HDFC ERGO GENERAL INSURANCE CO. LTD.versusMUKESH KUMAR & ORS.

                          [2021] 5 S.C.R. 927                              927


        HDFC ERGO GENERAL INSURANCE CO. LTD.                               A
                                   v.
                    MUKESH KUMAR & ORS.
                     (Civil Appeal No.4576/2021)
                          AUGUST 03, 2021                                  B
  [SANJAY KISHAN KAUL AND HRISHIKESH ROY, JJ.]
      Motor Vehicles Act, 1988 – Compensation under – For
permanent disability – Whether while determining compensation,
whether directions can be passed in the manner of a direction in
                                                                           C
perpetuity for continued maintenance of a prosthetic limb for the
injured claimant – Held: Determination of such compensation cannot
be by a continuing mandamus – The determination must take place
at one go – However, there must be a provision for maintenance/
replacement of the prosthetic limb, while fixing a lump sum amount
– Claimant is directed to file an affidavit setting forth the cost of      D
purchased prosthetic limb and showing what kind of maintenance/
replacement would be required – Quantum of compensation to be
determined thereafter.
       Motor Vehicles Act, 1988 – Compensation – For permanent
disability – In motor accident case while determining compensation,        E
Court below directed the insurance company to keep Rs.60 lakhs
in an interest bearing deposit from which Rs.50 thousand would be
generated as interest to meet the expenses of two semi-skilled
attendants for the rest of claimant’s life – Court’s direction to
Government to examine whether there could be a Government policy
                                                                           F
with regard to assistance to be provided to permanently disabled
adolescents whose parents are not economically well off – Held: In
cases where degree of disability is high, there is mental disability, it
is case of a young person etc. without it being possible to anticipate
all possibilites, applying of multiplier method in Kajal case*, would
be the appropriate course – In the facts of the present case,              G
appropriate course would be to follow method in Kajal case* –
High Court is directed to determine appropriate lump sum amount
based on multiplier method as set out in Kajal case* – Addressing
such larger issue, in a motor accident claim proceeding, amounts to
being beyond jurisdiction of the Court – It has taken the colour of
                                                                           H
                                  927
928            SUPREME COURT REPORTS                       [2021] 5 S.C.R.


A     a Public Interest Litigation – Therefore, this aspect sought to be
      examined by a Bench of High Court dealing with Public Interest
      Litigation determining the issue in general and not restricting to the
      present case.
            *Kajal v. Jagdish Chand & Ors. (2020) 4 SCC 413 :
B           [2020] 3 SCR 622 – relied on.
            Nagappa v. Gurudayal Singh & Others, (2003) 2 SCC
            274 : [2002] 4 Suppl.SCR 499;
            Sapna v. United India Insurance Co. Ltd. & Anr. (2008)
            7 SCC 613 : [2008]8 SCR 791; Nagappa v. Gurudayal
C           Singh & Ors. (2003) 2 SCC 274 : [2002] 4 Suppl. SCR
            499; Sapna v. United India Insurance Company Ltd. &
            Anr. (2008) 7 SCC 613 : [2008] 8 SCR 791; Lalan D.
            @ Lal & Another v. Oriental Insurance Company
            Limited, (2020) 9 SCC 805 : [2019] 8 SCR 986;
D           Parminder Singh v. New India Assurance Company
            Limited & Others, (2019) 7 SCC 217 : [2019] 8 SCR
            986; Mallikarjun v. Divisional Manager, National
            Insurance Company Limited & Another, (2014) 14 SCC
            396 : [2013] 8 SCR 268 – referred to.

E                            Case Law Reference
      [2002] 4 Suppl.SCR 499          referred to             Para 7
      [2008] 8 SCR 791                referred to             Para 7
      [2002] 4 Suppl. SCR 499         referred to             Para 16
F     [2008] 8 SCR 791                referred to             Para 16
      [2020] 3 SCR 622                relied on               Para 18
      [2019] 8 SCR 986                referred to             Para 20
      [2019] 8 SCR 986                referred to             Para 20
G     [2013] 8 SCR 268                referred to             Para 21
            CIVIL APPELLATE JURISDICTION : Civil Appeal No.4576
      of 2021.
            From the Judgment and Order dated 04.11.2020 of the High Court
      of Delhi at New Delhi in MAC. APP No.218 of 2020.
H
 HDFC ERGO GENERAL INSURANCE CO. LTD. v. MUKESH                               929
                KUMAR & ORS.

