High Court of KeralaSingle JudgeAppeal disposed of with enhanced compensation a...
BINOY v. DIVISIONAL MANAGER, NATIONAL INSURANCE COMPANY LTD.
Case / Petition Number:MACA NO. 4052 OF 2022
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- Murali Purushothaman J.
- Judgment Date
- 2023-05-23
- Court Decision / Holding
- Appeal disposed of. The High Court enhanced compensation in multiple heads, rejecting automatic equivalence between disability percentage and loss of earning capacity. It recalculated the claimant’s earning capacity: notional monthly income increased from Rs 8,000 to Rs 12,000 with 40% future prospects, yielding higher future disability compensation (Rs 20,68,416). It awarded additional amounts for loss of earnings (Rs 32,000), transport to hospital (Rs 24,000), pain and suffering (Rs 25,000), loss of amenities and enjoyment (Rs 2,00,000 extra over the earlier award), and future treatment (Rs 50,000). The total enhanced amount granted was Rs 10,20,472, with directions to deposit this amount by the insurer within two months from receipt of the judgment, with 8% interest per annum from the date of petition till realization and proportionate costs. The court clarified that future treatment interest would accrue from the date of award and that bystander’s expenses were not awarded due to the level of disability.
- Final Disposition
- Appeal disposed of with enhanced compensation and deposit directions to insurer.
Parties to the Case
Appellants / Petitioners
- BINOY AGED 24 YEARS S/O.SUSHAMAKUMAR, BINU BHAVAN, NJARACKAL, PERINAD P.O, KOLLAM, PIN - 691601
Respondents
- The Divisional Manager, M/S National Insurance Company Ltd., Kollam (3rd Respondent)
- Owner of Bus (unnamed in judgment)
- Driver of Bus (unnamed in judgment)
Legal Representation & Advocates
Counsels for Petitioners
- • Pratheesh.P
- • Anjana Kannath
Counsels for Respondents
- • N.S. Najeeb
Case Synopsis & Summary
This is a Motor Accident Claims Appeal arising from an award of the Motor Accidents Claims Tribunal, Kollam, in OP(MV) No.696 of 2019, concerning injuries sustained by the appellant, BINOY, when a private bus struck his motorcycle on 8 May 2019. The Tribunal held the bus driver negligent and awarded Rs 18,47,694 with 8% interest, allocating sums under heads such as loss of earnings, medical bills, transport, and pain and suffering, after considering a disability of 57% and a notional income of Rs 8,000 per month. The insurer contested age, occupation, income, and some heads of compensation, while the claimant pressed for higher compensation, arguing that his functional disability was effectively 100% and that his employment as a Lift Operator (earning about Rs 20,000 per month) had been permanently curtailed. He also sought compensation for “future bystander’s expenses” and, at age 21 at the time of the accident, argued for consideration of marriage prospects. The High Court, guided by Supreme Court principles on assessing loss of earning capacity, rejected a mechanical equation of disability percentage with earning loss, and re-evaluated the evidence to determine actual earning capacity and future prospects. It enhanced several heads of compensation and recalculated the total to Rs 10,20,472, directing the insurer to deposit the amount with interest within two months. The appeal was disposed of accordingly."
Legal Doctrines & Maxims
- Permanent disability should be assessed by its effect on earning capacity, not by the percentage of disability; the Tribunal must apply the standard multiplier method to compute future loss of earnings (Raj Kumar Ajay Kumar and others, 2010 KHC 5021, citing (2011) 1 SCC 343).
- Notional income and the Ramachandrappa principle justify determining income before calculating loss of earning capacity (Ramachandrappa v. Royal Sundaram, 2011 (13) SCC 236).
- Three-step framework for assessing permanent disability and earning capacity: (i) determine if disability is permanent, (ii) assess its impact on the individual's ability to earn, and (iii) apply the appropriate multiplier to quantify future loss (as reaffirmed in Pappu Deo Yadav v. Naresh Kumar et al., AIR 2020 SC 4424, and Jithendran v. New India Assurance Co. Ltd., AIR 2021 SC 5382).
- Kajal v. Jagdish Chand (2020 (1) KLT 743 SC) cited regarding bystander expenses (appeal discusses but not adopted).
Submissions & Arguments
Contentions of Appellants / Petitioners
The appellant contends that the claimant’s functional disability is effectively 100% as he cannot lift his right hand and cannot perform his pre-accident work. He was a qualified Lift Operator earning about Rs 20,000 per month, so the Tribunal’s notional income of Rs 8,000 per month and a partial disability award undervalue his loss of earning capacity. He seeks compensation for future bystander’s expenses and argues that at age 21, his prospects, including marriage prospects, were affected. He relies on Kajal v. Jagdish Chand (SC) to press for future bystander’s expenses and urges recalibration of compensation using the multiplier method (18) and a higher base salary, arguing for enhanced sums across several heads.
