Partly allowed

Sri Madhu v. Puttaswamy

Karnataka HC1 Dec 2022MFA/4093/2018

Case brief

AI extract

What is this about?

In a motor accident First Appeal, the High Court held that the lower Tribunal erred in assessing disability at a mere 20% instead of the medical 60%. The Court enhanced compensation to include 'loss of future prospects' and adjusted various heads including pain, suffering, and amenities to ensure just compensation.

What did the court decide?

Appeal allowed in part; judgment and award of Tribunal modified to enhance compensation to Rs. 14,06,120/- plus interest; additional compensation awarded for loss of marriage prospects.

Sri Madhu Vs Puttaswamy — Contract and Commercial Disputes | Karnataka HC (2022)

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MFA No. 4093 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF DECEMBER, 2022

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BEFORE

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THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR

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MISCELLANEOUS FIRST APPEAL NO.4093 OF 2018(MV-I)

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BETWEEN:

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SRI. MADHU, S/O. MANJAIAH AGED ABOUT 24 YEARS R/AT BYKERE VILLAGE, KASABA HOBLI, SAKALESHPURA TALUK, HASSAN DISTRICT- 34.

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…APPELLANT

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(BY SRI. PRATHEEP K C., ADVOCATE)

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Digitally signed by JAI JYOTHI J Location: HIGH COURT OF KARNATAKA

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AND:

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PUTTASWAMY

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S/O. LATE ERAIAH AGED ABOUT 42 YEARS R/AT HOUSE NO.15, 14TH CROSS, BEHIND CHETHANA SCHOOL CHAMPAKA NAGAR, SAKALESHPURA HASSAN DISTRICT - 56.

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UNIVERSAL SOMPO GENERAL INSURANCE CO LTD MAIN OFFICE : UNIT 401 4TH FLOOR, SANGAM COMPLEX 127, ANDERI KURAL ROAD, ANDERE EAST, MUMBAI - 400059.

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MFA No. 4093 of 2018

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BRANCH OFFICE:

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CT TRADE CENTRE 1ST FLOOR, OPPOSITE C.T. HOSPITAL, KADRI, MANGALORE - 03.

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…RESPONDENTS

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(BY SRI. B.C. SHIVANNEGOWDA, ADVOCATE FOR R2, NOTICE TO R1 DISPENSED WITH VIDE ORDER DATED 14.02.2020)

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THIS MFA IS FILED U/S 173(1)A OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 17.10.2017 PASSED IN MVC NO.1123/2014 ON THE FILE OF THE SENIOR CIVIL JUDGE AND JMFC, MACT, SAKALESHPUR, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the claimant under Section 173(1)A of Motor Vehicles Act, 1988 (hereinafter referred to as 'MV Act' for short), challenging the judgment and award passed in MVC No.1123/2014 dated 17.10.2017 by the Court of Senior Civil Judge and MACT, Sakaleshpur, seeking enhancement of the compensation.

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MFA No. 4093 of 2018

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The brief facts of the case are that on 05.08.2013, at about 5.45 p.m., the claimant was standing by the left side of the N.H. 48, B.M. Road, near Donigal Village. At that time, the driver of the lorry

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bearing registration No.KA-34-5859 drove the same in a rash and negligent manner with high speed and dashed against the car bearing registration No.KA-02-AB-5687, which dashed against the claimant. As a result of which, the claimant sustained severe injuries.

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The Tribunal after considering the facts and circumstances and evidence on record, has granted compensation of Rs.2,94,214/- with interest at the rate of 9% per annum from the date of petition till the date of realisation, under the following heads:

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MFA No. 4093 of 2018

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Sl.No.	Particulars	Amount (in.Rs.)
1.	Towards loss of future income due to disability	1,94,400-00
2.	Towards pain and suffering	50,000-00
3.	Towards food, nourishment, traveling, conveyance and attendant's charges	10,000-00
4.	Towards loss of future amenities	10,000-00
5.	Towards medical expenses	24,814-00
6.	Towards loss of income during laid up period	5,000-00
	Total	2,94,214-00

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Being aggrieved by the lesser quantum of

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compensation, the present appeal is filed.

