M.R. KRISHNA MURTHI versus THE NEW INDIA ASSURANCE CO. LTD. & OTHERS on 5 March 2019

1088 SUPREME COURT REPORTS [2019] 3 S.C.R.[2019] 3 S.C.R. 1088

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M.R. KRISHNA MURTHI

v.

THE NEW INDIA ASSURANCE CO. LTD. & OTHERS

(Civil Appeal Nos. 2476-2477 of 2019)

BMARCH 05, 2019

[A. K. SIKRI AND S. ABDUL NAZEER, JJ.]

Motor Vehicles Act, 1988:

Motor accident – Compensation – Assessment of –CDetermination of loss of future earning – On facts, 18 year studentstudying in school met with a motor accident leaving him 40%disabled – Award of Rs. 8,48,000/- as compensation with 7% interestfor a period of 10 years – In appeal, the High Court awardedadditional lumpsum damages of Rs 50,000/- – In review petition,the High Court enhanced the compensation by Rs. 24,000/- togetherDwith corresponding interest – On appeal, held: Appellant becauseof his family background-parents senior lawyers in the SupremeCourt, also wanted to join legal profession, even though at the timeof accident, he was studying in school – Having regard to affluentfamily background, the appellant at the time of accident wasEstudying in prestigious School – Thus, the appellant had a brightfuture and, his future earnings had to be considered keeping inview the said factors – Though, not very seriously, the functionalcapacity has been impaired because of the disability suffered bythe appellant as the appellant cannot run around like other youngadvocates of his age – In view thereof, loss of future earning fixedFat Rs.5,000/- pm i.e. Rs.60,000/- pa on which multiplier of 18 is tobe applied – Loss future earning comes to Rs.10,80,000/- – Appellantto be paid another sum of Rs.6,54,000/- under this head along withinterest as awarded by the court below Motor accidents – Road accident victims – Reforms inGpayment of compensation to victims – Mechanism to prevents delaysand other obstacles in awarding compensation to road accidentvictims and/or kiths and kins of victims – Held: Issuance of directionto the government to consider setting up of mediation authority forspeedy disposal of motor accident claims – Government to consider H

the feasibility of enacting Mediation Act to take care of variousaspects of mediation and examine the feasibility of setting up MotorAccident Mediation Authority by making necessary amendments inthe Motor Vehicles Act, along with other directions/recommendationsissued.

Disposing of the appeals, the Court

Conclusion

HELD:1.1 In those cases where the victim of the accidentis not an earning person but a student, while assessing thecompensation for loss of future earning, the focus of theexamination would be the career prospect and the likely earningof such a person in future. Where the claimant is pursuing aparticular professional course, the poseer would be: what wouldhave been his income had he joined a service commensuratingwith the said course. That can be the future earning. There maybe cases where the victim is not, at that stage, doing any suchcourse to get a particular job. He or she may be studying in aschool. In such a case, future career would depend upon multiplefactors like the family background, choice/interest of thecomplainant to pursue a particular career, facilities available tohim/her for adopting such a career, the favourable surroundingcircumstances to see which would have enabled the claimant tosuccessfully pick up the said career etc. If the chosen field isemployment, then the future earning can be taken on the basis ofsalary and allowances which are payable for such calling. In case,career is a particular profession, the future earning would dependon host of other factors on the basis of which chances to achievesuccess in such a profession can be ascertained. There may becases where even a student, the claimant would have madeearnings on part-time basis or would have received offer for aparticular job. In such cases, these factors would also assumerelevance. After ascertaining the likely earning of the victim inthe said manner, the nature of injuries and disability suffered as aresult thereof would be kept in mind while determining as to howmuch earning has been affected thereby. Here, impact of injurieson functional disability is to be seen. In case of death ofvictim, it would result in total loss of earning. In the case ofinjuries, the nature of disability becomes important.[Para 23][1107-E-H; 1108-A-D]

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A1.2 The appellant was a student studying in a school. Hewas not doing any job or was in any vocation and, thus, was notearning anything. The loss of future earning is to be assessed onthe said basis. The relevant factors brought on record for theappellant are that the appellant belongs to a family of lawyers asboth his parents were senior lawyers practicing in the SupremeBCourt. Because of his family background, the appellant alsowanted to join legal profession, even though at the time ofaccident, he was studying in school. Having regard to affluentfamily background, the appellant at the time of accident wasstudying in prestigious Modern School, Barakhamba Road, NewCDelhi. All these circumstances clearly indicated that the appellanthad a bright future and, therefore, his future earnings could notbe considered without keeping in view the aforesaid factors. Theappellant also produced evidence in respect of his disability. Thisdisability does not indicate much loss of prospects in earning. Ofcourse, his movements are restricted and he needs a Driver asDhe is not in a position to drive the car himself. This would hinderthe earning capacity to some extent, though not significant extent.[Para 17, 24][1100-F-G; 1108-D-G]

N. Manjegowda v. Manager, United India InsuranceCompany Limited (2014) 3 SCC 584 : [2013] 12ESCR 350 – relied on.

1.3 Though, not very seriously, the functional capacity hasbeen impaired because of the disability suffered by the appellantas the appellant cannot run around like other young advocates ofhis age. Going by the overall circumstances, in case of theFappellant, loss of future earning can be fixed at Rs.5,000/- permonth i.e. Rs.60,000/- per annum on which multiplier of 18 is tobe applied. Calculated in this manner, the loss future earningcomes to Rs.10,80,000/-. The appellant, thus, would be paidanother sum of Rs.6,54,000/- under this head along with interestGas awarded by the Court below. It is stated that the appellant hasvolunteered to give this amount to any Government or publiccharitable organisation working towards road safety. It is left tothe appellant to donate the amount to any particular organisationof his choice. Alternatively, it can also be given for MAMC-project by the appellant. [Paras 26 (i)].[1109-G-H; 1110-A-C]H

2.1 Focus is to ensure access to justice for road accidentvictims and also to bring about a mechanism which prevents delaysand other obstacles in awarding compensation to road accidentvictims. The suggestion for establishing a MAMA-MotorAccident Mediation Authority in every District is worthy ofacceptance. Whatever steps are taken by the authorities forreducing road accidents, harsh reality is that accidents would keepon happening. There may be a possibility of reducing the numberof road accidents, but occurrence thereof cannot be totallyeliminated. Such accidents, particularly fatal accidents, wouldalways lead to filing of claims by the victims and/or kith and kin ofvictims, for compensation. Fatal accidents also triggerprosecution of the driver who was negligent and rash in drivingwhich caused the accident. Insofar as disputes regarding claimsare concerned, there is a need to resolve the same at the earliestinasmuch as compensation money may be badly needed by theclaimants for so many reasons and delay may bring insurmountablesufferings of various kind. Having regard to the fact that largenumber of accidents are giving rise to phenomenal quantum jumpin such cases, methods need to be adopted for quick resolution.[Para 27][1110-E-H]

2.2 The various directions/recommendations are given: (a)The Government is impressed upon to also consider the feasibilityof enacting Mediation Act to take care of various aspects ofmediation in general. (b) The Government may examine thefeasibility of setting up MAMA by making necessary amendmentsin the Motor Vehicles Act. For this purpose, it can consider thetwo flow charts given by the appellant. (c) In the interregnum,NALSA is directed to set up Motor Accident Mediation Cellwhich can function independently under the aegis of NALSA orcan be handed over to MCPC. Such a project should be preparedwithin a period of two months and it should start functioningimmediately thereafter at various levels as suggested in thisjudgment. The directions contained in order dated November 6,2017 in Jai Prakash case are reitreated for implementation ofthe latest Modified Claims Tribunal Agreed Procedure. Forensuring such implementation, NALSA is directed to take upthe same in coordination and co-operation with various High AB

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1092 SUPREME COURT REPORTS [2019] 3 S.C.R.

