Kerala High Court
Koyakkutty vs Mohammed Kutty N.K on 10 February, 2022
Author: C.S.Dias
Bench: C.S.Dias
MACA NO. 2288 OF 2010
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
THURSDAY, THE 10TH DAY OF FEBRUARY 2022 / 21ST MAGHA, 1943
MACA NO. 2288 OF 2010
AGAINST THE ORDER/JUDGMENT IN OP(MV) 553/1999 OF the MOTOR
ACCIDENT CLAIMS TRIBUNAL ,PALAKKAD
APPELLANT/PETITIONER:
KOYAKKUTTY
CHOLAKKAL HOUSE, PERUR P.O., PATHIRIPPALA, PALAKKAD
DISTRICT.
BY ADV SRI.A.R.GANGADAS
RESPONDENTS/RESPONDENTS:
1 MOHAMMED KUTTY N.K.
S/O.CHERIYAKKUTTY ALIAS MOHAMMED KUTTY,
NADUVILKARUMANKUZHIYIL VEEDU,, KADAMCHERY P.O., THAVANNUR
PANCHAYATH,, PONNANI, MALAPPURAM DISTRICT.
2 MOIDEENKUTTY S/O.MOIDU
THOTTUNGAL HOUSE, KODUMUNDA, PATTAMBI.
3 THE ORIENTAL INSURANCE CO. LTD.
PRANAVAM BUILDING,, MELE PATTAMBI P.O., PATTAMBI.
BY ADV SRI.VPK.PANICKER
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR
ADMISSION ON 10.02.2022, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
MACA NO. 2288 OF 2010
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JUDGMENT
The petitioner in O.P(MV) No.553/1999 of the Additional Motor Accidents Claims Tribunal, Palakkad is the appellant. The respondents in the claim petition are the respondents in the appeal.
2. The appellant has filed the claim petition under Section 166 of the Motor Vehicles Act, 1988 ('Act'), claiming compensation on account of the injuries sustained to him in a motor vehicle road accident. It is his case that, on 11.11.1996, while he was riding a motorcycle bearing Reg. No.KL-09C/5150 through Ottappalam - Palakkad Public Road, a jeep bearing Reg.No.KL9B/6237 (Jeep), driven by the 1 st respondent in a negligent manner, hit his motorcycle. The appellant fell to the ground and suffered multiple injuries, including a compound fracture to his right knee, a grade III fracture to both bones of his right leg, a fracture of the lower right radius and a right side hemiplegia. He was treated as an inpatient for a period of 121 days at the District Hospital Palakkad, the Medical College Hospital and the Sri.Ramakrishna Hospital, Coimbatore. The jeep was owned by the 2nd respondent and insured with the 3rd respondent. The appellant was a cattle trader and was earning a monthly income of Rs.4,000/-. The appellant has become permanently disabled. Hence, he has claimed a compensation of Rs.4,75,000/- from the respondents.
MACA NO. 2288 OF 2010 3
3. The respondents have filed separate written statements denying the allegations in the claim petition. They have contended that the compensation claimed is excessive. The 3rd respondent has also disputed the age, occupation and income of the appellant.
4. A witness on the side of the appellant was examined as PW1 and Exts.A1 to A14 were marked in evidence. The respondents have not let in any evidence.
5. The Tribunal, after analysing the pleadings and materials on record, has allowed the claim petition, in part, by permitting the appellant to recover from the 3rd respondent an amount of Rs.3,45,388/- with interest @ 7.5% per annum from the date of claim petition till the date of payment and cost of the proceeding.
6. Dissatisfied with the quantum of compensation awarded by the Tribunal, the petitioner has preferred the appeal.
7. Heard; Sri.A.R.Gangadas, the learned counsel appearing for the appellant/petitioner and Sri.VPK Panicker, the learned counsel appearing for the 3rd respondent- insurer.
8. Sri.A.R.Gangadas argued that the Tribunal has failed to award just compensation to the appellant, particularly future prospects, because the appellant had sustained serious injuries and is now permanently disabled for life.
MACA NO. 2288 OF 2010 4
9. Sri.VPK Panicker vehemently countered the above submission and argued that the Tribunal has awarded just compensation for an accident that has taken place in 1996. 'Future prospects' is a relatively new concept, evolved through precedents, which cannot be given retrospective effect. 'Future prospects' may not be awarded to the appellant, as it would cause substantial financial loss and prejudice to the insurer. This Court may also consider the appeal with a mental screen of the year 1996. Furthermore, the appellant has not put forth a claim for future prospects; therefore, the prayer cannot be entertained at the appellate stage and may out-rightly be rejected.
