Kerala High Court
Oriental Insurance Co. Ltd. vs Hariprasad on 17 November, 2005
Equivalent citations: 2006ACJ432, AIR2006KER125, [2006(2)JCR501], 2005(4)KLT977, 2006 (1) AIR KAR R 560
Author: M. Ramachandran
Bench: M. Ramachandran, K.K. Denesan, M.N. Krishnan
ORDER M. Ramachandran, J.
1. When the above Miscellaneous First Appeal came up for hearing, a Division Bench, consisting of the Hon'ble Mr. Justice K.A. Abdul Gafoor and the Hon'ble Mr. Justice K.M. Joseph, noticed that there is apparently conflicting views expressed by two Division Benches on the question canvassed by the appellant -- the Oriental Insurance Company Limited, namely, whether compensation could be awarded separately on account of permanent disability and also on account of loss of earning capacity. The learned Judges were of the view that since the question is raised most often, an authoritative pronouncement on the issue is required to be made. The question has been referred for consideration of a Full Bench, in the above context.
2. Sri. V. Hariprasad, first respondent herein, aged about 18 years, sustained an amputation injury in a motor accident, which had occurred on 13.11.1993, whereby his right hand had been chopped of from the shoulder. Evidently the trauma and loss suffered was substantial. A claim under Sections. 140 and 166 of the Motor Vehicles Act, read with Rule 371 of the Kerala Motor Vehicles Rules, 1989 was got preferred. He had claimed a total compensation of Rs. l 5,32,284/- for the injuries that he had sustained. During the period concerned, he was a student and was not an earning member and he had not claimed any amount for loss of earning. The Motor Accident Claims Tribunal had granted Rs. 1500/- for transportation expenditure, Rs. 7500/- towards extra nourishment, Rs. 500/- as compensation for damage to clothing, and he had been directed to be paid Rs. 62,000/- towards medical experience incurred. Rs. 50,000/-had been awarded as compensation for pain and suffering. In respect of the claim for compensation for continuing permanent disability and for loss of earning power, respectively Rs. 1,92,000/- and Rs. 1,28,000/- had been awarded. A sum of Rs. 25,000/-has been awarded for loss of marriage prospects. On the heads of disfigurement and loss of amenities in life, a sum of Rs. 25,000/- had been awarded.
3. The above award of the Tribunal had been subjected to challenge by the Insurance Company. The contention of the appellant was that when permanent disablement is adequately compensated, there arises no question of granting a further compensation on loss of earning capacity. Reliance had been placed by them on decisions of this Court reported in Shajan v. N. Raman Pillai, 1994 (2) KLT SN 19 P. 14 : 1994 (2) KLJ 269, and Oriental Insurance Co. Ltd. and Anr. v. K.R. Vijayarajan and Anr., 1992 ACJ 663.
4. The first respondent, on the other hand, justified the grant as above made by the Tribunal, as according to the counsel, the compensation on account of permanent disability and compensation arising out of loss of earning capacity come under two distinct and different heads, and these always were, of course, subject to the discretion of the Tribunal. It was submitted that taking notice of the peculiar facts that the first respondent was a student, who was yet to enter the employment market, above yardstick alone would have rendered justice. Reliance had been placed on a Bench decision of this Court in K.S.R.T.C. v. Peethambaran, 1994 (2) KLT 717. The Madras High Court in Thiruvallur Transport Corporation v. Thangavelu, 1996 (1) KLT SC 6 Case No. 9, according to the counsel, had examined the issue and had held that, necessarily the Tribunal was obliged to come to the conclusion that these two heads are different and distinct for awarding compensation.
5. In addition to the decisions referred to as above, the counsel had adverted to some other judgments as well. General principles too had been cited. The cleavage in view is apparent, as had been noticed by the Division Bench, as could be seen from the reference order. We will examine the question in the above said background.
