REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7430 OF 2008 (Arising out of SLP (C) No.2489 of 2007)

Asraf Alli … Appellant

Versus

M/s. Naveen Hotels Ltd. & Anr. … Respondents

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. The claimant before the Motor Accident Claims Tribunal (for short

“the Tribunal” ) is before us aggrieved by and dissatisfied with a judgment

and  order  dated  12.7.2006  passed  by  the  High  Court  of  Karnataka  at

Bangalore  whereby  and  whereunder  it  allowed  an  appeal  preferred  by

Respondent  No.2,  Insurance  Company,  in  part,  reducing  the  amount  of

compensation  towards  loss  of  future  earning  from  Rs.4,53,600/-  to

Rs.67,500/-.

3. Appellant  was  aged  15  years  when  he  met  with  an  accident  on

14.9.1998  as  a  result  whereof  he  sustained  serious  injuries  and  suffered

permanent disability to the extent of 70% of his left lower limb which had to

be amputated.   

Before the Tribunal,  several  witnesses,  namely, PW1 to PW5 were

examined to prove that at the material time, appellant had been running a

poultry farm independently.  A large number of documents being Exhibit

P.1 to Exhibit P.16 were also brought on record.   

The learned Judge of the Tribunal, relying on or on the basis of the

said materials brought on record by the appellant, held :

“Thus, it is evident from the oral evidence of PW3, coupled  with  documentary  evidence  that  the petitioner  by  virtue  of  accident,  has  suffered permanent  physical  disability  amounting  to  70% on account  of amputation of his  left  lower limb. PW2 Fakruddin Nadaf, Proprietor of poultry farm has stated in his evidence that the petitioner has undergone  training  to  run  poultry  farm  as  his assistant.   Exh.P-8  certificate  issued  by  him, further speaks that petitioner is capable of running poultry  farm  independently.   Eh.P-20  are  the vouchers  in  favour  of  the  petitioner  for  having purchased  the  birds  from  time  to  time  and  the

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feeds  purchased  thereunder.   Thus,  from  the evidence of PW2, coupled with Exh.P-8 to P-10, it is evident that the petitioner was running poultry farm.  According to the petitioner he was earning Rs.5000-00 per month.  Taking into consideration the  age,  date  of  accident  and  the  avocation undertaken  by  the  petitioner,  I  consider  his monthly  earnings  at  Rs.3,000/-  as  against Rs.5,000/-  claimed  by  the  petitioner.   Since  the disability  suffered  by  the  petitioner  is  70%  on account of amputation of left lower limb, loss of earnings  per  month  will  be  Rs.3000 x 70/100 = Rs.2100/- and for 12 months it will be Rs.2100 x 12 = Rs.25,200/-.  Since the petitioner was aged 15 years, the proper multiplier as reported in ILR 1996 Kar.  on page No.2127 will  be 18.   Hence, Rs.25,200/- x 18 = Rs.4,53,600/- and that will be net loss of earnings and I award that amount for the same.”

4. An appeal was preferred thereagainst by the owner of the vehicle, i.e.,

Respondent  No.1  and  Respondent  No.2  jointly.   Later  on,  however,  the

Respondent No.1 was relegated to the position of the respondent in the said

appeal.   

The High Court,  by reason of the impugned judgment, reduced the

amount of compensation under the head ‘loss of future income’, stating :

“By taking note of the aforesaid judgment of this Court  and the submission of the learned counsel for  the  insured  in  so  far  as  the  “loss  of  future earning capacity” is concerned, the Tribunal could not have taken the notional income at Rs.3,000/-,

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but  it  should have been taken at Rs.15,000/-  per annum and based on such figure, if we work out, the  “loss  of  future  earning  capacity”  comes  to Rs.67,500/- and this we substitute in the place of Rs.4,53,600/-.”

5. Ms.  Kiran  Suri,  learned  counsel  appearing  for  the  appellant,  would

contend  that  the  High  Court  ignored  the  fact  that  the  appellant,  although

minor  at  the  relevant  time,  had  been  running  a  poultry  farm  and  as  his

monthly income could be assessed by the Tribunal at Rs.3,000/- per month

and, thus, the High Court committed a serious error in computing the same at

Rs.15,000/- per annum.  It was urged that the loss of future earning capacity

has wrongly been calculated at Rs.67,500/- and even on the said basis the

amount of compensation should have been calculated t Rs.1,80,000/-.

