Lalan D. @ Lal vs The Oriental Insurance Company … on 17 September, 2020

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Supreme Court of India

Lalan D. @ Lal vs The Oriental Insurance Company … on 17 September, 2020

Author: Sanjay Kishan Kaul

Bench: Sanjay Kishan Kaul, Aniruddha Bose, Krishna Murari

                                     IN THE SUPREME COURT OF INDIA
                                       CIVIL APPELLATE JURISDICTION

                                     CIVIL APPEAL NO.2855 OF 2020
                         (arising out of Special Leave Petition (Civil) No.2131 of 2018)

         Lalan D. @ Lal & Anr.                                          ..…Appellant(s)
         The Oriental Insurance Company Ltd.                           …Respondent(s)



The appellants before us are a victim of a road accident and

his wife. The first appellant is the victim. The accident occurred

on 31st December 2003 while the victim was riding his bicycle

along the side of Alappuzha­Kolam highway. At the time of

institution of the claim petition before the Motor Accidents

Claims Tribunal, Alappuzha under Section 166 of the Motor

Vehicles Act, 1988 (the Act), out of which this appeal arises, the
Signature Not Verified

first appellant was unconscious and was represented by his wife
Digitally signed by
Date: 2020.09.17
18:54:21 IST

as the legal guardian and next friend. She was also a co­

Page 1 of 16
applicant before the Tribunal. It was claimed before the forum of

first instance that the victim was skilled labourer in a building

construction project. His date of birth is 20 th May 1969. Before

the Tribunal, his age at the time of accident was found to be

above 34 years. He suffered, inter­alia, head injury causing brain

concussion, brain stems injury, diffuse axonial injury on left side.

He had to undergo extensive treatment in two hospitals, being

Medical College Hospital, Vandanam, Alappuzha and thereafter

at Medical Trust Hospital, Ernakulam. He had to spend about six

weeks in these two hospitals. Thereafter also his treatment

continued. The claim was not contested by the first respondent –

the owner of the vehicle and was decided ex­parte against him.

Before us also, it was only the insurance company who contested

the appeal. The first respondent was deleted from the array of the

parties by an order of this Court passed on 9 th April, 2019. The

Tribunal found involvement of the vehicle registered as KL­

2/No.9779. Rash and negligent driving by the driver of that

vehicle was also proved. As regards condition of the first

appellant, the Tribunal, in its award, found that the victim had

“right aided Hemiparalesis and there is weakness on the other

side also. He is completely bed ridden and he could not speak

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properly and he has some mental problem also. Tube was fitted

for the passage of urine……”. The Tribunal in its award made on

20th January, 2009 assessed permanent disability of the

appellant to be 50%.

2. Compensation was awarded by the Tribunal under following

heads, applying the multiplier of 17:

Compensation for loss of earning                  Rs.20,000/­
Cost of medicine and treatment charges            Rs.68,000/­
Transportation charges                            Rs. 6,000/­
Bystander expenses                                Rs. 6,000/­
Extra nourishment                                 Rs. 1,500/­
Damage to clothing                                Rs. 500/­
Compensation for pain and suffering               Rs.30,000/­
Compensation for permanent disability
And loss of earning power                         Rs.2,55,500/­
Compensation for loss of amenities                Rs.10,000/­
Compensation for future treatment                 Rs. 2,500/­
                                        Total     Rs.4,00,000/­

3. The victim and his wife appealed to the High Court of Kerala

at Ernakulam seeking enhancement of compensation. The High

Court considered certain additional documents. The appellant

established before the High Court the need to continue his

Page 3 of 16
treatment subsequent to the award of the Tribunal. It was opined

in the judgment of the High Court delivered on 16 th March, 2017,

that the condition of the appellant was such that it was more

than sufficient to arrive at a finding that he was virtually lying as

vegetable. The victim had permanent locomotor disability of right

hemiplegia sequelae of head injury which was not likely to

improve. The High Court found that the victim needed a full­time

caregiver as he was not in a position to move around on free will.

The High Court assessed the degree of disability to be reckoned

as 100% for working out proper compensation and applied the

multiplier of 16 considering his age. We shall reproduce the High

Court’s decision on quantum of compensation in the next

paragraph of this judgment.