ACourts. MACAD Scheme shall be implemented by all ClaimTribunals on All India basis. 21 Banks, Members of Indian BanksAssocation, who had taken decision to implement MACADScheme would do the same on All India basis. (d) The Governmentis implied upon to look into the feasibility of framing necessaryschemes and for the availability of annuity certificates. ThisBexercise may be done within the period of six months and decisionbe taken thereupon. (e) Likewise, it is directed that there shouldbe programmes from time to time, in all State Judicial Academies,to sensitizing the Presiding Officers of the Claims Tribunals,Senior Police Officers of the State Police as well as InsuranceCCompany for the implementation of the said Procedure.[Para 39][1117-C-H; 1118-A-B]

Arvind Kumar Mishra v. New India Assurance Co. Ltd.,(2010) 10 SCC 254 : [ 2010] 11 SCR 857 ; OrientalInsurance Company Limited v. Deo Patodi & Ors.,D(2009) 13 SCC 123 : [2009] 8 SCR 791 ; New IndiaAssurance Co. Ltd. v. Ganga Devi & Ors., MAC APPNo. 135 of 2008 decided on November 23, 2009 byDelhi High Court ; Sarla Verma v. Delhi TransportCorporation (2009) 6 SCALE 129 ; Raj Kumar v. AjayKumar & Anr., (2011) 1 SCC 343 : [2010] 13 SCR 179E; Arun Sondhi v. Delhi Transport Corporation (2001)ACJ 1779 ; Jaiprakash v. National Insurance Company[2009] 16 SCR 710 ; Rajesh Tyagi v. Jaiveer Singh andOthers (FAO No. 842 of 2003) – referred to H

M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCECO. LTD. & OTHERS

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2476-2477 of 2019.

From the Judgment and Order dated 19.05.2017 of the High Courtof Delhi at New Delhi in MAC. APP. No. 550 of 2007 in ReviewPetition No. 506 of 2016 and order dated 17.05.2016 in MAC. APP. No.550 of 2007.

Arun Mohan, Sr. Adv., Dinesh S. B., Vipin Kumar Jai, Rituj Chopra,Advs. for the Appellant.

Sahil Paul, Ms. Manjeet Chawla, S. S. Nehra, D. Vidyanandam,R. K. Gupta, Vikrant Nehra, M/S. Gaur & Nehra Law Firm, Advs. forthe Respondents.

The Judgment of the Court was delivered by

A. K. SIKRI, J. 1. Leave granted.

2. The appellant herein, who is a practicing advocate, had sufferedin nasty accident at the young age of 18 years. He was a student at thattime studying in Modern School, Delhi. It was 26[th] May, 1988. He wastravelling along with his mother from Delhi to Mussoorie to celebrate his18[th] birthday falling on 27[th] May, 1988. On Delhi-Dehradun highwaythe accident took place in which his entire left leg was crushed. He wasrushed to the hospital and his hospitalization continued for over twomonths. He had to undergo surgery for which he was operated on 31[st]May, 1988. Though, the appellant was discharged from the hospitalafter two months, his treatment continued for over 6 years, during whichperiod he had to undergo further operations. In all, three surgeries wereperformed. First, for putting plates and screws, another for removal ofplates and screws wherein doctor discovered that he could not removethe plates and screws of femur bone. The result is that even today thesaid screws and plates in the femur bone remain planted. This exposeshim to the risk of another fracture anytime. The third operation was forremoval of a lump in the right leg which had developed after the accidentand had grown over the years.

3. As per the appellant, the net result of the aforesaid accident ofsuch severity is that he is suffering permanent disability (pain and difficultyin locomotion) even today. This disability is certified by the DistrictGovernment Hospital, Muzaffarnagar at 40%, as per the disabilitycertificate dated 10[th] December, 2005 (Exh. PW-4/103).

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A4. The appellant filed an application claiming compensation beforeMotor Accidents Claims Tribunal (MACT), Muzaffarnagar, U.P. as theaccident took place in the area within the jurisdiction of the said MACT.However, on his application for transfer of the said claim petition, thisCourt passed orders dated 12[th] January, 1998 transferring the case toMACT, Patiala House, New Delhi. The MACT, after conclusion of theBtrial, rendered its award dated 23[rd] May, 2007 attributing negligence tothe driver of the ambassador car which had hit the vehicle in which theappellant was travelling. As the accident occurred due to the negligenceof the said driver (Respondent no. 4 in MACT case), and the offendingvehicle was insured with Respondent no. 1, namely, New India AssuranceCCompany Limited, the liability was fastened on the Insurance Company,the driver of the vehicle as well as the owner of the vehicle who alsoarrayed as respondents. The MACT, thereafter, dealt with the issue ofquantum of compensation and awarded a sum of Rs. 8,48,000/-, thebreakup of which is as under:

D“Pain and sufferingsRs.50,000/-MedicinesRs.2,10,000/-Special DietRs.15,000/-ConveyanceRs.15,000/-Compensation on accountRs.4,08,000/-of loss of income adoptingEmultiplier of 18 permanentRs.75,000/-disability attendantRs.25,000/-loss of enjoymentRs.50,000/-TotalRs.8,48,000/-”

5. The MACT also awarded interest @7% for a period of 10

Fyears, inter alia, taking note of the fact that the claim petition has beendismissed in default twice.

6. The appellant filed the appeal thereagainst before the HighCourt. However, when it was taken up for hearing, nobody appeared onbehalf of the appellant. Going by the fact that on several consecutiveGdates the appellant was not represented and remained absent, instead ofdismissing the appeal in default, the High Court decided the matter onmerits after hearing the counsel for the Insurance Company and onperusing the record.

7. Main contention of the appellant in appeal was that MACT hadfailed to take into account the disability certificate which showed thatthe appellant had suffered permanent disability to the extent of 40%.This submission is rejected by the High Court with the observations thatthe MACT had, in fact, calculated the loss of future income on the basisof inference that the claimant has suffered functional disability to theextent of 40% corresponding to affecting his earning capacity. TheHigh Court also took note of the income tax returns which were filed bythe appellant for the periods 2003-04, 2004-05, 2005-06. However, asper the High Court, these income tax returns were irrelevant and couldnot be taken into consideration as accident occurred way back in theyear 1988 and, therefore, compensation had to be fixed with referenceto the date of the accident when the claimant was a boy of 18 yearsonly. Instead, only addition is made by the High Court, that too on someother count. It has noted that the appellant would require services of adriver till he attains age of 70 years, which is a normal expected lifespan.Though, no evidence was led in support of this claim, the High Court hasawarded an additional lumpsum damages in the sum of Rs. 50,000/- onthis account, given the nature of disability and physical disfigurementsuffered by the appellant.

