Supreme Court of India
M.R. KRISHNA MURTHIversusTHE NEW INDIA ASSURANCE CO. LTD. & OTHERS
- Citation
- 2019 INSC 317
- Decided
- 5 March 2019
- Disposal
- Disposed off
- Bench
- A K SIKRI
Holding
Loss of future earnings for a student must be assessed on the basis of career prospects, family background and functional disability, fixing it at Rs 5,000 per month with a multiplier of 18, thereby entitling the appellant to an additional Rs 6,54,000, and the Court directed the establishment of a Motor Accident Mediation Authority and related reforms.
Summary
The appellant, an 18‑year‑old student from a family of senior Supreme Court lawyers, suffered a 40% permanent disability in a motor accident. The Motor Accidents Claims Tribunal awarded Rs 8,48,000 compensation with interest; the Delhi High Court added a Rs 50,000 lump‑sum and later enhanced the award by Rs 24,000 on review. The Supreme Court examined how loss of future earnings should be assessed for a student victim, emphasizing career prospects, family background, education and functional disability. It fixed loss of future earnings at Rs 5,000 per month (Rs 60,000 per annum) with a multiplier of 18, resulting in an additional Rs 6,54,000 payable with interest. The Court also directed the Government to consider establishing a Motor Accident Mediation Authority (MAMA), amending the Motor Vehicles Act, and implementing mediation, annuity schemes and training for speedy disposal of claims. The appeals were disposed of in favour of the appellant.
Issues considered
- The appropriate method for assessing loss of future earnings for a student victim of a motor accident
- Whether the High Court's additional lump‑sum award and the multiplier applied by the MACT are correct
- Whether the compensation should be enhanced based on the appellant's family background, education and functional disability
- The need for systemic reforms such as mediation mechanisms, fast‑track disposal and annuity schemes for motor accident claims
Legislation cited
Subjects
Motor accident compensationLoss of future earningsDisability assessmentMotor Vehicles ActClaims TribunalMediate dispute resolutionMotor Accident Mediation AuthorityAnnuity schemeAccess to justice
Judgment
1088 SUPREME[2019]
COURT REPORTS
3 S.C.R. 1088 [2019] 3 S.C.R.
A M.R. KRISHNA MURTHI
v.
THE NEW INDIA ASSURANCE CO. LTD. & OTHERS
(Civil Appeal Nos. 2476-2477 of 2019)
B MARCH 05, 2019
[A. K. SIKRI AND S. ABDUL NAZEER, JJ.]
Motor Vehicles Act, 1988:
Motor accident – Compensation – Assessment of –
C Determination of loss of future earning – On facts, 18 year student
studying in school met with a motor accident leaving him 40%
disabled – Award of Rs. 8,48,000/- as compensation with 7% interest
for a period of 10 years – In appeal, the High Court awarded
additional lumpsum damages of Rs 50,000/- – In review petition,
the High Court enhanced the compensation by Rs. 24,000/- together
D
with corresponding interest – On appeal, held: Appellant because
of his family background-parents senior lawyers in the Supreme
Court, also wanted to join legal profession, even though at the time
of accident, he was studying in school – Having regard to affluent
family background, the appellant at the time of accident was
E studying in prestigious School – Thus, the appellant had a bright
future and, his future earnings had to be considered keeping in
view the said factors – Though, not very seriously, the functional
capacity has been impaired because of the disability suffered by
the appellant as the appellant cannot run around like other young
advocates of his age – In view thereof, loss of future earning fixed
F
at Rs.5,000/- pm i.e. Rs.60,000/- pa on which multiplier of 18 is to
be applied – Loss future earning comes to Rs.10,80,000/- – Appellant
to be paid another sum of Rs.6,54,000/- under this head along with
interest as awarded by the court below
Motor accidents – Road accident victims – Reforms in
G payment of compensation to victims – Mechanism to prevents delays
and other obstacles in awarding compensation to road accident
victims and/or kiths and kins of victims – Held: Issuance of direction
to the government to consider setting up of mediation authority for
speedy disposal of motor accident claims – Government to consider
H
1088
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1089
CO. LTD. & OTHERS
the feasibility of enacting Mediation Act to take care of various A
aspects of mediation and examine the feasibility of setting up Motor
Accident Mediation Authority by making necessary amendments in
the Motor Vehicles Act, along with other directions/recommendations
issued.
Disposing of the appeals, the Court B
HELD:1.1 In those cases where the victim of the accident
is not an earning person but a student, while assessing the
compensation for loss of future earning, the focus of the
examination would be the career prospect and the likely earning
of such a person in future. Where the claimant is pursuing a C
particular professional course, the poseer would be: what would
have been his income had he joined a service commensurating
with the said course. That can be the future earning. There may
be cases where the victim is not, at that stage, doing any such
course to get a particular job. He or she may be studying in a
school. In such a case, future career would depend upon multiple D
factors like the family background, choice/interest of the
complainant to pursue a particular career, facilities available to
him/her for adopting such a career, the favourable surrounding
circumstances to see which would have enabled the claimant to
successfully pick up the said career etc. If the chosen field is E
employment, then the future earning can be taken on the basis of
salary and allowances which are payable for such calling. In case,
career is a particular profession, the future earning would depend
on host of other factors on the basis of which chances to achieve
success in such a profession can be ascertained. There may be
cases where even a student, the claimant would have made F
earnings on part-time basis or would have received offer for a
particular job. In such cases, these factors would also assume
relevance. After ascertaining the likely earning of the victim in
the said manner, the nature of injuries and disability suffered as a
result thereof would be kept in mind while determining as to how G
much earning has been affected thereby. Here, impact of injuries
on functional disability is to be seen. In case of death of
victim, it would result in total loss of earning. In the case of
injuries, the nature of disability becomes important.
[Para 23][1107-E-H; 1108-A-D]
H
1090 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 1.2 The appellant was a student studying in a school. He
was not doing any job or was in any vocation and, thus, was not
earning anything. The loss of future earning is to be assessed on
the said basis. The relevant factors brought on record for the
appellant are that the appellant belongs to a family of lawyers as
both his parents were senior lawyers practicing in the Supreme
B
Court. Because of his family background, the appellant also
wanted to join legal profession, even though at the time of
accident, he was studying in school. Having regard to affluent
family background, the appellant at the time of accident was
studying in prestigious Modern School, Barakhamba Road, New
C Delhi. All these circumstances clearly indicated that the appellant
had a bright future and, therefore, his future earnings could not
be considered without keeping in view the aforesaid factors. The
appellant also produced evidence in respect of his disability. This
disability does not indicate much loss of prospects in earning. Of
course, his movements are restricted and he needs a Driver as
D
he is not in a position to drive the car himself. This would hinder
the earning capacity to some extent, though not significant extent.
[Para 17, 24][1100-F-G; 1108-D-G]
N. Manjegowda v. Manager, United India Insurance
Company Limited (2014) 3 SCC 584 : [2013] 12
E SCR 350 – relied on.
