ICICI LOMBARD GENERAL INSURANCE CO. LTD. versus AJAY KUMAR MOHANTY & ANR. on 6 March 2018

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SUPREME COURT REPORTS

[2018] 3 S.C.R.

AICICI LOMBARD GENERAL INSURANCE CO. LTD.

v.

AJAY KUMAR MOHANTY & ANR.

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(Civil Appeal No. 7181 of 2015)

MARCH 06, 2018

[DIPAK MISRA, CJI, A. M. KHANWILKAR AND

DR. D. Y. CHANDRACHUD, JJ.]

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Motor Vehicles Act, 1988: s. 166 – Compensation –Computation of – Rash and negligent act of the driver of the vehicle– Claimant met with an accident sustaining disability – Evidence ofthe doctor that the disability to the extent of 55 % – Award ofRs. 22,85,322/- as compensation by the tribunal, however, HighDCourt reduced the amount to Rs. 12,00,000/- – On appeal, held:While calculating the income, the tribunal committed an error ofcomputation – Claim for compensation on the basis that the disabilitywas permanent not established – Annual loss of income comes toRs. 79,877/- – Disability being of a temporary nature, compensationof Rs. 5 lakhs is awarded towards loss of income, Rs. 2 lakhs towardsEtrauma, pain and suffering, and Rs. 2,09,622/- towards medicalexpenses – Thus, Rs. 9,10,000/- awarded with interest @ 9 per centp.a. from the date of the filing of the petition.

Claimant sustained disability as a result of a motor accident.Tribunal awarded Rs. 22,85,322/- as compensation. Appellant-FInsurer filed an appeal challenging the compensation amount.The High Court reduced the compensation to Rs. 12,00,000/-and interest from 7.5 per cent per annum to 7.0 per cent perannum. Hence, the present appeal.

GDisposing of the appeals, the Court

HELD: 1.1 On perusing the order of the tribunal, there ismerit in the submission of the insurer that while calculating theincome, the tribunal committed an error of computation. Thetribunal on the basis of the income tax returns for 2007, 2008Hand 2009 arrived at an average income of Rs. 1,45,231/-. However, the tribunal thereafter noted that the average income comes toRs. 2,62,372/-. Ultimately, the tribunal proceeded on the annualincome of Rs. 2,22,000/- on the basis of the testimony of theclaimant that he was earning Rs. 18,500/- per month. This iscontradictory. On the basis of the finding of the tribunal that theaverage income of the claimant for the previous three years wasRs. 1,45,231/-, it would be necessary to take into account theevidence of PW2-doctor that the disability is to the extent of 55per cent. In other words, the loss of earning as a result of thesaid disability would work out to Rs. 79,877/- per year. [Para 7][47-C-E]

1.2 In the instant case, the doctor admitted to having madean interpolation in the disability certificate. The evidence indicatesthat the disability is temporary and not permanent. The doctoradmitted that the disability certificate indicated a tick mark onthe word ‘permanent’ by mistake. He further stated that thedisability in the instant case was likely to improve. Having regardto all the facts and circumstances, the claim for compensation onthe basis that the disability was permanent was clearly notestablished. [Para 11, 12] [50-B-D]

1.3 There was no basis to award an amount ofRs.20,75,700/-. The tribunal awarded an amount ofRs. 2,09,622/- towards medical expenses. The figure of an annualloss of income of Rs. 79,877/- is accepted. The disability being ofa temporary nature, compensation of Rs. 5 lakhs is awardedtowards loss of income. Compensation of Rs. 2 lakhs is awardedtowards trauma, pain and suffering. In addition, the claimant isentitled to medical expenses of Rs. 2,09,622/-. The ends of justicewould be met by directing a payment of Rs. 9,10,000/- . Theclaimant would be entitled to interest at the rate of 9 per cent perannum from the date of the filing of the petition. The impugnedjudgment and order of the High Court is set aside. [Para 13][50-F]

Sri Laxman @ Laxman Mourya v Divisional Manager,Oriental Insurance Co. Ltd (2011) 12 SCALE658 ; Govind Yadav v New India Insurance CompanyLimited (2011) 10 SCC 683 ; R.D. Hattangadi v PestControl (India) (P) Ltd. (1951) 1 SCC 551 ; Nizam’s A