      With                                                                    A
      Civil Appeal No.4577 Of 2021
      V. Giri, Sr. Adv., Ms. Archana Pathak Dave, Ms. Vanya Gupta,
Kumar Prashant, Karan Lahiri, Pallav Mongia, Shailender Reddy, Ms.
Ankita Gupta, Advs. for the Appellant.
                                                                              B
     Jayesh K. Unnikrishnan, Ms. Sasmita Tripathy, Dilawar Singh,
Ms. Gitanjali Tripathy, Ms. Gautami Budhapriya, Vivekanand Singh,
Manish Maini, Ms. Manjeet Chawla, Ms. Ritu Rastogi, B. S. Chowdhary,
Ms. Adira A. Nair, Sanjay Kumar Visen, Durga Dut, Ms. Samta
Pushkarna Mishra, Amar Singh, Neeraj Goswami, R. D. Singh, M/s
Vibhu Shanker Mishra and Co., Advs. for the Respondents.                      C

      The Order of the Court was passed by
      SANJAY KISHAN KAUL, J.
      CIVIL APPEAL No.4576/2021
                                                                              D
      Leave granted.
       The sole question which arises for determination in this appeal
filed by the Insurance Company is whether directions can be passed by
the Court while determining compensation under the Motor Vehicle Act,
1988 (hereinafter referred to as “the said Act”) in the manner of a
direction in perpetuity for continued maintenance of a prosthetic limb for    E
the injured claimant.
       The respondent No.1 viz. Mukesh Kumar, was 19 years of age
when he met with an accident on 25.8.2017 which resulted in permanent
disability of his right lower limb, which was treated as a 100% disability.
An amputation had to take place below the knee of that limb. In the           F
assessment made by the Motor Accident Claims Tribunal (MACT), an
amount of Rs.2 Lakhs was quantified towards loss of amenities, life and
disfigurement which would include the expenses towards his prosthetic
limb. On examination in appeal, the learned judge of the High Court by
the impugned order dated 04.11.2020 has passed directions in the following    G
terms:
      “7. With consent, the impugned award dated 22.01.2020 passed
      by the learned MACT in Petition No.129/2018, is modified to the
      extent that the claimant/R-1 shall be supplied a prosthetic limb of
      good quality which is suitable and comfortable to him. It shall         H
930            SUPREME COURT REPORTS                            [2021] 5 S.C.R.


A           carry a lifetime warranty. Should it be required to be replaced/
            repaired at any stage, the insurance company will do so. The
            insurer will enquire from the victim, at least twice a year, as to the
            working condition of the prosthetic limb, through his e-mail address
            and telephone number, as well as through his counsel’s e-mail
            address and telephone number. The details are as under:-
B




            8. In case of any difficulty apropos the prosthetic limb, the claimant
C           may intimate the insurer through e-mail addresses and/ or
            telephone numbers of three officers of the insurer, as supplied to
            him. These details shall be provided to the claimant within 2 weeks
            from today.
            9. It will be open to the claimant to communicate the quotation or
D           estimate for a suitable prosthetic limb to the insurance company
            at the e-mail addresses and telephone numbers provided by the
            learned counsel for the insurer. The impugned order is modified
            to this extent.”
                                                              (details redacted)
E             Learned counsel for the appellant submitted that the consent which
      was given was for modification of the impugned award and not for the
      prosthetic limb to carry a lifetime warranty, as there is no such thing as
      a lifetime warranty for a prosthetic limb. Not only that, the impugned
      directions require that if any, repair or replacement has to be done, the
F     same should be done by the Insurance Company and the insurer was
      required to inquire from the victim at least twice a year as to the working
      condition of the prosthetic limb with an email address and telephone
      number specified. Thus, what has been directed by the High Court is a
      continuing maintenance of the prosthetic limb to be monitored by the
      Insurance Company. We may note that the aforesaid is the only issue
G     which is called upon by us to be examined.
             We had stayed the operation of the aforesaid paragraphs by the
      interim directions issued vide order dated 15.2.2021.
            We are of the view, that the aspect discussed in the aforesaid
      paragraphs could be made only a part of compensation, and not in the
H
 HDFC ERGO GENERAL INSURANCE CO. LTD. v. MUKESH                               931
      KUMAR & ORS. [SANJAY KISHAN KAUL, J.]

