REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5510 OF 2005

Arvind Kumar Mishra                                     ……  Appellant

   Vs.

New India Assurance Co. Ltd. and Anr.         ……  Respondents  

JUDGMENT

R.M. LODHA, J.  

The present appeal, by special leave,  raises  the issue,  

indeed the only  issue, of  assessment of loss of earnings in respect  

of the victim of a motor accident who was certified 70%   permanent  

disablement.  

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2. Arvind  Kumar  Mishra  –  appellant  –   a  student  of  

engineering final year at Birla Institute of Technology, Mesra (B.I.T.)  

at the time of accident  was seriously injured as a result of a  truck  

bearing registration No. DEG 3291 being negligently  driven on June  

23,  1993.   The truck coming  from the opposite   direction hit  the  

motorcycle  and the appellant riding  the motorcycle was thrown on  

the road.  He sustained multiple injuries; diffused multifocal damage  

of brain with interventricular hemorrhage; optic atrophy in right eye  

and 3+ relative afferent papillary in left eye; amputation of right hand  

distal  to carpometacarpal joint  level;  compound fracture of shaft  of  

tibia (left); total bronchial plexus palsy; blocking of anterior wall of the  

trachea  at  the  level  of  the  3rd  and  4th  cartilaginous  rings  and  

disfiguration.    He was treated by several doctors at various hospitals  

namely,  R.M.C.H,  Ranchi,  C.C.L  .Hospital,  Gandhinagar,  Christian  

Medical  College  and  Hospital,  Vellore  and  Shankar  Netralaya,  

Madras.   He had to undergo few surgical operations.  After a little  

recovery, he made an application under  Section 166 of  the Motor  

Vehicles Act, 1988 (`the 1988 Act’)  claiming total compensation in  

the  sum of  Rs.   22  lakhs which  included the  expenditure  already  

incurred by him up to that time to the extent of Rs.  1,50,000/- for his  

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treatment.  

3. The  offending  vehicle  was  insured  with  the  New India  

Assurance  Company  Ltd.  (‘the  insurer’).   The  owner  as  well  as  

insurer   contested  the  claim petition.   The  appellant   passed  out  

Bachelor of Engineering during the pendency of the claim petition.  

He  examined himself and tendered some of the doctors who treated  

him in evidence. The vouchers of the expenditure incurred by him on  

his treatment at various hospitals were also produced.   

4. The Motor Vehicle  Accident Claims Tribunal, Ranchi  (for  

short ‘the Tribunal’) in its award dated December 19, 2002 held that  

the accident occurred due to rash and negligent  driving  of the truck  

bearing registration No. DEG 3291.  It also  held that  the owner of  

the vehicle and the insurer were liable to pay the compensation to the  

appellant.   As  regards    quantum of  compensation,   the  Tribunal  

allowed  the  total  compensation  of  Rs.  2,50,000/-   along  with  the  

interest  @ 9%  per annum from August 7, 2002 by considering the  

matter  as follows:

“…….under   the  head  of  pecuniary  damages  the  amount which has been amended (sic) by the claimant  in  his  treatment  including  medical  expenditure  other  material loss, a total lump sum compensation amount of  Rs. 1,50,000/- (Rupees one lac and fifty thousand only)  

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is  being  granted  to  the  claimant.   So  far  as  non- pecuniary damages are concerned  from the evidence  itself  it  is  very much clear  that  injured was  a brilliant  student of engineering Final year at B.I.T. Mesra, and  due to said accident he has lost his future career.  He  has also suffered from mental and physical shock and  has to be suffered in future.  There is also damages and  the loss of expectation of life on account of the injuries  sustained  by  him.   He  has  to  face  inconvenience,  hardship, discomfort disappointment and mental stress  till his life, therefore, a lump sum compensation amount  of Rs. 1,00,000/- (Rupees one lac only) is being granted  to the claimant.  The total compensation came to Rs.  2,50,000/-  (Rupees  two  lac  and  fifty  thousand  only)  which the claimant is  entitled with  interest  @ 9% per  annum.”

5. The  claimant,  dissatisfied  with  the  assessment  of  

compensation  by  the  Tribunal,  approached  the  High  Court  of  

Jharkhand,  Ranchi.    The  High  Court  increased  the  amount  of  

compensation  from  Rs.  2,50,000/-  to  Rs.  3,50,000/-  having  

considered the matter thus:  

“On  an  application  under  Section  166  of  the  Motor  Vehicles Act, 1988 vide Compensation Case No. 183 of  1993  the  Motor  Vehicles  Accident  Claims  Tribunal,  Ranchi, assessed a sum of Rs. 1,50,000/- to be paid to  him under the head pecuniary damages i.e. the amount  which  was  expended   by  him  towards  his  treatment  including  the  medical  expenses  and  a  sum  of  Rs.  1,00,000/-  was  granted  towards  non  pecuniary  damages.   i.e.  for  his permanent   disablement to the  extent of 70% for the loss of right wrist and paralysis of  right upper limb as also for loss of vision in his right eye.