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AInstitute of Medical Sciences v Prasanth S. Dhananka[2009] 9 SCR 313 : (2009) 6 SCC 1 ; Reshma Kumariv Madam Mohan [2009] 11 SCR 305 : (2009) 13 SCC422 ; Arvind Kumar Mishra v New India Assurance Co.Ltd .[2010] 11 SCR 857 : (2010) 10 SCC 254 ; RajKumar v Ajay Kumar [2010] 13 SCR 179 : (2011) 1BSCC 343 ; Subulaxmi v MD Tamil Nadu State TransportCorporation [2012] 9 SCR 962 : (2012) 10 SCC 177– referred to.

Case Law Reference

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7181Fof 2015.

From the Judgment and Order dated 15.04.2015 of the HighCourt of Orissa at Cuttack in M.A C A. No. 1020 of 2014

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WITH

Civil Appeal No.1879 of 2016.

Ms. Neerja Sachdeva, Ms. Meera Mathur, Pranaya KumarMohapatra, Advs for the Appellant.

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The Judgment of the Court was delivered by DR. D. Y. CHANDRACHUD, J. 1. In a claim for compensationunder Section 166 of the Motor Vehicles Act, arising out of a disabilitysustained by the claimant as a result of a motor accident, the Tribunalawarded an amount of Rs. 22,85,322/-. The High Court in an appealfiled by the insurer reduced the compensation to Rs. 12,00,000/-Interestwas reduced from 7.5 per cent per annum to 7.0 per cent. The onlyreasoning contained in support of the order of the High Court reads asfollows:

“Considering the grounds taken in appeal and the submissionsmade by the learned counsel for the parties and keeping in viewthe findings of the learned Tribunal given in the impugned awardwith regard to the quantum of compensation amount awardedand the basis on which the same has been arrived at, I feel, theinterest of justice would be best served, if the awardedcompensation amount of Rs. 22,85,322/- is modified and reducedto Rs. 12,00,000/-. The award of interst @ 7.5% per annum isalso modified and reduced to 7% only. Accordingly, the claimantis entitled to the modified compensation amount of Rs. 12,00,000/- along with interest @ 7% per annum from the date of filing ofthe Claim application. The impugned award is modified to thesaid extent.”

2. Ex-facie, there has been no application of mind by the HighCourt to the evidence on the record and to the relevant facts andcircumstances. The above extract cannot be regarded as the expressionof a reasoned view. Ordinarily, we would have remitted the case back tothe High Court for a fresh determination. However, we are inclined notto do so in order to prevent a miscarriage of justice which delay in itselfis likely to occasion. The accident took place on 25 April 2009 when theappellant was 32 years of age. The judgment of the Tribunal was renderedon 26 February 2014. The High Court delivered its judgment on 15 April2015. Leave was granted by this Court on 25 February 2016. Hence,we have heard the learned counsel appearing on behalf of the contestingparties on merits and proceed to resolve the dispute so as to renderfinality to the case.

3. The accident in question took place on 25 April 2009 when theclaimant was proceeding from Keonjhar to Badbil. The vehicle fell over B

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Aa bridge of NH 215. The claimant was rescued by the villagers and wasshifted to hospital for treatment. He suffered from a fracture to the leftelbow and femur. The Tribunal entered a finding of fact that the evidenceof the claimant remained unshaken and that the accident was caused bythe rash and negligent act of the driver of the vehicle. The vehicle wasinsured with ICICI Lombard General Insurance Company Ltd. (theBinsurer).

4. While assessing the claim for compensation, the Tribunal notedthe evidence of PW2, the Doctor who had issued a disability certificateto the claimant. The Doctor opined that the disability was temporary andnot permanent. It appears that an admission was elicited during the courseCof the cross-examination to the effect that he had made certaininterpolations in the disability certificate without the consent or knowledgeof the CDMO. The Tribunal held that whether the disability waspermanent or temporary, it was duty bound to make an assessment.From the income tax returns of the claimant for 2007, 2008 and 2009,Dthe Tribunal observed that his annual income would work out to Rs.1,45,231/-. The Tribunal thereafter observed that the annual income wasRs. 2,62,372/-. The Tribunal however accepted the evidence of theclaimant which placed his income at a lower amount of Rs. 2,22,000/-annually on the basis of the evidence of the claimant that as a B-Classcontractor, he was earning Rs. 18,500/- per month. The Tribunal appliedEa multiplier of 17 per cent. Treating the disability to be 55 per cent, onthe basis of the certificate of the District Medical Board, Bhadrak, theTribunal computed the compensation at Rs. 20,75,700/-. In addition, anamount of Rs. 2,09,622/- was awarded on account of medical expenses.A total quantum of Rs. 22,85,322/- was awarded.