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Heard the arguments of learned counsel for the

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appellant and the learned counsel for the respondentInsurance Company and perused the records.

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Learned counsel for the appellant/claimant

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submitted that the quantum of compensation awarded by

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MFA No. 4093 of 2018

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the Tribunal is meager one and prays for enhancement of compensation.

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On the other hand, learned counsel for the respondent-Insurance Company submitted that the compensation awarded by the Tribunal is just and proper and therefore, prays for dismissal of the appeal.

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The medical evidence on record proves that the claimant has suffered abrasion of wrist, amputation of left hand. The doctor has assessed the percentage of disability to the left hand at 60%. It is stated that the claimant was working as an Assistant Operator of Hitachi Vehicle. The accident was occurred on 05.08.2013. The Tribunal has considered the notional income of the claimant as Rs.4,500/- per month and held the percentage of disability at 20% for computation of loss of income due to disability.

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The Tribunal has not added 'loss of future prospects in life' and the compensation awarded under other heads are also on the lesser side and the same is required to be modified.

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MFA No. 4093 of 2018

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In the present case, the doctor has stated that

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the claimant has suffered 60% of permanent physical disability to the left hand. The Tribunal has taken into consideration the percentage of disability at 20%, which is on the lesser side. The claimant was working as Assistant Operator of Hitachi vehicle, who needs physical strength to operate the same. But the claimant is not able to do any other manual or labour work with amputation of left hand. Therefore, the functional disability affecting the earning capacity is to be assessed on the basis of the principles of law laid down by the Hon'ble Supreme Court in the case of Rajkumar Vs. Ajay Kumar¹ .

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The Hon'ble Supreme Court in the case of Mohan Soni vs. Ram Avtar Tomar and others² , followed the principles of law laid down in Rajkumar's case supra and has observed at paragraphs 11 and 12, which reads as under:

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1 ( 2011) 1 SCC 343

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2 (2012) 2 SCC 267

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MFA No. 4093 of 2018

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11. In a more recent decision in Raj Kumar v. Ajay Kumar and another, (2011) 1 SCC 343, this Court considered in great detail the correlation between the physical disability suffered in an accident and the loss of earning capacity resulting from it. In paragraphs 10, 11 and 13 of the judgment in Raj Kumar, this Court made the following observations:

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"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,

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MFA No. 4093 of 2018

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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.

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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. (See for example, the decisions of this Court in Arvind Kumar Mishra v. New India Assurance Co. Ltd.)

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13. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could

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MFA No. 4093 of 2018

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carry on in spite of the permanent disability and what he could not do as a result of the permanent disability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood."

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12. In light of the aforesaid decisions, we find it extremely difficult to uphold the decision of the High Court and the Tribunal based on the finding that the loss of the appellant's earning capacity as a result of the amputation of his left leg was only 50%. It is noted above that the appellant used to earn his livelihood as a cart puller. The Tribunal has found that at the time of the accident his age was 55 years. At that age it would be impossible for the appellant to find any job. From

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MFA No. 4093 of 2018

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the trend of cross-examination it appears that an attempt was made to suggest that notwithstanding the loss of one leg the appellant could still do some work sitting down such as selling vegetables. It is all very well to theoretically talk about a cart puller changing his work and becoming a vegetable vendor. But the computation of compensation payable to a victim of motor accident who suffered some serious permanent disability resulting from the loss of a limb etc. should not take into account such indeterminate factors".

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Therefore, the functional disability is to be assessed considering the nature of avocation/ profession of the claimant and the nature of injuries and disability sustained.

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In the present case, the claimant is not able to do any other labour work including driving. Even though as urged by the learned counsel for the Insurance Company that the claimant may be able to work some other work, but that cannot compensate the satisfaction and earning being made by what he was doing prior to the accident. Therefore, the loss of earning capacity due to

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MFA No. 4093 of 2018

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disability is to be considered on the basis of the functional disability. The functional disability affecting the earning capacity is not a mathematical calculation by following the formula. But the Tribunal has erred upon making mathematical calculation in considering 1/3rd of disability stated by the doctor and this approach is not correct.

