Motor Accident Compensation Enhanced: Supreme Court Grants Higher Relief for 75% Disability

The Supreme Court of India, in the case of Anant v. Pratap & Another, significantly increased the compensation awarded to a motor accident victim, setting an important precedent for determining just compensation. The judgment, delivered on August 21, 2018, by a bench comprising Justice R.F. Nariman and Justice Indu Malhotra, ruled that the claimant was entitled to enhanced compensation of Rs. 20,29,000, with an interest rate of 9% per annum.

Background of the Case

The appellant, Anant, a 29-year-old driver, sustained 75% permanent disability in a motor accident on October 16, 2009. He and his wife were traveling on a motorcycle when a Maruti car, driven negligently by Respondent No. 1, Pratap, collided with them while attempting to overtake a state transport bus. The accident caused multiple fractures in Anant’s right thigh, ankle, and arm, leading to severe mobility restrictions and job loss.

As a result, Anant filed a compensation claim before the Motor Accident Claims Tribunal (MACT), which awarded him a lump sum of Rs. 7,00,000. Dissatisfied with the quantum of compensation, Anant approached the Bombay High Court, which revised the compensation to Rs. 14,65,500. However, Anant contended that the award remained inadequate and sought further enhancement before the Supreme Court.

Petitioners’ Arguments

Anant, through his legal counsel, argued:

• The MACT had incorrectly awarded a lump sum amount instead of following the multiplier method.
• The High Court had arbitrarily reduced his monthly income from Rs. 8,500 to Rs. 5,000, despite clear evidence of his actual earnings.
• His disability had rendered him completely incapable of resuming work as a driver, effectively reducing his earning capacity to zero.
• The awarded amount for pain and suffering, medical expenses, and loss of amenities was inadequate, given the extent of his injuries.
• The compensation for special diet and attendant care needed significant enhancement to match inflation and increased medical expenses.

Respondents’ Arguments

The insurance company and vehicle owner (Respondents) countered:

• The compensation awarded by the High Court was fair and based on reasonable calculations.
• The income claimed by the appellant was inflated, and the High Court had rightly reduced it to Rs. 5,000 per month.
• The medical expenses claimed were excessive and not supported by documentary evidence.

Supreme Court’s Observations

After reviewing the case, the Supreme Court held:

• The High Court erred in reducing the appellant’s income from Rs. 8,500 to Rs. 5,000 per month, as his employer had testified to the actual earnings.
• The multiplier method, as laid down in Sarla Verma v. Delhi Transport Corporation, must be followed in injury cases, rather than a lump sum approach.
• The permanent disability of 75% had effectively reduced the appellant’s ability to earn to zero, warranting higher compensation for future loss of earnings.
• The pain and suffering, special diet, and attendant care allowances granted by the High Court were insufficient, and the amounts needed enhancement to reflect inflation and cost of living.

Final Judgment

The Supreme Court calculated the enhanced compensation as follows:

Compensation Category	Amount (INR)
Loss of future income (Rs. 8,500 x 12 x 75% x 17)	13,00,500
Loss of actual income (for one month)	8,500
Medical expenses	2,50,000
Attendance and conveyance charges	90,000
Special diet and nutrition	80,000
Loss of amenities in future life	1,00,000
Pain and suffering	2,00,000
Total Compensation	20,29,000

The Supreme Court ruled that the compensation amount must be paid with 9% annual interest from the date of the original claim (October 11, 2010) until realization. The insurance company and the vehicle owner were held jointly and severally liable for the payment, which had to be made within 12 weeks.

Impact of the Judgment

The Supreme Court’s ruling set a crucial precedent for calculating motor accident compensation:

• Mandatory use of the multiplier method: Courts must use the Sarla Verma framework rather than granting arbitrary lump sums.
• Recognition of complete loss of livelihood: For cases of severe disability, the impact on earning capacity must be fully considered.
• Inflation adjustment: Compensation for medical expenses, diet, and attendant care must be periodically revised to reflect cost-of-living changes.
• Higher interest rates: The ruling emphasized 9% annual interest to ensure timely payments.

Conclusion

The Supreme Court’s decision in Anant v. Pratap highlights the need for fair and just compensation for accident victims suffering from severe disabilities. By reinforcing the use of the multiplier method and enhancing compensation under various heads, the Court ensured that the claimant received adequate financial support for his injuries, medical needs, and loss of livelihood.

Petitioner Name: Anant.
Respondent Name: Pratap & Another.
Judgment By: Justice R.F. Nariman, Justice Indu Malhotra.
Place Of Incident: Maharashtra.
Judgment Date: 21-08-2018.

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