In that case, after following the judgment in Kerala SRTC v. Susamma Thomas[7], the Court chose to apply multiplier of 18 keeping in view the age of the victim, who as 25 years at the time of the accident. In the instant case, the MACT had quantified the income of the appellant at ?10,000, i.e. ?1,20,000 per annum. Going by the age of the appellant at the time of the accident, multiplier of 17 would be admissible. Keeping in view that the permanent disability is 70%, the compensation under this head would be worked out at ?14,28,000. The MACT had awarded compensation of ?70,000 for permanent disability, which stands enhanced to ?14,28,000. For mental and physical agony and frustration and disappointment towards life, the MACT has awarded a sum of ?30,000, which we enhance to ?1,30,000. In this manner, the compensation that is payable to the appellant is worked out as under: |Head | |Awarded by MACT |Now Payable | | | |Amount (in Rs.) |Amount (in Rs.) | |Medical & Transport |- |3,10,227 |3,10,227 | |Expenses | | | | |Loss of Income |- |1,00,000 |1,00,000 | |Mental & Physical |- |30,000 |1,30,000 | |agony | | | | |Removal of rod |- |25,000 |25,000 | |inserted in right leg | | | | |Permanent disability |- |70,000 |14,28,000 | |to some extent | | | | |TOTAL |- |5,35,227 |19,93,227 | The appellant shall also be entitled to the interest, as awarded by the High Court, as well as costs of this appeal. The amount shall be paid to the appellant within two months after deducting the payments already made. The appeal is disposed of accordingly.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1329 OF 2017

(ARISING OUT OF SLP (C) NO. 22790 OF 2013)

|SANDEEP KHANUJA                            |…..APPELLANT(S)            |

|VERSUS                                     |                             |

|ATUL DANDE & ANR.                          |…..RESPONDENT(S)           |

J U D G M E N T

A.K. SIKRI, J.

Leave granted.

In a motor accident, the appellant herein suffered  physical  injuries.   It

happened on July 08, 2006 when the appellant was going on a scooter to  Gram

Pendri in the State of Chhattisgarh. When he reached  near  Gram  Pendri,  a

Hyundai Getz  car  bearing  Registration  No.  MH  12  CR  6917,  driven  by

respondent No.1, hit the scooter, as a result of which  the  appellant  fell

down and sustained fractures on both the legs, thereby  suffering  permanent

disability to some extent.  He filed  claim  for  compensation  against  the

respondents before the Motor Accidents Claims Tribunal (MACT),  Rajnandgaon,

Chhattisgarh.  The  MACT,  vide  award  dated  May  05,  2009,  granted  him

compensation in the sum of ?5,35,227, under the following heads:

|Head                          |   |Amount (in Rs.)|

|Medical & Transport Expenses  |-  |3,10,227       |

|Loss of Income                |-  |1,00,000       |

|Mental & Physical agony       |-  |30,000         |

|Removal of rod inserted in    |-  |25,000         |

|right leg                     |   |               |

|Permanent disability to some  |-  |70,000         |

|extent                        |   |               |

|TOTAL                         |-  |5,35,227       |

Not satisfied with the quantum of  compensation,  the  appellant  approached

the High Court by way of appeal under Section  173  of  the  Motor  Vehicles

Act, 1988 (for short,  the  ‘Act’).   The  High  Court  has,  vide  impugned

judgment, enhanced the compensation to ?6,35,000.  The High  Court  has  not

awarded compensation under different heads  but  has  deemed  it  proper  to

award lump sum compensation in the aforesaid  amount.   Relevant  discussion

in this behalf can be traced to paras 8 and  9  of  the  impugned  judgment,

which reads as under:

“(8)  We have gone through the evidence  adduced  by  the  claimant  on  the

issue  of  injury  sustained  by  him.   In   our   opinion,   taking   into

consideration the nature of injury, the  permanent  disability  occurred  on

the body of the appellant (claimant) to some extent, as a  result  of  which

he claims to be not as fit as he was prior to  accident  in  his  day-to-day

work, resulting in reducing his capacity to do  some  extent  of  work,  the

expenditure incurred in receiving medical treatment in actual, the loss  and

mental pain suffered due to his  involvement  in  accident  we  consider  it

proper to enhance  in  lump  sum  the  compensation  from  Rs.5,35,227/-  to

Rs.6,35,000/-.  In other words, in our view, the claimant is  held  entitled

for a total sum of Rs.6,35,000/- by way of  compensation  for  the  injuries

sustained by him.