10. The points that emanates for consideration in the appeal are
(i) Whether future prospects can be awarded in the present case?
(ii) Whether the quantum of compensation is reasonable and just? Question No.1
11. Section 168 of the Motor Vehicle Act, 1988, mandates that compensation to be awarded should appear to be "just".
12. In National Insurance Company Limited v. Pranay Sethi and others [(2017) 16 SCC 680], the Constitutional Bench of the Honourable Supreme Court has held, conception of "just compensation"
has to be viewed through the prism of fairness, reasonableness and non-
violation of the principle of equality, and Tribunals and Courts have to MACA NO. 2288 OF 2010 5 bear in mind the basic principle lies in pragmatic computation, which is in proximity to reality.
Precedents on awarding future prospects
13. In KSTRC v. Susamma Thomas [(1994) 2 SCC 176], the Honourable Supreme Court has held that, future prospects awarded for advancement of life and career should also be sounded in terms of money to augment the multiplicand. The said view has been reiterated in Sarla Verma and others v. Delhi Transport Corporation and another [(2009) 6 SCC 121] and approved in Pranay Sethi.
14. During the pendency of the reference in Reshma Kumari v.
Madan Mohan [(2013) 9 SCC 65] by a three Judge Bench, a two-Judge
Bench in Santosh Devi v. National Insurance Company
Limited [(2012) 6 SCC 421] held as follows:-
"14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma case that where the deceased was self- employed 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 naïve 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 self-employed 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 MACA NO. 2288 OF 2010 6 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 clothes. 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 paragraph 24 of Sarla Verma 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 self-employed 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 victim of an accident then the same formula deserves to be applied for calculating the amount of compensation."
15. The maze that prevailed due to the divergent views in Rajesh v.Rajbir Singh [(2013) 9 SCC 54] and in Reshma Kumari v. Madan Mohan [(2013) 9 SCC 65] was cleared in Pranay Sethi, as regards future prospects too, which is dealt in detail in paragraphs 53 to 58, which reads thus:
"53. Presently, we come to the issue of addition of future prospects to determine the multiplicand.
54. In Santosh Devi the Court has not accepted as a principle that a self-employed person remains on a fixed salary throughout his life. It has taken note of the rise in the cost of living which affects everyone without making any distinction between the rich and the poor. Emphasis has been laid on the extra efforts made by this category of persons to generate additional income. That apart, judicial notice has been taken of the fact that the salaries of those who are employed in private sectors also with the passage of time increase manifold. In Rajesh's case, the Court had added 15% in the case where the victim is between the age group of 15 to 60 years so as to make the compensation just, equitable, fair and reasonable. This addition has been made in respect of self- employed or engaged on fixed wages.
MACA NO. 2288 OF 2010 7
55. Section 168 of the Act deals with the concept of "just compensation" and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of "just compensation" has to be viewed through the prism of fairness, reasonableness and non- violation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, "just compensation". The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (supra) and it has been approved in Reshma Kumari (supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality. It is a well-accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of "standardization" so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.
56. The seminal issue is the fixation of future prospects in cases of deceased who is self-employed or on a fixed salary. Sarla Verma (supra) has carved out an exception permitting the claimants to bring materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any future prospects in respect of the said category.
57. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing MACA NO. 2288 OF 2010 8 attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.
58. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a thumb rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of self- employed or person on fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts."
16. However, future prospects awarded in Susamma Thomas, Sarla Verma, Pranay Sethi, were cases filed seeking compensation for persons who lost their lives in road accidents.
17. In Muthaiah Sekhar v.Nesamony Tpt.Corporation Ltd and another [(1998) 7 SCC 39], in an appeal arising from this Court, the Honourable Supreme Court, in an injury claim, for an accident that happened on 10.08.1984, awarded a consolidated amount, including MACA NO. 2288 OF 2010 9 future prospects, though not by referring to decisions in Susamma Thomas or Pranay Sethi.
18. In Syed Sadiq and others v. Divisional Manager, United India Insurance Company Limited [(2014) 2 SCC 735] the Honourable Supreme Court, relying on the decision in Santhosh Devi, awarded future prospects @ 50%, to a vegetable vendor, who suffered permanent disability in a road accident that took place on 14.02.2008.
19. Again, in V.Mekala v. Malathy & Another [(2014) 11 SCC 178] the Honourable Supreme Court while considering the case of a '16' year old student who suffered permanent disability in an accident on 11.04.2005 awarded future prospects @ 50%. It is apposite to extract the followings paragraphs:-
"17. Further, having regard to the undisputed fact that there has been inflation of money in the country since the occurrence of the accident, the same has to be taken into account by the Tribunal and Appellate Court while awarding compensation to the claimant-appellant as per the principle laid down by this court in the case of Govind Yadav which has reiterated the position of Reshma Kumari v. Madan Mohan, the relevant paragraph of which reads as under:
"46. 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 multiplicand this Court in Oriental Insurance Co. Ltd. v. Jashuben held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration."
18. The fact that the appellant was a brilliant student at the time of the accident should also be taken into consideration while awarding compensation to her. Therefore, taking Rs.6,000/- as monthly notional income by the Tribunal for the purpose of awarding compensation under this head is too meager an amount. The learned counsel appearing for the respondent No.2 contended that the appellant can still finish her education and find employment and therefore, there is no necessity to enhance the amount of compensation under the head of 'loss of income' and 'future prospects'. It is pertinent to reiterate here that the claimant/ appellant has undergone and undergoing substantial pain and suffering due to the accident which has rendered both her legs MACA NO. 2288 OF 2010 10 dysfunctional. This has reduced the scope of her future prospects including her marriage substantially. Moreover, a tortfeasor is not entitled to dictate the terms of the claimants- appellants career as has been held by the Karnataka High Court in the case of K.Narsimha Murthy v. The Manager, Oriental Insurance Company Ltd and Anr (ILR 2004 KARNATAKA 2471), the relevant paragraph of which reads as under:
"41. .... Further, it needs to be emphasized that it is not the right of the tortfeasor or a person who has taken over the liability of the tortfeasor in terms of and under the Act to dictate that the injured person should do some other work, manual or otherwise, it does not matter, may be with pain and discomfort, in order to minimize his or its liability. Such insistence is untenable in law and if such is the case, it would violate basic human rights of the injured person. In this case, the appellant is reduced to such a state that he is unable to do any work, manual or otherwise, without subjecting himself to pain and suffering, agony and discomfort. In an accident, if a man is disabled for a work which he was doing before the accident, that he has no talents, skill, experience or training for anything else and he is unable to find any work, manual or clerical, such a man for all practical purposes has lost all earning capacity he possessed before and he is required to be compensated on the basis of total loss. In reaching this conclusion we may derive support from the judgments in Daniels v. Sir Robert Mc Alpine and Sons Limited and Blair v. FJC Lilley (Marine) Limited. Secondly, the physical incapacity to earn income sustained by the appellant is not temporary, but permanent and complete as per Exhibit P. 43. Thirdly, it cannot be said that since the appellant has sustained only 54% permanent physical disability in respect of the whole body as per P.W. 3, the Court should take into account functional disability also at 54% only while assessing the loss of earning capacity. Such hypothesis does not stand to reason nor can it be accepted as valid in terms of law. An injured person is compensated for the loss which he incurs as a result of physical injury and not for physical injury itself. In other words, compensation is given only for what is lost due to accident in terms of an equivalent in money insofar as the nature of money admits for the loss sustained. In an accident, if a person loses a limb or eye or sustains an injury, the Court while computing damages for the loss of organs or physical injury, does not value a limb or eye in isolation, but only values totality of the harm which the loss has entailed the loss of amenities of life and infliction of pain and suffering: the loss of the good things of life, joys of life and the positive infliction of pain and distress."
19. Further, it has been held in the case of Reshma Kumari that certain relevant factors should be taken into consideration while awarding compensation under the head of future prospect of income. The relevant paragraph read as under:
"27. 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 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."
20. Therefore, in the light of the principles laid down in the aforesaid case, it would be just and proper for this Court, and keeping in mind her past results we take [pic]10,000/- as her monthly notional income for computation of just and reasonable MACA NO. 2288 OF 2010 11 compensation under the head of loss of income. Further, the High Court has failed to take into consideration the future prospects of income based on the principles laid down by this Court in catena of cases referred to supra. Therefore, the appellant is justified in seeking for re-enhancement under this head as well and we hold that the claimant- appellant is entitled to 50% increase under this head as per the principle laid down by this Court in the case of Santosh Devi......"
