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| |…..APPELLANT(S) |
Leave granted.

Unwrapping the events, which have led to the filing of the instant appeal,
depict the following scenario:
On 23.09.2007, the appellant after completion of his Goundi (working
at building construction sites) work, was returning from Navanagar,
Karnataka on his Motorcycle bearing Reg. No. KA 29/J – 731. He was driving
slowly and cautiously on the left side of the road. At that time a bus
bearing Reg. No. KA 29/6967 came from opposite direction in a high speed
and in rash and negligent manner as to endanger human life, dashed into the
Motorcycle of the appellant. This happened near the Simikeri Bypass Cross
on Gaddanakeri Hubli Road at about 20:30 hours. Due to the said accident,
the appellant sustained grievous injuries on his head and all over his
body. He was immediately admitted to District Government Hospital,
Bagalkot where he got preliminary treatment, whereafter he was shifted to
the S.H.K. Hospital, Bagalkot for further treatment. After getting some
treatment in the said hospital, the appellant had to be shifted again to
Dr. Kerudi Hospital, Bagalkot because of grievous head injuries and there
he was treated by Dr. Mohan Wamaske, Neurologist. He underwent a surgical
operation in the said hospital where he remained as indoor patient for 10
days. Notwithstanding this treatment, the appellant could not be
completely cured and has suffered permanent disability of 58% to the whole

3) We may record at this stage that the aforesaid facts pertaining to
accident caused due to rash and negligent driving of the bus and the nature
and extent of injuries suffered by the appellant stand established before
the Motor Accident Claims Tribunal (for short ‘MACT’). It would also be
worthwhile to mention that against the Driver of the Bus, a case under
Sections 279 and 334 of the Indian Penal Code was also registered at the
Kaladgi Police Station. After completing the investigation, even the
chargesheet has been filed against the Driver, though the outcome of the
said case is not known from the records.

4) Being a victim of the said accident resulting into aforesaid serious
injuries and incapacitation of his body, the appellant filed the claim
petition under Section 166 of Motor Vehicle Act claiming compensation of
Rs.15,00,000/-. This petition filed before the MACT at Bagalkot was
registered as M.V.C. No.296/2002. In this petition, the appellant had
impleaded respondent No.1 herein, who was the driver of the vehicle and
respondent No.2, Manager, Reliance General Insurance Co. Ltd., which had
insured the offending vehicle. The appellant examined himself as PW-1 and
narrated the details of the incident. Another significant and material
witness produced by him was Dr. Sanjeev S Kalasoor (PW-3), who deposed
about the injuries suffered by the appellant and produced copy of
Disability Certificate dated 11.02.2009 and other medical records. The
respondents also led their evidence. Arguments were heard. The said case
culminated in the decision dated 25.11.2010 that was rendered by the MACT
recording a categorical and definite finding to the effect that the
accident in question was caused due to the rash and negligent act of the
driver. The Tribunal, thus, allowed the petition but awarded a
compensation of Rs.93,800/- with interest at the rate of 6% p.a. from the
date of accident till the date of realisation. Different heads under which
the said compensation was awarded, thereby arriving at a aforesaid figure
of Rs.93,800/- are as under:

| | | |Amount (Rs.) |
|1. |Pain and sufferings |: |10,000/- |
|2. |Medical expenses |: |35,000/- |
|3. |Loss of future income |: |46,800/- |
|4. |Loss of amenities, diet, |: |2,000/- |
| |nutrition and attendant charges | | |
| |Total |: |93,800/- |

5) The appellant was not satisfied with the poor amount of compensation
and, thus, approached the High Court of Karnataka, Dharwad Bench by filing
appeal i.e. MFA No. 21150/2011 (MV). The High Court has enhanced the
compensation to Rs.2,59,500/- vide judgment dated 11.03.2013. The breakup
of compensation awarded by the High Court under different heads is as

| | | |Amount (Rs.) |
|1. |Pain and suffering |: |25,000/- |
|2. |Incidental expenses |: |10,000/- |
|3. |Medical expenses |: |35,000/- |
|4. |Loss of income during laid up |: |12,000/- |
| |period | | |
|5. |Loss of amenities |: |20,000/- |
|6. |Loss of future income |: |1,57,500/- |
| |Total |: |2,59,500/- |

6) Still not satisfied, the present appeal has been preferred by the
appellant in this Court for enhancement of compensation.