nature of continuing directions. In this behalf, we have noticed a view       A
taken by this Court vide order dated 06.8.2020 in SLP(C) No.8631/2020
where the same learned judge has taken a similar view and that aspect
of the order was deleted at the motion stage without notice by the Bench
and thus we considered it appropriate to issue notice to other side.
       Learned counsel for the appellant has referred two judgments of        B
this Court before us in Nagappa v. Gurudayal Singh & Others, (2003)
2 SCC 274 and Sapna V. United India Insurance Co. Ltd. & Anr.
(2008) 7 SCC 613 opining that while determining compensation under
the said Act there is no provision providing for passing of a further award
once the final award is passed. The future eventualities are to be taken
into consideration at that time. It was observed that:                        C
      “23…. Future medical expenses required to be incurred can be
      determined only on the basis of fair guesswork after taking into
      account increase in the cost of medical treatment.”
      In our view, the process of determination of such compensation
                                                                              D
cannot be by a continuing mandamus, in a colloquial sense, and the
determination must take place at one go.
       The aforesaid principle is not even disagreed to or contested by
the respondents but what is submitted is that there must be a provision
made fixing a lump sum amount for maintenance/ replacement of the
prosthetic limb, if necessary. We agree with the submission and in a          E
larger canvas consider it appropriate to direct that in such kind of cases
of providing facility of prosthetic limb, appropriate amount may be
quantified towards such maintenance.
       We, thus, allow the appeal to the extent aforesaid and set aside
the paragraph Nos.7,8 & 9 to be substituted by the determination for          F
maintenance/replacement of the prosthetic limb while a quantification
of the amount for compensation is being made.
       The question which remains is whether we should remit this case
to the High Court to determine the amount afresh having laid down the
principles, or we should determine it ourselves. In the given facts of the    G
case, we do not consider it appropriate to remit the case for fresh
determination and instead take on the burden ourselves to do complete
justice.
       In order to facilitate determination of the lump sum amount, we
call upon the learned counsel for respondent No.1 to file an affidavit        H
932             SUPREME COURT REPORTS                            [2021] 5 S.C.R.


A     setting forth the cost of the prosthetic limb purchased by him along with
      supporting documents. He should also file supporting documents of the
      company from which he purchased the prosthetic limb, to show what
      kind of maintenance/replacement would be required. On these documents
      being filed, we would determine the amount.
B           On the other aspects the appeal stands disposed of.
             Let the affidavit be filed within four weeks, as prayed for. Reply
      to the same be filed within two weeks, thereafter.
            List after six weeks.

C           CIVIL APPEAL No.4577/2021
            Leave granted.
             The grievance of the Insurance Company arises from the directions
      passed in the impugned order, more specifically in paragraph Nos.8 to
      10, opining that assistance of two semi-skilled workers on the basis of
D     minimum wages is to be provided to the respondent from the date of the
      accident for the rest of the appellant’s life. In order to sub-serve the said
      direction, inter alia, sum of Rs.60 Lakhs is required to be kept by the
      Insurance Company in an interest bearing deposit, from which about
      Rs.50,000/- per month would be generated as interest to meet the
      expenses of the assistants. The directions are contained in the following
E
      terms:
            8. Presently, the appellant may have the benefit of his caring
            parents but they cannot be expected to be present with him at all
            times, as they may be engaged in other activities and/or be
            employed to make provisions for the family’s needs. In the
F
            circumstances, the appellant shall be paid compensation towards
            the procurement of the assistance of two semi-skilled worker on
            the basis of minimum wages, from the date of the accident and
            for the rest of the appellant’s life.
            9. The arrears towards the same shall be paid by the insurer, on
G           the basis of notified minimum wage rates applicable to a semi-
            skilled worker. The arrears shall be deposited directly into the
            bank account of the appellant, jointly operated by his parents, in a
            month’s time, along with interest accrued thereon @ 9% p.a.
            Payments apropos ‘attendant charges’ in the future shall also be
H           ensured by the insurer. The current minimum wage rate of a semi-
 HDFC ERGO GENERAL INSURANCE CO. LTD. v. MUKESH                              933
      KUMAR & ORS. [SANJAY KISHAN KAUL, J.]