6. Chap.X, XI and XII of the Motor Vehioles Act deal with the issue of compensation, insurance and adjudication of claims in respect of accidents arising out of the use of motor vehicles. On receipt of an application, the Claims Tribunal, constituted under the Act, is to make an award determining the amount of compensation "which appears to it to be just". What is the just compensation has not been specified by the Act, and it may vary from claimant to claimant,, and depends upon a variety of circumstances. That a sufficiently large amount of discretion has been granted to the Tribunal, is evident from Section 169 of the Act. Subject to rules, that may be made on this behalf, it is authorised to follow such summary procedure as it thinks fit. Rule 371 of the Kerala Motor Vehicles Rules provides that the application for compensation is to be made in the Form prescribed.
7. It can safely be assumed that in a claim for compensation for personal injury, the attempt of the Tribunal is to compensate the victim. No other method has so far been possible to be employed than to compensate him with money. It is also universally accepted that an injured is entitled to recover compensation for having suffered pecuniary loss as also for non-pecuniary loss, but in the latter instance, compensation in terms of money is the only possible course.
8. At this juncture, before going to further details, it may be appropriate to refer to a passage from the decision of the Supreme Court, reported as R.D. Hattangadi v. Pest Control (India) (P) Ltd., , which could be adopted as a safe guideline before examining the rival contentions.
"9. Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant: (i) medical attendance; (ii) loss of earning of profit upto the date of trial; (iii) other material loss. So far non-pecuniary damages are concerned, they may include: (i) damages for mental and physical shock, pain and suffering, already suffered or likely to be suffered in future; (ii) damages to compensate for the loss of amenities of life which may include a variety of matters i.e., on account of injury the claimant may not be able to walk, run or sit; (iii) damages for the loss of expectation of life, i.e., on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life."
In the decision, loss of possible earnings had been dealt with, and the compensation awarded had been approved. But the loss of earning capacity as such had not been specifically adverted to, and it could very well be itemized as one coming under the head of non-pecuniary loss for the purpose of determining the compensation. The distinction is real though very fine.
9. As broadly classified, pecuniary damages could be brought within three heads. The expenditure that is required to be shelled out of his estate has to be got reimbursed.
The non-pecuniary losses may be in the like of loss of amenities of life, loss of expectation of life, the inconvenience caused by pain and suffering, damages for shock, hardship and the loss in set back of earning capacity. The draw back, the person may have in getting this compensation adjudicated, usually is that he has to approach the Tribunal within a reasonable period of the accident. Law does not permit a person to make repeated visits to the Tribunal, although in later life repercussions from the loss and injury might have conferred on him unforeseen disadvantages. The duty of the Tribunal therefore is to assess the situation with vision, and to award a just compensation, as prescribed by the Act. It should not be too low; simultaneously it should not be on the higher side, so as to result in a gain, which may lend a different character to the awarded compensation.
10. The principle that mitigation of the loss already suffered should be recognised to the full extent, gives no difficulty for the Tribunal, since it principally involves computation of damages with reference to the facts that are supplied. However, while deciding the loss of earning capacity, which comes under this head of non-pecuniary damage, which in fact in large number of cases could be the principal head of the damage, the scope of enquiry would be an investigation to the prospective loss, which might be there. Possibility and opportunities, which stand denied to the person by force defies set principles such as use of multipliers. In fact, the enquiry is to find in rough but not arbitrary terms as to the loss he is presumed to have sustained, by his becoming a commodity which cannot find a ready/ever again market, in his future life span. It is directly attributable to the accident sustained. Therefore, beyond dispute he deserves to be compensated on this score. The question is under what head?