8. The appellant, thereafter, preferred a review petition underOrder LXVII Rule 1 of the Code of Civil Procedure seeking review ofthe judgment dated 17[th] May, 2016 rendered by the High Court. It waspointed out that there was an error committed by the MACT as it hadapplied the multiplier of 17, whereas multiplier of 18 should have beenadopted while calculating the compensation towards loss of income, goingby the fact that the appellant was only 18 years of age when he sufferedthe injuries. This plea has been accepted by the High Court therebyapplying the multiplier of 18, instead of 17 which has resulted inenhancement of compensation by Rs.24000/- together with correspondinginterest. Main judgment dated 17[th] May, 2016 as well as order dated19[th] May, 2017 passed in review petition are the subject matters of thepresent appeals.

9. Mr. Arun Mohan, learned senior counsel appearing for theappellant has made two-fold submissions which are paraphrased in thefollowing manner:

(i) In the first instance, it is submitted that the MACT as well asthe High Court have erred in computing the future earning by fixing the AB

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Aincome at the rate of Rs.5000/- only while assessing the loss of futureearnings. No doubt, submitted the learned senior counsel, the appellantwas only a student and, therefore, there was no real earning at thatstage. Only future prospects can be taken into consideration, as per thelaw laid down by this Court in a series of judgments. However, submissionof learned senior counsel was that while assessing the loss of futureBearning, the Court should have regard to the family background of thevictim, the institution in which he is getting education, his potential toadopt the career he desired to choose, career prospects in view ofattendant circumstances etc. In this hue, Mr. Arun Mohan submittedthat the appellant belongs to a family of lawyers as both his parentsCwere senior lawyers practicing in Supreme Court. Because of this familybackground, the appellant also wanted to join legal profession. Though,at the time of accident, he was studying in school, after school he intendedto pursue his studies in law. He, in fact, did law and has joined the legalprofession, which fact was placed on record, as by the time the appellantbecame a lawyer the case before MACT was still pending. Further,Dhaving regard to affluent family background, the appellant at the time ofaccident was studying in prestigious Modern School, Barakhamba Road,New Delhi. All these circumstances clearly indicated that the appellanthad a bright future and, therefore, his future earnings could not beconsidered without keeping in view the aforesaid factors. In suchEcircumstances, loss of future earning prospects by treating the futureearnings at the rate of Rs.5000/- only was abysmally low. He alsosubmitted that though in the review petition filed before the High Court,specific ground to this effect was taken, it has not even been consideredby the High Court.

F(ii) Second submission of Mr. Arun Mohan was a passionate pleaaimed at reforming the system at following levels:

(a) On-road safety and grant of adequate compensation to thevictims without any delay. For ensuring expeditious settlement ofclaims, resort to alternate means which may include innovativeGmeasures.

(b) Taking adequate steps including adopting innovative measures,to ensure fast track disposal of cases by MACTs.

(c) Ensuring receipt of compensation in the safe hands of victimsand/or kiths and kins of victims, that too over a sustained period.H

10. Detailed submissions on these aspects and suggestions of Mr.Arun Mohan are as under:

“Road Safety and Compensation

IT is perceived that of road accidents (1,40,000 dead per yearand 5,00,000 injured per year), less than 10% reach the MACTwith claims. Almost 90% do not have Access to Justice.

And of the 10% or so who do reach MACT, the questions arise:

1. What is the ‘Cost’ to the State judiciary and insurance sectorfor adjudication of these claims?

2. What are the time delays?

3. On what income source do the dependents/injured survive duringpendency till the payout?

4. Of the ultimate payout, how much actually reaches the recipientsand how much is lost?

5. After, say, five years of receiving the compensation, whatactually remains with the majority of the recipients?

These were some disturbing questions on a ground level survey.

Put differently, firstly, as most are poor, there is hardly any accessto justice; the court resources are wasted; there are delays anddifficulties and slicing away (cut) from the payout; and little safetyfor the money that is received.

As a Solution to these problems, there are two proposals:

1. establishing a Motor Accidents Mediation Authority (MAMA)in every district;

2. making it compulsory for the accident investigator to:

(a) send a copy of his Report to MAMA;

(b) send e-mail to National Road Safety Council’sc e l lidentifying the accident spot and how similar accidents could beprevented in future.

MAMA will follow the following procedure:

1. MAMA will then issue notices to the claimants and others.

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A2. interim compensation (with recourse) of few thousand rupeesa month pending adjudication as direct credit to Aadhaar linkedbank account;

3. completion of paperwork at MAMA;

4. mediation proceedings at MAMA;B

5. complete safety in the hands of the recipient.

The amount settled is not given as rupees (or even FDRs), but asAnnuity Certificates, which have more return for the same value-meaning lesser payout by the insurance sector with full receipt bythe claimant.”C

11. He further submitted that this Court may consider a directionto the Government to frame these procedures and schemes. LIC/RBIcan provide for availability of Annuity Certificates in consultation withthe Pension Fund Regulatory and Development Authority and theDcommercial Banks/insurance companies.

12. To facilitate appreciation and implementation, he gave twoflowcharts as below:

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M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCECO. LTD. & OTHERS [A. K. SIKRI, J.]

13. In the Flowchart-1 (under the existing law), a direction fromthis Court is sought to all MACTs to compulsorily refer motor accidentcases to the District Mediation Authority which will serve the purposetill the Government amends the Statute. Flowchart - 2 shows where theamended statute and the rules can provide for establishing a MotorAccident Mediation Authority (MAMA) in every district in the country.He also suggested that rules can provide for every accident investigatorto send information to : (1) MAMA; and (2) National Road SafetyCouncil’s Cell.

14. Speaking with an optimist tone, Mr. Mohan submitted thatthere is a hope that with a provision for MAMA:

(1) access to justice will substantially increase;

(2) the court costs will reduce;

(3) insurance sector costs (as payout) will reduce;

(4) Annuity Certificates of the payout will nearly eliminate the‘slicing away’; and

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A(5) the actual benefit to the recipients will be far more (withAnnuity Certificates) than it is at present.

15. Mr. Salil Paul, learned counsel appearing for the InsuranceCompany advanced his argument on the quantum of compensation basedon future prospective. His submission was that the yardstick adoptedBby the courts below in fixing the income based on future prospective onthe basis of which compensation is given to the appellant is in tune withvarious judgments rendered by this Court as well as the High Court.Therefore, no interference was called for, insofar as grant ofcompensation is concerned. He referred to certain judgments in support.