      skilled workman is approximately Rs.18,000/-. Accordingly,             A
      Rs.36,000/- per month would be required to be paid to the appellant.
      These rates are revised twice a year. Therefore, prudently provision
      should be made for automatic crediting of the current and future
      wages into the appellant’s bank account. Logically, the insurance
      company should assure about Rs.50,000/- per month as DFR
                                                                             B
      interest. According to the current FDR rates, a deposit Rs.60
      lakhs is likely to fetch about Rs.50,000/- per month as interest.
      Let Rs.60 lakhs be kept in an interest bearing FDR by the insurer
      in its own bank. The interest earned therefrom, shall be credited
      into the appellants’ account by the 10th day of each Gregorian
      calendar month, on the basis of notified minimum wages for two         C
      attendants.
      10. Should the minimum wages be subsequently enhanced to a
      quantum which does not meet the interest generated from the
      FDR, the insurer shall augment the deposit to meet the shortfall.
      The insurer shall have a lien on the deposit, which it shall encash    D
      on the demise of the claimant.
      We have heard learned counsel for the parties and are of the
view that these directions are unsustainable.
       The reason for the same is that they are contrary to the judicial
view adopted by this court in Nagappa v. Gurudayal Singh & Ors.-             E
(2003) 2 SCC 274, Sapna v. United India Insurance Company Ltd. &
Anr. (2008) 7 SCC 613 & The Oriental Insurance Co. Ltd. v. Zakir
Hussain & Ors. [SLP (C) No.12210/2020 dated 13.10.2020]. In these
cases, this Court has opined that while determining the compensation
under the said Act there is no provision for providing for passing of        F
further award once the final award is made. The future eventualities are
to be taken into consideration at that time it has been observed that;
      “However, it is to be clearly understood that the MV Act does not
      provide for passing of further award after the final award is
      passed. Therefore, in a case where injury to a victim requires         G
      periodical medical expenses, fresh award cannot be passed or
      previous award cannot be reviewed when the medical expenses
      are incurred after finalisation of the compensation proceedings.
      Hence, the only alternative is that at the time of passing of final
      award, the Tribunal/court should consider such eventuality and
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934            SUPREME COURT REPORTS                           [2021] 5 S.C.R.


A           fix compensation accordingly. No one can suggest that it is improper
            to take into account expenditure genuinely and reasonably
            required to be incurred for future medical expenses. Future medical
            expenses required to be incurred can be determined only on the
            basis of fair guesswork after taking into account increase in the
            cost of medical treatment.”
B
             The aforesaid aspect has been considered by us today in another
      appeal filed by the same Insurance Company in SLP (C) No.16077/
      2020 dealing with the aspects of provisions for prosthetic limb. The
      principles which we have appreciated in the current case are slightly
      different as though it may not be strictly in the nature of a continuing
C     direction; but premised on the basis of a continuing requirement, a lump
      sum amount has been directed to be deposited the returns from which
      are to be utilised. We are of the view that this is not the appropriate
      course to follow.
             Learned counsel for the appellant has taken us through various
D     judicial pronouncements which show that the approach which has been
      adopted by different courts is of giving a lump sum amount. The moot
      point however remains as to how the lump sum amount is to be calculated.
            We find that in case of extreme injuries affecting the mental and
      physical abilities of a person, a similar approach has been adopted by
E     this Court in Kajal V. Jagdish Chand & Ors. (2020) 4 SCC 413.
             No doubt the factual matrix in that case painted a very grim picture
      of young girl who suffered an accident and as result thereof while
      physically she would age, her mental state would remain under one year
      of age. In that scenario, a methodology was suggested to apply the
F     multiplier method while determining the attendant charges. We consider
      it useful to reproduce the observations as under:-
            Attendant Charges
            22. The attendant charges have been awarded by the High Court
            @Rs.2,500/- per month for 44 years, which works out to
G
            Rs.13,20,000/-.Unfortunately, this system is not a proper system.
            Multiplier system is used to balance out various factors. When
            compensation is awarded in lump sum, various factors are taken
            into consideration. When compensation is paid in lump sum, this
            Court has always followed the multiplier system. The multiplier
H           system should be followed not only for determining the
HDFC ERGO GENERAL INSURANCE CO. LTD. v. MUKESH                               935
     KUMAR & ORS. [SANJAY KISHAN KAUL, J.]

