Reliance General Insurance Company Limited vs Santosh Kumar & Anr.

1.

Whether the petitioner sustained injuries on 28.05.2015, at about 7.00 p.m., at place Kotgali near Kotlu, due to rash and negligent driving of driver of vehicle bearing No.HP01K5100 (Bolero), as alleged? OPP

2.

If issue No.1 is proved in affirmative, to what amount of compensation, the petitioners are entitled and from whom? OPP

3.

Whether the petition is not maintainable in the present form? OPR 1&2

4.

Whether the petitioner has not come to the Court with clean hands, as alleged? OPR1

5.

Whether the driver of the offending vehicle was not having a valid and effective driving license at the time of accident, as alleged? OPR2

6.

Whether the vehicle was being plied in contravention of the terms and conditions of insurance policy, as alleged? OPR2

7.

Whether the petition is filed in collusion with respondent No.1? OPR2

8.

Whether the petitioner was traveling as gratuitous passenger in the vehicle at the time of accident? OPR2

9.

Relief.

“23.

Both, the 1923 Act and 1988 Act are beneficent legislation insofar as they provide for payment of compensation to the workmen employed by the employers and/or by use of motor vehicle by the owner thereof and/or the insurer to the petitioners suffering permanent disability. The amount of compensation is to be de termined in terms of the provisions of the respective Acts. Whereas in terms of the 1923 Act, the Commissioner who is a quasi judicial authority, is bound to apply the principles and the factors laid down in the Act for the purpose of de termining the compensation, Section 168 of the 1988 Act enjoins the Tribunal to make an award determining the amount of compensation which ap pears to be just.

24.

Both the Acts aim at providing for expeditious relief to the victims of accident. In these cases, the accidents took place by reason of use of motor vehicles. Both the statutes are beneficial ones for the workmen as also the third parties. The benefits thereof are available only to the persons specified under the Act besides under the Contract of Insurance. The statutes, therefore, deserve liberal construction. The legislative intent contained therein is required to be interpreted with a view to give effect thereto.”

175.

The licensing regime under the MV Act and the MV Rules, when read as a whole, does not provide for a separate endorsement for operating a ‘Transport Vehicle’, if a driver already holds a LMV license. We must however clarify that the exceptions carved out by the legislature for special vehicles like ecarts and erickshaws, or vehicles carrying hazardous goods, will remain unaffected by the decision of this Court.

176.

As discussed earlier in this judgment, the definition of LMV under Section 2(21) of the MV Act explicitly provides what a ‘Transport Vehicle’ ‘means’. This Court must ensure that neither provision i.e. the definition under Section 2(21) or the second part of Section 3(1) which concerns the necessity for a driving license for a ‘Transport Vehicle’ is reduced to a dead letter of law. Therefore, the emphasis on ‘Transport Vehicle’ in the licensing scheme has to be understood only in the context of the ‘medium’ See Rule 8A of MV Rules,’Minimum training required for driving E rickshaw or Ecart’ See Rule 9 of MV Rules, ’Educational Qualification for drivers of goods carriages carrying dangerous or hazardous goods’ and ‘heavy’ vehicles. This harmonious reading also aligns with the objective of the 1994 amendment in Section 10(2) to simplify the licensing procedure.

177.

The above interpretation also does not defeat the broader twin objectives of the MV Act i.e. road safety and ensuring timely compensation and relief for victims of road accidents. The aspect of road safety is earlier discussed at length. An authoritative pronouncement by this Court would prevent insurance companies from taking a technical plea to defeat a legitimate claim for compensation involving an insured vehicle weighing below 7,500 kgs driven by a person holding a driving license of a ‘Light Motor Vehicle’ class.

178.

In an era where autonomous or driverless vehicles are no longer tales of science fiction and appbased passenger platforms are a modern reality, the licensing regime cannot remain static. The amendments that have been carried out by the Indian legislature may not have dealt with all possible concerns. As we were informed by the Learned Attorney General that a legislative exercise is underway, we hope that a comprehensive amendment. The classes medium goods vehicle[(10(2)(e)], medium passenger vehicle[10(2)(f)],heavy goods vehicle[10(2)(g)] and heavy passenger vehicle [10(2)(h)] were deleted and a new class ‘Transport Vehicle’ was introduced in Section 10(2)(e) to address the statutory lacunae will be made with necessary corrective measures.

179.

