The sole question which arises for determination in this
appeal filed by the Insurance Company is whether directions can be passed by the Court while determining compensation under the Motor Vehicle Act, 1988 (hereinafter referred to as “the said Act”) in the manner of a direction in perpetuity for continued maintenance of a prosthetic limb for the injured claimant.
Learned counsel for the appellant has referred two judgments
of this Court before us in Nagappa v. Gurudayal Singh & Others, (2003) 2 SCC 274 and Sapna V. United India Insurance Co. Ltd. & Anr. (2008) 7 SCC 613 opining that while determining compensation under the said Act there is no provision providing for passing of a further award once the final award is passed. The future eventualities are to be taken into consideration at that time. It was observed that:
“23…. Future medical expenses required to be incurred
can be determined only on the basis of fair guesswork
after taking into account increase in the cost of
medical treatment.”
In our view, the process of determination of such compensation
cannot be by a continuing mandamus, in a colloquial sense, and the determination must take place at one go.
The aforesaid principle is not even disagreed to or contested
by the respondents but what is submitted is that there must be a
provision made fixing a lump sum amount for maintenance/
replacement of the prosthetic limb, if necessary. We agree with the
submission and in a larger canvas consider it appropriate to direct
that in such kind of cases of providing facility of prosthetic
limb, appropriate amount may be quantified towards such
maintenance.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.4576/2021
HDFC ERGO GENERAL INSURANCE CO. LTD. Vs MUKESH KUMAR
AUTHOR: SANJAY KISHAN KAUL, J.
Dated: 03rd August, 2021.
Leave granted.
The sole question which arises for determination in this
appeal filed by the Insurance Company is whether directions can be passed by the Court while determining compensation under the Motor Vehicle Act, 1988 (hereinafter referred to as “the said Act”) in the manner of a direction in perpetuity for continued maintenance of a prosthetic limb for the injured claimant.
The respondent No.1 viz. Mukesh Kumar, was 19 years of age
when he met with an accident on 25.8.2017 which resulted in
permanent disability of his right lower limb, which was treated as
a 100% disability. An amputation had to take place below the knee
of that limb. In the assessment made by the Motor Accident Claims
Tribunal (MACT), an amount of Rs.2 Lakhs was quantified towards
loss of amenities, life and disfigurement which would include the
expenses towards his prosthetic limb. On examination in appeal, the
learned judge of the High Court by the impugned order dated
04.11.2020 has passed directions in the following terms:
“7. With consent, the impugned award dated 22.01.2020
passed by the learned MACT in Petition No.129/2018, is
modified to the extent that the claimant/R-1 shall be
supplied a prosthetic limb of good quality which is
suitable and comfortable to him. It shall carry a lifetime
warranty. Should it be required to be replaced/ repaired at
any stage, the insurance company will do so. The insurer
will enquire from the victim, at least twice a year, as to
the working condition of the prosthetic limb, through his
e-mail address and telephone number, as well as through his
counsel’s e-mail address and telephone number. The details
are as under:-
Claimant’s
/ R1’s
Mobile No.
Claimant’s/ R1’s
email address
Counsel’s
Mobile No.
Counsel’s E-mail
address
……………………… ………………………. ………………………. ……………………….
8. In case of any difficulty apropos the prosthetic limb,
the claimant may intimate the insurer through e-mail
addresses and/ or telephone numbers of three officers of
the insurer, as supplied to him. These details shall be
provided to the claimant within 2 weeks from today.
9. It will be open to the claimant to communicate the
quotation or estimate for a suitable prosthetic limb to the
insurance company at the e-mail addresses and telephone
numbers provided by the learned counsel for the insurer.
The impugned order is modified to this extent.”
(details redacted)
Learned counsel for the appellant submitted that the consent
which was given was for modification of the impugned award and not
for the prosthetic limb to carry a lifetime warranty, as there is
no such thing as a lifetime warranty for a prosthetic limb. Not
only that, the impugned directions require that if any, repair or
replacement has to be done, the same should be done by the
Insurance Company and the insurer was required to inquire from the
victim at least twice a year as to the working condition of the
prosthetic limb with an email address and telephone number
specified. Thus, what has been directed by the High Court is a
continuing maintenance of the prosthetic limb to be monitored by
the Insurance Company. We may note that the aforesaid is the only
issue which is called upon by us to be examined.
We had stayed the operation of the aforesaid paragraphs by the
interim directions issued vide order dated 15.2.2021.
We are of the view, that the aspect discussed in the aforesaid
paragraphs could be made only a part of compensation, and not in
the nature of continuing directions. In this behalf, we have
noticed a view taken by this Court vide order dated 06.8.2020 in
SLP(C) No.8631/2020 where the same learned judge has taken a
similar view and that aspect of the order was deleted at the motion
stage without notice by the Bench and thus we considered it
appropriate to issue notice to other side.