Contentions of Respondents
The insurer argues that Ext.A7 CT head scan shows no skull fracture or intracranial hemorrhage and that the functional disability cannot be treated as 100%. There was no evidence of prior salary, so the Tribunal’s Rs 8,000 monthly income is appropriate. It contends that compensation awarded is just and reasonable, disputes future bystander’s expenses, and relies on Ramachandrappa for determining notional income. It maintains the Tribunal correctly assessed the disability and liability, and argues that the matter should not warrant any enhancement in the heads contested by the appellant.
Cited Precedents (5)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Kajal v. Jagdish Chand | 2020 (1) KLT 743 (SC) | Mentioned Only | Cited by the appellant to justify future bystander's expenses but not adopted by the Court in the final enhancement order. |
| Raj Kumar Ajay Kumar v. Naresh Kumar and others | [2010 KHC 5021; 2011 (1) KLT 620; (2011) 1 SCC 343] | Positive | Court follows the principle that permanent disability should be assessed for its effect on earning capacity, not by disability percentage alone. |
| Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. | [2011 (13) SCC 236] | Positive | Used to justify notional monthly income approach and assessment of earning capacity. |
| Pappu Deo Yadav v. Naresh Kumar and others | [AIR 2020 SC 4424] | Positive | Cited to reaffirm the three-stage framework for determining loss of earning capacity due to permanent disability. |
| Jithendran v. New India Assurance Co. Ltd. and another | [AIR 2021 SC 5382] | Positive | Reiterates the yardstick for assessing permanent disability impact on earning capacity in line with the above cases. |
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Extracted Judgment Text
Exact text extracted from official judgment records.
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN TUESDAY, THE 23[RD] DAY OF MAY 2023 / 2ND JYAISHTA, 1945**
**MACA NO. 4052 OF 2022**
**AGAINST THE AWARD IN OPMV 696/2019 DATED 25.08.2022 OF MOTOR**
**ACCIDENT CLAIMS TRIBUNAL ,KOLLAM**
## **APPELLANT/CLAIMANT:**
**BINOY AGED 24 YEARS S/O.SUSHAMAKUMAR, BINU BHAVAN, NJARACKAL, PERINAD P.O, KOLLAM, PIN - 691601**
**BY ADVS. PRATHEESH.P ANJANA KANNATH**
## **RESPONDENT/3RD RESPONDENT:**
**THE DIVISIONAL MANAGER M/S. NATIONAL INSURANCE COMPANY LTD., HOSPITAL ROAD, KOLLAM, PIN - 691001**
**BY ADV N.S.NAJEEB**
**THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD**
**ON 23.05.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**MACA NO. 4052 OF 2022 :2:**
## **JUDGMENT**
The appellant is the claimant in OP(MV)No. 696 of 2019 on the files of the Motor Accidents Claims Tribunal, Kollam. The parties are referred to as per their status in the claim petition.
2. On 08.05.2019, while the petitioner was riding a motor cycle, a private bus bearing Registration No.KL02/AB 9106, owned by the 1[st] respondent and driven by the 2[nd] respondent in a rash and negligent manner, hit the motor cycle and the petitioner sustained serious injuries. The petitioner claimed an amount of Rs.10,00,000/- as total compensation for the injuries sustained in the accident.
3. Before the Tribunal, respondents 1 and 2 were set _ex parte_ . Exts.A1 to A13 were marked on the side of the petitioner.
4. The Insurance Company filed a written statement
admitting the policy; but disputing the age, occupation and
**MACA NO. 4052 OF 2022 :3:**
income of the petitioner.
5. The Tribunal found that the accident happened due to the negligence on the part of the driver of the bus and awarded an amount of Rs.18,47,694/- with 8% interest per annum from the date of petition till realisation with proportionate costs. Compensation awarded under various
heads is as follows:
|**Sl.**<br>**No**|**Head of Claim**|**Amount**<br>**claimed**|**Amount**<br>**awarded**|
|---|---|---|---|
|1|Loss of earnings|150000|40000|
|2|Transport to hospital|30000|6000|
|3|Extra nourishment|20000|6000|
|4|Damages to clothing<br>and articles|5000|4000|
|5|Bystanders expenses|20000|24000|
|6|Medical bills &<br>others|100000|188750|
|7|Compensation for|125000|100000|
**MACA NO. 4052 OF 2022 :4:**
||pain and suffering|||
|---|---|---|---|
|8|Compensation for<br>contributing<br>permanent disability|350000|1378944|
|9|Loss of amenities and<br>enjoyment in life|120000|100000|
|10|Compensation for<br>future treatment|100000||
||**Total**|**1000000**|**1847694**|
6. The Tribunal took the notional monthly income of
the petitioner as Rs.8,000/- and ‘18’ as the multiplier. Ext.X1 disability certificate shows the permanent disability of the petitioner as '57%'.