4. The Medical Board at the Medical College Hospital,

Alappuzha had certified the victim’s permanent disability to be

50%, which was the basis for assessment of degree of his

disability by the Tribunal. The Tribunal’s award was made, as we

have already indicated, in the year 2009. But considering the

position of the victim, while hearing the appeal in the year 2017,

the High Court attributed the percentage of his disability to be

Page 4 of 16
100%. The High Court enhanced his notional monthly income to

Rs.3500/­ per month. In the judgment under appeal, it was

observed and held:

“It is true that the accident was in the
year 2003, but it was on the last day of the
year and by the dawn of the next day, it was to
begin with the year 2004. Evidently, the
injured was maintaining a family of his own,
consisting of his wife, who is the second
appellant/second claimant. By virtue of the
present state of affairs, it can be reasonably
presumed that the wife will not be in a position
to move about for getting some job and she has
to be near her husband throughout, to give
constant care and attention, even for meeting
the calls of nature, for administration of
medicines and for food intake. In the said
circumstance, we find that the notional
monthly income fixed by the Tribunal requires
some modification. We enhance the same to
Rs.3500/­ per month. The proper multiplier, as
rightly pointed out by the learned Sr. counsel
appearing for the Insurer is ‘16’; in view of the
date of birth of the injured being 25.9.1969.
On re­working the compensation towards
disability, it comes to Rs.6,72,000/­ (3500 x 12
x 16 x 100/100). After giving credit to the sum
of Rs.2,55,000/­ awarded by the Tribunal, the
balance comes to Rs.4,17,000/­. Since we have
awarded compensation for disability, reckoning
it as 100%, the compensation of loss of earning
awarded by the Tribunal becomes irrelevant
and insignificant and hence the said amount of
Rs.20000/­is deleted. Hence the balance
payable comes to Rs.3,97,000/­.

The compensation under the heads ‘pain and
suffering’ and towards ‘loss of amenities and

Page 5 of 16
enjoyment in life’ also require some
modification. Taking into the totality of the
facts and circumstances, we award a further
sum of Rs.10,000/­ under the head ‘pain and
suffering’ and a sum of Rs.40,000/­ towards
loss of amenities and enjoyment in life. Thus,
the total balance compensation comes to
Rs.4,47,000/­ (Rupees four lakhs forty seven
thousand only), which shall be satisfied with
interest at the rate of 9% from the date of
petition till realisation, within ‘one month’ from
the date of receipt of a copy of the judgment.”

5. The appellants have asked for further enhancement of

compensation before us. Grievance of the appellants is that the

victim has been under­compensated, having regard to the degree

of injury suffered by him. He has specifically raised the plea for

award of compensation under the head of loss of future

prospects. It is also his case that the High Court erred in law in

applying the multiplier of 16. It has been urged on behalf of the

appellants that the multiplier 17 as per the award of the

Tribunal, should have been retained.

6. On behalf of the insurance company, prayer of the

appellants for enhancement of compensation has been opposed.

It has been argued that there was contributory negligence on the

part of the first appellant in that he was under the influence of

Page 6 of 16
liquor at the time of accident. On that count, they want reduction

of 50% of the compensation from the judgment and order under

appeal. Quantification of his monthly income as Rs.3,500/­ has

also been questioned by the insurance company in their counter­

affidavit. The case of Sri Ramachandrappa vs. The Manager,

Royal Sundaram Alliance Insurance Company Ltd. [(2011) 13

SCC 236] has been referred to in this regard. On the question as

to what would constitute just compensation, the cases of Arvind

Kumar Mishra vs. New India Assurance Co. Ltd. & Anr. [(2010)

10 SCC 254] and National Insurance Company Ltd. vs.

Kusuma and Anr. [(2011) 13 SCC 306] have been cited on their

behalf. It has also been argued that as he was a construction

worker, he must have had received compensation under the

Building and other Construction Workers Welfare Cess Act, 1966

as also Workmen Compensation Act, 1923. The insurance

company’s case is that personal expenses of the victim ought to

have been taken to be one­fourth of the loss of income assessed.

The plea for attendant charges has been resisted on the ground

that no service by any bystander had been proved and no bill for

expenses for surgery or hospitalisation during the last 17 years

Page 7 of 16
had been produced. The insurance company, however, has not

come up in appeal questioning the High Court’s finding on the

heads of compensation and quantum of compensation awarded

under these heads. These submissions of the insurance

company we cannot entertain at this stage while dealing with the

victim’s appeal for enhancement of compensation. Otherwise

also, we do not think these submissions have any legal basis in

the context of the present appeal. The forum of first instance or

the High Court did not return any finding on the first appellant

being under influence of alcohol. In the victim’s appeal, we

cannot permit the insurance company to raise this plea at this

stage. Moreover, submission that the appellant must have drawn

compensation under different welfare statutes is inferential. The

insurance company has not disclosed any evidence to sustain

their stand on this count.