   compensation on account of loss of income but also for determining        A
   the attendant charges etc. This system was recognised by this
   Court in Gobald Motor Service Ltd. v. R.M.K. Veluswami (AIR
   1962 SC 1).The multiplier system factors in the inflation rate, the
   rate of interest payable on the lump sum award, the longevity of
   the claimant, and also other issues such as the uncertainties of
                                                                             B
   life. Out of all the various alternative methods, the multiplier method
   has been recognised as the most realistic and reasonable method.
   It ensures better justice between the parties and thus results in
   award of ‘just compensation’ within the meaning of the Act.
   23. It would be apposite at this stage to refer to the observation of
   Lord Reid in Taylor v. O’Connor (1971 AC 115):                            C

      “Damages to make good the loss of dependency over a period
      of years must be awarded as a lump sum and that sum is
      generally calculated by applying a multiplier to the amount of
      one year’s dependency. That is a perfectly good method in the
      ordinary case but it conceals the fact that there are two quite        D
      separate matters involved, the present value of the series of
      future payments, and the discounting of that present value to
      allow for the fact that for one reason or another the person
      receiving the damages might never have enjoyed the whole of
      the benefit of the dependency. It is quite unnecessary in the          E
      ordinary case to deal with these matters separately. Judges
      and counsel have a wealth of experience which is an adequate
      guide to the selection of the multiplier and any expert evidence
      is rightly discouraged. But in a case where the facts are special,
      I think, that these matters must have separate consideration if
      even rough justice is to be done and expert evidence may be            F
      valuable or even almost essential. The special factor in the
      present case is the incidence of Income Tax and, it may be,
      surtax.”
   24. This Court has reaffirmed the multiplier method in various
   cases like Municipal Corporation of Delhi v. Subhagwati (1966             G
   ACJ 57), U.P. State Road Transport Corporation and Ors. v. Trilok
   Chandra and Ors. [(1996) 4 SCC 362], Sandeep Khanduja v. Atul
   Dande and Ors. [(2017) 3 SCC 351]. This Court has also
   recognised that Schedule II of the Act can be used as a guide for
   the multiplier to be applied in each case. Keeping the claimant’s         H
936             SUPREME COURT REPORTS                            [2021] 5 S.C.R.