(9)  In our considered opinion, due to injuries in both legs which  is  also

duly proved in evidence by the claimant and his  doctor,  he  cannot  freely

move and attend to his duties.  His movements  are  restricted  to  a  large

extent and that too in young age.  It is for  all  these  reasons,  we  feel

that the Tribunal had awarded  a  less  compensation  under  this  head  and

hence, some enhancement under the head of pain and suffering and also  under

the head of permanent partial disability and loss  of  earning  capacity  is

called  for.   This  enhancement  figure   is   arrived   at   taking   into

consideration all relevant factors.”

The appellant is not satisfied with the aforesaid approach  and  the  manner

in which the compensation is awarded.   According  to  him,  had  the  Court

applied proper provision  and  principles  laid  down  under  the  Act,  the

appellant would have been entitled to much more compensation.

We may state, at the outset, that the MACT recorded a specific finding  that

the accident took place  due  to  rash  and  negligent  driving  of  car  by

respondent No.1 which hit the scooter of  the  appellant.   Respondent  No.1

did not challenge the finding of the MACT and, therefore,  this  aspect  has

attained  finality  and  we  need  not  go  into  the  same.   The  dispute,

therefore, pertains only to the quantum of the compensation that has  to  be

awarded.  Few facts relevant for resolving the dispute, which appear on  the

record, are as under:

At the time of the accident, the appellant was aged about 30 years.  He  was

working as a Chartered Accountant.  The appellant had produced  evidence  to

the effect that  he  had  worked  as  a  Chartered  Accountant  for  various

institutions for which he  was  paid  professional  fee.   He  had  produced

statements in this behalf (Exhibits P-195 to P-208) and  on  that  basis  he

claimed that his monthly income was ?34,600.  He also proved on  record  the

income tax return for the year 2006-2007 (Exhibit P-194).  The  certificates

which were produced by the appellant showing the professional fee  which  he

had received was not accepted by the MACT on the ground that he had  started

the business in the month of March 2006 and there  was  enough  professional

competition  in  the  said  field.   Moreover,  the   person   issuing   the

certificate had not been produced.  On this  basis,  the  Tribunal  assessed

the monthly income of the appellant at ?10,000.

Insofar as injuries suffered by the  appellant  in  the  said  accident  are

concerned, he had stated that his health had impaired drastically and  lungs

infected because of which he was admitted in the Intensive Care Unit and  he

was kept on ventilator and was operated thrice.  He had problem in  climbing

stairs, running, trouble of back while sleeping, etc.  A rod is  planted  in

his leg.  Because of all this he  has  suffered  70%  permanent  disability,

apart from mental and physical agony and the said  disability  is  going  to

give him frustration and disappointment towards life.  He pleaded that  this

disability has affected his efficiency in work as well resulting in loss  of

future income as well.

As already noticed above, the MACT granted him compensation  by  reimbursing

expenses incurred towards treatment  and  transportation,  loss  of  income,

mental and physical agony and expenses for removing the rod planted  in  his

leg.  The appellant contends that compensation awarded for mental agony  and

physical suffering is too less.  That apart,  his  main  grievance  is  that

only a  paltry  sum  of  ?70,000  is  awarded  by  the  MACT  for  permanent

disability suffered by him, which is too inadequate.

We may note in this behalf that the  MACT,  though  accepted  the  aforesaid

injuries and physical incapacity suffered  by  the  appellant,  was  of  the

opinion that even when it was not possible for  the  appellant  to  do  work

like a healthy person, looking to the nature of the said  injuries,  insofar

as work of a Chartered Accountant is concerned, he could  still  perform  it

properly and there was no impairment therein.  For  this  reason,  the  MACT

refused to award compensation to the appellant by applying the principle  of

multiplier based on permanent disability and granted a lump  sum  amount  of

?70,000.  The High Court has not gone into this aspect specifically.

In this conspectus, the only argument advanced by the  learned  counsel  for

the appellant was that the appellant was entitled  to  the  compensation  on

the basis of multiplier, as per the provisions of  the  Act,  fur  suffering

permanent disability to the extent of 70% and there was  no  reason  not  to

apply the said multiplier.

Learned counsel for the respondent, on the other hand, made an endeavour  to

justify the approach of the MACT with the submission that when the  injuries

suffered by him, even resulting in 70% permanent disability, had no  adverse

affect on the working of the appellant, who was a Chartered  Accountant,  he

was  not  entitled  to  have  the  compensation  computed  by  invoking  the

principle of multiplier.