C16. With reference to the second submission of Mr. Arun Mohan,Mr. Salil Paul gave a positive response with the plea that since suggestionsgiven by Mr. Arun Mohan were in larger public interest for reformationof the system, he had no objection if the Court issues appropriatedirections in this behalf. At the same time, he also pointed out thatinsofar as speedy disposal of cases and payment of compensation to theDvictims, particularly, young victims are concerned, the High Court ofDelhi had given directions on the basis of which Claims Tribunal AgreedProcedure was approved by High Court of Delhi. Modified versionthereof has now been approved as recent as on 7[th] December, 2018which takes care of the speedy disposal as well as periodical paymentsEto be made to the young victims over a period of time. Mr. Salil Paulplaced on record the relevant judgments as well as Modified ClaimsTribunal Agreed Procedure approved by the Delhi High Court vide ordersdated 7[th] December, 2018.

17. We now proceed to discuss the merits of the aforesaid twoFproposition advanced before us.

(I) Assessment of Compensation:

Admittedly, the appellant was a student studying in a school.He was not doing any job or was in any vocation and, thus, was notearning anything. The loss of future earning is to be assessed on theGaforesaid basis. Before adverting to the arguments that are raised byMr. Arun Mohan and taken note of above, it would be appropriate toscan through certain judgments cited before us by both the parties inorder to decipher the principles for determining loss of future earning insuch circumstances. First case which we would like to refer is the H

judgment in the case of Arvind Kumar Mishra v. New India AssuranceCo. Ltd., (2010) 10 SCC 254. In that case also, the appellant who wasa victim of accident, was a student. He was in the final year ofengineering which he was doing from a reputed college. He had abrilliant academic record, having passed all semester examinations withdistinction. In the accident that took place, the appellant suffered multipleinjuries which led to 70% permanent disability. This disability renderedhim incapacitated which had the consequence of dashing forever hisdream of becoming Mechanical Engineer, studies for which career hehad undertaken. On the aforesaid facts, his future earning were assessedat Rs.60,000/- per annum by taking salary and allowances payable toAssistant Engineer in public employment. This future earning wasdiscounted at 30% on the basis of which multiplicand was taken atRs.42,000/- per annum. Going by his age which was 25 years at thetime of accident, multiplier of 18 was applied and on that basis,compensation towards loss of future earning was assessed atRs.7,56,0000/-.

Second case to which reference is made is Oriental InsuranceCompany Limited v. Deo Patodi & Ors., (2009) 13 SCC 123. Here,the victim was a brilliant student and while a student, he was also earningRs.80,000/- per month in a job on part-time basis in the United Kingdom.He had not accepted a job offered by a US based company at a salaryof Rs.18 lakhs per annum. However, at the time of accident, he wasnot working. Accident took place on June 12, 2003 when he was 22years of age. He suffered head injuries which proved fatal and he diedwithin six days i.e. on June 18, 2003. While computing the compensationunder the head ‘loss of dependency’ (he was the only son of the claimant),the Tribunal as well as the High Court held that the deceased wouldhave earned only Rs.18,000/- per month. This Court, in appeal, however,considered the aforesaid estimation of income to be on lower side andthe Court decided to fix the earning at Rs.25,000/- per month, whichwas 1/3rd of the amount that he was receiving in the United Kingdom.The relevant discussion in this behalf runs as under:

“8. The question in regard to the calculation of loss of dependency,it is trite, would vary from case to case. The fact that the deceasedwas a brilliant student is not in dispute. He had graduated inBusiness Administration in the UK. Even as a student, in a job on AB

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a part-time basis he was being paid a salary of Rs 80,000 permonth (UK £1008.31). He paid his income tax even in the UK.After his graduation, he came back to India. He was offered ajob as EU Controller by GOA LLC, a company based in Chicago,USA at an annual salary of Rs 18 lakhs (i.e. $41,600). However,when the accident took place he was not working; having notaccepted the said offer. He was still a student. It would havebeen hazardous for the Tribunal to calculate the amount ofcompensation towards the loss of dependency on that basis.

9. The Tribunal and the High Court, however, in our opinion, keepingin view the aforementioned backdrop might not be correct inholding that he would have earned only Rs 18,000 per month. It istrue that the cost of living in the western countries would be higher.The standard of living in the western countries cannot be followed;in the absence of any material placed before this Court it shouldnot be followed in India. Even in a case where the victim of anaccident was earning salary in US dollars, this Court opined that alower multiplier should be applied.

10. In United India Insurance Co. Ltd. v. Patricia JeanMahajan [(2002) 6 SCC 281] this Court held: (SCC pp. 294-95,paras 19-20)

“19. In the present case we find that the parents of thedeceased were 69/73 years. Two daughters were aged 17and 19 years. The main question, which strikes us in thiscase is that in the given circumstances the amount ofmultiplicand also assumes relevance. The total amount ofdependency as found by the learned Single Judge and alsorightly upheld by the Division Bench comes to 2,26,297 dollars.Applying multiplier of 10, the amount with interest and theconversion rate of Rs 47, comes to Rs 10.38 crores and withmultiplier of 13 at the conversion rate of Rs 30 the amountcomes to Rs 16.12 crores with interest. These amounts arehuge indeed. Looking to the Indian economy, fiscal andfinancial situation, the amount is certainly a fabulous amountthough in the background of American conditions it may notbe so. Therefore, where there is so much of disparity in the H

M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCECO. LTD. & OTHERS [A. K. SIKRI, J.]

economic conditions and affluence of the two places viz. theplace to which the victim belongs and the place where thecompensation is to be paid, a golden balance must be strucksomewhere, to arrive at a reasonable and fair mesne. Lookingby the Indian standards they may not be much tooovercompensated and similarly not very much undercompensated as well, in the background of the country wheremost of the dependent beneficiaries reside. Two of thedependants, namely, parents aged 69/73 years live in India,but four of them are in the United States. Shri Soli J. Sorabjeesubmitted that the amount of multiplicand shall surely berelevant and in case it is a high amount, a lower multiplier canappropriately be applied. We find force in this submission. …

20. The court cannot be totally oblivious to the realities. TheSecond Schedule while prescribing the multiplier, hadmaximum income of Rs 40,000 p.a. in mind, but it isconsidered to be a safe guide for applying the prescribedmultiplier in cases of higher income also but in cases wherethe gap in income is so wide as in the present case income is2,26,297 dollars, in such a situation, it cannot be said thatsome deviation in the multiplier would be impermissible.Therefore, a deviation from applying the multiplier as providedin the Second Schedule may have to be made in this case.Apart from factors indicated earlier the amount of multiplicandalso becomes a factor to be taken into account which in thiscase comes to 2,26,297 dollars, that is to say an amount ofaround Rs 68 lakhs per annum by converting it at the rate of Rs 30. By Indian standards it is certainly a high amount.Therefore, for the purposes of fair compensation, a lessermultiplier can be applied to a heavy amount of multiplicand.”

The said decision, however, to some extent was clarified by thisCourt in Punjab National Bank v. Indian Bank [(2003) 6 SCC79] .

11. It is in the aforementioned situation, we are of the opinion thatthe fair amount of compensation should have been calculated atRs 25,000 per month being about one-third of the amount whichhe was receiving in the UK.”