Just to flag one concern, the legislature through the 1994 amendment in Section 10(2)(e) in order to introduce ‘transport vehicle’ as a separate class could not have intended to merge light motor vehicle (which continued as a distinct class) along with medium, and heavy vehicles into a single class. Else, it would give rise to a situation in which Sri (our hypothetical character), wanting to participate in the cycling sport, is put through the rigorous training relevant only for a multisport like Triathlon, which requires a much higher degree of endurance and athleticism. The effort therefore should be to ensure that the statute remains practical and workable.

180.

Now harking back to the primary issue and noticing that the core driving skills (as enunciated in the earlier paragraphs), expected to be mastered by all drivers are universal – regardless of whether the vehicle falls into “Transport” or “NonTransport” category, it is the considered opinion of this Court that if the gross vehicle weight is within 7,500 kg the quintessential common man’s driver Sri, with LMV license, can also drive a “Transport Vehicle”. We are able to reach such a conclusion as none of the parties in this case has produced any empirical data to demonstrate that the LMV driving licence holder, driving a ‘Transport Vehicle’, is a significant cause for road accidents in India. The additional eligibility criteria as specified in MV Act and MV Rules as discussed in this judgment will apply only to such vehicle (‘medium goods vehicle’, ‘medium passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy passenger vehicle’), whose gross weight exceeds 7,500 Kg. Our present interpretation on how the licensing regime is to operate for drivers under the statutory scheme is unlikely to compromise the road safety concerns. This will also effectively address the livelihood issues for drivers operating Transport Vehicles (who clock maximum hours behind the wheels), in legally operating “Transport vehicles” (below 7,500 Kg), with their LMV driving license. Perforce Sri must drive responsibly and should have no occasion to be called either a maniac or an idiot (as mentioned in the first paragraph), while he is behind the wheels. Such harmonious interpretation will substantially address the vexed question of law before this Court.

181.

Our conclusions following the above discussion are as under:

(I)

A driver holding a license for Light Motor Vehicle (LMV) class, under Section 10(2)(d) for vehicles with a gross vehicle weight under 7,500 kg, is permitted to operate a ‘Transport Vehicle’ without needing additional authorization under Section 10(2)(e) of the MV Act specifically for the ‘Transport Vehicle’ class. For licensing purposes, LMVs and Transport Vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirements will however continue to apply for, inter alia, ecarts, erickshaws, and vehicles carrying hazardous goods.

(II)

The second part of Section 3(1), which emphasizes the necessity of a specific requirement to drive a ‘Transport Vehicle,’ does not supersede the definition of LMV provided in Section 2(21) of the MV Act.

(III)

The additional eligibility criteria specified in the MV Act and MV Rules generally for driving ‘transport vehicles’ would apply only to those intending to operate vehicles with gross vehicle weight exceeding 7,500 kg i.e. ‘medium goods vehicle’, ‘medium passenger vehicle’, ‘heavy goods vehicle’ and ‘heavy passenger vehicle’.

(IV)

The decision in Mukund Dewangan (2017) is upheld but for reasons as explained by us in this judgment. In the absence of any obtrusive omission, the decision is not per incuriam, even if certain provisions of the MV Act and MV Rules were not considered in the said judgment.”

12.

In Reshma Kumari v. Madan Mohan (2009) 13 SCC 422, this Court reiterated that the compensation awarded under the Act should be just and also identified the factors which should be kept in mind while determining the amount of compensation. The relevant portions of the judgment are extracted below:

"The compensation which is required to be determined must be just. While the claimants are required to be compensated for the loss of their dependency, the same should not be considered to be a windfall. Unjust enrichment should be discouraged. This Court cannot also lose sight of the fact that in given cases, as for example death of the only son to a mother, she can never be compensated in monetary terms. The question as to the methodology required to be applied for determination of compensation as regards prospective loss of future earnings, however, as far as possible should be based on certain principles. A person may have a bright future prospect; he might have become eligible to promotion immediately; there might have been chances of an immediate pay revision, whereas in another (sic situation) the nature of employment was such that he might not have continued in service; his chance of promotion, having regard to the nature of employment may be distant or remote. It is, therefore, difficult for any court to lay down rigid tests which should be applied in all situations. There are divergent views. In some cases it has been suggested that some sort of hypotheses or guess work may be inevitable. That may be so.

In the Indian context several other factors should be taken into consideration including education of the dependants and the nature of job. In the wake of changed societal conditions and global scenario, future prospects may have to be taken into consideration not only having regard to the status of the employee, his educational qualification; his past performance but also other relevant factors, namely, the higher salaries and perks which are being offered by the private companies these days. In fact while determining the m ultiplicand this Court in O riental Insurance Co. Ltd. v. Jas huben held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration.