1.3 Though, not very seriously, the functional capacity has
been impaired because of the disability suffered by the appellant
as the appellant cannot run around like other young advocates of
his age. Going by the overall circumstances, in case of the
F appellant, loss of future earning can be fixed at Rs.5,000/- per
month i.e. Rs.60,000/- per annum on which multiplier of 18 is to
be applied. Calculated in this manner, the loss future earning
comes to Rs.10,80,000/-. The appellant, thus, would be paid
another sum of Rs.6,54,000/- under this head along with interest
G as awarded by the Court below. It is stated that the appellant has
volunteered to give this amount to any Government or public
charitable organisation working towards road safety. It is left to
the appellant to donate the amount to any particular organisation
of his choice. Alternatively, it can also be given for MAMC-
project by the appellant. [Paras 26 (i)].[1109-G-H; 1110-A-C]
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M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1091
CO. LTD. & OTHERS
2.1 Focus is to ensure access to justice for road accident A
victims and also to bring about a mechanism which prevents delays
and other obstacles in awarding compensation to road accident
victims. The suggestion for establishing a MAMA-Motor
Accident Mediation Authority in every District is worthy of
acceptance. Whatever steps are taken by the authorities for
B
reducing road accidents, harsh reality is that accidents would keep
on happening. There may be a possibility of reducing the number
of road accidents, but occurrence thereof cannot be totally
eliminated. Such accidents, particularly fatal accidents, would
always lead to filing of claims by the victims and/or kith and kin of
victims, for compensation. Fatal accidents also trigger C
prosecution of the driver who was negligent and rash in driving
which caused the accident. Insofar as disputes regarding claims
are concerned, there is a need to resolve the same at the earliest
inasmuch as compensation money may be badly needed by the
claimants for so many reasons and delay may bring insurmountable
D
sufferings of various kind. Having regard to the fact that large
number of accidents are giving rise to phenomenal quantum jump
in such cases, methods need to be adopted for quick resolution.
[Para 27][1110-E-H]
2.2 The various directions/recommendations are given: (a)
The Government is impressed upon to also consider the feasibility E
of enacting Mediation Act to take care of various aspects of
mediation in general. (b) The Government may examine the
feasibility of setting up MAMA by making necessary amendments
in the Motor Vehicles Act. For this purpose, it can consider the
two flow charts given by the appellant. (c) In the interregnum, F
NALSA is directed to set up Motor Accident Mediation Cell
which can function independently under the aegis of NALSA or
can be handed over to MCPC. Such a project should be prepared
within a period of two months and it should start functioning
immediately thereafter at various levels as suggested in this
judgment. The directions contained in order dated November 6, G
2017 in Jai Prakash case are reitreated for implementation of
the latest Modified Claims Tribunal Agreed Procedure. For
ensuring such implementation, NALSA is directed to take up
the same in coordination and co-operation with various High
H
1092 SUPREME COURT REPORTS [2019] 3 S.C.R.
A Courts. MACAD Scheme shall be implemented by all Claim
Tribunals on All India basis. 21 Banks, Members of Indian Banks
Assocation, who had taken decision to implement MACAD
Scheme would do the same on All India basis. (d) The Government
is implied upon to look into the feasibility of framing necessary
schemes and for the availability of annuity certificates. This
B
exercise may be done within the period of six months and decision
be taken thereupon. (e) Likewise, it is directed that there should
be programmes from time to time, in all State Judicial Academies,
to sensitizing the Presiding Officers of the Claims Tribunals,
Senior Police Officers of the State Police as well as Insurance
C Company for the implementation of the said Procedure.
[Para 39][1117-C-H; 1118-A-B]
Arvind Kumar Mishra v. New India Assurance Co. Ltd.,
(2010) 10 SCC 254 : [ 2010] 11 SCR 857 ; Oriental
Insurance Company Limited v. Deo Patodi & Ors.,
D (2009) 13 SCC 123 : [2009] 8 SCR 791 ; New India
Assurance Co. Ltd. v. Ganga Devi & Ors., MAC APP
No. 135 of 2008 decided on November 23, 2009 by
Delhi High Court ; Sarla Verma v. Delhi Transport
Corporation (2009) 6 SCALE 129 ; Raj Kumar v. Ajay
Kumar & Anr., (2011) 1 SCC 343 : [2010] 13 SCR 179
E ; Arun Sondhi v. Delhi Transport Corporation (2001)
ACJ 1779 ; Jaiprakash v. National Insurance Company
[2009] 16 SCR 710 ; Rajesh Tyagi v. Jaiveer Singh and
Others (FAO No. 842 of 2003) – referred to
Case Law Reference
F
[2010] 11 SCR 857 referred to Para 17
[2009] 8 SCR 791 referred to Para 18
(2009) 6 SCALE 129 referred to Para 19
[2010] 13 SCR 179 referred to Para 22
G
[2013] 12 SCR 350 relied on Para 23, 24
(2001) ACJ 1779 referred to Para 25
[2009] 16 SCR 710 referred to Para 32
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1093
CO. LTD. & OTHERS
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2476- A
2477 of 2019.
From the Judgment and Order dated 19.05.2017 of the High Court
of Delhi at New Delhi in MAC. APP. No. 550 of 2007 in Review
Petition No. 506 of 2016 and order dated 17.05.2016 in MAC. APP. No.
550 of 2007. B
Arun Mohan, Sr. Adv., Dinesh S. B., Vipin Kumar Jai, Rituj Chopra,
Advs. for the Appellant.
Sahil Paul, Ms. Manjeet Chawla, S. S. Nehra, D. Vidyanandam,
R. K. Gupta, Vikrant Nehra, M/S. Gaur & Nehra Law Firm, Advs. for
the Respondents. C
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1. Leave granted.
2. The appellant herein, who is a practicing advocate, had suffered
in nasty accident at the young age of 18 years. He was a student at that D
time studying in Modern School, Delhi. It was 26th May, 1988. He was
travelling along with his mother from Delhi to Mussoorie to celebrate his
18th birthday falling on 27th May, 1988. On Delhi-Dehradun highway
the accident took place in which his entire left leg was crushed. He was
rushed to the hospital and his hospitalization continued for over two
E
months. He had to undergo surgery for which he was operated on 31 st
May, 1988. Though, the appellant was discharged from the hospital
after two months, his treatment continued for over 6 years, during which
period he had to undergo further operations. In all, three surgeries were
performed. First, for putting plates and screws, another for removal of
plates and screws wherein doctor discovered that he could not remove F
the plates and screws of femur bone. The result is that even today the
said screws and plates in the femur bone remain planted. This exposes
him to the risk of another fracture anytime. The third operation was for
removal of a lump in the right leg which had developed after the accident
and had grown over the years.
G
3. As per the appellant, the net result of the aforesaid accident of
such severity is that he is suffering permanent disability (pain and difficulty
in locomotion) even today. This disability is certified by the District
Government Hospital, Muzaffarnagar at 40%, as per the disability
certificate dated 10th December, 2005 (Exh. PW-4/103).
H
1094 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 4. The appellant filed an application claiming compensation before
Motor Accidents Claims Tribunal (MACT), Muzaffarnagar, U.P. as the
accident took place in the area within the jurisdiction of the said MACT.
However, on his application for transfer of the said claim petition, this
Court passed orders dated 12th January, 1998 transferring the case to
MACT, Patiala House, New Delhi. The MACT, after conclusion of the
B
trial, rendered its award dated 23rd May, 2007 attributing negligence to
the driver of the ambassador car which had hit the vehicle in which the
appellant was travelling. As the accident occurred due to the negligence
of the said driver (Respondent no. 4 in MACT case), and the offending
vehicle was insured with Respondent no. 1, namely, New India Assurance
C Company Limited, the liability was fastened on the Insurance Company,
the driver of the vehicle as well as the owner of the vehicle who also
arrayed as respondents. The MACT, thereafter, dealt with the issue of
quantum of compensation and awarded a sum of Rs. 8,48,000/-, the
breakup of which is as under:
D “Pain and sufferings Rs.50,000/-
Medicines Rs.2,10,000/-
Special Diet Rs.15,000/-
Conveyance Rs.15,000/-
Compensation on account Rs.4,08,000/-
of loss of income adopting
E multiplier of 18 permanent Rs.75,000/-
disability attendant Rs.25,000/-
loss of enjoyment Rs.50,000/-
Total Rs.8,48,000/-”
5. The MACT also awarded interest @7% for a period of 10
F years, inter alia, taking note of the fact that the claim petition has been
dismissed in default twice.