Learned counsel for the appellant has referred two judgments
of this Court before us in Nagappa v. Gurudayal Singh & Others,
(2003) 2 SCC 274 and Sapna V. United India Insurance Co. Ltd. &
Anr. (2008) 7 SCC 613 opining that while determining compensation
under the said Act there is no provision providing for passing of a
further award once the final award is passed. The future
eventualities are to be taken into consideration at that time. It
was observed that:
“23…. Future medical expenses required to be incurred
can be determined only on the basis of fair guesswork
after taking into account increase in the cost of
medical treatment.”
In our view, the process of determination of such compensation
cannot be by a continuing mandamus, in a colloquial sense, and the
determination must take place at one go.
The aforesaid principle is not even disagreed to or contested
by the respondents but what is submitted is that there must be a
provision made fixing a lump sum amount for maintenance/
replacement of the prosthetic limb, if necessary. We agree with the
submission and in a larger canvas consider it appropriate to direct
that in such kind of cases of providing facility of prosthetic
limb, appropriate amount may be quantified towards such
maintenance.
We, thus, allow the appeal to the extent aforesaid and set
aside the paragraph Nos.7,8 & 9 to be substituted by the
determination for maintenance/replacement of the prosthetic limb
while a quantification of the amount for compensation is being
made.
The question which remains is whether we should remit this
case to the High Court to determine the amount afresh having laid
down the principles, or we should determine it ourselves. In the
given facts of the case, we do not consider it appropriate to remit
the case for fresh determination and instead take on the burden
ourselves to do complete justice.
In order to facilitate determination of the lump sum amount,
we call upon the learned counsel for respondent No.1 to file an
affidavit setting forth the cost of the prosthetic limb purchased
by him along with supporting documents. He should also file
supporting documents of the company from which he purchased the
prosthetic limb, to show what kind of maintenance/replacement would
be required. On these documents being filed, we would determine the
amount.
On the other aspects the appeal stands disposed of.
Let the affidavit be filed within four weeks, as prayed for.
Reply to the same be filed within two weeks, thereafter.
List after six weeks.
CIVIL APPEAL No.4577/2021
Leave granted.
The grievance of the Insurance Company arises from the
directions passed in the impugned order, more specifically in
paragraph Nos.8 to 10, opining that assistance of two semi-skilled
workers on the basis of minimum wages is to be provided to the
respondent from the date of the accident for the rest of the
appellant’s life. In order to sub-serve the said direction, inter
alia, sum of Rs.60 Lakhs is required to be kept by the Insurance
Company in an interest bearing deposit, from which about
Rs.50,000/- per month would be generated as interest to meet the
expenses of the assistants. The directions are contained in the
following terms:
8. Presently, the appellant may have the benefit of his
caring parents but they cannot be expected to be present
with him at all times, as they may be engaged in other
activities and/or be employed to make provisions for the
family’s needs. In the circumstances, the appellant shall
be paid compensation towards the procurement of the
assistance of two semi-skilled worker on the basis of
minimum wages, from the date of the accident and for the
rest of the appellant's life.
9. The arrears towards the same shall be paid by the
insurer, on the basis of notified minimum wage rates
applicable to a semi-skilled worker. The arrears shall be
deposited directly into the bank account of the appellant,
jointly operated by his parents, in a month’s time, along
with interest accrued thereon @ 9% p.a. Payments apropos
‘attendant charges’ in the future shall also be ensured by
the insurer. The current minimum wage rate of a semiskilled
workman is approximately Rs.18,000/-. Accordingly,
Rs.36,000/- per month would be required to be paid to the
appellant. These rates are revised twice a year.
Therefore, prudently provision should be made for
automatic crediting of the current and future wages into
the appellant’s bank account. Logically, the insurance
company should assure about Rs.50,000/- per month as DFR
interest. According to the current FDR rates, a deposit
Rs.60 lakhs is likely to fetch about Rs.50,000/- per month
as interest. Let Rs.60 lakhs be kept in an interest
bearing FDR by the insurer in its own bank. The interest
earned therefrom, shall be credited into the appellants’
account by the 10th day of each Gregorian calendar month,
on the basis of notified minimum wages for two attendants.
10. Should the minimum wages be subsequently enhanced to a
quantum which does not meet the interest generated from
the FDR, the insurer shall augment the deposit to meet the
shortfall. The insurer shall have a lien on the deposit,
which it shall encash on the demise of the claimant.
We have heard learned counsel for the parties and are of the
view that these directions are unsustainable.