One of the incidental issues which has also to be taken into consideration is inflation. Is the practice of taking inflation into consideration wholly incorrect? Unfortunately, unlike other developed countries in India there has been no scientific study. It is expected that with the rising inflation the rate of interest would go up.

In India it does not happen. It, therefore, may be a relevant factor which may be taken into consideration for determining the actual ground reality. No hardandfast rule, however, can be laid down therefor." (emphasis supplied)

13.

In Arvind Kumar Mishra v. New India Assurance Company Limited (2010) 10 SCC 254, the Court considered the plea for enhancement of compensation made by the appellant, who was a student of final year of engineering and had suffered 70% disablement in a motor accident. After noticing factual matrix of the case, the Court observed:

"We do not intend to review in detail state of authorities in relation to assessment of all damages for personal injury. Suffice it to say that the basis of assessment of all damages for personal injury is compensation. The whole idea is to put the claimant in the same position as he was insofar as money can. Perfect compensation is hardly possible but one has to keep in mind that the victim has done no wrong; he has suffered at the hands of the wrongdoer and the court must take care to give him full and fair compensation for that he had suffered." (emphasis supplied)

14.

In Raj Kumar v. Ajay Kumar (2011) 1 SCC 343, the Court considered some of the precedents and held:

"The provision of the Motor Vehicles Act, 1988 ("the Act", for short) makes it clear that the award must be just, which means that compensation should, to the extent possible, fully and adequately restore the claimant to the position prior to the accident. The object of awarding damages is to make good the loss suffered as a result of wrong done as far as money can do so, in a fair, reasonable and equitable manner. The court or the Tribunal shall have to assess the damages objectively and exclude from consideration any speculation or fancy, though some conjecture with reference to the nature of disability and its consequences, is inevitable. A person is not only to be compensated for the physical injury, but also for the loss which he suffered as a result of such injury. This means that he is to be compensated for his inability to lead a full life, his inability to enjoy those normal amenities which he would have enjoyed but for the injuries, and his inability to earn as much as he used to earn or could have earned.

The heads under which compensation is awarded in personal injury cases are the following:

Pecuniary damages (Special damages)

(i)

Expenses relating to treatment, hospitalisation, medicines, transportation, nourishing food, and miscellaneous expenditure.

(ii)

Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:

(a)

Loss of earning during the period of treatment;

(b)

Loss of future earnings on account of permanent disability.

(iii)

Future medical expenses.

Nonpecuniary damages (General damages)

(iv)

Damages for pain, suffering and trauma as a consequence of the injuries.

(v)

Loss of amenities (and/or loss of prospects of marriage).

(vi)

Loss of expectation of life (shortening of normal longevity).

In routine personal injury cases, compensation will be awarded only under heads (i), (ii)(a) and (iv). It is only in serious cases of injury, where there is specific medical evidence corroborating the evidence of the claimant, that compensation will be granted under any of the heads (ii)(b), (iii), (v) and (vi) relating to loss of future earnings on account of permanent disability, future medical expenses, loss of amenities (and/or loss of prospects of marriage) and loss of expectation of life." (emphasis supplied)

15.

In our view, the principles laid down in Arvind Kumar Mishra v. New India Assurance Company Ltd. (supra) and Raj Kumar v. Ajay Kumar (supra) must be followed by all the Tribunals and the High Courts in determining the quantum of compensation payable to the victims of accident, who are disabled either permanently or temporarily. If the victim of the accident suffers permanent disability, then efforts should always be made to award adequate compensation not only for the physical injury and treatment, but also for the loss of earning and his inability to lead a normal life and enjoy amenities, which he would have enjoyed but for the disability caused due to the accident.

16.

We shall now consider whether the compensation awarded to the appellant is just and reasonable or he is entitled to enhanced compensation under any of the following heads:

(i)

Loss of earning and other gains due to the amputation of leg.

(ii)

Loss of future earnings on account of permanent disability.

(iii)

Future medical expenses.

(iv)

Compensation for pain, suffering and trauma caused due to the amputation of leg.

(v)

Loss of amenities including loss of the prospects of marriage.

(vi)

Loss of expectation of life.

1. NON PECUNIARY DAMAGES:

(a) PAIN AND SUFFERINGS:

(b) LOSS OF ENJOYMENT OF LIFE:

(c) SHORTEN EXPECTANCY OF LIFE:

2. PECUNIARY DAMAGES:

(a) LOSS OF EARNINGS AND EARNING CAPACITY:

31.