6. The appellant filed the appeal thereagainst before the High
Court. However, when it was taken up for hearing, nobody appeared on
behalf of the appellant. Going by the fact that on several consecutive
G dates the appellant was not represented and remained absent, instead of
dismissing the appeal in default, the High Court decided the matter on
merits after hearing the counsel for the Insurance Company and on
perusing the record.
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1095
CO. LTD. & OTHERS [A. K. SIKRI, J.]
7. Main contention of the appellant in appeal was that MACT had A
failed to take into account the disability certificate which showed that
the appellant had suffered permanent disability to the extent of 40%.
This submission is rejected by the High Court with the observations that
the MACT had, in fact, calculated the loss of future income on the basis
of inference that the claimant has suffered functional disability to the
B
extent of 40% corresponding to affecting his earning capacity. The
High Court also took note of the income tax returns which were filed by
the appellant for the periods 2003-04, 2004-05, 2005-06. However, as
per the High Court, these income tax returns were irrelevant and could
not be taken into consideration as accident occurred way back in the
year 1988 and, therefore, compensation had to be fixed with reference C
to the date of the accident when the claimant was a boy of 18 years
only. Instead, only addition is made by the High Court, that too on some
other count. It has noted that the appellant would require services of a
driver till he attains age of 70 years, which is a normal expected lifespan.
Though, no evidence was led in support of this claim, the High Court has
D
awarded an additional lumpsum damages in the sum of Rs. 50,000/- on
this account, given the nature of disability and physical disfigurement
suffered by the appellant.
8. The appellant, thereafter, preferred a review petition under
Order LXVII Rule 1 of the Code of Civil Procedure seeking review of
the judgment dated 17th May, 2016 rendered by the High Court. It was E
pointed out that there was an error committed by the MACT as it had
applied the multiplier of 17, whereas multiplier of 18 should have been
adopted while calculating the compensation towards loss of income, going
by the fact that the appellant was only 18 years of age when he suffered
the injuries. This plea has been accepted by the High Court thereby F
applying the multiplier of 18, instead of 17 which has resulted in
enhancement of compensation by Rs.24000/- together with corresponding
interest. Main judgment dated 17th May, 2016 as well as order dated
19th May, 2017 passed in review petition are the subject matters of the
present appeals.
G
9. Mr. Arun Mohan, learned senior counsel appearing for the
appellant has made two-fold submissions which are paraphrased in the
following manner:
(i) In the first instance, it is submitted that the MACT as well as
the High Court have erred in computing the future earning by fixing the H
1096 SUPREME COURT REPORTS [2019] 3 S.C.R.
A income at the rate of Rs.5000/- only while assessing the loss of future
earnings. No doubt, submitted the learned senior counsel, the appellant
was only a student and, therefore, there was no real earning at that
stage. Only future prospects can be taken into consideration, as per the
law laid down by this Court in a series of judgments. However, submission
of learned senior counsel was that while assessing the loss of future
B
earning, the Court should have regard to the family background of the
victim, the institution in which he is getting education, his potential to
adopt the career he desired to choose, career prospects in view of
attendant circumstances etc. In this hue, Mr. Arun Mohan submitted
that the appellant belongs to a family of lawyers as both his parents
C were senior lawyers practicing in Supreme Court. Because of this family
background, the appellant also wanted to join legal profession. Though,
at the time of accident, he was studying in school, after school he intended
to pursue his studies in law. He, in fact, did law and has joined the legal
profession, which fact was placed on record, as by the time the appellant
became a lawyer the case before MACT was still pending. Further,
D
having regard to affluent family background, the appellant at the time of
accident was studying in prestigious Modern School, Barakhamba Road,
New Delhi. All these circumstances clearly indicated that the appellant
had a bright future and, therefore, his future earnings could not be
considered without keeping in view the aforesaid factors. In such
E circumstances, loss of future earning prospects by treating the future
earnings at the rate of Rs.5000/- only was abysmally low. He also
submitted that though in the review petition filed before the High Court,
specific ground to this effect was taken, it has not even been considered
by the High Court.
F (ii) Second submission of Mr. Arun Mohan was a passionate plea
aimed at reforming the system at following levels:
(a) On-road safety and grant of adequate compensation to the
victims without any delay. For ensuring expeditious settlement of
claims, resort to alternate means which may include innovative
G measures.
(b) Taking adequate steps including adopting innovative measures,
to ensure fast track disposal of cases by MACTs.
(c) Ensuring receipt of compensation in the safe hands of victims
and/or kiths and kins of victims, that too over a sustained period.
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1097
CO. LTD. & OTHERS [A. K. SIKRI, J.]
10. Detailed submissions on these aspects and suggestions of Mr. A
Arun Mohan are as under:
“Road Safety and Compensation
IT is perceived that of road accidents (1,40,000 dead per year
and 5,00,000 injured per year), less than 10% reach the MACT
with claims. Almost 90% do not have Access to Justice. B
And of the 10% or so who do reach MACT, the questions arise:
1. What is the ‘Cost’ to the State judiciary and insurance sector
for adjudication of these claims?
2. What are the time delays? C
3. On what income source do the dependents/injured survive during
pendency till the payout?
4. Of the ultimate payout, how much actually reaches the recipients
and how much is lost?
D
5. After, say, five years of receiving the compensation, what
actually remains with the majority of the recipients?
These were some disturbing questions on a ground level survey.
Put differently, firstly, as most are poor, there is hardly any access
to justice; the court resources are wasted; there are delays and E
difficulties and slicing away (cut) from the payout; and little safety
for the money that is received.
As a Solution to these problems, there are two proposals:
1. establishing a Motor Accidents Mediation Authority (MAMA) F
in every district;
2. making it compulsory for the accident investigator to:
(a) send a copy of his Report to MAMA;
(b) send e-mail to National Road Safety Council’s c e l l
identifying the accident spot and how similar accidents could be G
prevented in future.
MAMA will follow the following procedure:
1. MAMA will then issue notices to the claimants and others.
H
1098 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 2. interim compensation (with recourse) of few thousand rupees
a month pending adjudication as direct credit to Aadhaar linked
bank account;
3. completion of paperwork at MAMA;
4. mediation proceedings at MAMA;
B
5. complete safety in the hands of the recipient.
The amount settled is not given as rupees (or even FDRs), but as
Annuity Certificates, which have more return for the same value-
meaning lesser payout by the insurance sector with full receipt by
C the claimant.”
11. He further submitted that this Court may consider a direction
to the Government to frame these procedures and schemes. LIC/RBI
can provide for availability of Annuity Certificates in consultation with
the Pension Fund Regulatory and Development Authority and the
D commercial Banks/insurance companies.
12. To facilitate appreciation and implementation, he gave two
flowcharts as below:
E
F
G
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1099
CO. LTD. & OTHERS [A. K. SIKRI, J.]
A
B
C
D
13. In the Flowchart-1 (under the existing law), a direction from
this Court is sought to all MACTs to compulsorily refer motor accident
cases to the District Mediation Authority which will serve the purpose
till the Government amends the Statute. Flowchart - 2 shows where the E
amended statute and the rules can provide for establishing a Motor
Accident Mediation Authority (MAMA) in every district in the country.