11. Mr. George Cherian, counsel for the appellant, referred to certain passages from Megregor on Damages (14th Edition) and submits that when once an injured is compensated for permanent disability as a result of the accident, it will be illogical for him to contend that he should be compensated for his loss earnings once again, in a separate head. They are really not separable, and perhaps could be considered as mutually excluding. More precisely, perhaps it could be stated that permanent disability as well includes the compensation otherwise admissible for loss of future earning. The learned Counsel, in this context, had invited our attention to the decision of this Court in Shajan's case (cited supra). It was a case where a person had sustained injuries at the age of 26. He was a door checker of a stage carriage service. The Tribunal had fixed the liability finding that there was negligence on the part of the driver. The Tribunal had granted an amount of Rs. 30,000/- as compensation for loss of earning power. A different head of claim was the one for compensation for permanent disability. It had been denied, and the appeal challenged the above finding. Considering the" issue it had been observed as following:
"13. As stated earlier, the Tribunal had awarded an amount of Rs. 7,500/- for the loss of amenities and Rs. 30,000/- as loss of earning power. The Tribunal, therefore, found that when compensation is awarded for loss of amenities and loss of earning power, no further compensation need be paid for permanent disability. Permanent disability gives rise to loss of earning power. The earning power had been lost due to the disability. Therefore, the Tribunal is perfectly correct in coming to the conclusion that when entire amount claimed by the appellant as loss of earning power and loss of amenities is allowed, there is no further justification to pay any amount by way of compensation for permanent disability. The loss of earning power is the result of the permanent disability. It is after taking into consideration the permanent disability, the Tribunal decided to grant the entire amount claimed as loss of earning power by the appellant. It is true that loss of earning power and loss of amenities are different concepts. But it is not correct to say that the loss of earning power has no nexus or connection with the permanent disability. As stated earlier, the disability has resulted the injured from making his earning that he was making before the accident. Under such circumstances, we see no justification to interfere with the said finding arrived at by the Tribunal".
12. Counsel points out that the loss of earning power inseparably is entwined with the permanent disability. Disability results in preventing the injured from making earnings, though the rule is not universally acceptable. Therefore, according to him, there was no justification for grant of compensation on the basis of permanent disability when already he had been compensated for the loss of earning power.
13. Our attention had been invited thereafter to the decision reported in Oriental Insurance Co. Ltd. v. K.R. Vijayarajan, 1992 ACJ 663. The Court held that the injured cannot claim an" additional amount when the disability is compensated by awarding an amount of compensation. The Court observed that "In fact one of the elements to be taken into account for compensation is the loss of earning power". It had been indicated that if there is a special case to be cited for special treatment, a claim could have been figured, in case clear and clean evidence was there to substantiate the contention.
14. Mr. Justice Kamat in New India Assurance Co. Ltd. v. M.N. Sheeja, 1997 ACJ 1072, had occasion to consider this aspect, namely whether the grant of compensation with regard to personal disability as well as loss of earning due to personal disability is to be compensated separately. It was a case where the Tribunal had granted the relief's. The Court held that "bare reading of the award would show that Tribunal has not realised the overlapping character of pain and suffering at the time of the accident the consequence of permanent disability and loss of earning, all necessarily flowing in an overlapping way". The compensation awarded in two different heads, according to the Bench, was impermissible.
15. Mr. George Cherian had also invited our attention to the Madras decision in National Insurance Co. Ltd. v. A. Kala Mohan, . It had been contended by the appellant that the Tribunal had erred in granting a sum of Rs. 2,00,000/- for the permanent disability and at the same time, another sum of Rs. 2,00,000/- for loss of earning power, which the Bench referred to as double compensation. Accepting the arguments put in as above, it had been held as following:
"Coming to the award of compensation under the head, permanent disability, the Court is of the view that the Tribunal has rightly granted a sum of Rs. 2,00,000/- for disability. However, we are unable to confirm the finding of the Tribunal in awarding a sum of Rs. 2,00,000/- for loss of earning power, which amounts to double compensation. However, in our opinion the claimant is also entitled to a sum of Rs. 1,00,000/- for loss of marital life".
16. Therefore, according to the counsel, it is universally accepted that when permanent disablement is assessed and a compensation is suggested, a further award for loss of earning is not called for. Already the item is deemed to have been directed to be compensated, and the claim has to be adjudged as a whole. Counsel also had submitted that it is not as if a contrary view was not there. He had taken us to a few such decisions, but as the respondent too had adverted thereto, we will deal with it separately.
17. Mr. Nambiar, counsel for the respondents, submits that the submissions made on behalf of the insurer may not be fully acceptable. He firstly refer to the rules whereunder in a prescribed Form the claims have to be submitted before the Tribunal. According to him, this is an indication as to how the mind of the rule making authority works and this has to be sufficiently taken notice of. But it does not at all be necessary that one is unduly obsessed by the Forms prescribed by the Rules. Part II of Form Comp. A requires the applicant to specify expected compensation in the following heads:
1. Compensation for pain and suffering;
2. Compensation for continuing or permanent disability, if any;
3. Compensation for the loss of earning power.
18. Mr. Cherian submits that the Forms prescribed by many other State Rules do not provide for this artificial distinction between items 2 and 3. According to us, no inference as canvassed by the respondents could be drawn from the above circumstance. Perhaps Part I and Part II respectively deals with pecuniary and non-pecuniary compensation.