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A 18. We may also take note of one judgment of High Court ofDelhi in MAC. APP. No. 135 of 2008 titled ‘New India Assurance Co.Ltd. v. Ganga Devi & Ors.’ decided on November 23, 2009. In thatcase also, accident resulted in death of the victim, named, [REDACTED].He was 24 years of age at the time of accident and had completed hisMBBS. He was doing one year internship and was getting stipend ofBRs.5,000/- per month. The deceased had cleared the UPSC examinationfor the post of Medical Officer and was scheduled to be appointed asMedical Officer after completing the internship. Evidence of PW-2,Senior Assistant of the Hospital, where the deceased was interning, wasproduced who deposed that after completing his internship, there was aCpossibility of getting absorbed as Junior Resident Doctor in the samehospital at salary of Rs.18,000/- to Rs.20,000/- per month.

19. The Tribunal took the view that the aforesaid evidence wasinsufficient to prove the income. Accordingly, it took the minimum wagesof a graduate worker as Rs.3,543/- per month and added 50% towardsDinflation and rise in price index. From this, 1/3rd was deducted towardspersonal expenses and multiplier of 11 was applied to compute the lossof dependency at Rs.9,35,352/-. The High Court set aside the order ofthe Tribunal holding that evidence of PW-2 was believable. On thatbasis, income was taken at Rs.18,000/- per month to which 50% wasadded towards future prospects, following the judgment of this Court inESarla Verma v. Delhi Transport Corporation, (2009) 6 SCALE 129.Deduction towards personal expenses was made on which multiplier of13 was applied.

20. The aforesaid cases are of all those victims who were studentsat the time of accident and were not in actual employment. In addition,FMr. Arun Mohan had also referred to the judgment in N. Manjegowdav. Manager, United India Insurance Company Limited, (2014) 3SCC 584, where victim of an accident was a young advocate aged about36 years. In the accident, he sustained whole body disability of 50%.This judgment is cited for the purpose of showing principle laid down byGthe Court in determining the loss of earning capacity of an advocatewho suffers disability in an accident. The Tribunal had assessed the lossof future income due to disability at Rs.6,17,500/- per annum. The HighCourt reduced the same to Rs.1,50,000/-. This Court noted that due tothe said accident, the appellant had suffered partial sensory loss all over H

his limbs and there was lack of proper coordination in all four limbs. Heneeded an assistance for daily routine work. This kind of disability, inthe opinion of the Court, hindered his ability to practice as an advocateand compete with others in the field of legal profession. He was boundto suffer huge professional loss in the said condition. This Court, in theaforesaid circumstances, took the view that loss of future income fixedat Rs.6,17,500/- did not require any deduction. On the contrary, the lossof earning should be treated as 70% and the appropriate multiplier shouldbe 16 in place of 13. On that basis, the loss of income due to disabilityneeded enhancement from Rs.6,17,500/- by at least Rs.4,00,000/- andthe compensation under the head loss of income due to disability wasworked out accordingly.

21. It would be also appropriate to take note of certain judgmentsdealing with the assessment of loss of future earnings on account ofdisability suffered as a result of accident, even when these cases pertainto those victims who were having their earnings, as these cases wouldthrow light on the general principles which were laid down for assessingsuch a loss.

22. In the case of Raj Kumar v. Ajay Kumar & Anr., (2011) 1SCC 343, where the victim suffered 45% disability to left lower limb andpermanent functional disability of 25%, the Court held that it is a functionaldisability which would be the operative criteria for assessing the loss offuture earnings and not physical disability. There is a detailed and luciddiscussion of assessment of future loss of earning due to permanentdisability, covering all possible facets and discussing every nuance of thesubject matter. After explaining the meaning of permanent disabilityand contrasting it with temporary disability and also the manner in whichpermanent disability of different limbs expressed by Doctors in theDisability Certificates is to be interpreted, the Court clarified that theassessment of compensation under the head of loss of future earningswould depend upon the effect and impact of such permanent disabilityon his earning capacity. The manner in which the assessment is to becarried out is contained in the following passages in the said judgment:

“12. Therefore, the Tribunal has to first decide whether there isany permanent disability and, if so, the extent of such permanentdisability. This means that the Tribunal should consider and decidewith reference to the evidence:

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(i) whether the disablement is permanent or temporary;

(ii) if the disablement is permanent, whether it is permanent totaldisablement or permanent partial disablement;

(iii) if the disablement percentage is expressed with reference toany specific limb, then the effect of such disablement of the limbon the functioning of the entire body, that is, the permanent disabilitysuffered by the person.

If the Tribunal concludes that there is no permanent disability thenthere is no question of proceeding further and determining theloss of future earning capacity. But if the Tribunal concludes thatthere is permanent disability then it will proceed to ascertain itsextent. After the Tribunal ascertains the actual extent of permanentdisability of the claimant based on the medical evidence, it has todetermine whether such permanent disability has affected or willaffect his earning capacity.

13. Ascertainment of the effect of the permanent disability onthe actual earning capacity involves three steps. The Tribunal hasto first ascertain what activities the claimant could carry on inspite of the permanent disability and what he could not do as aresult of the permanent disability (this is also relevant for awardingcompensation under the head of loss of amenities of life). Thesecond step is to ascertain his avocation, profession and nature ofwork before the accident, as also his age. The third step is to findout whether (i) the claimant is totally disabled from earning anykind of livelihood, or (ii) whether in spite of the permanent disability,the claimant could still effectively carry on the activities andfunctions, which he was earlier carrying on, or (iii) whether hewas prevented or restricted from discharging his previous activitiesand functions, but could carry on some other or lesser scale ofactivities and functions so that he continues to earn or can continueto earn his livelihood.

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19. We may now summarise the principles discussed above:

(i) All injuries (or permanent disabilities arising from injuries), donot result in loss of earning capacity.

(ii) The percentage of permanent disability with reference to thewhole body of a person, cannot be assumed to be the percentageof loss of earning capacity. To put it differently, the percentage ofloss of earning capacity is not the same as the percentage ofpermanent disability (except in a few cases, where the Tribunalon the basis of evidence, concludes that the percentage of loss ofearning capacity is the same as the percentage of permanentdisability).

(iii) The doctor who treated an injured claimant or who examinedhim subsequently to assess the extent of his permanent disabilitycan give evidence only in regard to the extent of permanentdisability. The loss of earning capacity is something that will haveto be assessed by the Tribunal with reference to the evidence inentirety.

(iv) The same permanent disability may result in differentpercentages of loss of earning capacity in different persons,depending upon the nature of profession, occupation or job, age,education and other factors.”

23. From the conjoint reading of the aforesaid judgments, interalia, following principles can be culled out which would be relevant fordeciding the instant appeal:

(i) In those cases where the victim of the accident is not an earningperson but a student, while assessing the compensation for loss of futureearning, the focus of the examination would be the career prospect andthe likely earning of such a person in future. For example, where theclaimant is pursuing a particular professional course, the poseer wouldbe: what would have been his income had he joined a servicecommensurating with the said course. That can be the future earning.