He also suggested that rules can provide for every accident investigator
to send information to : (1) MAMA; and (2) National Road Safety
Council’s Cell.
F
14. Speaking with an optimist tone, Mr. Mohan submitted that
there is a hope that with a provision for MAMA:
(1) access to justice will substantially increase;
(2) the court costs will reduce;
G
(3) insurance sector costs (as payout) will reduce;
(4) Annuity Certificates of the payout will nearly eliminate the
‘slicing away’; and
H
1100 SUPREME COURT REPORTS [2019] 3 S.C.R.
A (5) the actual benefit to the recipients will be far more (with
Annuity Certificates) than it is at present.
15. Mr. Salil Paul, learned counsel appearing for the Insurance
Company advanced his argument on the quantum of compensation based
on future prospective. His submission was that the yardstick adopted
B by the courts below in fixing the income based on future prospective on
the basis of which compensation is given to the appellant is in tune with
various judgments rendered by this Court as well as the High Court.
Therefore, no interference was called for, insofar as grant of
compensation is concerned. He referred to certain judgments in support.
C 16. With reference to the second submission of Mr. Arun Mohan,
Mr. Salil Paul gave a positive response with the plea that since suggestions
given by Mr. Arun Mohan were in larger public interest for reformation
of the system, he had no objection if the Court issues appropriate
directions in this behalf. At the same time, he also pointed out that
insofar as speedy disposal of cases and payment of compensation to the
D victims, particularly, young victims are concerned, the High Court of
Delhi had given directions on the basis of which Claims Tribunal Agreed
Procedure was approved by High Court of Delhi. Modified version
thereof has now been approved as recent as on 7th December, 2018
which takes care of the speedy disposal as well as periodical payments
E to be made to the young victims over a period of time. Mr. Salil Paul
placed on record the relevant judgments as well as Modified Claims
Tribunal Agreed Procedure approved by the Delhi High Court vide orders
dated 7th December, 2018.
17. We now proceed to discuss the merits of the aforesaid two
F proposition advanced before us.
(I) Assessment of Compensation:
Admittedly, the appellant was a student studying in a school.
He was not doing any job or was in any vocation and, thus, was not
earning anything. The loss of future earning is to be assessed on the
G aforesaid basis. Before adverting to the arguments that are raised by
Mr. Arun Mohan and taken note of above, it would be appropriate to
scan through certain judgments cited before us by both the parties in
order to decipher the principles for determining loss of future earning in
such circumstances. First case which we would like to refer is the
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1101
CO. LTD. & OTHERS [A. K. SIKRI, J.]
judgment in the case of Arvind Kumar Mishra v. New India Assurance A
Co. Ltd., (2010) 10 SCC 254. In that case also, the appellant who was
a victim of accident, was a student. He was in the final year of
engineering which he was doing from a reputed college. He had a
brilliant academic record, having passed all semester examinations with
distinction. In the accident that took place, the appellant suffered multiple
B
injuries which led to 70% permanent disability. This disability rendered
him incapacitated which had the consequence of dashing forever his
dream of becoming Mechanical Engineer, studies for which career he
had undertaken. On the aforesaid facts, his future earning were assessed
at Rs.60,000/- per annum by taking salary and allowances payable to
Assistant Engineer in public employment. This future earning was C
discounted at 30% on the basis of which multiplicand was taken at
Rs.42,000/- per annum. Going by his age which was 25 years at the
time of accident, multiplier of 18 was applied and on that basis,
compensation towards loss of future earning was assessed at
Rs.7,56,0000/-.
D
Second case to which reference is made is Oriental Insurance
Company Limited v. Deo Patodi & Ors., (2009) 13 SCC 123. Here,
the victim was a brilliant student and while a student, he was also earning
Rs.80,000/- per month in a job on part-time basis in the United Kingdom.
He had not accepted a job offered by a US based company at a salary
of Rs.18 lakhs per annum. However, at the time of accident, he was E
not working. Accident took place on June 12, 2003 when he was 22
years of age. He suffered head injuries which proved fatal and he died
within six days i.e. on June 18, 2003. While computing the compensation
under the head ‘loss of dependency’ (he was the only son of the claimant),
the Tribunal as well as the High Court held that the deceased would F
have earned only Rs.18,000/- per month. This Court, in appeal, however,
considered the aforesaid estimation of income to be on lower side and
the Court decided to fix the earning at Rs.25,000/- per month, which
was 1/3rd of the amount that he was receiving in the United Kingdom.
The relevant discussion in this behalf runs as under:
G
“8. The question in regard to the calculation of loss of dependency,
it is trite, would vary from case to case. The fact that the deceased
was a brilliant student is not in dispute. He had graduated in
Business Administration in the UK. Even as a student, in a job on
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1102 SUPREME COURT REPORTS [2019] 3 S.C.R.
A a part-time basis he was being paid a salary of Rs 80,000 per
month (UK £1008.31). He paid his income tax even in the UK.
After his graduation, he came back to India. He was offered a
job as EU Controller by GOA LLC, a company based in Chicago,
USA at an annual salary of Rs 18 lakhs (i.e. $41,600). However,
when the accident took place he was not working; having not
B
accepted the said offer. He was still a student. It would have
been hazardous for the Tribunal to calculate the amount of
compensation towards the loss of dependency on that basis.
9. The Tribunal and the High Court, however, in our opinion, keeping
in view the aforementioned backdrop might not be correct in
C holding that he would have earned only Rs 18,000 per month. It is
true that the cost of living in the western countries would be higher.
The standard of living in the western countries cannot be followed;
in the absence of any material placed before this Court it should
not be followed in India. Even in a case where the victim of an
D accident was earning salary in US dollars, this Court opined that a
lower multiplier should be applied.
10. In United India Insurance Co. Ltd. v. Patricia Jean
Mahajan [(2002) 6 SCC 281] this Court held: (SCC pp. 294-95,
paras 19-20)
E “19. In the present case we find that the parents of the
deceased were 69/73 years. Two daughters were aged 17
and 19 years. The main question, which strikes us in this
case is that in the given circumstances the amount of
multiplicand also assumes relevance. The total amount of
F dependency as found by the learned Single Judge and also
rightly upheld by the Division Bench comes to 2,26,297 dollars.
Applying multiplier of 10, the amount with interest and the
conversion rate of Rs 47, comes to Rs 10.38 crores and with
multiplier of 13 at the conversion rate of Rs 30 the amount
comes to Rs 16.12 crores with interest. These amounts are
G huge indeed. Looking to the Indian economy, fiscal and
financial situation, the amount is certainly a fabulous amount
though in the background of American conditions it may not
be so. Therefore, where there is so much of disparity in the
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M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1103
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economic conditions and affluence of the two places viz. the A
place to which the victim belongs and the place where the
compensation is to be paid, a golden balance must be struck
somewhere, to arrive at a reasonable and fair mesne. Looking
by the Indian standards they may not be much too
overcompensated and similarly not very much under
B
compensated as well, in the background of the country where
most of the dependent beneficiaries reside. Two of the
dependants, namely, parents aged 69/73 years live in India,
but four of them are in the United States. Shri Soli J. Sorabjee
submitted that the amount of multiplicand shall surely be
relevant and in case it is a high amount, a lower multiplier can C
appropriately be applied. We find force in this submission. …
20. The court cannot be totally oblivious to the realities. The
Second Schedule while prescribing the multiplier, had
maximum income of Rs 40,000 p.a. in mind, but it is
considered to be a safe guide for applying the prescribed D
multiplier in cases of higher income also but in cases where
the gap in income is so wide as in the present case income is
2,26,297 dollars, in such a situation, it cannot be said that
some deviation in the multiplier would be impermissible.
