Supreme Court: Life and Career to be Considered for Motor Vehicle Accident Compensation

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A full bench consisting of Justice Sanjay Kishan Kaul, Justice Ajay Rastogi, and Justice Aniruddha Bose decided the case of Erudhaya Priya v. State Express Transport Corporation. Here, the bench granted compensation to the appellant.

Brief Facts of the Case

The appellant was travelling from Chennai to Bangalore on a bus that was owned by the respondent. The bus while going through the Kolar-Bangalore National Highway ran against a parked lorry. It caused injuries to many passengers including the appellant. The bus conductor died on the spot. The appellant was rushed to the nearby hospital. Further, she remained to be admitted to another hospital for 8 months. The injuries to the appellant were grievous including fractures in the arms and legs. She suffered a disability of 31.1% of the whole body.

Appeal from the Tribunal’s Decision 

The appellant filed a claim petition before the Motor Accident Claims Tribunal (“Tribunal”), Madurai under Section 166 of the Motor Vehicles Act, 1988 (“MV Act”) read with Rule 3(1) of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 claiming compensation of Rupees One Crore for injuries sustained in the accident.

The Tribunal held that the accident occurred due to the rash and negligent driving of the bus driver of the bus. It was owned by the respondent State Corporation and, thus, the respondent was held liable to pay compensation to the appellant. It opined that the permanent disability of 31.1% would have to be considered. The Tribunal also applied the multiplier method to calculate the loss of earning power. Since the appellant was 23 years of age, a multiplier of 17 was applied to the monthly salary of the appellant as a software engineer. The compensation was worked out for the loss of earning power to Rs. 35,24,288/-. It was payable by the respondent along with interest @ 7.5% per annum, from the date of petition till the date of realization with costs.

On appeal to the High Court, it confirmed the negligence of the bus driver but reduced the compensation to Rs. 25,00,000/-. This was on the ground that the multiplier method for quantifying loss of earning power has been applied. And how the injuries suffered would have a bearing on the appellant’s earning capacity as a software engineer had not come on record of the Courts.

In the present appeal, the appellant claimed that she is entitled to enhancement of compensation even over and above what was granted by the Tribunal. She quantified the same as Rs. 41,69,831/- under various heads. This is along with a revised interest rate @ 12% per annum.

Court’s Observations

The Court identified three aspects to be decided in the present appeal.

The first issue was about the application of multiplier for calculating compensation for the loss caused. The Bench affirmed the multiplier table in the case of Sarla Verma (Smt) and Others. v. Delhi Transport Corporation and Another (2009) 6 SCC 121. In the age group of 15-25 years, the multiplier has to be ‘18’ along with consideration of the extent of disability. The bench hence held that the multiplier to be applied in this case has to be ‘18’ and not ‘17’.

On the second issue of loss of earning capacity of the appellant, the judgment in Jagdish v. Mohan & Others (2018) 4 SCC 571 was agreed upon. The Court examined the disability certificate as well as the photographs of the Appellant’s condition. The prospects on advancement in life and career are to be taken into consideration. Hence this principle must be applied in the case of the appellant taking the permanent disability as 31.1%.

The final issue was about the increase in interest percentage from 9% to 12%. The Bench observed that the counsel for the appellant had not raised any objections to the decrease of such percentage by the High Court. Hence, the percentage to be paid by the State Corporation, from the date of petition till the date of realization with costs, is to remain the same at 9%.

Court’s Decision

The appellant would, thus, be entitled to the compensation of Rs. 41,69,831/- as claimed along with simple interest at the rate of 9% per annum from the date of application till the date of payment.


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