(ii) There may be cases where the victim is not, at that stage,doing any such course to get a particular job. He or she may be studyingin a school. In such a case, future career would depend upon multiplefactors like the family background, choice/interest of the complainant topursue a particular career, facilities available to him/her for adoptingsuch a career, the favourable surrounding circumstances to see whichwould have enabled the claimant to successfully pick up the said careeretc.

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If the chosen field is employment, then the future earning can betaken on the basis of salary and allowances which are payable for suchcalling. In case, career is a particular profession, the future earningwould depend on host of other factors on the basis of which chances toachieve success in such a profession can be ascertained.

(iii) There may be cases like Deo Patodi where even a student,the claimant would have made earnings on part-time basis or wouldhave received offer for a particular job. In such cases, these factorswould also assume relevance.

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(iv) After ascertaining the likely earning of the victim in theCaforesaid manner, the nature of injuries and disability suffered as a resultthereof would be kept in mind while determining as to how much earninghas been affected thereby. Here, impact of injuries on functional disabilityis to be seen. In case of death of victim, it would result in total loss ofearning. In the case of injuries, the nature of disability becomes important.Such an exercise was undertaken in N. Manjegowda case.D

24. The relevant factors which are brought on record by thelearned senior counsel for the appellant are these: the appellant belongsto a family of lawyers as both his parents were senior lawyers practicingin the Supreme Court. Because of his family background, the appellantalso wanted to join legal profession, even though at the time of accident,Ehe was studying in school. Having regard to affluent family background,the appellant at the time of accident was studying in prestigious ModernSchool, Barakhamba Road, New Delhi. All these circumstances clearlyindicated that the appellant had a bright future and, therefore, his futureearnings could not be considered without keeping in view the aforesaidFfactors. The appellant also produced evidence in respect of his disability.This disability does not indicate much loss of prospects in earning as it issimilar to N. Manjegowda case. Of course, his movements are restrictedand he needs a Driver as he is not in a position to drive the car himself.This would hinder the earning capacity to some extent, though notsignificant extent.

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25. From the judgment of the MACT, we find that, on this aspect,it has followed judgment of Arun Sondhi v. Delhi TransportCorporation, (2001) ACJ 1779 and has awarded the compensation atRs.4,08,000/-. It has also added Rs.75,000/- on account of 40% permanent M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCECO. LTD. & OTHERS [A. K. SIKRI, J.]

disability on the ground that apart from resulting in loss of income, it hassevere impact on the life of the appellant as a whole. The figure ofRs.4,08,000/- is calculated in the following manner:

“42. Learned counsel for petitioner has argued at length that asubstantial amount of compensation is required to be awarded tothe petitioner on account of loss of earning capacity in future. Ithas been stated that on account of injuries suffered in the accidentthe income of the petitioner has reduced to 60% of what he couldhave earned otherwise. I consider that this argument raised bylearned counsel for the petitioner cannot be accepted. Thepetitioner was student at the time of accident. He started hiscareer after around 5 years of accident. I do not say that theinjuries did not have an adverse impact on the petitioner, but toquantify the same in the manner claimed by the petitioner maynot be just. In this regard, I consider that the guidance can betaken from the case of Arun Sondhi v. Delhi TransportCorporation, 2001 ACJ 1779. In this case, the injured was astudent of 21 years and he had suffered disability of 100%. InL.P.A. the loss of future earning was assessed at Rs.5000/- p.m.and after adopting multiplier of 16 compensation of Rs.10,80,000/- was allowed. If the same principle is adopted and future earningis taken at Rs.5000/- p.m. and the disability of 40%, the monthlyloss of income comes to Rs.2000/- p.m. or Rs.24,000/- p.a. It isa settled proposition that in the case of permanent disability themultiplier is to be adopted according to the age at the time of trial.In this case adopting this principle if the multiplier of 17 is adoptedthe compensation on account of loss of future income comes toRs.24,000/- x 17 = Rs.4,08,000/-.”

26. As can be seen from the above, loss of future earning isassessed at Rs.2,000/- per month or Rs.24,000/- per annum. In theprocess, the MACT has not considered future prospects having regardto the relevant facts pointed out above which should have been takeninto consideration. At the same time, it is the functional disability whichhas to be kept in mind. Though, not very seriously, the functional capacityhas been impaired because of the disability suffered by the appellant asthe appellant cannot run around like other young advocates of his age.Going by the overall circumstances, we are of the opinion that in case of ABC

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Athe appellant, loss of future earning can be fixed at Rs.5,000/- per monthi.e. Rs.60,000/- per annum on which multiplier of 18 is to beapplied. Calculated in this manner, the loss future earning comes toRs.10,80,000/-. The appellant, thus, would be paid another sum ofRs.6,54,000/- under this head along with interest as awarded by theCourt below. We may place on record the statement of Mr. Arun MohanBthat the appellant has volunteered to give this amount to any Governmentor public charitable organisation working towards road safety. Weappreciate this gesture of the appellant. We leave it to the appellant todonate the amount to any particular organisation of his choice.Alternatively, it can also be given for MAMC project by the appellant.CChoice would entirely be that the appellant.

(II) With this, we advert to the second proposition advanced byMr. Arun Mohan. At the outset, we would like to point out that thisaspect pertains to the reforms that can be brought insofar as payment ofcompensation to the victims of road accidents is concerned. We wouldDalso like to commend the suggestions given by Mr. Arun Mohan to bringabout such reforms which are visionary in nature. The two aspectswhich he has highlighted are taken up for discussion in seriatim.

(A) ROAD SAFETY AND COMPENSATION:

(A) ROAD SAFETY AND COMPENSATION:

27. Focus here is to ensure access to justice for road accidentEvictims and also to bring about a mechanism which prevents delays andother obstacles in awarding compensation to road accident victims. Thesuggestion of Mr. Arun Mohan for establishing a MAMA in every Districtis worthy of acceptance. Whatever steps are taken by the authoritiesfor reducing road accidents, harsh reality is that accidents would keepFon happening. There may be a possibility of reducing the number ofroad accidents, but occurrence thereof cannot be totally eliminated. Suchaccidents, particularly fatal accidents, would always lead to filing of claimsby the victims and/or kith and kin of victims, for compensation. Fatalaccidents also trigger prosecution of the driver who was negligent andrash in driving which caused the accident. Insofar as disputes regardingGclaims are concerned, there is a need to resolve the same at the earliestinasmuch as compensation money may be badly needed by the claimantsfor so many reasons and delay may bring insurmountable sufferings ofvarious kind. Having regard to the fact that large number of accidents are giving rise to phenomenal quantum jump in such cases, methodsneed to be adopted for quick resolution. Here, mediation as a conceptof dispute resolution, even before dispute becomes part of adversarialadjudicatory process, would be of great significance. Advantages ofmediation are manifold. This stands recognised by the Legislature aswell as policy makers and need no elaboration. Mediation is here tostay. It is here to evolve. It is because of the advantages of mediationas a method here to find new grounds. It is here to prosper, as its timehas come. It is now finding statutory recognition and has been introducedin few Statutes as well. Examples are the Companies Act, Insolvencyand Bankruptcy Code, Commercial Courts Act etc. In these enactmentsprovisions are made even for pre-litigation mediation by making thisprocess mandatory. There is, in any case, umbrella provisions in theform of Section 89 of the Code of Civil Procedure which, inter alia,provides for court annexed mediation as well. Time is ripe now to havesimilar mechanism for settling accident claims as well. Therefore, thesuggestion of establishing MAMA is laudable. We recommend to theGovernment to examine the feasibility of setting up MAMA by makingnecessary amendments in the Motor Vehicles Act itself. In fact, theway mediation movement is catching up in this country, there is a direneed to enact Indian Mediation Act as well.