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Keeping into consideration the nature of  disability  the  appellant  had  to  sustain  and  loss  of  his  future  expectancy  in  life,  we  are  of  the  view  that  he  was  entitled to a sum of Rs. 2,00,000/- on account of non  pecuniary loss.  Accordingly, we modify  the impugned  judgment  and award to the extent that instead of total  amount of Rs.2,50,000, the claimant is  entitled to get  Rs. 3,50,000/-.  It is stated that the award amount with  interest granted by the tribunal had already been paid.  Hence, we make it clear that there will  be no interest  payable on the compensation amount if the said amount  is deposited before the tribunal within six weeks, failing  which the interest @9% per annum  as granted by the  tribunal  shall be payable on the enhanced amount also  from 07/08/2002.”

6. It  is  not  necessary  to  discuss  the  liability  of  the  

respondents.   That  was  disputed,   but  the  matter  has  been  

considered, and the Tribunal found that due to rash and negligent  

driving by the driver of the truck (DEG 3291), the accident took place  

in  which  the  appellant  sustained  serious  multiple  injuries  and,  

therefore,  owner  and  insurer  were  liable  to  him  for  the  damage.  

There was no appeal with regard to that matter before the High Court.  

7. 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  in  so  far  as  money  can.   Perfect  

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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. In some cases for personal  

injury,  the  claim  could  be  in  respect  of  life  time’s  earnings  lost  

because, though he will live, he cannot earn his living. In others, the  

claim may be made for partial loss of earnings.  Each case has to be  

considered in the light of its own facts and at the end, one must ask  

whether  the  sum  awarded  is  a  fair  and  reasonable  sum.   The  

conventional  basis  of  assessing  compensation  in  personal  injury  

cases –  and that is now recognized mode as to the proper measure  

of  compensation  –   is  taking  an  appropriate  multiplier  of  an  

appropriate multiplicand.  

8.  In  General  Manager  Kerala  State  Road  Transport   

Corporation, Trivandrum v.. Susamma Thomas (Mrs.) and Ors1.,  this  

Court laid down the following principles:   

“13. The multiplier method involves the ascertainment of  the  loss  of  dependency  or  the  multiplicand  having  regard to the circumstances of the case and capitalizing  the multiplicand by an appropriate multiplier. The choice  of  the  multiplier  is  determined  by  the  age  of  the  

1  (1994) 2 SCC 176  

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deceased (or that of the claimants whichever is higher)  and by the calculation as to what capital sum, if invested  at a rate of  interest  appropriate to a stable economy,  would yield the multiplicand by way of annual interest. In  ascertaining this, regard should also be had to the fact  that  ultimately  the  capital  sum  should  also  be  consumed-up over the period for which the dependency  is expected to last.”

17. The multiplier represents the number of years’ purchase  on  which  the  loss  of  dependency  is  capitalised.  Take  for  instance  a  case  where  annual  loss  of  dependency  is  Rs  10,000. If a sum of Rs 1,00,000 is invested at 10% annual  interest,  the  interest  will  take  care  of  the  dependency,  perpetually. The multiplier in this case works out to 10. If the  rate  of  interest  is  5%  per  annum  and  not  10%  then  the  multiplier  needed  to  capitalise  the  loss  of  the  annual  dependency at Rs 10,000 would be 20. Then the multiplier,  i.e., the number of years’ purchase of 20 will yield the annual  dependency perpetually. Then allowance to scale down the  multiplier  would  have  to be  made taking  into  account  the  uncertainties  of  the  future,  the  allowances  for  immediate  lump sum payment, the period over which the dependency is  to last being shorter and the capital feed also to be spent  away over the period of dependency is to last etc. Usually in  English Courts the operative multiplier rarely exceeds 16 as  maximum. This will come down accordingly as the age of the  deceased person (or  that  of  the dependants,  whichever is  higher) goes up.”

9.  The principles laid down in  Susamma Thomas1  still hold  

the    field;    the only variation has been in respect of maximum  

multiplier.   In the present case the Tribunal as well as the High Court  

seriously erred in not assessing the compensation for personal injury  

to the appellant in accord with the recognized mode i.e., by taking an  

appropriate multiplier of an appropriate multiplicand.  