7) From the perusal of the judgment of the High Court, it gets revealed
that the Tribunal as well as the High Court has accepted the injuries
certificate produced by the doctor. On going through this Certificate
along with Disability Certificate, CT Scan Reports, Medical Bills and Case-
Sheets etc., which were produced by the appellant on record, the High Court
has recorded that the appellant has sustained grievous injuries in his head
and all over the face. As per the testimony of the doctor (PW-3), CT Brain
reveals acute subdural left front temporal hemorrhagic with midline shift
and mass effect. The doctor examined the appellant as late as on
11.02.2009 and found that the appellant’s medical condition of on and off
headache, giddiness and vertigo impaired memory, altered speed and
imbalance while walking continuous to persist. He had operative scar left
side of scalp (head) motor aphasia and positive Romberg’s. The Courts
below have also accepted the fact that the appellant is suffering from
permanent disability of 58% to the whole body.
8) Having regard to the aforesaid injuries suffered by the appellant in
the said accident and the number of days for which the appellant was
treated and underwent physical and mental pain and suffering, the High
Court enhanced the compensation under this head from Rs.10,000/-, as
awarded by the Tribunal, to Rs.25,000/-. In so far as reimbursement of
medical expenses is concerned, it is maintained at Rs.35,000/- inasmuch as
that is the actual amount spent by the appellant, which is evident from the
medical bills produced by him. However, considering that the appellant was
indoor patient in a private hospital for more than 10 days, Rs.10,000/- is
awarded for incidental expenses such as conveyance, nourishment and
attendant charges. As regards loss of income during laid up period, the
amount of Rs.12,000/- has been awarded on the ground that the appellant had
been earning Rs.125/- per day i.e. Rs.3,750/- per month and as he was under
treatment and rest for about three months, loss of income was to the tune
of Rs.12,000/-.

9) In so far as compensation in respect of loss of amenities is
concerned, the High Court has enhanced the compensation from Rs.2,000/- to
Rs.20,000/- considering the disability reflected in the evidence produced
by the appellant, as according to the High Court, the appellant will have
to undergo discomfort and unhappiness in his future life because of the
said accident.

10) Major head of compensation is loss of future income. Here, the High
Court has observed that though the doctor has assessed permanent disability
at 58% to the whole body, it may be an exaggeration and justice would be
met if functional disability is taken at 25%. On this basis, multiplier of
14 is applied, keeping in view of the age of the appellant, and loss of
future income is assessed at Rs.1,57,500/- and this figure is worked out by
applying the following formula:
Rs.3,750/- x 25% x 12 x 14

11) The learned counsel for the appellant made grievance only on three
counts. In the first instance, he pleaded for increasing the amount of
physical and mental pain and suffering. His vehement submission was that
loss of future income is not assessed appropriately by the High Court. He
pointed out that when the permanent disability was 58%, for the purposes of
calculating the loss of future income, it had to be taken at 100%. Another
plea of the appellant was that interest should have been granted at the
rate of 9% instead of 6%. We find force in the submissions of the learned
counsel on all these aspects.
12) We are of the opinion that once the High Court had itself accepted
the evidence of PW-3 the doctor who had treated the appellant and issued
the Disability Certificate as credible and reliable, there was no reason to
treat the ‘functional disability’ at 25%. The High Court should have acted
upon the said Disability Certificate taking the permanent disability at 58%
which is to the whole body. It is to be borne in mind that before the
incident, the appellant was hail and healthy who enjoyed robust health as
it has emerged from the record that he was working as Goundi i.e. at the
building construction sites. Because of the permanent disability of the
nature described above, PW-3 has very categorically stated in his testimony
that the appellant is unable to walk and stand for a long time and is not
capable of doing heavy work. It is also testified that he is suffering
general weakness as well. This would lead us to the conclusion that the
appellant suffers 85% functional disability. On arriving at this
conclusion, we are bolstered by the judgment of this Court in the case of
Raj Kumar v. Ajay Kumar & Another, (2011) 1 SCC 343 wherein this aspect is
lucidly explained with impeccable erudition, as is discerned from the
following passages of the said judgment, reading whereof would amply
demonstrate that the nuances are so exhaustively dealt with, leaving no
scope for restating, much less refuting or refining:
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 [pic]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.


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

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, [pic]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)

12. Therefore, the Tribunal has to first decide whether there is any
permanent disability and, if so, the extent of such permanent disability.
This means that the Tribunal should consider and decide with reference to
the evidence:
(i) whether the disablement is permanent or temporary;
(ii) if the disablement is permanent, whether it is permanent total
disablement or permanent partial disablement;
(iii) if the disablement percentage is expressed with reference to any
specific limb, then the effect of such disablement of the limb on the
functioning of the entire body, that is, the permanent disability suffered
by the person.
If the Tribunal concludes that there is no permanent disability then there
is no question of proceeding further and determining the loss of future
earning capacity. But if the Tribunal concludes that there is permanent
disability then it will proceed to ascertain its extent. After the Tribunal
ascertains the actual extent of permanent disability of the claimant based
on the medical evidence, it has to determine whether such permanent
disability has affected or will affect his earning capacity.