A           age in mind, the multiplier in this case should be 18 as opposed to
            44 taken by the High Court.
            25. Having held so, we are clearly of the view that the basic
            amount taken for determining attendant charges is very much on
            the lower side. We must remember that this little girl is severely
B           suffering from incontinence meaning that she does not have control
            over her bodily functions like passing urine and faeces. As she
            grows older, she will not be able to handle her periods. She requires
            an attendant virtually 24 hours a day. She requires an attendant
            who though may not be medically trained but must be capable of
            handling a child who is bed ridden. She would require an attendant
C           who would ensure that she does not suffer from bed sores. The
            claimant has placed before us a notification of the State of Haryana
            of the year 2010 wherein the wages for skilled labourer is Rs.4846/
            - per month. We, therefore, assess the cost of one attendant at
            Rs.5,000/- and she will require two attendants which works out to
D           Rs.10,000/- per month, which comes to Rs.1,20,000/- per annum,
            and using the multiplier of 18 it works out to Rs.21,60,000/-for
            attendant charges for her entire life. This takes care of all the
            pecuniary damages.”
              Learned counsel for the appellant did seek to persuade us that
E     this is not the only methodology available and it should not be adopted.
      We are of the view that in cases where the degree of disability is high,
      there is mental disability, it is a case of a young person etc. without it
      being possible to anticipate all possibilities, the course followed aforesaid
      would be the appropriate course. We are not saying that the aforesaid
      can be the only course, and in a different scenario, lump sum amount
F     can be assessed as has been as done in Lalan D. @ Lal & Another v.
      Oriental Insurance Company Limited, (2020) 9 SCC 805 and
      Parminder Singh v. New India Assurance Company Limited & Others,
      (2019) 7 SCC 217.
            Learned Senior Counsel for the appellant also sought to point out
G     another course followed in Mallikarjun v. Divisional Manager,
      National Insurance Company Limited & Another, (2014) 14 SCC
      396, wherein cases of children suffering disability on account of motor
      vehicle accident, a broad principle was sought to be laid down in the
      following terms:-
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 HDFC ERGO GENERAL INSURANCE CO. LTD. v. MUKESH                                937
      KUMAR & ORS. [SANJAY KISHAN KAUL, J.]

      “12. Though it is difficult to have an accurate assessment of the        A
      compensation in the case of children suffering disability on account
      of a motor vehicle accident, having regard to the relevant factors,
      precedents and the approach of various High Courts, we are of
      the view that the appropriate compensation on all other heads in
      addition to the actual expenditure for treatment, attendant, etc.,
                                                                               B
      should be, if the disability is above 10% and upto 30% to the
      whole body, Rs.3 lakhs; upto 60%, Rs.4 lakhs; upto 90%, Rs.5
      lakhs and above 90%, it should be Rs.6 lakhs. For permanent
      disability upto 10%, it should be Re.1 lakh, unless there are
      exceptional circumstances to take different yardstick. In the instant
      case, the disability is to the tune of 18%. Appellant had a longer       C
      period of hospitalization for about two months causing also
      inconvenience and loss of earning to the parents.”
      The aforesaid only shows that there is more than one option
available i.e, there may be a lump sum amount specified on general
principles as enunciated aforesaid; or in cases where the factual scenario     D
requires, same multiplier method can be followed as in the case of Kajal
(supra).
      Now turning to the facts of the present case, the child was 11
years of age when he suffered functional disability which has been
assessed at 70% by the medical board and the tribunal, and which the           E
High Court determined as 100% functional disability. It is in these
circumstances that the direction has been passed for attendants with a
methodology of accessing the minimum wages payable for two skilled
workers. In the given factual scenario, we are of the view that the apposite
course to follow is set out in Kajal’s case (supra).
                                                                               F
       On having reached that conclusion, the issue would be what would
be the lump sum amount to be determined to be paid on those parameters.
       We find that in terms of the impugned order dated 08.12.2020, the
learned judge has since kept the matter pending by issuing the notice to
the GNCTD to examine whether there could be a Government policy in             G
regard to assistance to be provided to permanently disabled adolescents
whose parents are not economically well off. We are of the view that in
pursuance to this conclusion, it is the High Court which ought to examine
as to what would be the appropriate lump sum amount to be determined
based on the multiplier basis as set out in Kajal’s case (supra)
                                                                               H
938                SUPREME COURT REPORTS                        [2021] 5 S.C.R.


A            We, thus, set aside the directions contained in the impugned order
      in paragraph Nos.8 to 10.
             We also find that while seeking to examine the larger issues, the
      learned judge has ventured into the aspect of Government policy to be
      framed in that behalf. This really amounts to beyond the jurisdiction over
B     determination of the amount, in the Motor Accident Claim proceeding,
      but on a larger canvas taking the colour of a Public Interest Litigation.
      We, thus, consider it appropriate that this aspect ought to be examined
      by the Bench dealing with the Public Interest Litigation, as a larger canvas
      would have to be determined rather than something restricted to the
      case of the respondent before us.
C
            The civil appeal is allowed in the aforesaid terms leaving parties
      to bear their own costs.

      Ankit Gyan                                                    Appeal allowed.

D




E




F




G




H