The reason for the same is that they are contrary to the
judicial view adopted by this court in Nagappa v. Gurudayal Singh &
Ors.- (2003) 2 SCC 274, Sapna v. United India Insurance Company
Ltd. & Anr. (2008) 7 SCC 613 & The Oriental Insurance Co. Ltd. v.
Zakir Hussain & Ors. [SLP (C) No.12210/2020 dated 13.10.2020]. In
these cases, this Court has opined that while determining the
compensation under the said Act there is no provision for providing
for passing of further award once the final award is made. The
future eventualities are to be taken into consideration at that
time it has been observed that;
“However, it is to be clearly understood that the MV Act
does not provide for passing of further award after the final
award is passed. Therefore, in a case where injury to a
victim requires periodical medical expenses, fresh award
cannot be passed or previous award cannot be reviewed when
the medical expenses are incurred after finalisation of the
compensation proceedings. Hence, the only alternative is that
at the time of passing of final award, the Tribunal/court
should consider such eventuality and fix compensation
accordingly. No one can suggest that it is improper to take
into account expenditure genuinely and reasonably required to
be incurred for future medical expenses. Future medical
expenses required to be incurred can be determined only on
the basis of fair guesswork after taking into account
increase in the cost of medical treatment.”
The aforesaid aspect has been considered by us today in
another appeal filed by the same Insurance Company in SLP (C)
No.16077/2020 dealing with the aspects of provisions for prosthetic
limb. The principles which we have appreciated in the current case
are slightly different as though it may not be strictly in the
nature of a continuing direction; but premised on the basis of a
continuing requirement, a lump sum amount has been directed to be
deposited the returns from which are to be utilised. We are of the
view that this is not the appropriate course to follow.
Learned counsel for the appellant has taken us through various
judicial pronouncements which show that the approach which has been
adopted by different courts is of giving a lump sum amount. The
moot point however remains as to how the lump sum amount is to be
calculated.
We find that in case of extreme injuries affecting the mental
and physical abilities of a person, a similar approach has been
adopted by this Court in Kajal V. Jagdish Chand & Ors. (2020) 4 SCC
413.
No doubt the factual matrix in that case painted a very grim
picture of young girl who suffered an accident and as result
thereof while physically she would age, her mental state would
remain under one year of age. In that scenario, a methodology was
suggested to apply the multiplier method while determining the
attendant charges. We consider it useful to reproduce the
observations as under:-
Attendant Charges
22. The attendant charges have been awarded by the High
Court @Rs.2,500/- per month for 44 years, which works out
to Rs.13,20,000/-.Unfortunately, this system is not a
proper system. Multiplier system is used to balance out
various factors. When compensation is awarded in lump sum,
various factors are taken into consideration. When
compensation is paid in lump sum, this Court has always
followed the multiplier system. The multiplier system
should be followed not only for determining the
compensation on account of loss of income but also for
determining the attendant charges etc. This system was
recognised by this Court in Gobald Motor Service Ltd. v.
R.M.K. Veluswami (AIR 1962 SC 1).The multiplier system
factors in the inflation rate, the rate of interest payable
on the lump sum award, the longevity of the claimant, and
also other issues such as the uncertainties of life. Out
of all the various alternative methods, the multiplier
method has been recognised as the most realistic and
reasonable method. It ensures better justice between the
parties and thus results in award of ‘just compensation’
within the meaning of the Act.
23. It would be apposite at this stage to refer to the
observation of Lord Reid in Taylor v. O’Connor (1971 AC
115):
"Damages to make good the loss of dependency over a
period of years must be awarded as a lump sum and that
sum is generally calculated by applying a multiplier to
the amount of one year's dependency. That is a
perfectly good method in the ordinary case but it
conceals the fact that there are two quite separate
matters involved, the present value of the series of
future payments, and the discounting of that present
value to allow for the fact that for one reason or
another the person receiving the damages might never
have enjoyed the whole of the benefit of the
dependency. It is quite unnecessary in the ordinary
case to deal with these matters separately. Judges and
counsel have a wealth of experience which is an
adequate guide to the selection of the multiplier and
any expert evidence is rightly discouraged. But in a
case where the facts are special, I think, that these
matters must have separate consideration if even rough
justice is to be done and expert evidence may be
valuable or even almost essential. The special factor
in the present case is the incidence of Income Tax and,
it may be, surtax."
24. This Court has reaffirmed the multiplier method in
various cases like Municipal Corporation of Delhi v.
Subhagwati (1966 ACJ 57), U.P. State Road Transport
Corporation and Ors. v. Trilok Chandra and Ors. [(1996) 4
SCC 362], Sandeep Khanduja v. Atul Dande and Ors. [(2017) 3
SCC 351]. This Court has also recognised that Schedule II
of the Act can be used as a guide for the multiplier to be
applied in each case. Keeping the claimant’s age in mind,
the multiplier in this case should be 18 as opposed to 44
taken by the High Court.