Therefore, a deviation from applying the multiplier as provided
in the Second Schedule may have to be made in this case. E
Apart from factors indicated earlier the amount of multiplicand
also becomes a factor to be taken into account which in this
case comes to 2,26,297 dollars, that is to say an amount of
around Rs 68 lakhs per annum by converting it at the rate of
Rs 30. By Indian standards it is certainly a high amount. F
Therefore, for the purposes of fair compensation, a lesser
multiplier can be applied to a heavy amount of multiplicand.”
The said decision, however, to some extent was clarified by this
Court in Punjab National Bank v. Indian Bank [(2003) 6 SCC
79] . G
11. It is in the aforementioned situation, we are of the opinion that
the fair amount of compensation should have been calculated at
Rs 25,000 per month being about one-third of the amount which
he was receiving in the UK.”
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1104 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 18. We may also take note of one judgment of High Court of
Delhi in MAC. APP. No. 135 of 2008 titled ‘New India Assurance Co.
Ltd. v. Ganga Devi & Ors.’ decided on November 23, 2009. In that
case also, accident resulted in death of the victim, named, Dr. Brij Mohan.
He was 24 years of age at the time of accident and had completed his
MBBS. He was doing one year internship and was getting stipend of
B
Rs.5,000/- per month. The deceased had cleared the UPSC examination
for the post of Medical Officer and was scheduled to be appointed as
Medical Officer after completing the internship. Evidence of PW-2,
Senior Assistant of the Hospital, where the deceased was interning, was
produced who deposed that after completing his internship, there was a
C possibility of getting absorbed as Junior Resident Doctor in the same
hospital at salary of Rs.18,000/- to Rs.20,000/- per month.
19. The Tribunal took the view that the aforesaid evidence was
insufficient to prove the income. Accordingly, it took the minimum wages
of a graduate worker as Rs.3,543/- per month and added 50% towards
D inflation and rise in price index. From this, 1/3rd was deducted towards
personal expenses and multiplier of 11 was applied to compute the loss
of dependency at Rs.9,35,352/-. The High Court set aside the order of
the Tribunal holding that evidence of PW-2 was believable. On that
basis, income was taken at Rs.18,000/- per month to which 50% was
added towards future prospects, following the judgment of this Court in
E Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCALE 129.
Deduction towards personal expenses was made on which multiplier of
13 was applied.
20. The aforesaid cases are of all those victims who were students
at the time of accident and were not in actual employment. In addition,
F Mr. Arun Mohan had also referred to the judgment in N. Manjegowda
v. Manager, United India Insurance Company Limited, (2014) 3
SCC 584, where victim of an accident was a young advocate aged about
36 years. In the accident, he sustained whole body disability of 50%.
This judgment is cited for the purpose of showing principle laid down by
G the Court in determining the loss of earning capacity of an advocate
who suffers disability in an accident. The Tribunal had assessed the loss
of future income due to disability at Rs.6,17,500/- per annum. The High
Court reduced the same to Rs.1,50,000/-. This Court noted that due to
the said accident, the appellant had suffered partial sensory loss all over
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1105
CO. LTD. & OTHERS [A. K. SIKRI, J.]
his limbs and there was lack of proper coordination in all four limbs. He A
needed an assistance for daily routine work. This kind of disability, in
the opinion of the Court, hindered his ability to practice as an advocate
and compete with others in the field of legal profession. He was bound
to suffer huge professional loss in the said condition. This Court, in the
aforesaid circumstances, took the view that loss of future income fixed
B
at Rs.6,17,500/- did not require any deduction. On the contrary, the loss
of earning should be treated as 70% and the appropriate multiplier should
be 16 in place of 13. On that basis, the loss of income due to disability
needed enhancement from Rs.6,17,500/- by at least Rs.4,00,000/- and
the compensation under the head loss of income due to disability was
worked out accordingly. C
21. It would be also appropriate to take note of certain judgments
dealing with the assessment of loss of future earnings on account of
disability suffered as a result of accident, even when these cases pertain
to those victims who were having their earnings, as these cases would
throw light on the general principles which were laid down for assessing D
such a loss.
22. In the case of Raj Kumar v. Ajay Kumar & Anr., (2011) 1
SCC 343, where the victim suffered 45% disability to left lower limb and
permanent functional disability of 25%, the Court held that it is a functional
disability which would be the operative criteria for assessing the loss of E
future earnings and not physical disability. There is a detailed and lucid
discussion of assessment of future loss of earning due to permanent
disability, covering all possible facets and discussing every nuance of the
subject matter. After explaining the meaning of permanent disability
and contrasting it with temporary disability and also the manner in which
permanent disability of different limbs expressed by Doctors in the F
Disability Certificates is to be interpreted, the Court clarified that the
assessment of compensation under the head of loss of future earnings
would depend upon the effect and impact of such permanent disability
on his earning capacity. The manner in which the assessment is to be
carried out is contained in the following passages in the said judgment: G
“12. Therefore, the Tribunal has to first decide whether there is
any permanent disability and, if so, the extent of such permanent
disability. This means that the Tribunal should consider and decide
with reference to the evidence:
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1106 SUPREME COURT REPORTS [2019] 3 S.C.R.
A (i) whether the disablement is permanent or temporary;
(ii) if the disablement is permanent, whether it is permanent total
disablement or permanent partial disablement;
(iii) if the disablement percentage is expressed with reference to
any specific limb, then the effect of such disablement of the limb
B on the functioning of the entire body, that is, the permanent disability
suffered by the person.
If the Tribunal concludes that there is no permanent disability then
there is no question of proceeding further and determining the
loss of future earning capacity. But if the Tribunal concludes that
C there is permanent disability then it will proceed to ascertain its
extent. After the Tribunal ascertains the actual extent of permanent
disability of the claimant based on the medical evidence, it has to
determine whether such permanent disability has affected or will
affect his earning capacity.
D 13. Ascertainment of the effect of the permanent disability on
the actual earning capacity involves three steps. The Tribunal has
to first ascertain what activities the claimant could carry on in
spite of the permanent disability and what he could not do as a
result of the permanent disability (this is also relevant for awarding
E compensation under the head of loss of amenities of life). The
second step is to ascertain his avocation, profession and nature of
work before the accident, as also his age. The third step is to find
out whether (i) the claimant is totally disabled from earning any
kind of livelihood, or (ii) whether in spite of the permanent disability,
the claimant could still effectively carry on the activities and
F functions, which he was earlier carrying on, or (iii) whether he
was prevented or restricted from discharging his previous activities
and functions, but could carry on some other or lesser scale of
activities and functions so that he continues to earn or can continue
to earn his livelihood.
G xx xx xx
19. We may now summarise the principles discussed above:
(i) All injuries (or permanent disabilities arising from injuries), do
not result in loss of earning capacity.
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(ii) The percentage of permanent disability with reference to the A
whole body of a person, cannot be assumed to be the percentage
of loss of earning capacity. To put it differently, the percentage of
loss of earning capacity is not the same as the percentage of
permanent disability (except in a few cases, where the Tribunal
on the basis of evidence, concludes that the percentage of loss of
B
earning capacity is the same as the percentage of permanent
disability).