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The doctor has stated that the claimant has suffered 60% of permanent physical disability. This shall be considered along with the profession/avocation of the

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claimant. Even for that purpose, the Court can take Schedule-I of Workmen's Compensation Act, 1923 as guideline value, wherein at serial number 4 of the 1st schedule for 'loss of hand or of the thumb and four fingers of one hand or amputation from (11.43 cms) below tip olecranon, the percentage of loss of earning capacity is stated as 60%. Even though the compensation cannot be determined under the Employees' Compensation Act, but the present one is under the provisions of the Motor

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MFA No. 4093 of 2018

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Vehicles' Act. But the said factors stated in the Schedule-I can be taken as guideline value. Therefore, considering the disability sustained by the claimant, it can be safely held that the claimant has suffered 60% of functional disability for assessing the 'loss of earning capacity', based on the principles of law laid down by the judgments of the Hon'ble Supreme Court stated supra. Accordingly, 60% of functional disability is taken into consideration.

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In the present case, the claimant has suffered 60% of functional disability. Therefore, the claimant is entitled to an additional income towards loss of future prospects in life as stated by the Division bench of this Court in the case of New India Assurance Company

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Ltd., Vs. Abdul & Others³ . The Division Bench in the above case were pleased to grant compensation by adding income towards loss of future prospects in life. In the above stated case, the claimant - appellant was a tailor

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3 MFA.NO.103807/2016 C/W MFA.NOS.103835/2016 & 103807/2018 DD.27.05.2022

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MFA No. 4093 of 2018

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and had suffered 20% disability. Therefore, it was granted compensation including loss of future prospects in life. It is useful to refer the observations made by the Division Bench of this Court in the above case at Paragraph Nos.26, 27 and 31, which read as follows:

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"26. What is the true basis for incorporating 'loss of future prospects' in computing compensation under the head of loss of future earning capacity? Is it because courts have to make a distinction between various classes of injuries resulting in disabilities having a bearing on the earning capacity and thereafter, mark the cases only of disability resulting from amputation of limbs for incorporating an additional component of 'loss of future prospects' into the computational process of loss of future income? Our answer is an emphatic No! In an opinion marked by considerable prescience and percipience, Singhvi J. speaking for a Bench of Supreme Court observed as follows:

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"14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma's case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should

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MFA No. 4093 of 2018

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be made only in rare and exceptional cases involving special circumstances. In our view, it will be naive to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life.

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15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put extra efforts to generate additional Income necessary for sustaining their families.

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16. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher

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MFA No. 4093 of 2018

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echelons of service will cross the figure of rupees one lakh.

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17. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the Government employees and those employed in private sectors but it cannot be denied that there has been incremental enhancement in the income of those who are selfemployed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc.

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18. Therefore, we do not think that while making the observations in the last three lines of paragraph 24 of Sarla Verma's judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self-

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MFA No. 4093 of 2018

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employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is selfemployed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he/she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation."

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(Santosh Devi v. National Insurance Company Limited and others)⁴

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27. It is thus evident that this component of 'loss of future prospects' is a forensic tool forged by the Supreme Court to off-set the adverse effect of imponderable vagaries of inflation on the assessment of loss of future earning. To link this component only to disability arising from amputation of limbs defies logic and has no sanction of law. It is undoubtedly true that it is no part of the statutory law governing the field of award of compensation in motor vehicle accident cases. But, Courts are enjoined under law to award "just compensation" and no compensation can be regarded as just unless law is capable of reinventing itself by making proper adjustments as the "needs of the time require". Judges some times make law if the statutes made by the Parliament fall short of meeting the requirements of the time.

