Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. 7605 of 2022

(@ Special Leave Petition (C) No.25303 of 2019)

Divya

…Appellant

Versus

The National Insurance Co. Ltd. & Anr.

…Respondents

J U D G M E N T

C.T. RAVIKUMAR, J.

1. Leave Granted.

2. Little was known to the little girl when she was taken in an

autorickshaw by her parents about the jinx that she had to face and the

consequences which would be lifelong and haunting, both mentally and

physically. On 08.08.1998, when the appellant/claimant was a suckling,

to be precise aged two years, her parents took her in an autorickshaw

bearing registration No. TN-29-0958. When they were travelling from

near Vaishnav College, from west to east, a car bearing registration No.

Page 1 of 21

TMQ-2266 driven rashly and negligently came from the opposite

direction, that too through its off side, dashed against the autorickshaw.

She sustained very serious injuries. Taking into account the injuries

sustained and its serious consequences, after assessing the compensation

at Rs. 60 lakhs, the claimant filed an application for compensation under

Section 166 of the Motor Vehicles Act, 1988 (for short ‘MV Act’)

limiting the claim of compensation at Rs. 30 lakhs. The Tribunal, on

consideration of the evidence on record, held that the driver of the car

was responsible for the accident, but dismissed the claim petition on

technical grounds. It was found by the Tribunal that the vehicle was sold

on 21.05.1998 viz., prior to the accident and the claimant had not taken

steps to implead the actual owner of the car and, therefore, could not

claim compensation from the second respondent herein, the erstwhile

owner of the car as also from the insurance company. Aggrieved by the

dismissal of the claim petition the claimant preferred appeal before the

High Court of Judicature at Madras as CMA No. 991/2018. Upon finding

that the claim petition ought not to have been dismissed for the aforesaid

technical reason pending the appeal the High Court referred the claimant

before a Medical Board for examination and assessment of permanent

disability. The Medical Board assessed her locomotive disability as 75%

Page 2 of 21

and the neuro-physical disability as 40%. In fact, the Medical Board

conducted such examination on 19.05.2018 viz., almost two decades

since the date of accident. The Medical Board opined that the disability

caused to the appellant is almost 100%. The High Court, based on the

opinion given under the certificate issued by the Medical Board,

considered the claim of the appellant. Obviously, the High Court found

that the Tribunal was at fault in dismissing the claim petition assigning

the aforesaid reason in view of Section 157 of the MV Act, 1988. In fact,

after considering the position with respect to the aforesaid provision and

also the fact that the insurance coverage of the offending vehicle was

valid even on the date of the accident, the High Court came to the

conclusion that the appellant is entitled to be compensated.

Consequently, the award of the Tribunal was set aside.

3.After setting aside the award of the Tribunal, the High Court took

note of the fact that about two decades have lapsed since the date of the

accident to decline remand of the matter to the Tribunal. Obviously, in

the interest of the justice, the High Court went on to determine the

quantum of compensation. Taking note of the permanent disability

incurred by the appellant in the light of the certificate issued by the

Medical Board and taking into account the various heads under which

Page 3 of 21

compensation is grantable in the case of such serious injuries assessed

the compensation as under:

Award towards Amount

Permanent Disability -Rs. 2,00,000/-

Pecuniary loss/ loss of earning -Rs. 5,04,000/-

Pain and Sufferings -Rs. 1,50,000/-

Medical expenses -Rs. 10,000/-

Loss of amenities -Rs. 1,50,000/-

Transportation -Rs. 10,000/-

Extra nourishment -Rs. 10,000/-

Mental agony -Rs. 1,00,000/-

Future Medical Expenses -Rs. 1,00,000/-.

Attender Charges -Rs. 1,00,000/-

Total -Rs. 13,34,000/-

As per the impugned judgment, the High Court directed the first

respondent –Insurance Company, to pay the said quantified

compensation of Rs. 13,34,000/- with interest at the rate of 7.5 percent

per annum from the date of the petition (18.12.1998) till the date of the

payment. Appropriate directions for disbursement and deposit were also

issued thereunder. It is dissatisfied with the quantum of compensation

granted thereunder that the captioned appeal has been preferred seeking

enhancement of the quantum compensation.

