In a significant judgment delivered on October 15, 2024, the Supreme Court of India enhanced the compensation awarded to Chandramani Nanda, a victim of a motor vehicle accident, to ₹52.31 lakh, up from ₹30.99 lakh. Nanda, who suffered grievous injuries leading to 100% functional disability, had initially approached the Motor Accident Claims Tribunal and later the High Court of Orissa seeking just compensation for his injuries and loss of earning capacity. Dissatisfied with the amount awarded, Nanda filed an appeal in the Supreme Court, which ultimately ruled in his favour.
The judgment, delivered by Justice J.K. Maheshwari and Justice Rajesh Bindal, highlights the Court’s commitment to ensuring that accident victims receive fair compensation that accounts for their future prospects, pain, suffering, and overall loss of quality of life.
Background of the Case:
Chandramani Nanda, the appellant, was involved in a severe motor vehicle accident on January 16, 2014, while traveling in a Verito Vibe car from Sambalpur to Cuttack, Odisha. The car was hit by a speeding bus on NH-55 near CPP Chawk, NALCO, resulting in serious injuries to Nanda and the other occupants. While one of the passengers, Ranjan Rout, succumbed to his injuries in May 2017, Nanda was left with life-altering injuries, including a grievous head injury and vertebral fractures, which required extensive medical treatment, including brain surgery.
Nanda, a 32-year-old Branch Manager with Padma Infrastructure Pvt. Ltd. at the time of the accident, lost his capacity to work due to the injuries. His family claimed that he had been left mentally unsound and bedridden since the accident. The Motor Accident Claims Tribunal (MAC Tribunal) initially awarded him ₹20.60 lakh in compensation. Dissatisfied with this amount, Nanda appealed to the High Court of Orissa, which increased the compensation to ₹30.99 lakh by assessing his functional disability at 100%, compared to the 60% assessed by the Tribunal.
Nanda, however, continued to seek further enhancement of the compensation, arguing that the awarded amount failed to adequately cover his loss of income, future medical expenses, and the mental agony he would endure throughout his life due to his disability.
Legal Issues Involved:
1. Assessment of Income and Future Prospects:
Nanda contended that the assessment of his income by both the Tribunal and the High Court was inadequate. While he had claimed an income of ₹22,000 per month at the time of the accident, the courts had based their calculations on his income from the assessment year 2011-12, which was significantly lower. The question of whether the court should consider future prospects in assessing compensation was also raised.
2. Percentage of Functional Disability:
While the Tribunal assessed Nanda’s disability at 60%, the High Court increased it to 100%, considering his complete inability to work. However, Nanda’s appeal raised the issue of whether the compensation should further reflect the full extent of his functional disability, particularly in light of his brain injury.
3. Compensation for Pain, Suffering, and Loss of Amenities:
Nanda also argued that the amounts awarded for pain, suffering, and loss of amenities were insufficient, given the severity of his injuries and their permanent impact on his life.
4. Entitlement to Attendant Costs and Loss of Marriage Prospects:
Another key issue was whether Nanda should receive additional compensation for the costs of an attendant, who would be required due to his long-term disability, and for his diminished prospects of marriage.
Decision of the Court:
After considering the arguments presented by Nanda’s counsel and the insurance company, the Supreme Court delivered a detailed judgment addressing each of the issues raised:
1. Assessment of Income and Future Prospects:
The Court noted that both the Tribunal and the High Court had failed to account for the appellant’s rising income at the time of the accident. Given that Nanda had been earning ₹22,000 per month just prior to the accident, the Court reassessed his annual income at ₹2,00,000. Furthermore, in line with the precedent set in National Insurance Company Ltd. v. Pranay Sethi, the Court held that Nanda was entitled to a 40% increase for future prospects, increasing his annual income for compensation purposes to ₹2,80,000.
2. Functional Disability:
The Court upheld the High Court’s assessment of 100% functional disability, noting that despite his 60% physical disability, the severity of Nanda’s brain injury had effectively rendered him completely incapable of employment. The Court applied a multiplier of 16, considering Nanda’s age at the time of the accident (32 years), to calculate his loss of future income, arriving at a total of ₹44,80,000 under this head.
3. Pain, Suffering, and Loss of Amenities:
The Court found that the ₹50,000 awarded by the lower courts for pain and suffering was inadequate, considering Nanda’s lifelong disability and mental impairment. It enhanced this amount to ₹1,00,000.
4. Attendant Costs and Loss of Marriage Prospects:
Acknowledging the ongoing need for an attendant due to Nanda’s mental condition, the Court awarded an additional ₹1,00,000 for future attendant costs. Moreover, the Court noted that Nanda’s injuries had effectively deprived him of the opportunity to marry and lead a normal family life, awarding a further ₹1,00,000 under the head of loss of marriage prospects.
5. Medical Expenditure and Future Medical Expenses:
The Court affirmed the award of ₹3,51,153 for past medical expenses, based on the bills produced, and maintained the ₹1,00,000 awarded for future medical expenses.
Key Observations of the Court:
The Supreme Court made critical observations on the importance of ensuring that compensation is just and reasonable, stating:
“It is a settled proposition of law that the amount of compensation claimed is not a bar for the Tribunal and the High Court to award more than what is claimed, provided it is found to be just and reasonable.”
The Court further emphasized that compensation should not be restricted to the victim’s immediate loss but must account for future prospects and quality of life, especially in cases of severe and lifelong
