Supreme Court Upholds High Court’s Reduction in Compensation for Road Accident Victim: S. Kumar vs. United India Insurance Co. Ltd.

The Supreme Court of India, in S. Kumar (Dead) vs. United India Insurance Co. Ltd. & Anr., addressed a crucial issue regarding the reduction of compensation awarded to a road accident victim by the High Court. The case revolved around the extent of disability, loss of earning capacity, and the appropriate quantum of compensation. The judgment highlights the necessity of corroborated medical evidence in motor accident compensation claims.

Background of the Case

On August 2, 1992, at around 5:30 PM, the appellant, S. Kumar, a 25-year-old mason, was hit by an auto-rickshaw while walking along the road. The vehicle, owned by Respondent No. 2 and insured by United India Insurance Co. Ltd. (Respondent No. 1), caused severe injuries to Kumar. He suffered:

A fracture of the left thigh bone.
Head injuries and skull fracture.
Injuries in the stomach region and testis.

Following the accident, he was admitted to a Government Hospital for three months as an in-patient and continued as an out-patient for another three months. Later, he underwent surgeries on his hip and testis. He claimed that:

His left leg was shortened by two inches due to the accident.
He suffered from intermittent headaches and dizziness.
His injuries rendered him incapable of working.
He was unable to marry or live a normal marital life.

Seeking compensation, Kumar filed a claim before the Motor Accidents Claims Tribunal (MACT), Chennai, stating that he was earning Rs. 2,750 per month as a mason before the accident.

MACT’s Decision

The MACT awarded Kumar Rs. 4,58,060 as compensation, along with interest at 15% per annum. The compensation breakdown was:

Rs. 31,000 for loss of earnings (from August 1992 to July 1993).
Rs. 3,500 for traveling expenses.
Rs. 6,360 for nutrition and diet.
Rs. 200 for damage to clothing.
Rs. 10,000 for medical expenses.
Rs. 56,000 for pain and suffering.
Rs. 1,15,000 for permanent disability.
Rs. 2,36,000 for future loss of earning capacity.

The Tribunal relied on medical evidence from two doctors:

Dr. Sai Chandran (PW-1): He confirmed a two-inch shortening of Kumar’s left leg and limited hip movement, assessing 45% permanent disability.
Dr. Thiagarajan (PW-4): He testified that Kumar suffered from skull fractures and permanent testicular damage, further increasing his disability assessment by 50%.

High Court’s Reduction in Compensation

United India Insurance Co. Ltd. appealed the MACT ruling before the Madras High Court, which reduced the compensation from Rs. 4,58,060 to Rs. 2,11,060. The High Court made the following observations:

The claim of 95% permanent disability was exaggerated and not supported by medical records.
Dr. Sai Chandran (PW-1) did not mention any head injury or testicular injury in his report.
The scrotum injury was noted three months after the accident, making it unlikely that it was caused by the accident.
The lack of X-ray evidence for testicular damage weakened the claim.

Based on these findings, the High Court revised the compensation as follows:

Reduced compensation for permanent disability from Rs. 1,15,000 to Rs. 50,000.
Reduced compensation for pain and suffering from Rs. 56,000 to Rs. 20,000.
Reduced compensation for future loss of earning from Rs. 2,36,000 to Rs. 1,00,000.
Eliminated Rs. 10,000 for medical expenses due to lack of evidence.
Reduced interest rate from 15% to 9% per annum, in line with Supreme Court precedent in Kaushnuma Begum vs. New India Assurance Co. Ltd.

Supreme Court’s Observations

1. Exaggeration of Permanent Disability

The Supreme Court upheld the High Court’s rejection of the claim that Kumar suffered 95% disability. It observed:

“There was neither any basis nor any reason to sum up the percentages of disability assessed by two doctors and take it to be a case of 95% permanent disability.”

2. Lack of Medical Evidence for Additional Injuries

The Court noted that:

The claim of skull fractures and testicular injury was not mentioned in the immediate post-accident medical report.
No hospital records corroborated the injury to Kumar’s scrotum.
The disability certificate by PW-4 was issued 2.5 years after the accident, raising doubts about its accuracy.

3. Just Compensation Principle

The Supreme Court reiterated that compensation must be reasonable and based on actual losses. It ruled:

“While compensation should not be unjustly reduced, it must be determined based on credible evidence. The High Court’s assessment is justified and does not warrant interference.”

4. Interest Rate Reduction

The Supreme Court found the High Court’s decision to reduce the interest rate to 9% reasonable and in line with precedent. It affirmed:

“The Tribunal had been rather generous in awarding an interest rate of 15%, which was excessive in the given circumstances.”

Final Judgment

The Supreme Court dismissed Kumar’s appeal and upheld the High Court’s decision:

Compensation remained at Rs. 2,11,060.
Interest rate of 9% per annum was confirmed.
No further claims were allowed.

Key Takeaways

Medical evidence is crucial: Compensation must be based on verifiable medical records, not exaggerated claims.
Courts will scrutinize disability claims: A high disability percentage must be backed by credible medical documentation.
Interest rates follow judicial precedent: The Supreme Court continues to apply a standard rate of 9% in accident claims.
Reasonable compensation principle: Courts aim to award fair compensation, balancing victim relief with factual evidence.

Conclusion

The Supreme Court’s ruling in S. Kumar vs. United India Insurance Co. Ltd. reinforces the principle of just and reasonable compensation in motor accident claims. It underscores the necessity of credible medical evidence to substantiate claims and ensures that courts do not award excessive compensation based on exaggerated or unsupported allegations.

Petitioner Name: S. Kumar (Dead).
Respondent Name: United India Insurance Co. Ltd. & Anr..
Judgment By: Justice Abhay Manohar Sapre, Justice Dinesh Maheshwari.
Place Of Incident: Chennai, Tamil Nadu.
Judgment Date: 18-02-2019.

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