7. The High Court has assessed monthly income of the victim

to be Rs.3500/­. This was enhanced from the Tribunal’s

quantification of Rs.2,500/­ per month. We do not want to

disturb the finding of the High Court on this point. This is

essentially a finding on question of fact. The respondent

Page 8 of 16
insurance company has cited the case of Mohan Soni vs. Ram

Avatar Tomar & Ors. [(2012) 2 SCC 267] to contend that in the

context of loss of future earning, physical disability resulting

from an accident ought to be judged with reference to the nature

of work being performed by the person suffering the disability.

The approach of the Tribunal as also the High Court in the case

of the victim has been in that line only. The respondents also

sought to rely upon the decision of this Court in the case of Priya

Vasant Kalgutkar vs. Murad Shaikh & Ors. [(2009) 15 SCC 54].

This case, however, relates to computation of compensation for

injuries suffered by a minor. Ratio of this decision has no

application in the facts of this case. We are, however, also of the

opinion that the High Court went wrong in not awarding any sum

under the head of loss of future prospects. In the case of

National Insurance Company Ltd. vs. Pranay Sethi & Ors.

[(2017) 16 SCC 680], a Constitution Bench has opined that the

standardisation of just compensation is to include addition of

future prospects to the income of the victim at the time of

occurrence of the accident. This was a case where the victim had

succumbed to the injuries. The present appeal relates to a victim,

Page 9 of 16
who has survived the accident but his disability has been

assessed to be 100% by the High Court. We confirm this finding

of the High Court. In the case of Parminder Singh vs. New

India Assurance Co. Ltd. & Ors. [(2019) 7 SCC 217], a Bench

comprising of two Judges of this Court found 50% of the income

of the victim was to be assessed as loss of future prospects.

Earlier, this Court broadly took the same view in the case of

Sanjay Verma vs. Haryana Roadways [(2014) 3 SCC 210]. The

course mandated by this Court in the case of Parminder Singh

(supra) is addition to the monthly income of the victim, 50%

thereof as loss of future prospects to arrive at compensation for

loss of income for the purpose of application of the multiplier.

This method of computation is based on sound logic and we

choose to apply the same methodology in this appeal also. The

loss of earning capacity of the first appellant is 100%. On this

basis, his loss of future earning would have to be calculated

treating income of the victim to be Rs.3,500/­ per month, to

which loss of future prospects at the rate of 40% thereof is to be

added, which would make it Rs.4900/­ per month. This is the

computation method directed by the Constitution Bench in the

Page 10 of 16
case of Pranay Sethi (supra) so far as self­employed persons are

concerned. We direct addition of 40% as there is no material

before us to prove that the victim had a permanent job. Evidence

before the Tribunal was that he was a skilled labourer in a

building construction project. There was no evidence that he was

on their permanent roll. The multiplier to be applicable in this

case would be 16 following the specification contained in the case

of Sarla Verma & Ors. vs. Delhi Transport Corporation & Anr.

[(2009) 6 SCC 121]. Accordingly, his loss of future earning would

have to be calculated first by multiplying Rs.4,900/­ by 12,

which would come to Rs.58,800/­ This would be his annual

income. Once multiplier of 16 is applied, his loss of future

earning would come to Rs.9,40,800/­, considering that degree of

his disability is 100%. As the appellant has survived though at

present in almost “coma stage” as observed by the High Court, we

reject the insurance company’s plea for making any deduction

towards personal living expenses.

8. We also find that there was no compensation awarded

towards expenses for a caregiver barring a paltry sum of

Rs.6,000/­ as bystander expenses. The defence of the insurance

Page 11 of 16
company for keeping the said sum at that negligible level is that

no evidence had been led as regards expenses incurred towards

any medical attendant. But going by the work the victim was

doing and his physical state of being resulting from his injuries,

conclusion has to be inevitable that he required and still requires

caregiver round­the­clock and round the year to remain barely

functional. Judging by the stratum of the society he comes from,

it would be irrational to expect that he would have been in a

position to directly engage a caregiver after his accident. It would

not be an unreasonable assumption that his family members

must have had to fit into that role. They could perform the role of

caregiver only by diverting their own time from any form of

gainful employment which could have generated some income.

