Madras HC Expresses Shock Over Compensation Of Rs 86 Lacs Awarded In A Claim Restricted To Rs 36 Lacs [Read Judgment]

The Madras High Court has expressed its shock over the Motor Accidents Claims Tribunal (Special Subordinate Court), Coimbatore [MACT] awarding a compensatory amount of more than Rs. 86 lakhs in a case where the claim itself was restricted to Rs. 36 lakhs. The Division Bench comprising of Justices R. Subbiah and R. Pongiappan set aside this motor accident award and remanded the matter back to the Tribunal. MACT has been directed to consider and appreciate the oral and documentary evidence from both sides afresh and award compensation, preferably within 6 months.

In 2005, the claimant suffered a head injury after being involved in a road accident where his car was rammed into by a lorry, which was coming from the wrong side of the road and being being driven in a rash and negligent manner. Approximately Rs 11 lakh went towards his medical treatment, spent by the claimant. The claimant thereafter approached MACT seeking a compensation of Rs. 36 lakhs from the Insurance Company. To substantiate this claim, it was urged that the claimant was working as a Junior Manager in National Mineral Development Corporation Limited, drawing a monthly salary of almost Rs. 18,000, but due to the accident, which had rendered him disabled, he would not be able to get promoted.

Despite the claimant restricting his claim to Rs. 36 lakh, in January 2018, the MACT awarded a sum of around 86.3 lakhs as compensation. This was calculated at an interest of 7.5% p.a from the date of claim till the date of realization. The break-up of this computation is under several categories, including Rs. 33.55 lakh under the head of "Future loss of earning capacity".

The Insurance Company challenged this award and asserted that no one except the claimant had been examined by the MACT before arriving at this compensatory award. Neither did the Tribunal examine the Doctor to establish the extent of the claimant's disability, nor did it question his employer to prove income, contended the Insurer, but still it fixed the claimant's disability at 100% and awarded an exorbitant amount as compensation towards "future loss of earning capacity". It was also submitted that no reasons were attributed by the Tribunal in granting such an "unreasonable" and "fanciful" award. Furthermore, it was brought to the Court's notice that the MACT had a history of passing such unreasoned awards and, as recently as last January, the High Court had to pull up the Presiding Officer for granting large amounts of "compensation under various heads, without any rhyme or reason".

Agreeing with the submissions of the Insurance Company, the High Court observed that "the amount awarded under the head of 'Future loss of earning capacity' shocks the conscience of this Court". Further noting that even the claimant was agreeable for the matter to be sent back to the MACT, the High Court remitted the same while setting aside the compensation awarded and directed the Tribunal to conduct a fresh trial into the matter.

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