4.Heard Mr. T. Harish Kumar, Advocate, the learned counsel for the

appellant and Mr. Abhishek Gola, Advocate, the learned counsel for the

respondent.

Page 4 of 21

5. The first and second respondents filed counter affidavits

separately. They did not dispute the certification of the permanent

disability by the Medical Board constituted pursuant to the direction of

the High Court. True that in the counter affidavit the second respondent

took up the stand that ‘just compensation’ was awarded by the High

Court in the appeal and the appellant herein is, therefore, not entitled to

get further enhancement of the quantum of compensation. Virtually, the

first respondent -Insurance Company, also adopted the same stand in its

affidavit. It was further contended therein that the claimant had failed to

provide any documentary evidence regarding the proof of income. We

may hasten to state here that it is nothing but mispleading due to

misreading as the High Court had only notionally fixed the income for

calculation purpose taking into account the fact that the appellant was

aged only two years at the time of the accident. The learned counsel for

the appellant would contend that there is no merit in the objections raised

by the respondents as in terms of Section 168 of the MV Act, the

appellant is entitled to ‘just compensation’ and she was deprived of the

same in the instant case. It was contended that going by the opinion of

the Medical Board the appellant had incurred permanent disability

almost of 100%. At the time of the accident the claimant was a minor

Page 5 of 21

aged about two years and its serious consequences and impact are

reflected in the medical certificate issued pursuant to the examination

conducted on 19.05.2018 viz., after about 20 years of the accident. It was

further contended by the learned counsel that the notional income fixed

by the High Court for calculation purpose viz., Rs. 2000/- is too meagre.

The calculation of compensation for loss of earning and for permanent

disability are on the lower side. Further, it was contended that the

amount of compensation granted under the heads “Pain and suffering”,

“Medical expenses”, Loss of amenities”, “Extra nourishment”, “Mental

agony”, “Future medical expenses” and “Attender charges” are all on the

lower side. In such circumstances, compensation granted under such

heads require enhancement for the purpose of granting ‘just

compensation’. We may also take note of the fact that despite being

saddled with liability to pay compensation the respondents have not

chosen to assail the judgment of the High Court.

6. The evidence on record would undoubtedly show that the

appellant had sustained very serious injuries in a motor accident

involving the two vehicles mentioned hereinbefore and the same

virtually doomed her future. Besides the undisputed details regarding the

disability certified by the Medical Board the appellant had produced

Page 6 of 21

photographs in this appeal revealing her pathetic plight. No doubt, the

trauma and the throe which she had experienced and experiencing are

inexplicable and cannot be expiated appropriately as the situation is

indisputable that regaining self-reliance much less recuperation is totally,

now an unpossibility. Obviously, the corporeal independence is lost

forever. The state of her lower limbs, as revealed from the photographs

supporting the certification of the opinion of the Medical Board, would

suggest that she could never be cursorial or even, stretch her legs. In

troth, she could not stand sans support. Needless to say, she lost all her

amenities and marriage prospects. The question is how would you assess

the ‘just compensation’ in such a case when Section 168 of the MV Act,

provides for ‘just compensation’?

7. In the contextual situation revealing the fact that it is an

impossibility to bring back the appellant to her original position it is only

appropriate to refer to the decision in Philipps v. London & South

Western Railway Co.

1

quoted with the agreement by the two-Judge

Bench of this Court in Kajal v. Jagdish Chand & Ors.

2

, it reads thus:

“…You cannot put the plaintiff back again into his original

position, but you must bring your reasonable common sense

to bear, and you must always recollect that this is the only

occasion on which compensation can be given. The plaintiff

1 (1879) LR 5 QBD 78 (CA)

2 (2020) 4 SCC 413

Page 7 of 21

can never sue again for it. You have, therefore, now to give

him compensation once and for all. He has done no wrong,

he has suffered a wrong at the hands of the defendants and

you must take care to give him full fair compensation for that

which he has suffered.”

8.In Kajal’s case (supra) this Court also referred to an early decision

in Raj Kumar v. Ajay Kumar

3

. Para 6 of judgment in Rajkumar’ case

(supra) is worthy to be noticed for awarding compensation for personal

injuries. It reads thus:

“6. The heads under which compensation is awarded in personal

injury cases are the following:

Pecuniary damages (Special damages)

(i)Expenses relating to treatment, hospitalisation,

medicines, transportation, nourishing food, and

miscellaneous expenditure.