It is now a well settled position of law that even in cases of permanent disablement incurred as a result of a motoraccident, the claimant can seek, apart from compensation for future loss of income, amounts for future prospects as well. We have come across many orders of different tribunals and unfortunately affirmed by different High Courts, taking the view that the claimant is not entitled to compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. That is not a correct position of law. There is no justification to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. Such a narrow reading is illogical because it denies altogether the possibility of the living victim progressing further in life in accident cases – and admits such possibility of future prospects, in case of the victim’s death.

32.

This Court has emphasised time and again that “just compensation” should include all elements that would go to place the victim in as near a position as she or he was in, before the occurrence of the accident. Whilst no amount of money or other material compensation can erase the trauma, pain and suffering that a victim undergoes after a serious accident, (or replace the loss of a loved one), monetary compensation is the manner known to law, whereby society assures some measure of restitution to those who survive, and the victims who have to face their lives.

33.

In Santosh Devi v. National Insurance Company Limited and Others, (2012) 6 SCC 421, this Court held that:

“14.

We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma case [Sarla Verma v. DTC, (2009) 6 SCC 121] that where the deceased was selfemployed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be nave to say that the wages or total emoluments/income of a person who is self employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life.

15.

The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are selfemployed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put in extra efforts to generate additional income necessary for sustaining their families.

16.

The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lakh.

17.

Although the wages/income of those employed in unorganised sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the government employees and those employed in private sectors, but it cannot be denied that there has been incremental enhancement in the income of those who are self employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc.

18.

Therefore, we do not think that while making the observations in the last three lines of para 24 of Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121] judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is selfemployed or is engaged on fixed wages will also get 30% increase in his total income over a period of time and if he/she becomes the victim of an accident then the same formula deserves to be applied for calculating the amount of compensation.”

34.

In Jagdish v. Mohan and Others, (2018) 4 SCC 571, the victim, a carpenter, suffered permanent disablement, and his claim for compensation including for loss of future prospects was considered by a threeJudge Bench which included, incidentally, the judges who had decided National Insurance Company (supra). This Court held that:

“13.

In the judgment of the Constitution Bench in Pranay Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680], this Court has held that the benefit of future prospects should not be confined only to those who have a permanent job and would extend to selfemployed individuals. In the case of a selfemployed person, an addition of 40% of the established income should be made where the age of the victim at the time of the accident was below 40 years. Hence, in the present case, the appellant would be entitled to an enhancement of Rs. 2400 towards loss of future prospects.

14.

In making the computation in the present case, the court must be mindful of the fact that the appellant has suffered a serious disability in which he has suffered a loss of the use of both his hands. For a person engaged in manual activities, it requires no stretch of imagination to understand that a loss of hands is a complete deprivation of the ability to earn. Nothing —at least in the facts of this case—can restore lost hands. But the measure of compensation must reflect a genuine attempt of the law to restore the dignity of the being. Our yardsticks of compensation should not be so abysmal as to lead one to question whether our law values human life. If it does, as it must, it must provide a realistic recompense for the pain of loss and the trauma of suffering. Awards of compensation are not law's doles. In a discourse of rights, they constitute entitlements under law. Our conversations about law must shift from a paternalistic subordination of the individual to an assertion of enforceable rights as intrinsic to human dignity.

15.

The Tribunal has noted that the appellant is unable to even eat or to attend to a visit to the toilet without the assistance of an attendant. In this background, it would be a denial of justice to compute the disability at 90%. The disability is indeed total. Having regard to the age of the appellant, the Tribunal applied a multiplier of 18. In the circumstances, the compensation payable to the appellant on account of the loss of income, including future prospects, would be Rs 18,14,400. In addition to this amount, the appellant should be granted an amount of Rs 2 lakhs on account of pain, suffering and loss of amenities. The amount awarded by the Tribunal towards medical expenses (Rs 98,908); for extra nourishment (Rs 25,000) and for attendant's expenses (Rs 1 lakh) is maintained. The Tribunal has declined to award any amount towards future treatment. The appellant should be allowed an amount of Rs 3 lakhs towards future medical expenses. The appellant is thus awarded a total sum of Rs.25,38,308 by way of compensation. The appellant would be entitled to interest at the rate of 9% p.a. on the compensation from the date of the filing of the claim petition. The liability to pay compensation has been fastened by the Tribunal and by the High Court on the insurer, owner and driver jointly and severally which is affirmed. The amount shall be deposited before the Tribunal within a period of 6 weeks from today and shall be paid over to the appellant upon proper identification.” (Self emphasis supplied)

TRANSPORTATION CHARGES:

(c) SPECIAL DIET AND ATTENDANT CHARGES: