ARVIND KUMAR MISHRAversusNEW INDIA ASSURANCE CO. LTD. AND ANR.

                    [2010] 11 S.C.R. 857

                 ARVIND KUMAR MISHRA                              A
                              v.
      NEW INDIA ASSURANCE CO. LTD. AND ANR.
            (Civil Appeal No. 5510 of 2005)
                   SEPTEMBER 29, 2010
                                                                  B
          [AFTAB ALAM AND R.M. LODHA, JJ.]

     Motor Vehicles Act, 1988 - s. 166 - Compensation -
Claim for - Motor accident of final year engineering student,
aged 25 years - 70% permanent disability - Compensation           C
of Rs. 2,50,000 with interest@ 9 % p.a. by tribunal -
Enhanced to Rs. 3, 50, 0001- by High Court - On appeal held:
Tribunal as well as High Court erred in not taking appropriate
multiplier of an appropriate multplicand while assessing
compensation - In view of the facts, taking multiplicand as Rs.   D
42,0001- p.a. and operative multiplier as 18, compensation is
enhanced to Rs. 9,06,0001- with simple interest@ 9% p.a. -
Claimant also entitled to cost of Rs. 15, 0001-.

    The appellant, final year engineering student aged
                                                                  E
about 25 years, met with the serious accident due to rash
and negligent driving by the driver of the truck. It was
certified that the appellant suffered 70% permanent
disablement. The appellant filed an application under
Section 166 of the Motor Vehicles Act, 1988. The tribunal
awarded compensation of Rs. 2,50,0001- with interest @            F
9% per annum, holding the owner of the vehicle and the
insurer liable to pay compensation to the appellant. The
High Court enhanced the compensation to Rs. 3,50,000/
-. Aggrieved, by the compensation awarded by the High
Court, the appellant filed the instant appeal.                    G

    Partly allowing the appeal, the Court

    HELD: 1.1 The conventional basis of assessing
                             857                                  H
    858     SUPREME COURT REPORTS                [2010] 11 S.C.R.


A compensation in personal injury cases - and that is now
  a recognized mode as to the proper measure of
  compensation - is taking an appropriate multiplier of an
  appropriate. multiplicand. In the instant case, the tribunal
  as well as the High Court seriously erred in not assessing
B the compensation for personal injury to the appellant in
  accord with the recognized mode - by taking an
  appropriate multiplier of an appropriate multiplicand.
  [Paras 7 and 9] [864-C-D; 865-E]

      General Manager Kera/a State Road Transport
C Corporation, Trivandrum v.. Susamma Thomas (Mrs.) and
  Ors (1994) 2 SCC 176 - affirmed.

         1.2 The appellant at the time of accident was a final
    year engineering (Mechanical) student in a reputed
D   college. He was a remarkably brilliant student having
    passed all his semester examinations in distinction. Due
    to the 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
E   surgeries a'nd other treatments. For many months his
    condition remained serious and his right hand was
    amputated and vision seriously affected. These multiple
    injuries ultimately leCt to 70% permanent disablement. He
    wa~ rendered incapacitated and a career ahead of him in
F   his chosen line of mechanical engineering got dashed for
    ever. He is now in a physical condition in which he would
    require domestic help throughout his life. He has been
    deprived of pecuniary benefits which he could have
    reasonably acquired had he not suffered permanent
G   disablement to the extent of 70% in the accident. [Para
    10] [865-F-H; 866-A]

        1.3 On completion of Bachelor of Engineering
    (Mechanical) from the prestigious institute like B.l.T., it can
    be reasonably assumed that he would have got a good
H
      ARVIND KUMAR MISHRA v. NEW INDIA                  859
        ASSURANCE CO. LTD. AND ANR.
job. The appellant stated in his evidence that in the A
campus interview he was selected 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, there would not have been any
difficulty for him in getting some decent job' in the private B
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 c
high position. But uncertainties of life cannot be ignored
taking· relevant factors into consideration. 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
                                                              0
basis. Since he suffered 70% permanent disability, the
future earnings may be discounted by 30% and, it is
estimated 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 *Sar/a Verma's case the operative multiplier E
would be 18. The loss of future earnings by multiplying
the multiplicand of Rs. 42,000/- by a multiplier of 18
comes to Rs. 7,56,000/-. The damages to compensate the
appellant towards loss of future earnings must be Rs.
7 ,56,000/-. The tribunal awarded him Rs. 1,50,000/- · F
towards treatment including the medical expenses. The
same is maintained as it is and, the total amount of
compensation to which the appellant is entitled is Rs.
9,06,000/- . [Para 11) (866-B-H; 867-A]
                                                           ,G
    *Sar/a Verma (Smt.) and Ors. v. Delhi Transport
Corporation and Anr. (2009) 6 sec 121 - relied on.

   1.4 The submission that the appellant is entitled to
compensation in accordance with the multiplier specified
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    860      SUPREME COURT REPORTS               [2010] 11 S.C.R.


