Case Law Details
S. Shakul Hameed Vs Tamil Nadu State Transport Corporation Limited (Supreme Court of India)
Income and Disability Must Be Realistically Assessed: Supreme Court Enhances Compensation in Motor Accident Claim
The Supreme Court enhanced the compensation awarded to the appellant who suffered permanent disability in a motor accident, holding that the income and disability assessment adopted by the Tribunal and modified by the High Court was partly erroneous. Although the claim petition mentioned Section 163A of the Motor Vehicles Act, 1988, the Court found that the pleadings clearly alleged rash and negligent driving, and the quantum claimed exceeded the structured formula. The claim was therefore rightly treated as one under Section 166, warranting a realistic assessment of loss.
In the absence of documentary proof of income, the Court held that adoption of the notional income under the Second Schedule was unjustified. Relying on Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd., the Court fixed the appellant’s monthly income at ₹5,000, considering the accident occurred in 2005. Applying the appropriate multiplier of 17, adding 40% towards future prospects (the appellant being self-employed), and accepting 50% permanent disability as assessed by the Tribunal, the Court recalculated the loss of income at ₹7,14,000.
The Court also disapproved the High Court’s reduction of disability from 50% to 40% in the absence of any appeal by the insurer, holding such interference to be impermissible. The amounts awarded under other conventional heads were left undisturbed.
Accordingly, the appeal was allowed, and the respondent Transport Corporation was directed to pay the enhanced compensation with interest at 7.5% per annum within three months, reaffirming that just compensation requires pragmatic and humane assessment, not rigid adherence to outdated schedules
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
2. The appeal is by the claimant who suffered a disability in a motor accident, seeking enhancement of the award amounts. The Tribunal awarded an amount of Rs.2,12,800/- (Rupees two lakhs, twelve thousand and eight hundred) which was enhanced by the High Court to Rs.2,23,000/- (Rupees two lakhs and twenty three thousand) together with interest at the rate of 7.5% per annum from the date of the petition till the date of deposit.
3. The learned counsel for the claimant submitted that the appellant was employed as a salesman and was earning an amount of Rs.8,000/- (Rupees eight thousand) per month. However, the Tribunal only took an amount of Rs.3,300/- (Rupees three thousand and three hundred) as his monthly income, adopted from the Schedule applicable to Section 163A of the Motor Vehicle Act, 19881 and it was left untouched by the High Court. It is argued that at least the minimum wages applicable on the date of accident ought to have been taken. It is also argued that the reduction of the disability quotient to 40% as assessed by the medical expert was without any valid cause.
4. The learned counsel for the respondent-Corporation, however, submits that the application itself was filed under Section 163A of the MV Act. There was absolutely no evidence to prove the employment or the income as claimed by the appellant. The disability being functional disability, the Tribunal and the High Court was perfectly correct in having determined it at 40%.
5. We have looked at the order of the Tribunal, and we see that at the outset it has been mentioned that the application is filed under Section 163A of the MV Act. However, the compensation claimed was Rs.7,40,000/-(Rupees seven lakhs and forty thousand) and the averments itself indicates that the contention was that the accident occurred because of the rash and negligent manner in which the bus of the Corporation was being driven. Hence, we are of the opinion that though Section 163A of the MV Act was mentioned in the application, the claim is one under Section 166 of the MV Act.
6. As far as the income is concerned, it has to be noticed that though the appellant had claimed that he was a vendor of electronic equipment, there was nothing produced to show the employment, nor the income claimed of Rs.8,000/- (Rupees eight thousand). However, it has to be noticed that in Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd.2, this Court computed the income of a Coolie at Rs.4,500/- (Rupees four thousand and five hundred) per month in the year 2004. Computing a nominal increase, even a Coolie would be entitled to an income of Rs.5,000/- (Rupees five thousand) per month in the year 2005 when the accident occurred. We are of the opinion that the income of the appellant, hence can be safely computed at Rs.5,000/- (Rupees five thousand) per month and the appellant being of the age of 27 years, the multiplier applicable would be 17. There should be future prospects of an addition of 40%, the claimant being self-employed. The loss of compensation has to be reduced, in accordance with the disability assessed.
7. The appellant had produced a certificate, Exhibit P14 wherein the disability was assessed at 60% by the Doctor who was examined as PW-2. It is also stated in cross examination that only skin grafting was done on the appellant. It was hence, the disability was fixed at 50% by the Tribunal. The High Court without any appeal by the Insurance Company reduced the disability to 40%, which was improper. Disability as assessed by the Tribunal hence has to be maintained.
8. The total award amount, hence, would be modified as follows: –
Loss of income
Rs.5000 x 12 x 17 x 140% x 50% = Rs.7,14,000/-
9. The compensation as above would be for the loss of income. The amounts awarded under the conventional heads by the Tribunal and affirmed by the High Court would stand as it is. The respondent would pay the said amounts within a period of three months from today with interest at the rate of 7.5% as awarded by the High Court.
10. The appeal stands allowed with the above directions.
11. Pending application(s), if any, shall stand disposed of.
Notes:-
1 for short, the MV Act
2 (2011) 13 SCC 236
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