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5. Learned counsel appearing on behalf of the insurer submitsthat the order of the Tribunal is contradictory and contrary to the weightof the evidence. The error has been compounded by the failure of theHigh Court to attribute reasons. Counsel submits that the Tribunalproceeded on the manifestly erroneous basis that the claimant sufferedGa permanent disability. It was urged that the evidence of PW 2, thedoctor, indicates that the disability certificate was unauthorizedlyinterpolated by him. The admissions of the doctor in the course of hisevidence that the injury was of a temporary nature and was likely toimprove have been ignored. Moreover, it has been submitted that thejudgment of the Tribunal, especially paragraph 10, would indicate thatH

the Tribunal has committed serious and apparent errors of computationand there is an internal inconsistency in its reasoning.

6. On the other hand, learned counsel appearing on behalf of theclaimant submits that while PW 2 admits having interpolated the disabilitycertificate, this should in fact weigh in favour of the claimant as thenature of the interpolation would indicate. Like the insurer, the claimantalso has a grievance in regard to the fact that the order of the HighCourt is not reasoned. However, what the claimant submits is that therewas no justification for the High Court to reduce the quantum ofcompensation awarded by the Tribunal.

7. On perusing the order of the Tribunal, we find merit in thecontention of the insurer that while calculating the income in paragraph10 of its order, the Tribunal has committed an error of computation. TheTribunal has on the basis of the income tax returns for 2007, 2008 and2009 arrived at an average income of Rs. 1,45,231/-. However, theTribunal has thereafter noted that the average income comes to Rs.2,62,372/-. Ultimately, the Tribunal proceeds on the annual income ofRs. 2,22,000/- on the basis of the testimony of the claimant that he wasearning Rs. 18,500/- per month. This is contradictory. In our view, on thebasis of the finding of the Tribunal that the average income of the claimantfor the previous three years was Rs. 1,45,231/-, it would be necessary totake into account the evidence of PW2 that the disability is to the extentof 55 per cent. In other words, the loss of earning as a result of theaforesaid disability would work out to Rs. 79,877/- per year.

8. In arriving at the quantification of compensation, we must beguided by the well-settled principle that compensation can be grantedboth on account of permanent disability as well as loss of future earnings,because one headrelates to the impairment of the person’s capacity andthe other to the sphere of pain and suffering on account of loss ofenjoyment of life by the person himself.

9. In SriLaxman @ Laxman Mourya v Divisional Manager,Oriental Insurance Co. Ltd[1], this Court held thus:

“The ratio of the above noted judgments is that if the victim of anaccident suffers permanent or temporary disability, then effortsshould always be made to award adequate compensation not onlyfor the physical injury and treatment, but also for the pain, suffering 12011 (12) SCALE 658

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48SUPREME COURT REPORTS

Aand trauma caused due to accident, loss of earnings and victim’sinability to lead a normal life and enjoy amenities, which he wouldhave enjoyed but for the disability caused due to the accident.”

In Govind Yadav v New India Insurance CompanyLimited[2],this Court after referring to the pronouncements in R.D.BHattangadi v Pest Control (India) (P) Ltd.[3] , Nizam’s Institute ofMedical Sciences v Prasanth S. Dhananka[4], Reshma Kumari vMadam Mohan[5], Arvind Kumar Mishra v New India AssuranceCo. Ltd.[6], Raj Kumar v Ajay Kumar[7] held thus:

“18. In our view, the principles laid down in Arvind Kumar MishraCv. New India Assurance Co. Ltd. and Raj Kumar v. Ajay Kumarmust be followed by all the Tribunals and the High Courts indetermining the quantum of compensation payable to the victimsof accident, who are disabled either permanently or temporarily.If the victim of the accident suffers permanent disability, thenefforts should always be made to award adequate compensationDnot only for the physical injury and treatment, but also for the lossof earning and his inability to lead a normal life and enjoy amenities,which he would have enjoyed but for the disability caused due tothe accident.” (Id at page 693)

These principles were reiterated in a judgment delivered by oneEof us (Justice Dipak Misra, as the learned Chief Justice then was) inSubulaxmi v MD Tamil Nadu State Transport Corporation[8].