20. Then, the Honourable Supreme Court in Jagdish v. Mohan & Others [(2018) 4 SCC 571] and Anthony @ Anthony Swamy v. Managing Director, KSRTC [2020 SCC Online SC 493] and in a plethora of decision, has awarded future prospects to claimants who have suffered serious permanent/functional disability in road accidents.
21. Recently, a three Judge bench of the Honourable Supreme Court in Pappu Deo Yadav v. Naresh Kumar & Others[2020 SCC Online SC 752] has categorically held thus:-
"6. The principle consistently followed by this court in assessing motor vehicle compensation claims, is to place the victim in as near a position as she or he was in before the accident, with other compensatory directions for loss of amenities and other payments. These general principles have been stated and reiterated in several decisions.
7. Two questions arise for consideration: one, whether in cases of permanent disablement incurred as a result of a motor accident, the claimant can seek, apart from compensation for future loss of income, amounts for future prospects too; and two, the extent of disability. On the first question, the High Court no doubt, is technically correct in holding that Pranay Sethi involved assessment of compensation in a case where the victim died. However, it went wrong in saying that later, the three-judge bench decision in Jagdish was not binding, but rather that the subsequent decision in Anant to the extent that it did not award compensation for future prospects, was binding. This court is of the opinion that there was no justification for the High Court to have read the previous rulings of this court, to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. Such a narrow reading of Pranay Sethi 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.
8. This court has emphasized 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.........
xxx xxx xxx xxx xxx
MACA NO. 2288 OF 2010
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12. In view of the above decisive rulings of this court, the High Court clearly erred in holding that compensation for loss of future prospects could not be awarded. In addition to loss of future earnings (based on a determination of the income at the time of accident), the appellant is also entitled to compensation for loss of future prospects, @ 40% (following the Pranay Sethi principle)."
22. Thus, it is well settled in a host of precedents, that persons who suffer serious functional disability in motor vehicle accidents are, in addition to the compensation to be awarded under the pecuniary and non- pecuniary heads, also entitled to future prospects. But, the precedents do not fix any benchmark of the percentage of permanent/functional disability to award 'future prospects'. Invariably, in most of the cases referred to above, the victims have suffered permanent/functional disability above 50%. Therefore, 'future prospects' is to be awarded to victims who suffer serious functional disability, that too depending on the facts of each case, based on the principles laid down in the above precedents.
23. Now, coming to the pivotal point whether 'future prospects' can be awarded to the appellant.
24. The specific case of the appellant is that, on 11.11.1996, while he was riding his motorcycle, he was hit by a jeep driven by the 1st respondent in a negligent manner.
MACA NO. 2288 OF 2010 13 Principles of prospective and retrospective overruling
25. In Golak Nath v. State of Punjab [AIR 1967 SC 1643] a eleven Judge bench of the Honourable Supreme Court, while considering the principles of prospective and retrospective overruling held thus:-
"45. There are two doctrines familiar to American Jurisprudence, one is described as Blackstonian theory and the other as "prospective over-ruling" which may have some relevance to the present enquiry. Blackstone in his Commentaries, 69 (15th Edn., 1809) stated the common law rule that the duty of the Court was "not to pronounce a new rule but to maintain and expound the old one". It means the Judge does not make law but only discovers or finds the true law. The law has always been the same. If a subsequent decision changes the earlier one, the latter decision does not make law but only discovers the correct principle of law. The result of this view is that it is necessarily retrospective in operation. But Jurists, George F. Canfield, Robert Hill Freeman, John Henry Wigmore and Cardozo have expounded the doctrine of "prospective over-ruling" and suggested it as "a useful judicial tool".
In the words of Canfield the said expression means:
"... a Court should recognise a duty to announce a new and better rule for future transactions whenever the court has reached the conviction that on old rule (as established by the precedents) is unsound even though feeling compelled by stare decisis to apply the old and condemned rule to the instance case and to transactions which had already taken place".
Cardozo, before he became a Judge of the Supreme Court of the United States of America, when he was the Chief Justice of New York State addressing the Bar Association said thus:
"The rule (the Blackstonian rule) that we are asked to apply is out of tune with the life about us. It has been made discordant by the forces that generate a living law. We apply it to this case because the repeal might work hardship to those who have trusted to its existence. We give notice however that any one trusting to it hereafter will do at his peril."
