Motor Accident Claims - Loss Of Earning Capacity To Be Fixed As 100% When Claimant Is Incapacitated For Life: Supreme Court

The Supreme Court has held that the loss of earning capacity must be fixed as 100% when a claimant-motor accident victim is incapacitated for life and is confined to home.

A person therefore is not only to be compensated for the injury suffered due to the accident but also for the loss suffered on account of the injury and his inability to lead the life he led, prior to the life altering event  the bench of Justices R. Subhash Reddy and Hrishikesh Roy observed.  The court added that the extent of economic loss arising from a disability may not be measured in proportions to the extent of permanent disability.

"While the money awarded by Courts can hardly redress the actual sufferings of the injured victim (who is deprived of the normal amenities of life and suffers the unease of being a burden on others), the courts can make a genuine attempt to help restore the self-dignity of such claimant, by awarding 'just compensation' ", the bench remarked.

The court was considering the appeal filed by a person who suffered serious injuries from an accident. He was riding pillion in a bike when it was hit by a car. Both riders were impacted, resulting in severe head injuries to the appellant. He was bedridden, totally immobilized and initially, remained admitted in the hospital for 191 days. He has also suffered severe impairment of cognitive power with hemiparesis and total aphasia and the prognosis for him is 69%permanent disability.

In appeal, he submitted that he suffered 69% permanent disability and is unable to perform everyday activities and he requires constant support even for the confined life that he is leading. He also questioned the logic of the logic of restricting the compensation to 69% under the head of permanent disability when his  earning capacity is reduced to zero (notwithstanding his 69% permanent disability).

The bench observed that the Motor Vehicles Act is in the nature of social welfare legislation and its provisions make it clear that the compensation should be justly determined.

"While the permanent disability as certified by the doctors stands at 69%,the same by no means, adequately reflects the travails the impaired claimant will have to face all his life. The 21 year old's youthful dreams and future hopes were snuffed out by the serious accident. The young man's impaired condition has certainly impacted his family members. Their resources and strength are bound to be stressed by the need to provide full time care to the claimant. For the appellant to constantly rely on them for stimulation and support is destined to cause emotional, physical and financial fatigue for all stakeholders .", the court said.

The court noted that even though the physical disability is assessed at 69%, the functional disability is 100% in so far as claimant's loss of earning capacity is concerned.

12. The Courts should strive to provide a realistic recompense having regard to the realities of life, both in terms of assessment of the extent of disabilities and its impact including the income generating capacity of the claimant. In cases of similar nature, wherein the claimant is suffering severe cognitive dysfunction and restricted mobility, the Courts should be mindful of the fact that even though the physical disability is assessed at 69%, the functional disability is 100% in so far as claimant's loss of earning capacity is concerned.

The court therefore held that his loss of earning capacity must be fixed at 100%. An amount of Rs.27,67,800/- was directed to be given as compensation to him.

While allowing the appeal, the bench made the following

19. Before parting, it needs emphasizing that in cases such as this, the Tribunal and the Courts must be conscious of the fact that the permanent disability Page 17 of 20 suffered by the individual not only impairs his cognitive abilities and his physical facilities but there are multiple other non-quantifiable implications for the victim. The very fact that a healthy person turns into an invalid, being deprived of normal companionship, and incapable of leading a productive life, makes one suffer the loss of self-dignity. Such a Claimant must not be viewed as a modern day Oliver Twist, having to make entreaties as the boy in the orphanage in Charles Dickens's classic, "Please Sir, I want some more". The efforts must be to substantially ameliorate the misery of the claimant and recognize his actual needs by accounting for the ground realities. The measures should however be in correct proportion. As is aptly said by Justice R.V Raveendran, while speaking for the Division Bench in Sarla Verma and Others Vs. Delhi Transport Corporation and Another , just compensation is adequate compensation and the Award must be just that- no less and no more. The plea 8 (2009)6 SCC 121 Page 18 of 20 of the victim suffering from a cruel twist of fate, when asking for some more, is not extravagant but is for seeking appropriate recompense to negotiate with the unforeseeable and the fortuitous twists is his impaired life. Therefore, while the money awarded by Courts can hardly redress the actual sufferings of the injured victim (who is deprived of the normal amenities of life and suffers the unease of being a burden on others), the courts can make a genuine attempt to help restore the self-dignity of such claimant, by awarding 'just compensation'.

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