7. Sri.Pratheesh P., the learned counsel appearing for the petitioner submits that the petitioner is not in a position to lift his right hand and to do any work due to the injuries sustained in the accident and that the functional disability of the petitioner has to be taken as 100%. The petitioner was a qualified Lift Operator and was drawing
**MACA NO. 4052 OF 2022 :5:**
an amount of Rs.20,000/- per month and his monthly income should have been taken as Rs.20,000/-. It is also contended that the petitioner now requires the assistance of a bystander and relying on the decision of the Hon'ble Supreme Court in **Kajal** _**v**_ **. Jagdish Chand** [2020 (1) KLT 743 (SC)], he would submit that the petitioner is entitled to get compensation for 'future bystander's expenses' taking the multiplier as 18 and the Tribunal went wrong in denying compensation under the head future bystander's expenses. Sri. Pratheesh submits that the amounts awarded under the heads transport to hospital and bystander's expenses are inadequate. Sri.Pratheesh also contends that the petitioner was aged only 21 years at the time of the accident and the Tribunal ought to have awarded just and reasonable compensation for loss of marriage prospects.
8. Sri. N.S. Najeeb, the learned counsel appearing for
**MACA NO. 4052 OF 2022 :6:**
the insurance company submits that Ext.A7 CT scan report of head shows that there is no skull fracture or intracranial hemorrhage and the functional disability cannot be taken as 100% and the disability of the petitioner does not warrant any compensation under the head future bystander's expenses. He also contends that there is no evidence with regard to the salary drawn by the petitioner before the accident and the Tribunal has rightly arrived at the notional income of the petitioner as Rs.8,000/- per month. It is contended that the compensation awarded is just and reasonable.
9. Ext.A5 would show that the petitioner sustained the following injuries:-
“.....an open wound of size 5x4 cm in the lateral area of right ankle, swelling abrasions over right side of forehead, right shoulder, right posterior aspect of hand, right elbow, right anterior aspect of leg and right knee (Anterior aspect). Grade IV compound fracture talus right with lateral malleolus protruding out and comminuted
**MACA NO. 4052 OF 2022 :7:**
fracture medial malleolus with talus.
10. Ext.X1 certificate evidences that the petitioner has sustained 57% disability. The injuries noted in Ext.X1
are:-
1) Open fracture Right talus with extrusion
2) Right brachial plexus traction injury.
Injury(2) has not recovered to full extend and further recovery not expected”.
11. The Medical Board has certified the disability of the petitioner as 57%. The Tribunal has taken the functional disability of the petitioner as 57%. The Hon'ble _**v**_ Supreme Court, in **Raj Kumar . Ajay Kumar and another [2010 KHC 5021: 2011 (1) KLT 620:(2011) 1 SCC 343]** , considered in detail the correlation between the permanent disability suffered in an accident and the loss of earning capacity resulting therefrom. The Court held as under;
- “8. Where the claimant suffers a permanent
**MACA NO. 4052 OF 2022 :8:**
disability as a result of injuries, the assessment of compensation under the head of loss of future earnings, would depend upon the effect and impact of such permanent disability on his earning capacity. The Tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability. Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in award of either too low or too high a compensation. What requires to be assessed by the Tribunal is the effect of the permanently disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it
**MACA NO. 4052 OF 2022 :9:**
has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency). We may however note that in some cases, on appreciation of evidence and assessment, the Tribunal may find that percentage of loss of earning capacity as a result of the permanent disability, is approximately the same as the percentage of permanent disability in which case, of course, the Tribunal will adopt the said percentage for determination of compensation.....”
“9. Therefore, the Tribunal has to first decide whether there is any permanent disability and if so the extent of such permanent disability. This means that the tribunal should consider and decide with reference to the evidence: (i) whether the disablement is permanent or temporary; (ii) if the disablement is permanent, whether it is permanent total disablement or permanent partial disablement, (iii) if the disablement percentage is expressed with reference to any specific limb, then the effect of such disablement of the limb on the functioning of the entire body, that is the permanent disability suffered by the person. If the Tribunal concludes that there is no permanent disability then there is no question of proceeding
**MACA NO. 4052 OF 2022 :10:**
further and determining the loss of future earning capacity. But if the Tribunal concludes that there is permanent disability then it will proceed to ascertain its extent. After the Tribunal ascertains the actual extent of permanent disability of the claimant based on the medical evidence, it has to determine whether such permanent disability has affected or will affect his earning capacity.
10. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent ability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could
**MACA NO. 4052 OF 2022 :11:**
carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood..”