A   in the Second Schedule appended to the 1988 Act only,
    overlooks the fact that the appellant made his claim under
    Section 166 of the 1988 Act and not under Section 163A.
    The Second Schedule has no application to the claim
    petition made under Section 166 of the 1988 Act. [Para
B   12] [867-B-D]

        Reshma Kumari and Ors. v. Madan Mohan and Anr.
    (2009) 13 sec 422 - referred to.

         1.5 The compensation awarded by the High Court in
C   the sum of Rs. 3,50,000/- is enhanced to Rs. 9,06,000/-.
    The appellant would be entitled to 9% simple interest per
    annum on the enhanced amount from August 7, 2002 u,ntil
    the date of actual payment. The appellant would also be
    entitled to the costs of the appeal which is quantified at
D   Rs. 15,000/-. [Para 13] [867-E-F]
                         Case Law Reference:
          (1994) 2 sec 116        Referred to.         Para 8
          c2009) 6 sec 121        Referred to.         Para 12
E
          (2009) 13 sec 422       Referred to.         Para 12
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    5510 of 2005.
F       From the Judgment & Order dated 12.01.2004 of the High
    Court of Jharkhand at Ranchi in M.A. No. 71 of 2003.

       Shree Prakash Sinha, Vijay Kumar, Shekhar Kumar, S.
    Chandra Shekhar for the Appellant.
G
          A.K. Raina, Anil Kumar Jha for the Respondents.

          The Judgment of the Court was delivered by

          R.M. LODHA, J. 1. The present appeal, by special leave,
H
     ARVIND KUMAR MISHRA v. NEW INQIA         861
 ASSURANCE CO. LTD. AND ANR. [R.M. LODHA, J.]

raises the issue, indeed the only issue, of assessment of loss       A
of earnings in respect of the victim of a motor accident who was
certified 70% permanent disablement.

        2. Arvind Kumar Mishra - appellant - a student of
  engineering final year at Birla Institute of Technology, Mesra B
  (8.1.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 C
  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 D
  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 E
  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 treatment.
                                                                      F
         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 G
  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
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    862       SUPREME COURT REPORTS                [2010] 11 S.C.R.


A   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
B   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
c         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) is
          being granted to the claimant. So far as non-pecuniary
          damages are concerned from the evidence itself it is very
D         much clear that injured was a brilliant student of
          engineering Final year at 8.1.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
E         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
F         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
G 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
H
    ARVIND KUMAR MISHRA v. NEW INDIA         863
ASSURANCE CO. LTD. AND ANR. [R.M. LODHA, J.]
    Act, 1988 vide Compensation Case No. 183 of 1993 the            A
    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                B
    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.

    Keeping into consideration the nature of disability the         C
    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,      D
    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     E
    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         F
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     G
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       H
    864      SUPREME COURT REPORTS                  [2010] 11 S.C.R.


A   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 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
B   care to give him full and fair compensation for that he had
    suffered. In some cases for personal injury, the claim could be
    in ~espect 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
c   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.
0
         8. In General Manager Kera/a State Road Transport
    Corporation, Trivandrum v.. Susamma Thomas (Mrs.) and
    Ors1 ., this Court laid down the following principles:

E         "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 deceased (or that
F         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
G
          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
H         10,000. If a sum of Rs 1,00,000 is invested at 10% annual
    ARVIND KUMAR MISHRA v. NEW INDIA         865
ASSURANCE CO. LTD. AND ANR. [R.M. LODHA, J.]
    interest, the interest will take care of the dependency,          A
    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          B
    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          c
    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."
                                                                      D
     9. The principles laid down in Susamma Thomas 1 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        E
mode i.e., by taking an appropriate multiplier of an appropriate
multiplicand.

     10. The appellant at the time of accident was a final year
engineering (Mechanical) student in a reputed college. He was         F
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         G
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
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    866      SUPREME COURT REPORTS                  [2010] 11 S.C.R.


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.

B         11. On completion of Bachelor of Engineering
    (Mechanical) from the prestigious institute like B.l.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 by Tata as well as Reliance Industries and was
C   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
D   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
E   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.
F   The appellant at the time of accident was about 25 years. As
    per the decision of this Court in Sar/a Verma (Smt.) and Ors.
    v. Delhi Transport Corporation and Anr2 . the operative
    multiplier would be 18. The loss of future earnings by multiplying
    the multiplicand of Rs. 42,000/- by a multiplier of 18 comes to
G   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
H
     ARVIND KUMAR MISHRA v. NEW INDIA         867
 ASSURANCE CO. LTD. AND ANR. [R.M. LODHA, J.]

amount of compensation to which the appellant is entitled is Rs.     A
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           8
 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., 3
·a two-Judge Bench of this Court has referred the question
 whether multiplier specified in the Second Schedule should be       C
 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       D
 aforenoticed question as there are already few decisions of this
 Court taking a view that the Second Schedule has no
 application to the claim petition made under Section 166 of the
 1988 Act.
                                                                     E
     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.         F
The appellant shall also be entitled to the costs of this appeal
which we quantify at Rs. 15,000/-.

N.J                                      Appeal partly allowed.

                                                                     G




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