Featured image for Supreme Court Judgment dated 16-06-2020 in case of petitioner name Savitha vs M/s Chodamandalam M.S. General
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Compensation for Housewife in Motor Accident: Supreme Court Increases Award

The case of Savitha vs. M/s Chodamandalam M.S. General Insurance Co. Ltd. & Others concerns the adequacy of compensation granted to a housewife who suffered severe injuries in a motor accident. The Supreme Court’s judgment addressed the assessment of compensation, considering factors like disability, loss of future income, and loss of amenities.

Background of the Case

On December 25, 2008, the appellant, Savitha, was traveling in a bus belonging to respondent no.3 when a lorry, being driven rashly and negligently, collided with the bus. As a result of the accident, Savitha suffered nine injuries, seven of which were classified as grievous. The orthopedic surgeon who treated her, P.W.4, testified that she had suffered 32% total body disability and was incapable of performing household work.

The Motor Accident Claims Tribunal (MACT) initially awarded a total compensation of Rs.5,82,500/- with interest at 6%. The High Court, upon appeal, reassessed and enhanced the compensation to Rs.6,50,350/-. Dissatisfied with this amount, the appellant approached the Supreme Court seeking a higher compensation.

Petitioner’s Arguments

The counsel for the appellant argued the following:

  • The assessment of notional income at Rs.4,250/- per month was inadequate. The appellant claimed she was earning Rs.6,000/- per month from her tailoring business, and this should have been considered for calculating loss of income.
  • The medical expert (P.W.4) clearly stated that the appellant had suffered 32% whole body disability, but the High Court arbitrarily reduced this figure to 20%, leading to lower compensation.
  • The amount awarded towards loss of amenities and future happiness was only Rs.25,000/-, which was grossly inadequate considering the extent of disability and permanent physical limitations.

Respondent’s Arguments

The insurance company, represented by the counsel for respondent no.1, countered the appellant’s claims with the following arguments:

  • The High Court had already increased the compensation amount reasonably, and there was no need for further enhancement.
  • The appellant failed to provide documentary proof of her alleged tailoring business, justifying the reliance on notional income assessment.
  • The Tribunal and the High Court had adequately examined the evidence and fairly determined the compensation amount.

Supreme Court’s Observations

After carefully considering the arguments and evidence, the Supreme Court made the following key observations:

1. Notional Income Assessment: The court agreed that the appellant had failed to provide proof of her tailoring business, and therefore, the assessment of Rs.4,250/- per month as notional income was justified.

2. Whole Body Disability: The court found that the medical expert (P.W.4) had unambiguously assessed the whole body disability at 32%. The Tribunal had reduced this to 15%, while the High Court further increased it to 20%. The Supreme Court ruled that there was no reason to disregard the expert’s assessment and set the whole body disability at 32%.

3. Loss of Future Earning Capacity: Based on the revised disability percentage of 32%, the court recalculated the compensation under this head:

  • Rs.4,250 (monthly income) × 12 × 13 × 32% = Rs.2,12,160/-

4. Loss of Amenities and Future Happiness: The court found that the award of Rs.25,000/- was insufficient and increased it to Rs.50,000/-, considering the appellant’s lifelong physical impairment.

Final Judgment

The Supreme Court modified the compensation award as follows:

  • The total compensation amount was enhanced to Rs.7,54,910/-, up from the High Court’s award of Rs.6,50,350/-.
  • Interest was to be paid at the rate of 6% per annum from the date of the claim petition until realization.
  • The appeal was allowed, and the revised compensation amount was to be paid promptly.

Conclusion

This ruling is significant in recognizing the economic value of a housewife’s work in motor accident claims. The judgment reinforces the principle that courts must fairly assess compensation by considering the severity of injuries, disability, and its impact on future earning capacity. The decision further ensures that compensation remains just and reasonable, preventing arbitrary reductions in disability assessment.


Petitioner Name: Savitha.
Respondent Name: M/s Chodamandalam M.S. General Insurance Co. Ltd. & Others.
Judgment By: Justice R.F. Nariman, Justice Navin Sinha, Justice B.R. Gavai.
Place Of Incident: India.
Judgment Date: 16-06-2020.

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