Safiya Malik

The Kerala High Court has adjudicated in favor of a petitioner seeking an enhanced compensation claim in a motor accident case, revising the amount awarded by the Motor Accident Claims Tribunal (MACT). The court, in its judgment, modified the compensation based on judicial precedents, notional income principles, and considerations of permanent disability.

The petitioner, a 32-year-old woman, was involved in a road accident on June 16, 2014, while traveling as a pillion rider on a motorcycle. The vehicle, driven by the first respondent in a rash and negligent manner, lost control, causing the petitioner to fall and sustain severe injuries. These injuries included multiple rib fractures on the right side and a lacerated wound on the right temporal region. The first respondent was both the owner and the rider of the offending vehicle, while the second respondent was the insurance company responsible for covering liability.

Following the accident, the petitioner filed a compensation claim under O.P. (MV) No. 1129 of 2014 before the MACT, Pathanamthitta, citing serious physical impairment and loss of earnings. The claim stated that she was a dairy farmer earning Rs. 18,000 per month and that her injuries had significantly impacted her ability to work. However, the tribunal fixed her notional monthly income at Rs. 5,000 due to the lack of documentary proof of income. The tribunal subsequently awarded a total compensation of Rs. 88,437.

During the proceedings, the petitioner presented medical records, including an officially certified disability certificate confirming a 5% permanent disability. However, the tribunal only considered 4% functional disability when computing compensation for loss of earning capacity. Dissatisfied with this evaluation, the petitioner appealed to the High Court, seeking a more just calculation of compensation based on established legal principles.

The Kerala High Court referred to the judgments of the Supreme Court that govern the determination of notional income, i.e. Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. [(2011) 13 SCC 236] and Syed Sadiq v. United India Insurance Co. [(2014) 2 SCC 735], which establish that in the absence of direct income proof, a reasonable estimate must be made.

The judgment recorded: 

“The monthly income of an ordinary worker has to be fixed at Rs. 4,500 for accidents occurring in the year 2004, with an increment of Rs. 500 per year thereafter. Accordingly, for the year 2014, the petitioner’s notional monthly income is reasonably fixed at Rs. 9,500.”

Further, the court examined the method used to assess functional disability. It referred to Raj Kumar v. Ajay Kumar [(2011) 1 SCC 343], which clarified the distinction between permanent disability and its actual impact on earning capacity. The judgment stated:

“The percentage of permanent disability cannot be assumed as the percentage of loss of earning capacity. The tribunal must assess the impact of the disability on the petitioner’s profession, considering age, education, and occupation.”

Given that the petitioner’s occupation involved manual labour as a dairy farmer, the court found it reasonable to assess the functional disability at 5% as aganist the tribunal’s 4% estimation.

Additionally, the court referenced National Insurance Co. Ltd. v. Pranay Sethi [(2017) 16 SCC 680] and Jagdish v. Mohan [(2018) 4 SCC 571], which confirmed that self-employed individuals under 40 years of age are entitled to a 40% increase in income for future prospects. Accordingly, the High Court applied this principle to recalculate the compensation.

The court also examined the compensation granted for loss of earnings. The tribunal had awarded compensation for only two months of lost income. However, given the severity of the injuries and the period of medical treatment required, the High Court ruled that compensation should be calculated for three months instead.

Furthermore, the High Court examined the tribunal’s grant of compensation under the heads of ‘pain and suffering’ and ‘loss of amenities.’ The tribunal had awarded Rs. 25,000 for pain and suffering and Rs. 5,000 for loss of amenities. The High Court, considering the prolonged treatment, disability, and impact on quality of life, found this to be insufficient and deemed it necessary to grant an additional Rs. 10,000 under each head.

The High Court reassessed the compensation by revising the key components and awarded additional compensation as follows:

• Rs. 89,280 for loss of earning capacity

• Rs. 18,500 for loss of earnings

• Rs. 10,000 for pain and suffering

• Rs. 10,000 for loss of amenities

“Thus, a total amount of Rs. 1,27,780 is awarded as enhanced compensation. The said amount shall carry interest at the rate of 9% per annum from the date of the application till realization.”

Additionally, the insurance company was directed to deposit the enhanced amount into the petitioner’s bank account, the details of which were to be furnished by the claimant

Case Title: Suja Sajeev v. Usha & Anr.
Case Number: M.A.C.A. No. 139 of 2019
Bench: Justice Johnson John

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