(iii) The doctor who treated an injured claimant or who examined
him subsequently to assess the extent of his permanent disability
can give evidence only in regard to the extent of permanent
disability. The loss of earning capacity is something that will have C
to be assessed by the Tribunal with reference to the evidence in
entirety.
(iv) The same permanent disability may result in different
percentages of loss of earning capacity in different persons,
depending upon the nature of profession, occupation or job, age, D
education and other factors.”
23. From the conjoint reading of the aforesaid judgments, inter
alia, following principles can be culled out which would be relevant for
deciding the instant appeal:
E
(i) In those cases where the victim of the accident is not an earning
person but a student, while assessing the compensation for loss of future
earning, the focus of the examination would be the career prospect and
the likely earning of such a person in future. For example, where the
claimant is pursuing a particular professional course, the poseer would
be: what would have been his income had he joined a service F
commensurating with the said course. That can be the future earning.
(ii) There may be cases where the victim is not, at that stage,
doing any such course to get a particular job. He or she may be studying
in a school. In such a case, future career would depend upon multiple
factors like the family background, choice/interest of the complainant to G
pursue a particular career, facilities available to him/her for adopting
such a career, the favourable surrounding circumstances to see which
would have enabled the claimant to successfully pick up the said career
etc.
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1108 SUPREME COURT REPORTS [2019] 3 S.C.R.
A If the chosen field is employment, then the future earning can be
taken on the basis of salary and allowances which are payable for such
calling. In case, career is a particular profession, the future earning
would depend on host of other factors on the basis of which chances to
achieve success in such a profession can be ascertained.
B (iii) There may be cases like Deo Patodi where even a student,
the claimant would have made earnings on part-time basis or would
have received offer for a particular job. In such cases, these factors
would also assume relevance.
(iv) After ascertaining the likely earning of the victim in the
C aforesaid manner, the nature of injuries and disability suffered as a result
thereof would be kept in mind while determining as to how much earning
has been affected thereby. Here, impact of injuries on functional disability
is to be seen. In case of death of victim, it would result in total loss of
earning. In the case of injuries, the nature of disability becomes important.
Such an exercise was undertaken in N. Manjegowda case.
D
24. The relevant factors which are brought on record by the
learned senior counsel for the appellant are these: the appellant belongs
to a family of lawyers as both his parents were senior lawyers practicing
in the Supreme Court. Because of his family background, the appellant
also wanted to join legal profession, even though at the time of accident,
E he was studying in school. Having regard to affluent family background,
the appellant at the time of accident was studying in prestigious Modern
School, Barakhamba Road, New Delhi. All these circumstances clearly
indicated that the appellant had a bright future and, therefore, his future
earnings could not be considered without keeping in view the aforesaid
F factors. The appellant also produced evidence in respect of his disability.
This disability does not indicate much loss of prospects in earning as it is
similar to N. Manjegowda case. Of course, his movements are restricted
and he needs a Driver as he is not in a position to drive the car himself.
This would hinder the earning capacity to some extent, though not
significant extent.
G
25. From the judgment of the MACT, we find that, on this aspect,
it has followed judgment of Arun Sondhi v. Delhi Transport
Corporation, (2001) ACJ 1779 and has awarded the compensation at
Rs.4,08,000/-. It has also added Rs.75,000/- on account of 40% permanent
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1109
CO. LTD. & OTHERS [A. K. SIKRI, J.]
disability on the ground that apart from resulting in loss of income, it has A
severe impact on the life of the appellant as a whole. The figure of
Rs.4,08,000/- is calculated in the following manner:
“42. Learned counsel for petitioner has argued at length that a
substantial amount of compensation is required to be awarded to
the petitioner on account of loss of earning capacity in future. It B
has been stated that on account of injuries suffered in the accident
the income of the petitioner has reduced to 60% of what he could
have earned otherwise. I consider that this argument raised by
learned counsel for the petitioner cannot be accepted. The
petitioner was student at the time of accident. He started his
career after around 5 years of accident. I do not say that the C
injuries did not have an adverse impact on the petitioner, but to
quantify the same in the manner claimed by the petitioner may
not be just. In this regard, I consider that the guidance can be
taken from the case of Arun Sondhi v. Delhi Transport
Corporation, 2001 ACJ 1779. In this case, the injured was a D
student of 21 years and he had suffered disability of 100%. In
L.P.A. the loss of future earning was assessed at Rs.5000/- p.m.
and after adopting multiplier of 16 compensation of Rs.10,80,000/
- was allowed. If the same principle is adopted and future earning
is taken at Rs.5000/- p.m. and the disability of 40%, the monthly
loss of income comes to Rs.2000/- p.m. or Rs.24,000/- p.a. It is E
a settled proposition that in the case of permanent disability the
multiplier is to be adopted according to the age at the time of trial.
In this case adopting this principle if the multiplier of 17 is adopted
the compensation on account of loss of future income comes to
Rs.24,000/- x 17 = Rs.4,08,000/-.” F
26. As can be seen from the above, loss of future earning is
assessed at Rs.2,000/- per month or Rs.24,000/- per annum. In the
process, the MACT has not considered future prospects having regard
to the relevant facts pointed out above which should have been taken
into consideration. At the same time, it is the functional disability which G
has to be kept in mind. Though, not very seriously, the functional capacity
has been impaired because of the disability suffered by the appellant as
the appellant cannot run around like other young advocates of his age.
Going by the overall circumstances, we are of the opinion that in case of
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1110 SUPREME COURT REPORTS [2019] 3 S.C.R.
A the appellant, loss of future earning can be fixed at Rs.5,000/- per month
i.e. Rs.60,000/- per annum on which multiplier of 18 is to be
applied. Calculated in this manner, the loss future earning comes to
Rs.10,80,000/-. The appellant, thus, would be paid another sum of
Rs.6,54,000/- under this head along with interest as awarded by the
Court below. We may place on record the statement of Mr. Arun Mohan
B
that the appellant has volunteered to give this amount to any Government
or public charitable organisation working towards road safety. We
appreciate this gesture of the appellant. We leave it to the appellant to
donate the amount to any particular organisation of his choice.
Alternatively, it can also be given for MAMC project by the appellant.
C Choice would entirely be that the appellant.
(II) With this, we advert to the second proposition advanced by
Mr. Arun Mohan. At the outset, we would like to point out that this
aspect pertains to the reforms that can be brought insofar as payment of
compensation to the victims of road accidents is concerned. We would
D also like to commend the suggestions given by Mr. Arun Mohan to bring
about such reforms which are visionary in nature. The two aspects
which he has highlighted are taken up for discussion in seriatim.
(A) ROAD SAFETY AND COMPENSATION:
27. Focus here is to ensure access to justice for road accident
E victims and also to bring about a mechanism which prevents delays and
other obstacles in awarding compensation to road accident victims. The
suggestion of Mr. Arun Mohan for establishing a MAMA in every District
is worthy of acceptance. Whatever steps are taken by the authorities
for reducing road accidents, harsh reality is that accidents would keep
F on happening. There may be a possibility of reducing the number of
road accidents, but occurrence thereof cannot be totally eliminated. Such
accidents, particularly fatal accidents, would always lead to filing of claims
by the victims and/or kith and kin of victims, for compensation. Fatal
accidents also trigger prosecution of the driver who was negligent and
rash in driving which caused the accident. Insofar as disputes regarding
G claims are concerned, there is a need to resolve the same at the earliest
inasmuch as compensation money may be badly needed by the claimants
for so many reasons and delay may bring insurmountable sufferings of
various kind. Having regard to the fact that large number of accidents
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M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1111
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are giving rise to phenomenal quantum jump in such cases, methods A
need to be adopted for quick resolution. Here, mediation as a concept
of dispute resolution, even before dispute becomes part of adversarial
adjudicatory process, would be of great significance. Advantages of
mediation are manifold. This stands recognised by the Legislature as
well as policy makers and need no elaboration. Mediation is here to
B
stay. It is here to evolve. It is because of the advantages of mediation
as a method here to find new grounds. It is here to prosper, as its time
has come. It is now finding statutory recognition and has been introduced
in few Statutes as well. Examples are the Companies Act, Insolvency
and Bankruptcy Code, Commercial Courts Act etc. In these enactments
provisions are made even for pre-litigation mediation by making this C
process mandatory. There is, in any case, umbrella provisions in the
form of Section 89 of the Code of Civil Procedure which, inter alia,
provides for court annexed mediation as well. Time is ripe now to have
similar mechanism for settling accident claims as well. Therefore, the
suggestion of establishing MAMA is laudable. We recommend to the
D
Government to examine the feasibility of setting up MAMA by making
necessary amendments in the Motor Vehicles Act itself. In fact, the
way mediation movement is catching up in this country, there is a dire
need to enact Indian Mediation Act as well.
28. Till the time such an amendment is made by the Parliament,
National Legal Services Authority (NALSA) should take up this work E
as a project. A complete report/module be made about the functioning
of Motor Accident Mediation Cell (MAMC). This exercise be completed
within a period of two months. Thereafter, this project can be shared
with all State Legal Services Authorities (SLSA) so that State Legal
Services Authorities implement the same through their respective District F
Legal Services Authorities (DLSAs).
29. There is Mediation and Conciliation Project Committee
(MCPC) in the Supreme Court which takes various policy decisions for
better working of mediation, including court annexed mediation.
Broadening the structure of MCPC, so as to have proper coordination G
with High Court Mediation Centers as well as Mediation Centers at
District Court Level is achieved. Thus, NALSA can even consider
entrusting the project of MAMC to MCPC as well.
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1112 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 30. In a book titled ‘Road Accidents: Prevention, Attention and
Compensation’, authored by Mr. Arun Mohan, Senior Advocate various
aspects pertaining to access to justice to road victims are deliberated
upon. There is a specific chapter on the establishment of MAMA which
can be of immense help to the NALSA for preparing and finalizing the
project. NALSA would be well-advised to take into consideration the
B
suggestions and proposals given in that book. It may, inter alia, make a
provision for the accident investigator to compulsorily send a copy of
report to MAMC or email to National Road Safety Council. Forwarding
the copy to MAMC shall facilitate mediation, on the other hand giving
information to National Road Safety Council would help the council to
C take measures for preventing such accidents in future.
(B) FAST TRACKING DISPOSAL OF CASES BY MACTs:
31. Establishment of MAMA/MAMC is for the purpose of
resolving the claims before the case is filed in the MACT. It is a matter
of common knowledge that for amicable settlement of the cases pending
D before MACT, ADR in the form of Lok Adalat is resorted to, which has
achieved tremendous success over a period of time. These Lok Adalats
are also organised by the Legal Services Authorities. Settlement of
cases by Lok Adalats have their own pros and cons. Be as it may,
resort to Lok Adalat should continue because of its own advantages.
E 32. Notwithstanding, the aforesaid ADR methods, adjudicatory
process before the MACTs is indispensable. There cannot be a guarantee
that 100% cases would be settled through mediation or Lok Adalat.
Therefore, there is a dire need for deciding these cases without delays
and within reasonable period. The Delhi High Court has given few
F judgments providing for mechanism to speed up the disposal of such
cases and to ensure that schemes are settled within a period of 90/120
days from the date of accident. In nutshell, these directions include that
on the occurrence of accident, the police which comes into the picture in
the first instance, should complete the investigation and along with filing
of FIR before the concerned Court of Metropolitan Magistrate, copies
G are sent to MACT as well as Insurance Company also. Insurance
Company is supposed to look into the same to find out as to whether the
claim is payable and within 30 days it should respond to MACT and
once all these documents are before the MACT in the form of evidence
etc. as well it would enable the MACT to decide the case within 30
H
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days. The case where entire procedure is articulated is judgment dated A
16th December, 2009 in FAO No. 843 of 2003. This Court has also
given its imprimatur in Jaiprakash v. National Insurance Company
(SLP(Civil) No. 11801-11804 of 2005) in its order dated 13th May,
2016 in the following manner:
“Insofar as the said suggestion is concerned, learned Solicitor B
General drew our attention to the response filed before us on
behalf of the General Insurance Council, in particular paragraph
4, which states that presently the procedure suggested in
Paragraph 23 is being followed by the Insurance Companies in
Delhi by way of a Scheme called “Claims Tribunal Agreed
Procedure” which was formulated by the Delhi High Court in the C
judgment dated 16.12.2009 passed in FAO No.843 of 2003 in
Rajesh Tyagi & Ors. v. Jaibir Singh 3 & Ors. It is also mentioned
therein that Tribunal as well as the Legal Service Authority are
taking effective steps to implement the said procedure, which is
being carried out in the National Capital Territory of Delhi. In D
paragraph 5, it is further submitted that since this procedure has
been successful in Delhi it can be extended on pan India basis.
The agreed procedure has also been filed as Annexure R5 with
the response filed on behalf of the General Insurance Council.
“We have also perused the procedure, which has been placed E
before us as Annexure R5 with the response which, in our
view, appears to be a comprehensive one and that we can
issue further directions to the Registrar General of the Delhi
High Court to ensure that procedure is strictly followed insofar
as Delhi is concerned and also circulate the said procedure to
all the other High Courts and the Registrar General of all the F
other High Courts are directed to ensure that the said procedure
is implemented through the Motor Accidents Claims Tribunals
in coordination with the Legal Service Authorities as well as
the Director General of Police of the States concerned.
The Registry of the Supreme Court is directed to forward a copy G
of this order along with Annexure R5 (pages 32 to 46 in the
response filed on behalf of the General Insurance Council) to all
the High Courts including the Delhi High Court to ensure
compliance of the present order.”
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1114 SUPREME COURT REPORTS [2019] 3 S.C.R.
A 33. Vide order dated 6th November, 2017 in Jaiprakash case,
this Court modified its order dated 13th May, 2016 and directed all States
to implement the Modified Claims Tribunal Agreed Procedure formulated
by Delhi High Court on 12th December, 2014. The copy of the Modified
Claims Tribunal Agreed Procedure was directed to be circulated to the
B Registrar General of each High Court for necessary compliance. The
relevant part of the said order is reproduced hereunder:
“It is also pointed out by learned amicus curiae that the order
passed by Justice Midha referred to in our order of 13th May,
2016 was actually modified by Justice Midha on 12th December,
C 2014. The order dated 13th May, 2016 will, therefore, stand
modified to the extent that Justice Midha has himself modified his
earlier order on 12th December, 2014. The Registry will send a
copy of this order as well as the order passed by Justice Midha on
12th December, 2014 to the Registrar General of each High Court
D for necessary information and compliance.”
34. This needs to be followed at All India Level. NALSA should
take up and monitor the same as well in coordination and cooperation
with various high courts to facilitate the same.