19. Counsel had thereafter referred to a Division Bench judgment of the Madras High Court. The Learned Judge, who was a party to the decision in (cited supra), had been party to the reported judgment in Thiruvallur Transport Corporation v. Thangavelu, 1996 (1) KLT SN 6 Case No. 9. It had been held that there is no merit in the contention that compensation cannot be awarded for permanent disability if compensation is awarded under the heading "loss of earning power". They are two distinctive and separate claims. Loss of earning power is only one of the consequences of permanent disability. It was therefore submitted that it was not as if separate claims were not possible at all.
20. But the position does not appear to be as one canvassed. When the Court held that loss of earning power is a consequence of permanent disability, the claim could have been considered as one in the slot of permanent disability.
20. Strong reliance had also been placed to the judgment in K.S.R.T.C. v. Peethambaran, 1994 (2) KLT 717. There also, according to the counsel, the learned Judge, who decided Sheeja 's case (cited supra), had come to an altogether different finding. The question posed was as to whether the three heads, namely (1) pain and suffering, (2) permanent disability and (3) loss of earning power could have been permissible. The Court had held that "Whatever is possible, with the best efforts of measuring of these aspects in terms of money becomes the concern of the Court and the Court has to deal with these aspects in the light of the pleadings, independently and separately". Here also; we do not find that we can lend a meaning to the observation as canvassed by the respondents.
22. Referring to a treatise on the subject (Kameshwara Rao's Law of Damages and Compensation 7th Edition, Vol. I), Mr. Nambiar submits that compensation amounts are generally to be awarded on two principal heads, such as "Personal loss" and "Economic loss". Under the head of personal loss, damages for pain and suffering, loss of amenities, personal inconvenience, and discomfiture or consciousness of loss are to be included. The economic loss can include damages in respect of pecuniary loss, past and future, such as loss of earning, medical expenses and of nursing, care, as also loss of earning capacity, where the injured is handicapped. Besides all these, damages are claimable for loss of expectation of life, where the injury is likely to deprive him of the normal expectation of life. It is submitted by Mr. Nambiar that it is the settled principle that in disablement cases the compensation awards are always higher than in cases of death for obvious reasons. Therefore, when the Court sit in judgment, the amount of deprivation caused due to bodily injury, deprivation with consequences of loss of earnings or earning capacity and duration of deprivation are to be separately noticed. Counsel had also referred to the decision of the Allahabad High Court, , State of U.P. v. Vinod Kumar. In the above case, the right arm of the victim had been amputated. The gravity of deprivation, the Court held, had to be specially noticed. But apart from the above, there is nothing in the decision to indicate that the learned Judges had referred to the specific controversy as forming the subject matter of this appeal and the decision is not helpful.
23. In Dr. C.B. Singh v. Cantonment, Board, Agra, 1974 ACJ 248, the learned Counsel points out that the Allahabad High Court had thrown light to the science of awarding compensation in general and special terms. With reference to paragraph 23-A, it is submitted that the ambit of non-pecuniary losses covers the injury itself and not merely the consequences of injury. Of course, the judgment shows that general damages have to be compensated. Simultaneously, compensation for permanent impairment and loss of earning capacity was given. But we do not find anything to show that the principle highlighted in the decisions cited by Mr. Cherian had been held as inapplicable or irrelevant. The decision of a Division Bench of this Court in Section James Vincent v. K.A. George, 1983 ACJ 774, also has not specifically adverted to the principles highlighted. Of course, compensation had been awarded for loss of earning capacity as well coming under the head personal disability, but it may not be possible for us to gain any advantage from the observations, as the issue particularly relevant here apparently had not been agitated there.