(ii) Loss of earnings (and other gains) which the injured

would have made had he not been injured, comprising:

(a)Loss of earning during the period of treatment;

(b)Loss of future earnings on account of permanent

disability.

(iii) Future medical expense.

Non-pecuniary damages (General damages)

(iv) Damages for pain, suffering and trauma as a consequence

of the injuries.

(v) Loss of amenities (and/or loss of prospects of marriage).

(vi) Loss of expectation of life (shortening of normal

longevity).

In routine personal injury cases, compensation will be awarded

only under heads (i), (ii)(a) and (iv). It is only in serious cases of

3 (2011) 1 SCC 343

Page 8 of 21

injury, where there is specific medical evidence corroborating the

evidence of the claimant, that compensation will be granted under

any of the heads (ii)(b), (iii), (iv) and (vi) relating to loss of future

earnings on account of permanent disability, future medical

expenses, loss of amenities (and/or loss of prospects of marriage)

and loss of expectation of life.”

9.Bearing in mind the aforesaid decisions carrying salutary

principles for the purpose of computing compensation in cases where

serious injuries having lifelong disabilities occurred and also the fact that

to bring back the appellant to a stage where she would be able to attend

her quotidian needs, on her own, is also an impossibility, we will proceed

to consider the question whether compensation granted by the High

Court require enhancement/grant of compensation is warranted on any

ground.

10.The learned counsel for the appellant placed reliance on the

decision in Kajal’s case (supra) to claim enhancement/grant, of

compensation under different heads. On careful scrutiny of the heads of

compensation, bearing in mind the aforesaid decision, we find that the

appellant is entitled to enhancement/grant, of compensation on certain

grounds.

(1)Attender Charges :- towards ‘attender charges’ the High Court has

granted a lumpsum amount of Rs. 1 Lakh. In the decision in

Page 9 of 21

Kajal’s case this Court held that when compensation is awarded

in lumpsum, various factors had to be taken into consideration and

usually for ordering grant of lumpsum amount this Court always

followed a multiplier system. It was further held that various

factors such as inflation rate, rate of interest payable on the

lumpsum award, the longevity of the claimant and other issues

such as the uncertainties of life are factors to be taken into account

while following the said system. Furthermore, it is held therein

that adoption of multiplier method would ensure justice between

parties and thus results in award of “just compensation” within the

meaning of MV Act. The notional income fixed by the High Court

in the instant case requires no interference. The grievance raised in

relation to its fixation merits no consideration reckoning the age

when she met with the accident.

10.1.1 An incongruity appears to exist in the matter of selection of

multiplier in the case of persons belonging to the age group up to 15

years. In the decision in Kajal’s case in respect of the appellant/claimant

belonging to the said age group the two-Judge Bench took the multiplier

as 18. This was followed by another two-Judge Bench in Abhimanyu

Pratap Singh Vs. Namita Sekhon & Anr.

4

. However, in the case on hand

4 (2022) 8 SCC 489

Page 10 of 21

the multiplier as relates the appellant/claimant belonging to the self-same

age group (at the time of the accident) was taken as 15. In this context it

is relevant to refer to the Constitutional Bench decision of this Court in

National Insurance Company Ltd. vs. Pranay Sethi

5

. The

Constitutional Bench after taking into account the decisions in Sarla

Verma (Smt) & Ors. vs. Delhi Transport Corporation & Anr.

6

case,

Reshma Kumari & Ors. V. Madan Mohan & Anr.

7

case and Rajesh v.