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4 (2012) 6 Supreme Court Cases 421

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MFA No. 4093 of 2018

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31. Resultantly we are constrained to reject the contention of Sri. G. N. Raichur, learned counsel for the Insurance Company. 'Loss of future prospects' also has to be factored in notwithstanding the fact that this is not a case of death but a case of injury without amputation resulting in whole body disability to the extent of 20% which ultimately has a bearing on the reduced earning capacity. It is essentially on account of the fact that money value does not remain constant over a long spell of years and thus claimant being aged only 40 years, he has long years ahead of him to look forward to, the sliding value of the money will have adverse impact on his future prospects. Accordingly, having due regard to the fact that he was aged about 40 years at the time of the accident 25% of his established income will have to be factored in towards compensation for loss of future prospects'. Therefore, loss of earning capacity' is recomputed as follows:

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Rs.6,000/- +25% (Rs.1,500/-) = Rs.7,500/-

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Rs.7,500 x 12 x 15 x 20% = Rs.2,70,000/-“

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Therefore, as per the principles of law laid down by this Court stated above and considering the age of

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claimant i.e., 20 years, 40% of income is to be added towards 'loss of future prospects in life' as per the

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MFA No. 4093 of 2018

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principles of law laid down by the Hon'ble Supreme Court

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in the case of National Insurance Company Ltd., Vs. Pranay Sethi and others⁵ . The accident was occurred in the year 2013. The notional income of the claimant is taken as Rs.8,000/- per month as recognized by the Karnataka State Legal Services Authority. The appropriate multiplier applicable is '18'. Therefore, the 'loss of future income due to disability' is re-assessed and quantified as follows:

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Rs.8,000/- + Rs.3,200/- (40% of Rs.8000)=11,200/-.

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Rs.11,200/- x 60% x 18 x 12 = Rs.14,51,520/-.

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The compensation awarded under the head 'pain and sufferings' is on the lesser side and the same is enhanced to Rs.75,000/-.

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The compensation of Rs.10,000/- awarded under the head 'food, nourishment, traveling, conveyance

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5 (2017) 16 SCC 680

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MFA No. 4093 of 2018

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and attendant charges' is on the lesser side and the same is enhanced to Rs.25,000/-.

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The Tribunal has awarded a sum of Rs.10,000/-

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under the head 'loss of future amenities'. The same is on the lesser side and the same is enhanced to Rs.50,000/-.

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The sum awarded under the head 'medical expenses' is as per the bills produced by the claimant. The same is kept intact.

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The Tribunal has awarded lesser sum of Rs.5,000/- under the head 'loss of income during laid up period'. The claimant must not have attended the work for three months on account of the accident. Hence, a sum of Rs.24,000/- (Rs.8,000x3 months) is awarded under the said head.

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The Tribunal has not awarded any

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compensation under the head 'loss of marriage prospects'. A sum of Rs.50,000/- is awarded under the said head.

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MFA No. 4093 of 2018

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Thus, in all, the claimant is entitled for the

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following compensation :

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Sl.No.	Particulars	Compensation awarded(in Rs.)
1.	Loss of future income due to disability	14,51,520-00
2.	Towardspain and suffering	75,000-00
3.	Towards food, nourishment, traveling, conveyance and attendant's charges	25,000-00
4.	Towards loss of future amenities	50,000-00
5.	Towards medical expenses	24,814-00
6.	Towards loss of income during laid up period	24,000-00
7.	Loss of marriageprospects	50,000-00
	TOTAL	17,00,334-00

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The Tribunal has awarded the compensation of Rs.2,94,214/-, but the appellant/claimant is entitled to total compensation of Rs.17,00,334/- . Therefore, the appellant/claimant is entitled to enhanced compensation of Rs.14,06,120/- (Rs.17,00,334 - Rs.2,94,214) along with interest @ 6% p.a., from the date of petition till its

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MFA No. 4093 of 2018

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realization, in addition to what has been awarded by the Tribunal.

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Accordingly, I proceed to pass the following:

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ORDER

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i. The appeal is allowed-in-part .

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ii. The judgment and award passed by the Tribunal in MVC No.1123/2014 dated 17.10.2017 by the Senior Civil Judge and MACT, Sakaleshpur, is hereby modified holding the claimant is entitled for enhanced compensation of Rs.14,06,120/- with interest @ 6% p.a., from the date of petition till its realization, in addition to what has been awarded by the Tribunal.

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iii. The claimant is not entitled for interest for the delayed period of 59 days in filing the appeal.

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