The Supreme Court of the United States of America in the year 1932, after Cardozo became an Associate Justice of that Court in Great Northern Railway v. Sunburst Oil & Ref. Co., applied the said doctrine to the facts of that case. In that case the Montana Court had adhered to its previous construction of the statute in question but had announced that that interpretation would not be followed in the future. It was contended before the Supreme Court of the United States of America that a decision of a court overruling earlier decision and not giving its ruling retroactive operation violated the due process clause of the 14th Amendment. Rejecting that plea, Cardozo said:
"This is not a case where a Court in overruling an earlier decision has come to the new ruling of retroactive dealing and thereby has made invalid what was followed in the doing. Even that may often be done though litigants not infrequently have argued to the contrary.... This is a case where a Court has refused to make its ruling retroactive, and the novel stand is taken that the Constitution of the United States is infringed by the refusal. We think that the Federal Constitution has no voice upon the subject. A state in defining the elements of adherence to precedent may make a choice for itself between MACA NO. 2288 OF 2010 14 the principle of forward operation and that of relation backward. It may be so that the decision of the highest courts, though later overruled, was law nonetheless for intermediate transactions.... On the other hand, it may hold to the ancient dogma that the law declared by its Courts had a platonic or ideal existence before the act of declaration, in which event, the discredited declaration will be viewed as if it had never been and to reconsider declaration as law from the beginning...... The choice for any state may be determined by the juristic philosophy of the Judges of her Courts, their considerations of law, its origin and nature."
The opinion of Cardozo tried to harmonize the doctrine of prospective over-ruling with that of stare decisis.
* * *
51. As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we would like to move warily in the beginning. We would lay down the following propositions: (1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution; (2) it can be applied only by the highest court of the country i.e. the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the courts in India; (3) the scope of the retroactive operation of the law declared by the Supreme Court superseding its 'earlier decisions' is left to its discretion to be moulded in accordance with the justice of the cause or matter before it."
26. Again, in Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange [(2008) 14 SCC 171], the Honourable Supreme Court held as follows:
"35. In our judgment, it is also well settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the court to pronounce a "new rule" but to maintain and expound the "old one". In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood.
36. Salmond in his well- known work states:
"The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime."
27. The Honourable Supreme Court in M.A. Murthy v. State of Karnataka [ (2003) 7 SCC 517] explained the rationale for prospective overruling as under:
MACA NO. 2288 OF 2010 15 "8. The learned counsel for the appellant submitted that the approach of the High Court is erroneous as the law declared by this Court is presumed to be the law at all times. Normally, the decision of this Court enunciating a principle of law is applicable to all cases irrespective of its stage of pendency because it is assumed that what is enunciated by the Supreme Court is, in fact, the law from inception. The doctrine of prospective overruling which is a feature of American jurisprudence is an exception to the normal principle of law, was imported and applied for the first time in L.C. Golak Nath v. State of Punjab. In Managing Director, ECIL v. B. Karunakar the view was adopted. Prospective overruling is a part of the principles of constitutional canon of interpretation and can be resorted to by this Court while superseding the law declared by it earlier. It is a device innovated to avoid reopening of settled issues, to prevent multiplicity of proceedings, and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applies to future cases. (See Ashok Kumar Gupta v. State of U.P and Baburam v. C.C. Jacob). It is for this Court to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective overruling, unless it is so indicated in the particular decision. It is not open to be held that the decision in a particular case will be prospective in its application by application of the doctrine of prospective overruling. The doctrine of binding precedent helps in promoting certainty and consistency in judicial decisions and enables an organic development of the law besides providing assurance to the individual as to the consequences of transactions forming part of the daily affairs.............."
28. The net result of the above analysis is that, judgements will take effect retrospectively, unless specifically provided for to operate prospectively, to cater to specific situations and for reasons to be stated therein.
29. Starting from Susamma Thomas to Pappu Deo Yadav, none of the decisions state that 'future prospects' shall only be paid prospectively. Hence, the concept of 'future prospects' relates back from the date of the commencement of the Motor Vehicles Act, 1988. Disability in the case at hand
30. In the case at hand, the disability of the appellant was assessed by the Medical Board attached to the Medical College Hospital, Thrissur, as per Ext.A14 disability certificate. In Ext.A14, the appellant MACA NO. 2288 OF 2010 16 is found to have reduced speech output, impaired comprehension, residual aphasia, right side hemiparesis with spasticity, walking differently and needs support to walk. His daily living activity of walking, feeding, dressing and toilet habits are affected and, therefore, he has a permanent disability of 50%.