We may observe at the outset that it is now a settled principle,  repeatedly

stated and  restated  time  and  again  by  this  Court,  that  in  awarding

compensation the multiplier method  is  logically  sound  and  legally  well

established.  This method, known as  ‘principle  of  multiplier’,  has  been

evolved to quantify the loss of income as a result  of  death  or  permanent

disability suffered in an  accident.   Recognition  to  this  principle  was

given for the first  time  in  the  year  1966  in  the  case  of  Municipal

Corporation of Delhi v. Subhagwanti &  Ors.[1]   Again,  in  Madhya  Pradesh

State Road Transport Corporation, Bairagarh, Bhopal v. Sudhakar  &  Ors.[2],

the Court referred to an English decision while emphasising  the  import  of

this principle in the following manner:

“4. A method of assessing damages, usually followed in England,  as  appears

from Mallet v. McMonagle[3], is to calculate the net pecuniary loss upon  an

annual basis and to “arrive at the total award  by  multiplying  the  figure

assessed as the amount of the annual ‘dependency’ by  a  number  of  ‘year’s

purchase’  that is the number of years the benefit  was  expected  to  last,

taking into consideration the imponderable  factors  in  fixing  either  the

multiplier or the multiplicand…”

While applying the multiplier method, future  prospects  on  advancement  in

life and career  are  taken  into  consideration.   In  a  proceeding  under

Section 166 of the Act relating to death of the  victim,  multiplier  method

is applied after taking into consideration the loss of income to the  family

of the deceased that resulted due to the said demise.  Thus, the  multiplier

method  involves  the  ascertainment  of  the  loss  of  dependency  or  the

multiplicand  having  regard  to  the  circumstances   of   the   case   and

capitalising the multiplicand by an appropriate multiplier.  The  choice  of

the multiplier is determined by the age of  the  deceased  or  that  of  the

claimant, as the case may be.  In  injury  cases,  the  description  of  the

nature of injury and the permanent disablement are the relevant factors  and

it has to be seen as to what would be the impact of such  injury/disablement

on the earning capacity of the injured.  This Court, in  the  case  of  U.P.

State Road  Transport  Corporation  &  Ors.  v.  Trilok  Chandra  &  Ors.[4]

justified the application of multiplier method in the following manner:

“13. It was rightly clarified that there should be  no  departure  from  the

multiplier method on the ground that  Section  110-B,  Motor  Vehicles  Act,

1939 (corresponding to the present provision of Section 168, Motor  Vehicles

Act, 1988) envisaged payment of ‘just’  compensation  since  the  multiplier

method is the accepted method for determining and ensuring payment  of  just

compensation and is expected  to  bring  uniformity  and  certainty  of  the

awards made all over the country.”

The multiplier  system  is,  thus,  based  on  the  doctrine  of

equity, equality and necessity.  A departure therefrom is to  be  done  only

in rare and exceptional cases.

In the last few years, law in this aspect  has  been  straightened  by  this

Court by removing certain cobwebs that had  been  created  because  of  some

divergent views on certain aspects.  It is not even necessary  to  refer  to

all  these  cases.   We  find  that  the  principle  of   determination   of

compensation  in  the  case  of  permanent/partial  disablement   has   been

exhaustively dealt with after referring to the  relevant  case  law  on  the

subject in the case of Raj Kumar v. Ajay Kumar & Ors.[5]  in  the  following

words:

“Assessment of future loss of earnings due to permanent disability

8. Disability refers to any restriction or lack of  ability  to  perform  an

activity in the manner  considered  normal  for  a  human  being.  Permanent

disability refers to the residuary incapacity or loss of use  of  some  part

of the body, found existing at the  end  of  the  period  of  treatment  and

recuperation, after achieving the maximum  bodily  improvement  or  recovery

which is likely to remain for the remainder life of the  injured.  Temporary

disability refers to the incapacity or loss of use of some part of the  body

on account of the injury, which will cease  to  exist  at  the  end  of  the

period of treatment and recuperation. Permanent  disability  can  be  either

partial  or  total.  Partial  permanent  disability  refers  to  a  person’s

inability to perform all the duties  and  bodily  functions  that  he  could

perform before the accident, though he is able to perform some of  them  and

is  still  able  to  engage  in  some  gainful  activity.  Total   permanent

disability refers to a  person’s  inability  to  perform  any  avocation  or

employment related activities as a result of  the  accident.  The  permanent

disabilities that may arise from motor accident  injuries,  are  of  a  much

wider range when compared to the physical disabilities which are  enumerated

in the Persons with Disabilities (Equal Opportunities, Protection of  Rights

and Full Participation) Act, 1995 (“the Disabilities Act”, for  short).  But

if any of the disabilities enumerated in Section 2(i)  of  the  Disabilities

Act are the result of injuries sustained in a motor accident,  they  can  be

permanent disabilities for the purpose of claiming compensation.