We proceed on the same assumption on his requirement of

continued medical treatment post­discharge from the hospital.

There is observation in the judgment of the High Court that he

was undergoing treatment in “Aarogya Keralam” Palliative Caring

Scheme. We are of the opinion that Rs.7,00,000/­ ought to be

awarded as lumpsum, composite amount for medical attendant

charges and future medical treatment. In the case of Kajal vs.

Jagdish Chand & Ors. [(2020) 4 SCC 413] for attendant charges,
Page 12 of 16
a Bench of two­Judges of this Court has held that the multiplier

methodology ought to be applied. On the other hand, in the case

of Parminder Singh (supra) a lumpsum amount has been

awarded. In the facts of the given case, we are of the opinion that

award of lumpsum would be the proper course considering the

fact that the first appellant was a daily labourer. In traumatic

times after his accident, his family was unlikely to maintain

detailed records of the expenses incurred.

9. Under the head pain and suffering the High Court has

awarded a sum of Rs.40,000/­. The appellants want this sum to

be raised to Rs.6,00,000/­ relying on a judgment of this Court in

the case of Mallikaarjun Vs. Divisional Manager, National

Insurance Company Ltd. & Anr. [(2014) 14 SCC 396]. In the

case of Kajal (supra), where the victim was a young girl of 12

years having suffered 100% disability, the amount awarded was

Rs.15,00,000/­ under the heads pain and suffering and loss of

amenities. But this judgment qualified such award with a caveat

that the sum was awarded in peculiar facts and circumstances of

the case. In the case of Raj Kumar vs. Ajay Kumar & Anr.

[(2011) 1 SCC 343] it has been observed that when compensation

Page 13 of 16
is awarded by treating loss of future earning capacity to be 100%

or even anything more than 50% the need to award

compensation separately under the head of loss of amenities or

loss of expectation of life may disappear. As a result, only a token

or nominal amount may have to be awarded under those heads.

It is a fact that in the cases of Kajal (supra) and

Mallikaarjun (supra), the victims were minor children. Their loss

of income and permanent disability compensation were computed

treating their income to be Rs.15,000/­ per annum. So far as the

present appeal is concerned, the High Court has assessed the

annual income to be Rs.42,000/­ (Rs.3500×12). But this very fact

cannot altogether deprive the victim from compensation under

the head pain and suffering. The High Court had awarded

Rs.10,000/­only under this head. We assess the same to be

Rs.3,00,000/­. Considering the observations made in the case of

Raj Kumar (supra), to which we have already referred, we reduce

the sum awarded by the High Court under the head loss of

amenities from Rs.40,000/­ to Rs.10,000/­.

10. We accordingly modify the award as made by the High

Court and direct the respondent­insurance company to make

Page 14 of 16
payment as compensation under the following heads (which also

includes the heads under which sums were awarded by the

Tribunal and the High Court) :­

Compensation Heads Amount (in Rs.)
Compensation for permanent disability 9,40,800
and loss of future earning

Medical Attendant charges (Bystander 7,00,000
charges) and future Treatment cost
Pain and suffering 3,00,000
Medicines & Treatment charges 68,000
Transportation Charges 6,000
Extra Nourishment 1500
Damage to Clothing 500
Loss of Amenities 10,000
Total 20, 26,800

11. The aforesaid sum will carry interest @ 9% per annum.

Upon adjusting the sum already paid, the amount we have

awarded shall be released to the appellants. Interest on the

differential sum shall be computed from the date of filing of the

application under Section 166 of the Act. The said amount shall

be invested in an interest bearing fixed deposit account of a

Nationalised Bank for a period of one year in the name of the first

appellant within eight weeks. The appellants shall be entitled to

withdraw the interest therefrom on a regular basis during the

Page 15 of 16
tenure of the fixed deposit. Thereafter, the entire sum shall be

paid over to the appellants.

12. The appeal is disposed of in the above terms. Pending

applications, if any, shall stand disposed of. There shall be no

order as to costs.


(Sanjay Kishan Kaul)


(Ajay Rastogi)


(Aniruddha Bose)

New Delhi,
Dated: 17th September, 2020.

Page 16 of 16

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