6. Mr.  A.K. Raina, learned counsel  appearing on behalf  of Respondent

No.1, however, would submit that appellant being a minor, the High Court

has rightly refused to hold that he has been able to establish that his income at

Rs.3,000/- per month.   

7. The fact that an accident had taken place on 14.9.1998 is not in dispute.

It  is  also  not  in  dispute  that  in  the  said  accident  appellant  had  suffered

grievous injuries.   

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PW3, Dr.  Basavaraj  Dodamani,  in  his  evidence stated that  appellant

had been walking with the help of crutches and his left lower limb had been

amputated below knee with 3” stump but there was an old scar on right heel

and it was on that basis the disability of the appellant was calculated at 70%

in respect of lower limb.

8. In computing the amount of compensation, the court may in a given

case  take  the  benefit  of  the  structured  formula  as  envisaged  in  the  table

appended to the Second Schedule of the Motor Vehicles Act, 1988, Note 5

whereof reads as under :

“5. Disability in non-fatal accidents :

The  following  compensation  shall  be  payable  in case of disability to the victim arising out of non- fatal accidents:

Loss  of  income,  if  any,  for  actual  period  of disablement not exceeding fifty two weeks.

PLUS either of the following:—

(a) In case of permanent total disablement the amount  payable  shall  be  arrived  at  by multiplying the annual loss of income by the Multiplier applicable to the age on the date of determining the compensation, or

(b) In  case  of  permanent  partial  disablement such  percentage  of  compensation  which would  have  been  payable  in  the  case  of permanent  total  disablement  as  specified under item (a) above.

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Injuries  deemed  to  result  in  Permanent  Total Disablement/Permanent  Partial  Disablement  and percentage of loss of earning capacity shall be as per  Schedule  I  under  Workmen’s  Compensation Act, 1923.”

9. Appellant was admitted as an indoor patient on 25.9.1998 and was

discharged on 26.10.1998.  If  the principle  akin  to  the Second Schedule

appended to the 1988 Act is to be applied, the learned Tribunal must be held

to have applied the same correctly.  The High Court has not assigned any

reason in support of its judgment.  It did not enter into the correctness of the

the findings of fact arrived at by the Tribunal in regard to the income of the

deceased.   The  Tribunal  held  that  the  income  of  the  appellant  was

Rs.3,000/- per month not on a notional basis but on actual basis.  The High

Court,  in  exercise  of  its  jurisdiction under Section  173 of the  Act  either

could have affirmed the said finding or reversed the same but for the said

purpose it was required to consider the merit of the matter.  The High Court,

in  our opinion,  has proceeded on a wrong premise that  the Tribunal  had

fixed the income of the appellant  at  Rs.3,000/-  per  month  on  a  notional

basis.   

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10. However,  if  the  Second  Schedule  appended  to  the  Act  is  to  be

applied, the correct multiplier in the case of the appellant, he being aged

about 15 years, was 15 and not 18.   

11. Item (19) of Part II of Schedule I of the Workmen’s Compensation

Act, 1923 provides for list of injuries, deemed to result in permanent partial

disablement, which reads, thus :

“(19) Amputation below middle  thigh to 8.89 cms.  below knee 60%”

Hence, the ‘percentage of loss of earning capacity’ should be treated

as 60% of the monthly income instead of 70% as treated by the Tribunal.   

In that view of the matter, the total amount of compensation payable

to the appellant under the head ‘loss of future earning capacity’ would be

Rs.3,24,000/-  (Rupees  three  lac  twenty  four  thousand  only),  the  annual

income being Rs.21,600/- and the multiplier being 15.

12. The appeal is allowed to the aforementioned extent.  In the facts and

circumstances of the case, however, there shall be no order as to costs.

……………………………….J.

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[S.B. Sinha]

..…………………………..…J. [Cyriac Joseph]

New Delhi; December 19, 2008

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