be summarized as follows:

The Court considered the following points:

• The High Court’s assessment of functional disability at 35% was incorrect. The appellant’s inability to move freely and drive impacts his earning capacity.
• The appellant was entitled to future prospects at 40%, as per the principles laid down in National Insurance Company Limited v. Pranay Sethi & Others (2017) 16 SCC 680.
• The compensation for the prosthetic limb and its maintenance was inadequate, considering the limb’s cost, limited lifespan, and the appellant’s age. The Court determined that the appellant must be compensated for three prosthetic limbs and their maintenance until he reaches 70 years of age.
• The non-pecuniary damages awarded by the High Court were inadequate, considering the nature of the permanent disability and its impact on the appellant’s life.

The court quoted from Anant Son of Sidheshwar Dukre (Supra):

“In cases of motor accidents leading to injuries and disablements, it is a well settled principle that a person must not only be compensated for his physical injury, but also for the non- pecuniary losses which he has suffered due to the injury. The Claimant is entitled to be compensated for his inability to lead a full life and enjoy those things and amenities which he would have enjoyed, but for the injuries.”

The court also quoted from R.D. Hattangadi v. Pest Control (India) (P) Ltd. (1995) 1 SCC 551:

“Broadly speaking while fixing the amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations.”

The court observed:

“It is almost universally seen that persons from marginalized backgrounds often face an additional layer of discrimination due to bodily disabilities. This is because persons from marginalized sections of the society already face severe discrimination due to a lack of social capital, and a new disability more often than not compounds to such discrimination. In such circumstances, to preserve the essence of justice, it becomes the duty of the Court to at the very least restore the claimant as best as possible to the position he was in before the occurrence of the disability, and to do so must award compensation in a liberal manner.”

Key Takeaways

• The Supreme Court emphasized the need to consider the socio-economic background of claimants while awarding compensation in cases of permanent disability.
• The Court reiterated that compensation should aim to restore the injured to their pre-accident position as much as possible.
• The assessment of functional disability should not be mechanical and must consider the impact on the injured’s earning capacity.
• Claimants are entitled to future prospects in cases of permanent disability.
• Compensation for prosthetic limbs and their maintenance must be adequate to cover the claimant’s lifetime needs.
• Non-pecuniary damages must be adequate to compensate for the pain, suffering, and loss of amenities of life.

Directions

The Supreme Court directed that the appellant is entitled to a total compensation of Rs. 38,70,120/- along with 9% interest per annum from the date of making the application.

Development of Law

The Supreme Court’s judgment clarifies the principles of “just compensation” in motor accident cases involving permanent disabilities. It emphasizes the need to consider the socio-economic background of the claimant, the impact of the disability on their earning capacity, and the long-term costs associated with prosthetic limbs and their maintenance. The judgment also reiterates the importance of awarding future prospects and adequate non-pecuniary damages. This judgment reinforces the principle that compensation should aim to restore the injured to their pre-accident position as much as possible.

Conclusion

The Supreme Court’s judgment in this case demonstrates a commitment to providing fair and adequate compensation to victims of motor accidents, particularly those who have suffered permanent disabilities. By enhancing the compensation awarded to the appellant, the Court has set a precedent for considering the socio-economic background of claimants and ensuring that they are restored to their pre-accident position as much as possible. The judgment underscores the importance of a holistic approach in assessing compensation, taking into account not only the immediate financial losses but also the long-term impact of the disability on the victim’s life.