E (C) Ensuring receipt of compensation in the safe hands of
victims and/or kiths and kins of victims:
35. Mr. Arun Mohan has suggested that Government may frame
procedures and schemes in this behalf. In particular LIC/RBI can provide
for availability of annuity services in consultation with Pension Fund
F Regulatory and Development Authority and the commercial banks/
insurance companies. To facilitate the same, the learned senior counsel
has given two flowcharts, one under the existing law and the other on
establishment of MAMA. The details for framing such procedure and
schemes are given in the book of Mr. Arun Mohan referred to above.
G We impress upon the Government to look into the feasibility of framing
such schemes and for the availability of annuity certificates. This exercise
may be done within the period of six months and decision be taken
thereupon.
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36. In addition, we would also like to mention that the Delhi High A
Court (speaking through J.R. Midha, J.) in Rajesh Tyagi v. Jaiveer
Singh and Others (FAO No. 842 of 2003) undertook the exercise of
framing Motor Accident Claims Annuity Deposit Scheme (MACAD
Scheme) in cooperation with Indian Banks Association. Purpose of
involving the banks was to ensure that the Scheme is implemented through
B
the banks. In its order dated 7th December, 2018 passed in the aforesaid
case, the learned Judge recorded that 21 banks had taken decision to
implement MACAD Scheme which was approved by the Court on 1 st
May, 2018. Operative documents of these 21 banks were taken on
record. The court directed that sets of these operative documents be
furnished to the Registrar General of the High Court so that these are C
circulated to all the MACTs. Further, directions for implementation of
the said Scheme are given. Therefore, we would like to reproduce
order dated 7th December, 2018 in its entirety.
“1. Mr. Lalit Bhasin, learned counsel for Indian Bank Association
has handed over copies of the operative documents of 21 Banks D
which have implemented Motor Accident Claims Annuity Deposit
Scheme (MACAD Scheme) approved by this Court on 01st May,
2018. The compilations of the operative documents of 21 banks
are taken on record. Learned counsel for the Indian Bank
Association shall furnish the sets of the operative documents to
the Registrar General for being circulated to all the Claims E
Tribunals. 2. The Registrar General is directed to circulate the
aforesaid compilation to all the Claims Tribunals for being
implemented forthwith. The Claims Tribunals shall disburse the
awarded amount to the claimants in a phased manner in terms of
the order dated 01st May, 2018 and the award amount be disbursed F
through MACAD Scheme. 3. All the Banks are directed to appoint
a Nodal Officer within four weeks. Learned counsel for the IBA
shall compile the list of all the Nodal Officers of the Banks with
their respective addresses, phone numbers as well as e-mail
addresses and submit the same to the Registrar General who shall
circulate the list of Nodal Officers to all the Claims Tribunals. G
The Nodal Officer of each Bank shall ensure the implementation
of the MACAD Scheme by their branches. The Claims Tribunal
shall send the copy of the disbursement order by e-mail to the
Nodal Officer of that Bank who shall ensure the disbursement by
H
1116 SUPREME COURT REPORTS [2019] 3 S.C.R.
A the Bank within three weeks of the receipt of the e-mail. 4. The
Indian Bank Association and Delhi State Legal Services Authority
shall give adequate publicity to MACAD Scheme in the print as
well as digital media. 5. Claims Tribunal Agreed Procedure in
terms of the order dated 15th December, 2017 is further modified
to incorporate the directions contained in orders dated 18th January,
B
2018, 09th March, 2018, 01st May, 2018, 20th July, 2018 and 07th
September, 2018. The Modified Claims Tribunal Agreed Procedure
is annexed to this order. 6. The Registrar General shall circulate
the Modified Claims Tribunal Agreed Procedure to all the Claims
Tribunals. The Claims Tribunals, Delhi Police and Insurance
C Companies are directed to implement the Modified Claims Tribunal
Agreed Procedure with effect from 01st January, 2019. 7. Learned
amicus curiae submits that the Committee is deliberating upon the
issues referred to it by this Court. Let the final report of the
Committee be submitted before this Court on the next date of
D hearing. 8. List for reporting compliance on 08th February, 2019
at 02:30 P.M. 9. This Court appreciates the assistance rendered
by Mr. Lalit Bhasin, learned counsel for Indian Bank Association
for implementation of MACAD Scheme. 10. Copy of this order
along with Modified Claims Tribunal Agreed Procedure be sent
E to the Registrar General of this Court, National Legal Services
Authority (NALSA), Delhi State Legal Services Authority
(DSLSA), Delhi Police as well as General Insurance Council (5th
Floor, Building No.14, National Insurance Building, Jamshedji Tata
Road, Churchgate, Mumbai-400020). General Insurance Council
shall circulate this order to all the Insurance Companies. 11. Copy
F
of this order be given dasti to learned counsel for the parties as
well as learned counsel for IBA and Delhi Police under signature
of Court Master.”
37. Thus, direction for implementation of the ‘Claims Tribunal
G Agreed Procedure’ which is substituted by modified procedure, as noted
above, are already there. However, we find that there is no proper
implementation thereof by the Claims Tribunals. We, thus, direct that
there should be programmes from time to time, in all State Judicial
Academies to sensitizing the presiding officers of the Claims Tribunals,
H
M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE 1117
CO. LTD. & OTHERS [A. K. SIKRI, J.]
Senior Police Officers of the State Police as well as Insurance Company A
for the implementation of the said Procedure.
38. The Modified Claims Tribunal Agreed Procedure as approved
by High Court of Delhi in its aforesaid order dated 7th December, 2018
has the propensity to ensure speedy disposal of MACT cases. Likewise,
Operative Documents of 21 documents which have implemented Annuity B
Deposit Scheme can ensure that compensation is delivered to the persons
for whom it is meant. It has the element of annuity payments as well.
There is, therefore, a need to implement the MACAD Scheme by the
Claims Tribunals in the entire country. We direct accordingly. We also
direct 21 banks to implement its operative documents on All India basis. C
39. We sum up the various directions/recommendations
hereinbelow:
(a) We impress upon the Government to also consider the feasibility
of enacting Indian Mediation Act to take care of various aspects of D
mediation in general.
(b) The Government may examine the feasibility of setting up
MAMA by making necessary amendments in the Motor Vehicles Act.
For this purpose, it can consider the two flow charts given by the appellant.
(c) In the interregnum, NALSA is directed to set up Motor Accident E
Mediation Cell which can function independently under the aegis of
NALSA or can be handed over to MCPC. Such a project should be
prepared within a period of two months and it should start functioning
immediately thereafter at various levels as suggested in this judgment.
We reiterate the directions contained in order dated November 6, 2017 F
in Jai Prakash case for implementation of the latest Modified Claims
Tribunal Agreed Procedure. For ensuring such implementation, NALSA
is directed to take up the same in coordination and cooperation with
various High Courts. MACAD Scheme shall be implemented by all
Claim Tribunals on All India basis. 21 Banks, Members of Indian Banks G
Assocation, who had taken decision to implement MACAD Scheme
would do the same on All India basis.
(d) We impress upon the Government to look into the feasibility of
framing necessary schemes and for the availability of annuity certificates.
H
1118 SUPREME COURT REPORTS [2019] 3 S.C.R.
A This exercise may be done within the period of six months and decision
be taken thereupon.
(e) Likewise, we direct that there should be programmes from
time to time, in all State Judicial Academies, to sensitizing the Presiding
Officers of the Claims Tribunals, Senior Police Officers of the State
B Police as well as Insurance Company for the implementation of the said
Procedure.
The appeals are disposed of in the aforesaid manner.
Nidhi Jain Appeals disposed of.
C
D
E
F
G
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