9. The percentage of permanent disability is expressed by the  doctors  with

reference to the whole body, or more often than not,  with  reference  to  a

particular limb. When a disability certificate states that the  injured  has

suffered permanent disability to an extent of 45% of the  left  lower  limb,

it is not the same as 45% permanent disability with reference to  the  whole

body. The extent of disability of a limb (or part of the body) expressed  in

terms of a percentage of the total functions of that limb, obviously  cannot

be assumed to be the extent of disability of the whole  body.  If  there  is

60% permanent disability of the right hand and 80% permanent  disability  of

left leg, it does not mean that the  extent  of  permanent  disability  with

reference to the whole body is 140% (that is 80%  plus  60%).  If  different

parts of the body have suffered different percentages of  disabilities,  the

sum total thereof expressed  in  terms  of  the  permanent  disability  with

reference to the whole body cannot obviously exceed 100%.

10.  Where the claimant suffers  a  permanent  disability  as  a  result  of

injuries, the assessment of compensation under the head of  loss  of  future

earnings  would  depend  upon  the  effect  and  impact  of  such  permanent

disability on his earning capacity. The  Tribunal  should  not  mechanically

apply the percentage of permanent disability as the percentage  of  economic

loss or loss of earning capacity. In most of the cases,  the  percentage  of

economic loss, that is, the percentage of loss of earning capacity,  arising

from a permanent  disability  will  be  different  from  the  percentage  of

permanent disability. Some Tribunals wrongly assume that  in  all  cases,  a

particular extent (percentage) of permanent disability  would  result  in  a

corresponding loss of earning capacity, and consequently,  if  the  evidence

produced show 45% as the permanent disability, will hold that there  is  45%

loss of future earning capacity. In most of the cases, equating  the  extent

(percentage) of loss of earning  capacity  to  the  extent  (percentage)  of

permanent disability will result in award of either too low or  too  high  a

compensation.

11. What requires to be assessed by  the  Tribunal  is  the  effect  of  the

permanent disability on the earning  capacity  of  the  injured;  and  after

assessing the loss of earning capacity in  terms  of  a  percentage  of  the

income, it has to be quantified in terms of money, to arrive at  the  future

loss of earnings  (by  applying  the  standard  multiplier  method  used  to

determine loss of dependency). We may however note that in  some  cases,  on

appreciation of evidence and assessment, the  Tribunal  may  find  that  the

percentage of loss  of  earning  capacity  as  a  result  of  the  permanent

disability, is  approximately  the  same  as  the  percentage  of  permanent

disability in which case, of  course,  the  Tribunal  will  adopt  the  said

percentage for determination of compensation.”

The crucial factor which has to be taken into  consideration,  thus,  is  to

assess as to whether the permanent disability has any adverse effect on  the

earning capacity of the injured.  In this sense,  the  MACT  approached  the

issue in right direction by taking into consideration  the  aforesaid  test.

However, we feel that the conclusion of the MACT, on the application of  the

aforesaid test, is erroneous.  A very myopic view is taken by  the  MACT  in

taking the view that 70% permanent  disability  suffered  by  the  appellant

would not impact the earning capacity of the appellant.   The  MACT  thought

that since the appellant is a Chartered Accountant, he  is  supposed  to  do

sitting work and, therefore, his working capacity is not impaired.   Such  a

conclusion was justified if the appellant was in the  employment  where  job

requirement could be to do sitting/table work  and  receive  monthly  salary

for the said work.  An important feature and aspect which is ignored by  the

MACT is that the appellant is a professional Chartered  Accountant.   To  do

this work efficiently and in  order  to  augment  his  income,  a  Chartered

Accountant is supposed to move around as well.  If  a  Chartered  Accountant

is doing taxation work, he has to appear before  the  assessing  authorities

and  appellate  authorities  under  the  Income  Tax  Act,  as  a  Chartered

Accountant is allowed to practice  up  to  Income  Tax  Appellate  Tribunal.