The said yardstick in determining the extent of permanent disability for assessment of loss of earning capacity has been reaffirmed by the Hon'ble Supreme Court in **Pappu Deo Yadav** _**v**_ **. Naresh Kumar and others [AIR 2020 SC 4424]** and reiterated in **Jithendran** _**v**_ **. New India Assurance Co. Ltd. And another [2021 KHC 6653: 2021 (4) KLJ 646: AIR 2021 SC 5382].**
12. True that due to the injuries sustained in the accident, the petitioner has difficulty in moving his right hand. He is prevented and restricted from discharging his previous activities and functions, but that will not totally prevent or restrict him from carrying on some other or lesser scale of activities, functions or avocation, so that he continues to earn or can continue to earn his livelihood. Therefore, the Tribunal was right in taking the functional disability of the petitioner as 57% based on the medical
**MACA NO. 4052 OF 2022 :12:**
report. Since the permanent disability is only 57%, the said disability will not warrant any compensation for 'future bystander’s expenses' also. Therefore, I reject the claim for compensation under the head 'future bystander’s expenses'.
13. The petitioner was a qualified Lift Operator. In the absence of any evidence, the Tribunal took his notional monthly income as Rs.8,000/-. In the light of the decision _**v**_ **.** of the Hon’ble Supreme Court in **Ramachandrappa Manager, Royal Sundaram Alliance Insurance Company Limited [2011 (13) SCC 236]** , the petitioner is entitled for an amount of Rs.12,000/- as notional monthly income. Accordingly, I fix the monthly income of the petitioner as Rs.12,000/-.
14. Regarding future prospects, the petitioner was aged only 21 years at the time of the accident and he is entitled to an addition of 40% towards future prospects for
**MACA NO. 4052 OF 2022 :13:**
the purpose of calculation of compensation for permanent disability. Therefore, on such addition, his monthly income can be arrived at Rs.16,800/-. Accordingly, the compensation for continuing permanent disability is recalculated as Rs.20,68,416/- [16,800 x12x18x57/100]. Since the petitioner has already been awarded an amount of Rs.13,78,944/-, he is entitled for an enhanced amount of **Rs.6,89,472/-** under the above head.
15. Towards compensation for loss of earnings, the Tribunal has awarded an amount of Rs.40,000/-. With the re-fixed income, the petitioner will be entitled for an amount of Rs.72,000/- (12,000x6) and an enhanced amount of **Rs.32,000/-** (72,000-40,000) is awarded under the said head.
16. Towards the compensation for transport to hospital, an amount of Rs.6,000/- was awarded by the Tribunal. Taking into consideration the nature of injuries,
**MACA NO. 4052 OF 2022 :14:**
the disability and the reviews made by the petitioner at hospital, I award an amount of Rs.30,000/- as claimed by the petitioner. Accordingly, the petitioner is entitled for an enhanced amount of **Rs.24,000/-** (30,000-6,000) under the said head.
17. The Tribunal has awarded only an amount of Rs.1,00,000/- towards compensation for pain and sufferings. Taking into consideration the nature of the injuries sustained, the petitioner is awarded an amount of Rs.1,25,000/- as claimed and he is entitled for an enhanced amount of **Rs.25,000/-** (1,25,000-1,00,000) under the said head.
18. With regard to compensation for loss of amenities and enjoyment in life, the Tribunal has awarded only an amount of Rs.1,00,000/-. The petitioner was aged 21 years at the time of the accident and was a bachelor. Ext.A12 photographs would show that he has disfiguration. Taking
**MACA NO. 4052 OF 2022 :15:**
note of the disabilities sustained and the loss of marriage prospects, I award an amount of Rs.3,00,000/- towards compensation for loss of amenities and enjoyment in life and the petitioner is entitled for an enhanced amount of **Rs.2,00,000/-** (3,00,000-1,00,000) under the said head.
19. No amount has been awarded by the Tribunal under the head compensation for future treatment. Taking note of the injuries sustained by the petitioner, I award an amount of **Rs.50,000/-** under the said head.
20. In the result, the petitioner is entitled for an enhanced amount of **Rs.10,20,472/-** (Rupees ten lakhs twenty thousand four hundred and seventy two only) [6,89,472+32,000+24,000+25,000+2,00,000+50,000]. The 3[rd] respondent insurance company shall deposit the amount with 8% interest per annum from the date of petition till realisation with proportionate costs before the Tribunal, within a period of two months from the date of
**MACA NO. 4052 OF 2022 :16:**
receipt of a copy of this judgment. While calculating interest on the enhanced compensation, the petitioner will not be entitled for interest for the period of 15 days delay in the light of the order dated 25.01.2023 in C.M. Application No.1/2022 in the appeal. It is made clear that the amount awarded under the head future treatment expenses will carry interest only from the date of the award.
Appeal is disposed of.
**Sd/MURALI PURUSHOTHAMAN JUDGE**
SB