24. Our attention had also been invited to a decision of the Gujarat High Court reported in 1995 ACJ 493 (A.S. Sharma v. Union of India), wherein prospective loss is classified in the head of pecuniary loss, although non-pecuniary losses suffered also had come within the purview of adjudication. The judgment principally dealt with future loss of income. The Court had observed that the Tribunal while deciding the issue had heavily relied on the text Disability: Determination and Evaluation by Dr. Henry H. Kessler. The term disability, the Court observed had been attempted to be defined as 'inability to meet certain standards of physical efficiency, social, occupational and economic competence'. The ultimate finding appears to be that although medical evaluation is less subject to error, it may not be the last word; for assessment, the impairment has to be applied to the profession or vocation of the claimant, so as to ascertain the resultant diminution or the capacity to earn'. This is a sound principle, and we agree with the views. Such assessment should come within a group, along with other heads, so that the compensation for permanent disability could be finally fixed.
25. Respondent had adverted to the observations, that had been given by various High Courts, including the Kerala High Court, on the subject in a few other cases as well. But it may not be necessary to recite them individually, as the principles highlighted have been dealt with in cases already adverted to.
26. We had also occasion to notice a judgment of this Court dated 21.7.2005, rendered in M.F.A. No. 7 of 1996. Mr. Justice K.M. Joseph, speaking for the Bench, had held that even if it is presumable that it is open to the Tribunal to award compensation towards loss of earning capacity apart from the amount awarded towards disability, the appellant therein was not entitled to any amount under the head, since there was no fall in his remuneration. But, the discussions in the judgment do indicate that there was no doubt in the minds of the learned Judges that the head of the compensation "loss of earning capacity" arises on account of disability inflicted by the accident. The Court had also noticed that it was not universal that in every case of permanent disability there should be loss of earning capacity as well.
27. Statute prescribes for a just compensation. What is suggested is not a reasonable compensation. Under the two broad divisions, what is expected of the Tribunal is to assess the damages dispassionately and give a total packet of compensation, so as to protect the interest of the victim, simultaneously ensuring that an uncalled for burden is not there on the respondents. The sum total of our discussions lead us to conclude that the view taken in Shajan 's case (cited supra) has correctly laid down the principle. When compensation is assessed, the basic principle to be borne in mind is the heads of damages, namely the requirement for compensating pecuniary losses on the one hand, and for assessing the non-pecuniary losses and appropriately compensating such loss. The exercise required while attending the latter of course is complex.
28. The loss of earning capacity does not come within the category of pecuniary damage in its broad sense. It is directly attributable to the injury and the extent of the irretrievable damage suffered. As the first step, therefore, items coming within the broad head for determining compensation for permanent disability are to be individually examined. Extent of loss of earning power is one of the ingredients. The sequence, if scrupulously followed, would avoid any confusion. Determination of loss of earning power does not prevent the Tribunal from further proceeding with its duty of assessing compensation for permanent disablement. But after adjudging quantum of compensation for the permanent disablement suffered, a fresh expedition therefore for fixing loss of earning power is not called for.
29. Resultantly, we find that (1) Loss of earning power is one of the consequences that follows from a permanent disability; (2) Permanent disability is a physical impairment which results in distinct personal, social and financial consequences to be classified as one head requiring compensation to be worked out as one entitling for non-pecuniary damages; (3) An injured, who sustained a disability in entitled to claim compensation under the head "permanent disability". If the resultant deprivation is categorized and claim is made under separate heads and compensation is awarded under the above heads, over and above the same, for the deprivation suffered compensation is not to be granted under the general head "permanent disability"; (4) all the eventualities that may surface on account of a disability, which deserve to be compensated may not be possible to be catalogued and essentially the Tribunal has to determine the claim bearing in mind the statutory mandate that what is payable is a just compensation; and (5) While awarding compensation under the head "permanent disability", the Tribunal should take notice of the loss of earning power, in each individual case, in case a claim is made as one of the contributory to the total packet of compensation and shall not take into consideration the loss of earning power as a separate head after fixation of compensation for permanent disability.
30. We answer the reference as above. Office is to list the M.E.A. before the appropriate Bench for final disposal during the first week of December, 2005.