Many times Chartered Accountants are supposed  to  visit  their  clients  as

well.  In case a Chartered Accountant is primarily doing audit work,  he  is

not only required to visit his clients  but  various  authorities  as  well.

There  are  many  statutory  functions  under  various  statutes  which  the

Chartered Accountants perform.  Free movement is  involved  for  performance

of such functions.  A person who  is  engaged  and  cannot  freely  move  to

attend to his duties may not be able to  match  the  earning  in  comparison

with the one who is healthy and bodily abled.  Movements  of  the  appellant

have been restricted to a large extent and that too at a young age.   Though

the High Court  recognised  this,  it  did  not  go  forward  to  apply  the

principle of multiplier.  We are of the opinion that in  a  case  like  this

and having regard to the injuries suffered by  the  appellant,  there  is  a

definite loss of earning capacity and it calls  for  grant  of  compensation

with the adoption of multiplier method, as held  by  this  Court  in  Yadava

Kumar v. Divisional Manager, National Insurance Company Limited & Anr.[6]:

“9.  We do not intend to review in detail state of authorities  in  relation

to assessment of all damages for personal injury. Suffice  it  to  say  that

the basis of assessment of all damages for personal injury is  compensation.

The whole idea is to put the  claimant  in  the  same  position  as  he  was

insofar as money can. Perfect compensation is hardly possible  but  one  has

to keep in mind that the victim has done no wrong; he has  suffered  at  the

hands of the wrongdoer and the court must take care to  give  him  full  and

fair compensation for that he had suffered.

10.  In some cases for personal injury, the claim could  be  in  respect  of

lifetime’s earnings lost because, though he will live, he  cannot  earn  his

living. In others, the claim may be made for partial loss of earnings.  Each

case has to be considered in the light of its own facts and at the end,  one

must ask whether  the  sum  awarded  is  a  fair  and  reasonable  sum.  The

conventional basis of assessing compensation in  personal  injury  cases—and

that is now recognised mode as to  the  proper  measure  of  compensation—is

taking an appropriate multiplier of an appropriate multiplicand.”

In that case, after  following  the  judgment  in  Kerala  SRTC  v.  Susamma

Thomas[7], the Court chose to apply multiplier of 18  keeping  in  view  the

age of the victim, who as 25 years at the time of the accident.

In the instant case, the MACT had quantified the income of the appellant  at

?10,000, i.e. ?1,20,000 per annum.  Going by the age  of  the  appellant  at

the time of the accident, multiplier of 17 would be admissible.  Keeping  in

view that the permanent disability is 70%, the compensation under this  head

would be worked out at ?14,28,000.  The MACT  had  awarded  compensation  of

?70,000 for permanent disability, which stands enhanced to ?14,28,000.   For

mental and physical agony and frustration and disappointment  towards  life,

the MACT has awarded a sum of ?30,000, which we enhance  to  ?1,30,000.   In

this manner, the compensation that is payable to  the  appellant  is  worked

out as under:

|Head                  |  |Awarded by MACT    |Now Payable      |

|                      |  |Amount (in Rs.)    |Amount (in Rs.)  |

|Medical & Transport   |- |3,10,227           |3,10,227         |

|Expenses              |  |                   |                 |

|Loss of Income        |- |1,00,000           |1,00,000         |

|Mental & Physical     |- |30,000             |1,30,000         |

|agony                 |  |                   |                 |

|Removal of rod        |- |25,000             |25,000           |

|inserted in right leg |  |                   |                 |

|Permanent disability  |- |70,000             |14,28,000        |

|to some extent        |  |                   |                 |

|TOTAL                 |- |5,35,227           |19,93,227        |

The appellant  shall  also  be  entitled  to  the  interest,  as

awarded by the High Court, as well as costs  of  this  appeal.   The  amount

shall be paid to  the  appellant  within  two  months  after  deducting  the

payments already made.

The appeal is disposed of accordingly.

………………………………………J.

(A.K. SIKRI)

………………………………………J.

(R.K. AGRAWAL)

NEW DELHI;

FEBRUARY 02, 2017.

———————–

[1]   (1966) 3 SCR 649

[2]   (1977) 3 SCC 64

[3]   1969 ACJ 312 (HL. England)

[4]   (1996) 4 SCC 362

[5]   (2011) 1 SCC 343

[6]   (2010) 10 SCC 341

[7]   (1994) 2 SCC 176

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