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10. The appellant  at  the  time of  accident  was a  final  year  

engineering  (Mechanical)  student in a reputed college.  He was a  

remarkably  brilliant  student   having  passed  all  his  semester  

examinations  in  distinction.   Due to  the  said  accident  he suffered  

grievous  injuries  and remained  in coma for about two months.  His  

studies got interrupted as he  was moved to different hospitals for  

surgeries  and  other  treatments.   For  many  months  his  condition  

remained serious; his right hand was amputated and  vision seriously  

affected.  These multiple injuries ultimately led  to 70% permanent  

disablement.   He has been rendered  incapacitated  and a  career  

ahead  of  him  in  his  chosen  line  of  mechanical  engineering  got  

dashed for ever.   He is now  in a physical condition that he requires  

domestic  help   throughout  his  life.     He  has  been  deprived  of  

pecuniary  benefits which he could have reasonably acquired   had  

he not suffered permanent disablement to the extent of 70% in the  

accident.  

11.  On completion of Bachelor of Engineering (Mechanical)  

from  the   prestigious  institute  like  B.I.T.,  it  can  be  reasonably  

assumed that he would have got a good job.    The appellant  has  

stated in his evidence that in the campus interview he was selected  

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by Tata as well as Reliance Industries and was offered pay package  

of Rs. 3,50,000/- per annum.  Even if that is not accepted for want of  

any evidence  in  support  thereof,  there would not  have been any  

difficulty  for  him in  getting  some decent  job  in  the  private  sector.  

Had  he decided to join government  service and got  selected,  he  

would have been put in the  pay scale for Assistant Engineer  and  

would have at least earned  Rs. 60,000/- per annum.  Wherever he  

joined, he had a fair chance of some promotion and remote chance of  

some  high position. But uncertainties of life cannot be ignored taking  

relevant  factors  into  consideration.   In  our  opinion,  it  is  fair  and  

reasonable to assess his future earnings at  Rs. 60,000/- per annum  

taking the salary and allowances payable to an Assistant Engineer in  

public employment as the basis.  Since he  suffered 70% permanent  

disability,  the  future  earnings  may  be  discounted  by  30%  and,  

accordingly, we estimate upon the facts that the multiplicand should  

be Rs.42,000/- per annum.   The appellant at the time of accident  

was  about 25 years.   As  per the decision of this Court  in  Sarla  

Verma (Smt.) and Ors. v. Delhi Transport Corporation and Anr1.  the  

operative multiplier  would be 18.    The  loss of future   earnings by  

multiplying   the  multiplicand of  Rs.  42,000/-  by a multiplier  of  18  1 (2009) 6 SCC  121

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comes   to  Rs.  7,56,000/-.    The  damages  to  compensate  the  

appellant   towards  loss  of  future  earnings,  in  our  considered  

judgment, must be Rs. 7,56,000/-.  The Tribunal awarded him  Rs.  

1,50,000/- towards  treatment including the medical expenses.  The  

same   is maintained as it is and,  accordingly,  the total amount of  

compensation to which the appellant is entitled is Rs. 9,06,000/- .

12. Before  we  close,  we must  notice  in  all  fairness  to  the  

learned counsel for the insurer his submission that the appellant is  

entitled to  compensation in  accordance with the Second Schedule  

appended to the 1988 Act only.  This submission overlooks the fact  

that the appellant made his claim under Section 166 of the 1988 Act  

and not under Section 163A.  It is true that in Reshma Kumari & Ors.  

v.  Madan  Mohan  &  Anr.,1 a  two-Judge  Bench  of  this  Court  has  

referred  the  question  whether  multiplier  specified  in  the  Second  

Schedule should be taken to be a guide for calculation of the amount  

of compensation payable in a case falling under Section 166 to the  

larger bench and the said question is not yet authoritatively decided.  

However, in a case such as the present case, we find no justification  

to await decision of the larger bench on the aforenoticed question as  

there are already few decisions of this Court taking a view that the  1 (2009) 13 SCC 422

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Second Schedule has no application to the claim petition made under  

Section 166 of the 1988 Act.  

13. In  the  result,   the  appeal  is   allowed  in  part  and  the  

compensation  awarded  by  the  High  Court  in  the  sum  of  Rs.  

3,50,000/-  is enhanced to Rs. 9,06,000/-.    The appellant  shall  be  

entitled to 9% simple interest per annum on the  enhanced amount  

from August 7, 2002 until the date of actual payment.  The appellant  

shall also be entitled to the costs of this appeal which we quantify at  

Rs. 15,000/-.  

…………………… J. (Aftab Alam)

……………………. J. New Delhi,             (R.M. Lodha) September 29, 2010  

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