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HOW TO FIX DISABILITY PERCENTAGE =In the context of loss of future earning, any physical disability resulting from an accident has to be judged with reference to the nature of work being performed by the person suffering the disability. This is the basic premise and once that is grasped, it clearly follows that the same injury or loss may affect two different persons in different ways. Take the case of a marginal farmer who does his cultivation work himself and ploughs his land with his own two hands; or the puller of a cycle-rickshaw, one of the main means of transport in hundreds of small towns all over the country. The loss of one of the legs either to the marginal farmer or the cycle-rickshaw-puller would be the end of the road insofar as their earning capacity is concerned. But in case of a person engaged in some kind of desk work in an office, the loss of a leg may not have the same effect. The loss of a leg (or for that matter the loss of any limb) to anyone is bound to have very traumatic effects on one’s personal, family or social life but the loss of one of the legs to a person working in the office would not interfere with his work/earning capacity in the same degree as in the case of a marginal farmer or a cycle-rickshaw-puller.

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REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 237 OF 2012

[ARISING OUT OF SLP (CIVIL) NO.9850 OF 2010]
MOHAN SONI … APPELLANT
VERSUS
RAM AVTAR TOMAR AND ORS. … RESPONDENTS

 
J U D G M E N T

 
Aftab Alam, J.

 
1. Leave granted.
2. The appellant, victim of a motor vehicle accident has come to
this Court making grievance about the low amount of compensation
awarded to him by the Tribunal and the High Court.
3. The appellant used to earn his livelihood as a cart puller. On
December 17, 2003, at about 3.00 P.M. he was carrying some goods
on a four-wheel cart when he was hit by a tanker which was being
driven in a rash and negligent manner. In the accident, the left leg of
the appellant was crushed. The X-Ray report showed multiple
fractures in the left leg. He was admitted to a hospital where he had
to undergo two surgeries between December 17, 2003 and January
3, 2004 and in the end his left leg was amputated below the knee.
He filed an application (Claim Case No.16/2004) before the Second
Additional Motor Accident Claims Tribunal, Gwalior, (M.P.), claiming
compensation for the injuries suffered by him under section 166 of
the Motor Vehicles Act, 1988. It was stated by him before the
Tribunal that at the time of accident his age was 50 years and his
monthly income, as a cart puller, was Rs.3,300/-. As a result of the
amputation of his leg, he was no longer in a position to walk without
support and he was, therefore, rendered incapable of doing any work
and to earn his livelihood.
4. The Tribunal found and held that the accident took place as a
result of the negligent and rash driving by the tanker driver. It further
held that at the time of the accident the age of the appellant was 55
years and his monthly income was Rs.2,400/- and not Rs.3,300/- as
claimed by him. Coming to the extent of disability, the Tribunal
referred to the disabled-person identity card given to the appellant
(Exhibit P.27) in which his disability was shown as 60%. The Tribunal
also observed that when the claimant appeared in court, it was
evident that his left leg was amputated below the knee. Though the
appellant’s disabled-person card showed his disability as 60%, the
Tribunal, with reference to Schedule 1 of the Workmen’s
Compensation Act, 1923, held that the appellant’s disability could not
be reckoned above 50%.
5. Having held that that the appellant’s age at the time of the
accident was 55 years, the Tribunal applied the multiplier of 11 and
on the basis of the findings that the appellant’s monthly income was
Rs.2,400/- and the extent of his disability was 50%, fixed the amount
of Rs.1,58,400/- as compensation for loss of future earnings. In
addition to this, the Tribunal gave to the appellant Rs.30,000/- for
mental and physical agony due to permanent disability and a further
sum of Rs.15,000/- for medical expenses and special diet.
Accordingly, the Tribunal, by its award dated July 31, 2004 held the
appellant entitled to receive a total sum of Rs.2,03,400/- as
compensation along with interest at the rate of 9% per annum from
the date of filing of the claim petition on January 9, 2004 till the date
of payment.
6. Against the award of the Tribunal, the appellant preferred an
appeal (Miscellaneous Appeal No.844 of 2004) before the Madhya
Pradesh High Court, Gwalior Bench. In the High Court, the case was
referred to Lok Adalat where the Insurance Company agreed for
enhancement of the amount of compensation by Rs.50,000/-. It,
however, appears that the matter could not be settled in the Lok
Adalat and the appeal came to be finally heard and disposed of by
the High Court on merits. The High Court by its judgment and order
dated April 1, 2009 simply raised the amount of the monthly income
of the appellant from Rs.2,400/- to Rs.3,000/- and, thereby, arrived at
a sum of Rs.1,98,000/- as compensation for the loss of future
earnings. The total compensation amount was, thus, raised from
Rs.2,03,400/- to Rs.2,58,000/- (practically what was offered by the
Insurance Company before the Lok Adalat on which no settlement
was arrived at between the parties!)
7. On hearing counsel for the parties and on going through the
materials on record, we are of the view that both the Tribunal and the
High Court were in error in pegging down the disability of the
appellant to 50% with reference to Schedule 1 of the Workmen’s
Compensation Act, 1923. In the context of loss of future earning, any
physical disability resulting from an accident has to be judged with
reference to the nature of work being performed by the person
suffering the disability. This is the basic premise and once that is
grasped, it clearly follows that the same injury or loss may affect two
different persons in different ways. Take the case of a marginal
farmer who does his cultivation work himself and ploughs his land
with his own two hands; or the puller of a cycle-rickshaw, one of the
main means of transport in hundreds of small towns all over the
country. The loss of one of the legs either to the marginal farmer or
the cycle-rickshaw-puller would be the end of the road insofar as their
earning capacity is concerned. But in case of a person engaged in
some kind of desk work in an office, the loss of a leg may not have
the same effect. The loss of a leg (or for that matter the loss of any
limb) to anyone is bound to have very traumatic effects on one’s
personal, family or social life but the loss of one of the legs to a
person working in the office would not interfere with his work/earning
capacity in the same degree as in the case of a marginal farmer or a
cycle-rickshaw-puller.
8. The question of loss of earning capacity resulting from
amputation of one the legs in the case of a tanker driver was
considered by this Court in K. Janardhan v. United India Insurance
Company Limited and another, (2008) 8 SCC 518. In that case, a
tanker driver suffered serious injuries in a motor accident and as a
result, his right leg was amputated upto the knee joint. He made a
claim under the Workmen’s Compensation Act, 1923. The
Commissioner for Workmen’s Compensation held that disability
suffered by him as a result of the loss of the leg was 100% and
awarded compensation to him on that basis. In appeal, the High
Court, like in the present case, referred to the Schedule to the
Workmen’s Compensation Act, 1923 and held that the loss of a leg
on amputation amounted to reduction in the earning capacity by 60%
and, accordingly, reduced the compensation awarded to the tanker
driver. This Court set aside the High Court judgment and held that the
tanker driver had suffered 100% disability and incapacity in earning
his keep as a tanker driver as his right leg was amputated from the
knee and, accordingly, restored the order passed by the
Commissioner of Workmen’s Compensation. In K. Janardhan this
Court also referred to and relied upon an earlier decision of the Court
in Pratap Narain Singh Deo v. Srinivas Sabata (1976) 1 SCC 289, in
which a carpenter who suffered an amputation of his left arm from the
elbow was held to have suffered complete loss of his earning
capacity.
9. 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:

 
“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. (See for example, the

decisions of this Court in Arvind Kumar Mishra v. New

India Assurance Co. Ltd. (2010) 10 SCC 254 and Yadava

Kumar v. National Insurance Co. Ltd. (2010) 10 SCC

341).
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 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.”
10. 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 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. Any
scaling down of the compensation should require something more
tangible than a hypothetical conjecture that notwithstanding the
disability, the victim could make up for the loss of income by changing
his vocation or by adopting another means of livelihood. The party
advocating for a lower amount of compensation for that reason must
plead and show before the Tribunal that the victim enjoyed some
legal protection (as in the case of persons covered by The Persons
with Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995) or in case of the vast multitude who earn
their livelihood in the unorganized sector by leading cogent evidence
that the victim had in fact changed his vocation or the means of his
livelihood and by virtue of such change he was deriving a certain
income. The loss of earning capacity of the appellant, according to
us, may be as high as 100% but in no case it would be less than
90%. We, accordingly, find and hold that the compensation for the
loss of appellant’s future earnings must be computed on that basis.
On calculation on that basis, the amount of compensation would
come to Rs.3,56,400/- and after addition of a sum of Rs.30,000/- and
Rs.15,000/- the total amount would be Rs.4,01,400/-. The additional
compensation amount would carry interest at the rate of 9% per
annum from the date of filing of the claim petition till the date of
payment. The additional amount of compensation along with interest
should be paid to the appellant without delay and not later than three
months from today.
11. In the result, the appeal is allowed to the extent indicated

above.

 

 

………………………………

…….J.

(Aftab Alam)

 

 

………………………………

…….J.

(R.M. Lodha)

New Delhi;

January 10, 2012.

 

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