10. In the present case, the evidence of PW2 Dr Umakanta Jenaindicates that he had initially, before issuing the disability certificate,examined the shoulder joint, elbow joint and left femur as per the dischargeFcertificate. The discharge certificate indicated that the injuries sustainedwere grievous in nature. The Doctor initially placed a tick mark over theword ‘permanent’. However, subsequently he made an interpolation bycutting the word ‘permanent’ and “not likely to improve”. The evidenceof the Doctor is reproduced below, insofar as it is material:

G2(2011) 10 SCC 6833(1951) 1 SCC 5514(2009) 6 SCC 15(2009) 13 SCC 4226(2010) 10 SCC 2547(2011) 1 SCC 343H8(2012) 10 SCC 177

ICICI LOMBARD GENERAL INSURANCE CO. LTD. v. AJAYKUMAR MOHANTY & ANR. [DR. D.Y. CHANDRACHUD, J.]

“4) The disability is temporary but not permanent. The disability islikely to improve. The disability certificate is the original one. Bymistake, I gave a tick mark on the word “permanent”. Per dayabout one hundred disability certificates are issued. So, I committedthis wrong. I have not mentioned which documents I verified priorto issuance of this disability certificate. There is nothing in thecertificate to show that there was nailing. Particularly in this case,the disability may improve. Any fracture of extremity will causedisability. I cannot give any authority to the opinion of my abovesentence.

5) It is not a fact that the percentage of disability has been madeby me being gained over by the injured and that there was nodisability. It is not a fact that being gained over by the injured Igave this disability certificate.

TO COURT:-

Q. No. 1:- Whether the certificate issued by youis creating confusion?Ans;Yes.

Q. No. 2: Whether you will be paid T.A. andD.A. from State Exchequer for yourmistake?

Ans:,No, I should be paid.

Q. No. 3:- Whether my attendance in the court is a govt. duty or C.L.?

Ans:

For my mistake I should take C.L.

Q. No. 4:- Can you explain why you interpolatedthe certificate which was signedby 4 doctors including CDMO,Bhadrak?Ans:I cannot explain.

Q. No. 5:- Was not it desirable to obtain theconsent of other three doctorsbefore cutting and putting tick markand making interpolation on analready prepared public document?

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AAns:I should have obtained the consent andsignature of all other signatories beforeinterpolating the document.”

11. The doctor has admitted to having made an interpolation in theBdisability certificate. The above evidence indicates that the disability istemporary and not permanent. The Doctor admitted that the disabilitycertificate indicated a tick mark on the word ‘permanent’ by mistake.He further stated that the disability in the present case was likely toimprove.

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C12. Having regard to all these facts and circumstances, we findmerit in the contention that the claim for compensation on the basis thatthe disability was permanent was clearly not established. There was nobasis to award an amount of Rs. 20,75,700/-. The Tribunal has awardedan amount of Rs. 2,09,622/- towards medical expenses. We accept thefigure of an annual loss of income of Rs. 79,877/-. The disability being ofDa temporary nature, we award compensation of Rs. 5 lakhs towardsloss of income. We allow compensation of Rs. 2 lakhs towards trauma,pain and suffering. In addition, the claimant is entitled to medical expensesof Rs. 2,09,622. We are of the view that the ends of justice would bemet by directing a payment of Rs. 9,10,000/-. The claimant shall beEentitled to interest at the rate of 9 per cent per annum from the date ofthe filing of the petition. The insurer shall deposit the compensation alongwith interest before the Tribunal within twelve weeks which shall bedisbursed to the claimant on proper identification.

13. For the above reasons, we set aside the impugned judgmentFand order of the High Court. Both the appeals are disposed of in termsof the directions issued above. There shall be no order as to costs.

Nidhi Jain

Appeals disposed of.

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