25. Having held so, we are clearly of the view that the
basic amount taken for determining attendant charges is
very much on the lower side. We must remember that this
little girl is severely suffering from incontinence meaning
that she does not have control over her bodily functions
like passing urine and faeces. As she grows older, she will
not be able to handle her periods. She requires an
attendant virtually 24 hours a day. She requires an
attendant who though may not be medically trained but must
be capable of handling a child who is bed ridden. She would
require an attendant who would ensure that she does not
suffer from bed sores. The claimant has placed before us a
notification of the State of Haryana of the year 2010
wherein the wages for skilled labourer is Rs.4846/- per
month. We, therefore, assess the cost of one attendant at
Rs.5,000/ and she will require two attendants which works
out to Rs.10,000/ per month, which comes to Rs.1,20,000/-
per annum, and using the multiplier of 18 it works out to
Rs.21,60,000/-for attendant charges for her entire life.
This takes care of all the pecuniary damages.”
Learned counsel for the appellant did seek to persuade us that
this is not the only methodology available and it should not be
adopted. We are of the view that in cases where the degree of
disability is high, there is mental disability, it is a case of a
young person etc. without it being possible to anticipate all
possibilities, the course followed aforesaid would be the
appropriate course. We are not saying that the aforesaid can be the
only course, and in a different scenario, lump sum amount can be
assessed as has been as done in Lalan D. @ Lal & Another v.
Oriental Insurance Company Limited, (2020) 9 SCC 805 and Parminder
Singh v. New India Assurance Company Limited & Others, (2019) 7 SCC
217.
Learned Senior Counsel for the appellant also sought to point
out another course followed in Mallikarjun v. Divisional Manager,
National Insurance Company Limited & Another, (2014) 14 SCC 396,
wherein cases of children suffering disability on account of motor
vehicle accident, a broad principle was sought to be laid down in
the following terms:-
“12. Though it is difficult to have an accurate assessment
of the compensation in the case of children suffering
disability on account of a motor vehicle accident, having
regard to the relevant factors, precedents and the approach
of various High Courts, we are of the view that the
appropriate compensation on all other heads in addition to
the actual expenditure for treatment, attendant, etc.,
should be, if the disability is above 10% and upto 30% to
the whole body, Rs.3 lakhs; upto 60%, Rs.4 lakhs; upto 90%,
Rs.5 lakhs and above 90%, it should be Rs.6 lakhs. For
permanent disability upto 10%, it should be Re.1 lakh,
unless there are exceptional circumstances to take
different yardstick. In the instant case, the disability is
to the tune of 18%. Appellant had a longer period of
hospitalization for about two months causing also
inconvenience and loss of earning to the parents.”
The aforesaid only shows that there is more than one option
available i.e, there may be a lump sum amount specified on general
principles as enunciated aforesaid; or in cases where the factual
scenario requires, same multiplier method can be followed as in the
case of Kajal (supra).
Now turning to the facts of the present case, the child was 11
years of age when he suffered functional disability which has been
assessed at 70% by the medical board and the tribunal, and which
the High Court determined as 100% functional disability. It is in
these circumstances that the direction has been passed for
attendants with a methodology of accessing the minimum wages
payable for two skilled workers. In the given factual scenario, we
are of the view that the apposite course to follow is set out in
Kajal’s case (supra).
On having reached that conclusion, the issue would be what
would be the lump sum amount to be determined to be paid on those
parameters.
We find that in terms of the impugned order dated 08.12.2020,
the learned judge has since kept the matter pending by issuing the
notice to the GNCTD to examine whether there could be a Government
policy in regard to assistance to be provided to permanently
disabled adolescents whose parents are not economically well off.
We are of the view that in pursuance to this conclusion, it is the
High Court which ought to examine as to what would be the
appropriate lump sum amount to be determined based on the
multiplier basis as set out in Kajal’s case (supra).
We, thus, set aside the directions contained in the impugned
order in paragraph Nos.8 to 10.
We also find that while seeking to examine the larger issues,
the learned judge has ventured into the aspect of Government policy
to be framed in that behalf. This really amounts to beyond the
jurisdiction over determination of the amount, in the Motor
Accident Claim proceeding, but on a larger canvas taking the colour
of a Public Interest Litigation. We, thus, consider it appropriate
that this aspect ought to be examined by the Bench dealing with the
Public Interest Litigation, as a larger canvas would have to be
determined rather than something restricted to the case of the
respondent before us.
The civil appeal is allowed in the aforesaid terms leaving
parties to bear their own costs.
………………………………………….J.
[SANJAY KISHAN KAUL]
…………………………………………………J.
[HRISHIKESH ROY]
NEW DELHI;
03rd August, 2021.
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