31. In Rajkumar v. Ajaykumar [2011 (1) KLT 620 SC] , the Honourable Supreme Court has categorically held that, what needs to be looked into in an injury claim, is the functional disability of the injured- claimant.
32. Going by nature of disability assessed in Ext.A14 certificate and considering the fact that the appellant was a cattle trader, I fix the functional disability of the appellant at 50% .
33. On a consideration of the grievous injuries sustained by the appellant, I am of the definite view that the appellant is entitled to future prospects as laid down in the afore-cited decisions.
34. Likewise, in the instant case, the accident happened on 11.11.1996. The Honourable Supreme Court has awarded future prospects in Muthaiah Sekhar, for an accident that occurred on 10.08.1984; in V.Mekala, for an accident that happened on 11.04.2005 and in Syed Sadiq, for an accident that took place on 14.02.2008. So, the concept of 'future prospects' is not a relatively new term as contended by the learned counsel for the insurer.
MACA NO. 2288 OF 2010 17
35. Moreover, the appellant cannot be blamed for the delay in deciding the claim petition and the appeal because he had promptly filed the claim petition as well as the appeal. It is only due to the backlog of cases, that the appeal that was filed in 2010 has been considered in the year 2022, for which the appellant cannot be blamed. Also, the Motor Vehicles Act, 1988 is a beneficial piece of legislation which has to liberally construed and interpreted in favour of the injured-claimant. For all the above reasons, I answer Question No.1 in favour of the appellant and hold that he is entitled to future prospects.
QUESTION No.(ii) Income
36. The appellant had claimed that he was a cattle trader by profession and was earning a monthly income of Rs.4,000/-. For the want of materials, the Tribunal fixed the notional monthly income of the appellant at Rs.1,500/-. As the accident occurred in the year 1996 and following the principles laid down by the Honourable Supreme Court in Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited [(2011) 13 SCC 236], I find the fixation of the notional monthly income of the appellant at Rs.1,500/- to be reasonable and justifiable.
MACA NO. 2288 OF 2010 18 Future Prospects
37. The appellant was aged 38 years at the time of the accident, therefore, the multiplier to be adopted is '15' as per the principles laid down in Sarala Verma. Hence, the appellant is entitled to future prospects at 40% as laid down Pranay Sethi.
Loss due to disability
38. Taking into account the above mentioned factors, namely, the monthly income of the appellant at Rs.1,500/-, his functional disability at '50%', the multiplier at '15' and future prospects at 40%, I award the appellant an amount of Rs.1,89,000/- towards 'loss due to disability', instead of Rs.1,35,000/- awarded by the Tribunal. Other heads of compensation
39. With respect to the other heads of compensation, particularly keeping in mind the fact that the accident occurred on 11.11.1996, I find that the Tribunal has awarded reasonable and just compensation under the other heads.
Negligence and liability
40. Ext.A4 charge-sheet filed by the Mankara Police in Crime No.155/1996 proves that the accident occurred due to the negligence of the 1st respondent. Indisputably, the 2nd respondent was the owner and the 3rd respondent was the insurer of the jeep. The respondents MACA NO. 2288 OF 2010 19 have not let in any evidence to discredit Ext.A4 charge-sheet. The 3rd respondent has also not proved that the 2nd respondent had violated the insurance policy conditions. Therefore, the 3 rd respondent is to indemnify the liability of the 2nd respondent arising out of the accident.
In the result, the appeal is allowed, in part, by enhancing the compensation by a further amount of Rs.54,000/- (i.e. an enhancement of compensation under the head 'loss due to disability) with interest at the rate of 6% per annum from the date of petition till the date of deposit and a cost of Rs.10,000/-. The 3rd respondent is ordered to deposit the enhanced compensation with interest and cost before the Tribunal within a period of sixty days from the date of receipt of a certified copy of the judgment. Immediately on the compensation amount being deposited, the Tribunal shall disburse the enhanced compensation to the appellant/petitioner in accordance with law.
ma/11.02.2022 Sd/- C.S DIAS, JUDGE
/True copy/