Rajbir Singh

8

case observed that the formula relating to multiplier has

been clearly stated in Sarla Verma’s case and it has been approved in

Reshma Kumari’s case. Thereafter, it was held in Pranay Sethi’s case

thus, the selection of multiplier shall be as indicated in the table in Sarla

Verma’s case read with paragraph 42 of that judgment. The two-Judge

Bench in Abhimanyu Pratap Singh’s case (supra) found that in column

No. 4 of the table referred to in paragraph 42 of Sarla Verma’s case

virtually no multiplier has been shown. This is certainly true as in the

table the figure ‘15’ is shown only in column No. 5 which is the

multiplier specified in second column in the table in II, Schedule-II, MV

Act. In fact, in column No. 4 of the table in Sarla Verma’s case the

highest multiplier is ‘18’ and it is shown applicable to two age groups;

5 (2017) 16 SCC 680

6 (2009) 6 SCC 121

7 (2013) 9 SCC 65

8 (2013) 9 SCC 54

Page 11 of 21

firstly, to the age group of 15 to 20 years and secondly, to the age group

of 21 to 25 years. It is in the said circumstances, that as relates the age

group up to 15 years the multiplier was selected as ‘18’.

10.1.2 As noticed herein the Constitutional Bench in Pranay

Sethi’s case at paragraph 57 observed that the formula relating to

multiplier has been clearly stated in Sarla Verma’s case (supra) and it has

been approved in Reshma Kumari’s case (supra). It is also relevant to

note that as per conclusion No. 2 in paragraph 1 of Pranay Sethi’s case

the Constitutional Bench declared thus:

“As Rajesh has not taken note of the decision in

Reshma Kumari, which was delivered at earlier point

of time, the decision in Rajesh is not a binding

precedent.”

10.1.3 In the said circumstances, in the light of the aforesaid

observation and conclusion and also taking note of the fact that Reshma

Kumari is a three-Judge Bench decision we will have to refer to the

relevant recitals in the said decision. In Reshma Kumari’s case the

conclusion in paragraph 43.2 reads thus:

“43.2. In cases where the age of the deceased is upto 15

years, irrespective of 166 or 163A under which the

claim for compensation has been made, the multiplier

of 15 and the assessment as indicated in the second

Page 12 of 21

schedule subject to correction as pointed out in Column

(6) of the table in Sarla Verma should be followed.”

It is also relevant to note that after referring to paragraph 42

in Sarla Verma’s case dealing with the multiplier the three-Judge

Bench in Reshma Kumari’s case approved the same stating thus:

“It is high time that we move to a standard method of

selection of multiplier, income for future prospects and

deduction for personal and living expenses. The courts

in some of the overseas jurisdictions have made this

advance. It is for these reasons, we think we must

approve the Table in Sarla Verma for the selection of

multiplier in claim applications made Under Section

166 in the cases of death. We do accordingly. If for the

selection of multiplier, Column (4) of the Table in Sarla

Verma is followed, there is no likelihood for the

claimants who have chosen to apply under Section 166

being awarded lesser amount on proof of negligence on

the part of the driver of the motor vehicle than those

who prefer to apply under Section 163-A. As regards

the cases where the age of the victim happens to be up

to 15 years, we are of the considered opinion that in

such cases irrespective of Section 163-A or Section 166

under which the claim for compensation has been

made, multiplier of 15 and the assessment as indicated

in the Second Schedule subject to correction as pointed

out in Column (6) of the Table in Sarla Verma should

be followed. This is to ensure that the claimants in such

cases are not awarded lesser amount when the

application is made under Section 166 of the 1988 Act.

In all other cases of death where the application has

been made under Section 166, the multiplier as

indicated in Column (4) of the Table in Sarla Verma

should be followed.

(emphasis added)

Page 13 of 21

10.1.4 We are of the considered view that the selection of

multiplier ‘15’ for the age group upto 15 years by the three-Judge Bench

in Reshma Kumari’s case is having a sound basis. It is common

knowledge that the age group of 21 to 25 years is regarded as the

commencement of normal productive years as referred specifically by the

two-Judge Bench in Sarla Verma’s case at paragraph 39. True that in

Sarla Verma’s case the same multiplier viz., ‘18’ is selected for the age

group 15 to 20 years. In this context, it is relevant to refer to the Child

and Adolescent Labour (Prohibition and Regulation) Act, 1986, which is

an enactment to prohibit the engagement of children in all occupation and

to prohibit the engagement of adolescence in hazardous occupations and

process and matters connected therewith and incidental thereto. In the

said Act the term “child” has been defined in Section 2(ii) as hereunder:

“S.2…

(i)…

(ii) "child" means a person who has not completed his

fourteenth year of age or such age as may be specified

in the Right of Children to Free and Compulsory

Education Act, 2009 (35 of 2009), whichever is more”

In the said circumstances, when there is clear prohibition

under an enactment for engagement of children and the definition

of “child” under the said enactment takes in children who have not

Page 14 of 21

completed their fourteenth year of age within its fold, there is

certainly justification for selecting a lower multiplier of ‘15’ in the

case of victims belonging to the age group upto 15 years. Since

the Constitutional Bench in Pranay Sethi’s case held Rajesh’s case

(supra) as not a binding precedent for not taking note of decision

in Reshma Kumari’s case, held that the formula relating to

multiplier has been approved in Reshma Kumari’s case after

extracting the afore-extracted paragraph No. 43.1 and 43.2 in

Reshma Kumari’s case and that the three-Judge Bench in Reshma

Kumari held that as regards the cases where the age of the victim

happens to be upto 15 years the multiplier should be ‘15’ we are

bound to take the multiplier of victims upto the age group of 15

years as ‘15’. Hence, according to us, the High Court has rightly

identified the multiplier by looking into the table in Sarla

Verma’s case as 15. The physical condition of the appellant

would, undoubtedly, reveal that she would require lifelong

services of two attendants. Following the decision in Kajal’s case

we thought that in that regard Rs. 10,000/- per month can be

granted and at that rate the annual amount would come to Rs.

1,20,000/-. Applying the multiplier of 15 the amount payable

Page 15 of 21

under the said head would be Rs. 18 lakh (1,20,000 x 15). After

deducting the amount already granted by the High Court under

that head viz., Rs. 1 lakh, the amount would be Rs. 17 lakhs.

(2)Pain and Sufferings and Loss of Amenities: - Under the head of

‘Pain and Sufferings” and “Loss of Amenities” a total of Rs. 3

lakh (1,50,000 each) was granted by the High Court. In Kajal’s

case this Court referred to with agreement the decision in

Mallikarjun v. Divisional Manager, National Insurance

Company Limited & Anr.

9

whereunder, while dealing with the

issue of award under this head, it was held that it should be at least

Rs. 6 lakhs if the disability is more than 90%. Since the disability

in this case was already assessed as more than 90% in the light of

the aforesaid decision, we are inclined to grant an amount of Rs. 3

lakhs additionally to the appellant idest after deducting Rs. 3 lakhs

from Rs. 6 lakhs.

(3)Marriage Prospects: - No amount whatsoever was granted by the

High Court for loss of marriage prospects. Obviously, in Kajal’s

case (supra) this Court declined to interfere with fixation of Rs. 3

9 (2014) 14 SCC 396)

Page 16 of 21

lakhs under that head by the Tribunal concerned. We find no

reason to deny such an amount viz., Rs. 3 lakhs to the appellant

for the loss of marriage prospects, taking into account her physical

condition.

(4)Future Medical Treatment: - The appellant was awarded only an

amount of Rs. 1 lakh under that head by the High Court.

Considering the nature of the injuries and the present physical

condition of the appellant we are of the view that in future she will

have to face a lot of medical problems keeping in view of her

young age and taking into account the life expectancy of an

average Indian. We are inclined to grant an amount of Rs. 1 lakh

more to the appellant.

Besides the aforesaid heads we think it appropriate to grant some

additional amount for special diet. The appellant was awarded an amount

of Rs. 10,000/- towards Extra Nourishment. It is common knowledge

that consumption of normal food by a person who is practically

bedridden is not advisable and what is advisable is to have a special

dietary to avoid putting on weight. It needs no expertise to know that if

such a person without any kind of regular exercise takes food with

Page 17 of 21

following dietary besides putting weight would become prone to several

diseases. In such circumstances, we are of the view that she may have to

spend amount for keeping her body fit, as far as possible, to adapt to the

situation. We are inclined to grant Rs. 90,000/- more in addition to the

amount of Rs. 10,000/- granted under the head ‘Extra Nourishment’.

11.In view of the enhancement/grant, of compensation the award

granted by the High Court under the impugned judgment would stand

modified by granting and enhancement amount of Rs. 24,90,000/- in

addition to amount already awarded by the High Court to its

compensation as hereunder:

Sr.