28. Till the time such an amendment is made by the Parliament,National Legal Services Authority (NALSA) should take up this workas a project. A complete report/module be made about the functioningof Motor Accident Mediation Cell (MAMC). This exercise be completedwithin a period of two months. Thereafter, this project can be sharedwith all State Legal Services Authorities (SLSA) so that State LegalServices Authorities implement the same through their respective DistrictLegal Services Authorities (DLSAs).

29. There is Mediation and Conciliation Project Committee(MCPC) in the Supreme Court which takes various policy decisions forbetter working of mediation, including court annexed mediation.Broadening the structure of MCPC, so as to have proper coordinationwith High Court Mediation Centers as well as Mediation Centers atDistrict Court Level is achieved. Thus, NALSA can even considerentrusting the project of MAMC to MCPC as well.

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1112 SUPREME COURT REPORTS [2019] 3 S.C.R.

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A30. In a book titled ‘Road Accidents: Prevention, Attention andCompensation’, authored by Mr. Arun Mohan, Senior Advocate variousaspects pertaining to access to justice to road victims are deliberatedupon. There is a specific chapter on the establishment of MAMA whichcan be of immense help to the NALSA for preparing and finalizing theproject. NALSA would be well-advised to take into consideration theBsuggestions and proposals given in that book. It may, inter alia, make aprovision for the accident investigator to compulsorily send a copy ofreport to MAMC or email to National Road Safety Council. Forwardingthe copy to MAMC shall facilitate mediation, on the other hand givinginformation to National Road Safety Council would help the council toCtake measures for preventing such accidents in future.

(B) FAST TRACKING DISPOSAL OF CASES BY MACTs:

31. Establishment of MAMA/MAMC is for the purpose ofresolving the claims before the case is filed in the MACT. It is a matterof common knowledge that for amicable settlement of the cases pendingDbefore MACT, ADR in the form of Lok Adalat is resorted to, which hasachieved tremendous success over a period of time. These Lok Adalatsare also organised by the Legal Services Authorities. Settlement ofcases by Lok Adalats have their own pros and cons. Be as it may,resort to Lok Adalat should continue because of its own advantages.E

32. Notwithstanding, the aforesaid ADR methods, adjudicatoryprocess before the MACTs is indispensable. There cannot be a guaranteethat 100% cases would be settled through mediation or Lok Adalat.Therefore, there is a dire need for deciding these cases without delaysand within reasonable period. The Delhi High Court has given fewFjudgments providing for mechanism to speed up the disposal of suchcases and to ensure that schemes are settled within a period of 90/120days from the date of accident. In nutshell, these directions include thaton the occurrence of accident, the police which comes into the picture inthe first instance, should complete the investigation and along with filingof FIR before the concerned Court of Metropolitan Magistrate, copiesGare sent to MACT as well as Insurance Company also. InsuranceCompany is supposed to look into the same to find out as to whether theclaim is payable and within 30 days it should respond to MACT andonce all these documents are before the MACT in the form of evidenceetc. as well it would enable the MACT to decide the case within 30

M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCECO. LTD. & OTHERS [A. K. SIKRI, J.]

days. The case where entire procedure is articulated is judgment dated16[th] December, 2009 in FAO No. 843 of 2003. This Court has alsogiven its imprimatur in Jaiprakash v. National Insurance Company(SLP(Civil) No. 11801-11804 of 2005) in its order dated 13[th] May,2016 in the following manner:

“Insofar as the said suggestion is concerned, learned SolicitorGeneral drew our attention to the response filed before us onbehalf of the General Insurance Council, in particular paragraph4, which states that presently the procedure suggested inParagraph 23 is being followed by the Insurance Companies inDelhi by way of a Scheme called “Claims Tribunal AgreedProcedure” which was formulated by the Delhi High Court in thejudgment dated 16.12.2009 passed in FAO No.843 of 2003 inRajesh Tyagi & Ors. v. Jaibir Singh 3 & Ors. It is also mentionedtherein that Tribunal as well as the Legal Service Authority aretaking effective steps to implement the said procedure, which isbeing carried out in the National Capital Territory of Delhi. Inparagraph 5, it is further submitted that since this procedure hasbeen successful in Delhi it can be extended on pan India basis.The agreed procedure has also been filed as Annexure R5 withthe response filed on behalf of the General Insurance Council.

“We have also perused the procedure, which has been placedbefore us as Annexure R5 with the response which, in ourview, appears to be a comprehensive one and that we canissue further directions to the Registrar General of the DelhiHigh Court to ensure that procedure is strictly followed insofaras Delhi is concerned and also circulate the said procedure toall the other High Courts and the Registrar General of all theother High Courts are directed to ensure that the said procedureis implemented through the Motor Accidents Claims Tribunalsin coordination with the Legal Service Authorities as well asthe Director General of Police of the States concerned.

The Registry of the Supreme Court is directed to forward a copyof this order along with Annexure R5 (pages 32 to 46 in theresponse filed on behalf of the General Insurance Council) to allthe High Courts including the Delhi High Court to ensurecompliance of the present order.”

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A33. Vide order dated 6[th] November, 2017 in Jaiprakash case,this Court modified its order dated 13[th] May, 2016 and directed all Statesto implement the Modified Claims Tribunal Agreed Procedure formulatedby Delhi High Court on 12[th] December, 2014. The copy of the ModifiedClaims Tribunal Agreed Procedure was directed to be circulated to theBRegistrar General of each High Court for necessary compliance. Therelevant part of the said order is reproduced hereunder:

“It is also pointed out by learned amicus curiae that the orderpassed by Justice Midha referred to in our order of 13th May,2016 was actually modified by Justice Midha on 12th December,C2014. The order dated 13th May, 2016 will, therefore, standmodified to the extent that Justice Midha has himself modified hisearlier order on 12th December, 2014. The Registry will send acopy of this order as well as the order passed by Justice Midha on12th December, 2014 to the Registrar General of each High CourtDfor necessary information and compliance.”34. This needs to be followed at All India Level. NALSA shouldtake up and monitor the same as well in coordination and cooperationwith various high courts to facilitate the same.

