SC Restate Law on Compensation for Loss of Future Prospects in Motor Accident Claims

Yesterday, a three Judges Bench of Supreme Court allowed an appeal for enhancement of compensation under Motor Accident Claim and reaffirmed the position that payment under the loss of future prospects should be duly considered.

An accident occurred on 31/12/2003 when the victim was riding his bicycle along the side of a highway. A motor accident claim was filed under section 166 of the Motor Vehicles Act 1988, seeking compensation for the accident. It was claimed before the forum that the victim was a skilled labourer in a building construction project. At the time of the accident, the appellant/victim was 35 years old, and he suffered a head injury, causing brain concussion and other related injuries. The victim has to undergo extensive treatment at two hospitals, and after six weeks in hospitals, he was discharged.

On 20/01/2009, the Tribunal gave an award assessing permanent disability of the Appellant//victim to be 50%. The total compensation of Rs. 4 lakh was awarded to the Appellant. Being aggrieved by the award of the Tribunal, the wife of the Appellant filed an appeal before the High Court of Kerala seeking enhancement of compensation. 

The High Court, after considering the record of the Tribunal and some additional documents concluded that the victim was virtually lying like a vegetable. Therefore the degree of disability was reckoned to be 100% for working out proper compensation. The High Court enhanced the notional monthly income to Rs. 3500 per month and awarded total compensation of Rs. 4,47,000/-. 

The victim and his wife filed an appeal before the Supreme Court seeking further enhancement of the compensation. It was pleaded that considering the degree of injury suffered by the victim, the victim has been not duly compensated. A categorical plea was raised with respect to the award of compensation under the head of loss of future prospects. Further, it was also submitted on behalf of the Appellant that the multiplier of 16 applied by the High Court is wrong and the multiplier of 17 should have been applied.

The insurance company opposed the appeal for enhancement of compensation, on the ground of contributory negligence on the part of the Appellant and he was under the influence of liquor at the time of the accident. Insurance company further pleaded that on this score, they seek a reduction of 50% of the compensation from the Judgment and order of the High Court.

The insurance company further pleaded that since the Appellant was a construction worker, he must have also received compensation under the building and other construction workers welfare cess Act 1966.

A Bench of Justice S.K. Kaul, Justice Ajay Rastogi and Justice Aniruddha Bose, modified the award made by the High Court and enhanced the compensation amount. The Court observed that the submission of the insurance company with respect to the victim being under the influence of liqor at the time of the accident or receiving any compensation under any other enactment cannot be gone into by the Court, as the same was not raised before the High Court, which is the forum of the first instance.

Further, the Court also observed that in view of various Judgments, the victim was entitled to payment of compensation under the head of loss of future prospects and therefore the Court directed addition of 40%, as there was no evidence to prove that the victim had a permanent job. The Court also awarded compensation towards expenses for a caregiver barring a paltry sum of Rs. 6000/- as bystander expenses. The High Court had awarded Rs. 10,000/- under the head of pain and suffering, however, the Supreme Court enhanced the same to Rs. 3,00,000, considering the fact that the victim had minor children.

Accordingly, the Supreme Court granted a total compensation of Rs.20,26,800/-

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