No.

Award towards Amount

1.Attender Charges -Rs. 17,00,000/-

2.Pain and Sufferings and Loss of

Amenities

-Rs. 3,00,000/-

3.Marriage Prospects -Rs. 3,00,000/-

4.Future medical treatment -Rs. 1,00,000/-

5.Grant of additional amount for special

diet

-Rs. 90,000/-

Total -Rs. 24,90,000/-

12.The insurance company shall be liable to deposit the said

enhanced amount with interest at the rate of 7.5% per annum with effect

from 29.08.2018 till the date of deposit. True that the appellant is now a

Page 18 of 21

major but at the same time taking note of her physical condition we

thought it just and proper to issue some direction in regard to its

investment in the best interest of the appellant.

13.In Kajal’s case the guidelines laid down by this Court in Kerala

SRTC v. Susamma Thomas

10

have been reproduced. The following

guidelines are relevant for the instant case:

“(vi)In personal injury cases if further treatment is

necessary the Claims Tribunal on being satisfied about the

same, which shall be recorded in writing, permit withdrawal

of such amount as is necessary for incurring the expenses

for such treatment;

(vii)In all cases in which investment in long term fixed

deposits is made it should be on condition that the Bank will

not permit any loan or advance on the fixed deposit and

interest on the amount invested is paid monthly directly to

the claimant or his guardian, as the case may be;

(viii)In all cases Tribunal should grant to the claimants

liberty to apply for withdrawal in case of an emergency. To

meet with such a contingency, if the amount awarded is

substantial, the Claims Tribunal may invest it in more than

one fixed deposit so that if need be one such FDR can be

liquidated.”

14.After referring to those guidelines laid down in Sussama’s

case (supra) this court in Kajal’s case observed thus:-

“These guidelines protect the rights of the minors, the

claimants who are under some disability and also widows

and illiterate persons who may be deprived of the

compensation paid to them in lump sum by unscrupulous

10 (1994) 2 SCC 176

Page 19 of 21

elements. These victims may not be able to invest their

monies properly and in such cases MACT as well the High

Courts must ensure that investments are made in

nationalised banks to get a high rate of interest. The interest

in most cases is sufficient to cover the monthly expenses. In

special cases, for reasons to be given in writing, MACT or

the trial court may release such amount as is required. We

reiterate these guidelines and direct that they should be

followed by all the Tribunals and High Courts to ensure that

the money of the victims is not frittered away.”

15.In the said circumstances, while keeping intact the directions

issued by the High Court regarding the investment of the amount

awarded by it as per the impugned judgment, we think it proper to issue

further directions, in regard to the investment of the additional amount of

compensation granted as per this judgment. Since we have granted

compensation in excess of what is claimed and the appellant had

remitted court fee for the claim of Rs. 30 lakhs the appellant is liable to

pay the balance court fee for the amount granted in excess of Rs. 30

lakhs. Therefore, the insurance company shall draw a cheque covering

the balance court fee for the amount in excess of Rs. 30 lakhs awarded

under this judgment and produce it before the MACT. In other words,

the balance amount need be deposited to comply with the judgment

before the MACT by way of two cheques, in which one should be for an

amount of Rs. 15 lakhs. MACT shall keep the said amount of Rs. 15

lakhs in a fixed deposit in a nationalized bank, for a period of 5 years.

Page 20 of 21

The bank concerned shall not permit any loan or advance on the fixed

deposit and the interest payable on this amount shall be released on

quarterly basis and for the care of the appellant alone. After the period of

5 years the MACT shall keep renewing the said amount on such terms as

it deems just and proper, for a further term of 5 years. The amount

covered by the other cheque shall be released to the appellant, in

accordance with the procedures as by now, the family must have

incurred huge amount for the treatment of the appellant. The insurance

company shall deposit the enhanced amount as above, within a period of

3 months from today.

16.This appeal stands disposed of as above. There will be no order as

to cost. Pending application(s), if any, shall stand(s) dismissed.

……………………, J.

(B. R. Gavai)

……………………, J.

(C.T. Ravikumar)

New Delhi;

October 18, 2022.

Page 21 of 21