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
14. For example, if the left hand of a claimant is amputated, the permanent
physical or functional disablement may be assessed around 60%. If the
claimant was a driver or a carpenter, the actual loss of earning capacity
may virtually be hundred per cent, if he is neither able to drive or do
carpentry. On the other hand, if the claimant was a clerk in government
service, the loss of his left hand may not result in loss of employment and
he may still be continued as a clerk as he could perform his clerical
functions; and in that event the loss of earning capacity will not be 100%
as in the case of a driver or carpenter, nor 60% which is the actual
physical disability, but far less. In fact, there may not be any need to
award any compensation under the head of “loss of future earnings”, if the
claimant continues in government service, though he may be awarded
compensation under the head of loss of amenities as a consequence of losing
his hand. Sometimes the injured claimant may be continued in service, but
may not be found suitable for discharging the duties attached to the post
or job which he was earlier holding, on account of his disability, and may
therefore be shifted to some other suitable but lesser post with lesser
emoluments, in which case there should be a limited award under the head of
loss of future earning capacity, taking note of the reduced earning

19. We may now summarise the principles discussed above:
(i) All injuries (or permanent disabilities arising from injuries), do not
result in loss of earning capacity.
(ii) The percentage of permanent disability with reference to the whole
body of a person, cannot be assumed to be the percentage of loss of earning
capacity. To put it differently, the percentage of loss of earning capacity
is not the same as the percentage of permanent disability (except in a few
cases, where the Tribunal on the basis of evidence, concludes that the
percentage of loss of earning capacity is the same as the percentage of
permanent disability).
(iii) The doctor who treated an injured claimant or who examined him
subsequently to assess the extent of his permanent disability can give
evidence only in regard to the extent of permanent disability. The loss of
earning capacity is something that will have to be assessed by the Tribunal
with reference to the evidence in entirety.
(iv) The same permanent disability may result in different percentages of
loss of earning capacity in different persons, depending upon the nature of
profession, occupation or job, age, education and other factors.

13) The principle laid down in the aforesaid judgment is recently
followed in Syed Sadiq and others v. Divisional Manager, United India
Insurance Company Limited, (2014) 2 SCC 735. After quoting paras 11 and 13
from Raj Kumar (supra), the Court worked out the compensation treating the
disability at 85%, whereas the High Court had determined the disability at
65%. Following discussion ensued in this behalf:

“7. Further, the appellant claims that he was working as a vegetable
vendor. It is true that a vegetable vendor might not require mobility to
the extent that he sells vegetables at one place. However, the occupation
of vegetable vending is not confined to selling vegetables from a
particular location. It rather involves procuring vegetables from the
wholesale market or the farmers and then selling it off in the retail
market. This often involves selling vegetables in the cart which requires
100% mobility. But even by conservative approach, if we presume that the
vegetable vending by the appellant claimant involved selling vegetables
from one place, the claimant would require assistance with his mobility in
bringing vegetables to the marketplace which otherwise would be extremely
difficult for him with an amputated leg. We are required to be sensitive
while dealing with manual labour cases where loss of limb is often
equivalent to loss of livelihood. Yet, considering that the appellant
claimant is still capable to fend for his livelihood once he is brought in
the marketplace, we determine the disability at 85% to determine the loss
of income”
14) Applying the aforesaid test to the facts of the present case, as
already pointed out above, the appellant was working as Goundi i.e. at the
building construction sites. Such a work requires good health and extreme
fitness as it is a strenuous task which involves lot of physical
activities. The appellant has suffered permanent disability of 58% to the
whole body. It has also come on record he suffers from general weakness
and is not capable of doing heavy work. He is even unable to walk and
stand for a long time. For this reason, we have already mentioned that his
functional disability is to be taken at 85% as was done in Syed Sadiq and
others (supra).

15) For the purposes of calculating the compensation, the formula
contained in Note (5) of the Second Schedule to the Motor Vehicle Act, 1988
is to be applied which is as under:

“5. Disability in non-fatal accidents. – The following compensation shall
be payable in case of disability to the victim arising out of non-fatal

Loss of income, if any, for actual period of disablement not exceeding
fifty-two weeks.

Plus either of the following:

(a) In case of permanent total disablement the amount payable shall be
arrived at by multiplying the annual loss of income by the multiplier
applicable to the age on the date of determining the compensation, or

(b) In case of permanent partial disablement such percentage of
compensation which would have been payable in the case of permanent total
disablement as specified under Item (a) above.

Injuries deemed to result in permanent total disablement/permanent partial
disablement and percentage of loss of earning capacity shall be as per
Schedule I under the Workmen’s Compensation Act, 1923.”
16) Applying the aforesaid formula, loss of future income would work out
to Rs.5,35,500/- (Rs.3,750/- x 85% x 12 x 14). Similarly, for pain and
suffering, the amount of Rs.25,000/- awarded by the High Court appears to
be on lower side. We increase this amount to Rs.60,000/-.

17) We are also of the view that the appellant should get interest at the
rate of 9% per annum from the date of claim petition till the payment
having regard to the ratio of the judgment in the case of Municipal
Corporation of Delhi, Delhi v. Uphaar Tragedy Victims Association and
others, (2011) 14 SCC 481.
18) In this manner, the total compensation which would be payable to the
appellant comes to Rs.6,72,000/- as against Rs.2,59,500/-, awarded by the
High Court. We enhance the compensation accordingly with the direction
that the appellant shall also be entitled to interest at the rate of 9% per
annum on the aforesaid amount from the date of claim petition till the date
of payment.

19) Appeal is allowed in the aforesaid manner with cost of Rs.25,000/-.



OCTOBER 10, 2014.


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