E(C) Ensuring receipt of compensation in the safe hands ofvictims and/or kiths and kins of victims:

35. Mr. Arun Mohan has suggested that Government may frameprocedures and schemes in this behalf. In particular LIC/RBI can providefor availability of annuity services in consultation with Pension FundFRegulatory and Development Authority and the commercial banks/insurance companies. To facilitate the same, the learned senior counselhas given two flowcharts, one under the existing law and the other onestablishment of MAMA. The details for framing such procedure andschemes are given in the book of Mr. Arun Mohan referred to above.GWe impress upon the Government to look into the feasibility of framingsuch schemes and for the availability of annuity certificates. This exercisemay be done within the period of six months and decision be takenthereupon.

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36. In addition, we would also like to mention that the Delhi HighCourt (speaking through J.R. Midha, J.) in Rajesh Tyagi v. JaiveerSingh and Others (FAO No. 842 of 2003) undertook the exercise offraming Motor Accident Claims Annuity Deposit Scheme (MACADScheme) in cooperation with Indian Banks Association. Purpose ofinvolving the banks was to ensure that the Scheme is implemented throughthe banks. In its order dated 7[th] December, 2018 passed in the aforesaidcase, the learned Judge recorded that 21 banks had taken decision toimplement MACAD Scheme which was approved by the Court on 1[st]May, 2018. Operative documents of these 21 banks were taken onrecord. The court directed that sets of these operative documents befurnished to the Registrar General of the High Court so that these arecirculated to all the MACTs. Further, directions for implementation ofthe said Scheme are given. Therefore, we would like to reproduceorder dated 7[th] December, 2018 in its entirety.

“1. Mr. Lalit Bhasin, learned counsel for Indian Bank Associationhas handed over copies of the operative documents of 21 Bankswhich have implemented Motor Accident Claims Annuity DepositScheme (MACAD Scheme) approved by this Court on 01st May,2018. The compilations of the operative documents of 21 banksare taken on record. Learned counsel for the Indian BankAssociation shall furnish the sets of the operative documents tothe Registrar General for being circulated to all the ClaimsTribunals. 2. The Registrar General is directed to circulate theaforesaid compilation to all the Claims Tribunals for beingimplemented forthwith. The Claims Tribunals shall disburse theawarded amount to the claimants in a phased manner in terms ofthe order dated 01st May, 2018 and the award amount be disbursedthrough MACAD Scheme. 3. All the Banks are directed to appointa Nodal Officer within four weeks. Learned counsel for the IBAshall compile the list of all the Nodal Officers of the Banks withtheir respective addresses, phone numbers as well as e-mailaddresses and submit the same to the Registrar General who shallcirculate the list of Nodal Officers to all the Claims Tribunals.The Nodal Officer of each Bank shall ensure the implementationof the MACAD Scheme by their branches. The Claims Tribunalshall send the copy of the disbursement order by e-mail to theNodal Officer of that Bank who shall ensure the disbursement by AB

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1116 SUPREME COURT REPORTS [2019] 3 S.C.R.

Athe Bank within three weeks of the receipt of the e-mail. 4. TheIndian Bank Association and Delhi State Legal Services Authorityshall give adequate publicity to MACAD Scheme in the print aswell as digital media. 5. Claims Tribunal Agreed Procedure interms of the order dated 15th December, 2017 is further modifiedto incorporate the directions contained in orders dated 18th January,B2018, 09th March, 2018, 01st May, 2018, 20th July, 2018 and 07thSeptember, 2018. The Modified Claims Tribunal Agreed Procedureis annexed to this order. 6. The Registrar General shall circulatethe Modified Claims Tribunal Agreed Procedure to all the ClaimsTribunals. The Claims Tribunals, Delhi Police and InsuranceCCompanies are directed to implement the Modified Claims TribunalAgreed Procedure with effect from 01st January, 2019. 7. Learnedamicus curiae submits that the Committee is deliberating upon theissues referred to it by this Court. Let the final report of theCommittee be submitted before this Court on the next date ofDhearing. 8. List for reporting compliance on 08th February, 2019at 02:30 P.M. 9. This Court appreciates the assistance renderedby Mr. Lalit Bhasin, learned counsel for Indian Bank Associationfor implementation of MACAD Scheme. 10. Copy of this orderalong with Modified Claims Tribunal Agreed Procedure be sentEto the Registrar General of this Court, National Legal ServicesAuthority (NALSA), Delhi State Legal Services Authority(DSLSA), Delhi Police as well as General Insurance Council (5thFloor, Building No.14, National Insurance Building, Jamshedji TataRoad, Churchgate, Mumbai-400020). General Insurance Councilshall circulate this order to all the Insurance Companies. 11. CopyFof this order be given dasti to learned counsel for the parties aswell as learned counsel for IBA and Delhi Police under signatureof Court Master.”

37. Thus, direction for implementation of the ‘Claims TribunalGAgreed Procedure’ which is substituted by modified procedure, as notedabove, are already there. However, we find that there is no properimplementation thereof by the Claims Tribunals. We, thus, direct thatthere should be programmes from time to time, in all State JudicialAcademies to sensitizing the presiding officers of the Claims Tribunals, H

Senior Police Officers of the State Police as well as Insurance Companyfor the implementation of the said Procedure.

38. The Modified Claims Tribunal Agreed Procedure as approvedby High Court of Delhi in its aforesaid order dated 7[th] December, 2018has the propensity to ensure speedy disposal of MACT cases. Likewise,Operative Documents of 21 documents which have implemented AnnuityDeposit Scheme can ensure that compensation is delivered to the personsfor whom it is meant. It has the element of annuity payments as well.There is, therefore, a need to implement the MACAD Scheme by theClaims Tribunals in the entire country. We direct accordingly. We alsodirect 21 banks to implement its operative documents on All India basis.

39. We sum up the various directions/recommendationshereinbelow:

(a) We impress upon the Government to also consider the feasibilityof enacting Indian Mediation Act to take care of various aspects ofmediation in general.

(b) The Government may examine the feasibility of setting upMAMA by making necessary amendments in the Motor Vehicles Act.For this purpose, it can consider the two flow charts given by the appellant.

(c) In the interregnum, NALSA is directed to set up Motor AccidentMediation Cell which can function independently under the aegis ofNALSA or can be handed over to MCPC. Such a project should beprepared within a period of two months and it should start functioningimmediately thereafter at various levels as suggested in this judgment.We reiterate the directions contained in order dated November 6, 2017in Jai Prakash case for implementation of the latest Modified ClaimsTribunal Agreed Procedure. For ensuring such implementation, NALSAis directed to take up the same in coordination and cooperation withvarious High Courts. MACAD Scheme shall be implemented by allClaim Tribunals on All India basis. 21 Banks, Members of Indian BanksAssocation, who had taken decision to implement MACAD Schemewould do the same on All India basis.

(d) We impress upon the Government to look into the feasibility offraming necessary schemes and for the availability of annuity certificates.

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AThis exercise may be done within the period of six months and decisionbe taken thereupon.

(e) Likewise, we direct that there should be programmes fromtime to time, in all State Judicial Academies, to sensitizing the PresidingOfficers of the Claims Tribunals, Senior Police Officers of the StateBPolice as well as Insurance Company for the implementation of the saidProcedure.

The appeals are disposed of in the aforesaid manner.

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Nidhi Jain

Appeals disposed of.

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