Supreme Court Doubles Motor Insurance Award For 77% Disabled Victim, Includes Future Medical Costs And Loss Of Marriage Prospects

The Supreme Court of India enhanced the accident insurance claim compensation to double for a victim of a road accident in 2002, when he was 12 years old. The boy became permanently disabled due to the accident in which he sustained severe injury, resulting in 77.1 per cent permanent disability. While initially the victim was awarded Rs 1.73 lakh by the Motor Accident Claims Tribunal (MACT), Thrissur in Kerala, which was later increased to Rs 7.5 lakh by the Kerala High Court, the petitioner approached the Supreme Court, seeking higher compensation. Justices K Vinod Chandran and NV Anjaria, modified High Court’s order and enhanced the compensation to Rs 15.13 lakh.

Case Background

The incident happened in April 2002, when Riyas, a 14-year-old boy studying in the 7th standard, was traveling in an auto rickshaw, which was hit by a lorry. He was severely injured in that accident. The Claim Tribunal concluded that the lorry driver’s rash and negligent driving was the sole reason for the accident. The lorry was insured. The insurance company with which it was insured was held liable to indemnify the injured boy.

The MACT then awarded Rs 1.73 lakh, together with 7 per cent per annum interest to be paid by the insurance company to the injured.

But when the petitioner approached the Kerala High Court appealing against the low compensation, the court enhanced the amount to around Rs 7.5 lakh. The court noted 77 per cent disability in the disability certificate dated November 20, 2019, and used the multiplier of 15 to calculate the compensation. Note that the certification that the boy suffered 77.1 per cent permanent disability due to the accident was given by the Medical Board, to which the insurance company did not raise any objection.

While calculating, the court considered the monthly income of the injured (Rs 3,620 per month), future prospects (40 per cent), and a multiplier of 15. It also increased bystander expenses to Rs 3,300, extra nourishment to Rs 2,200, and determined medical expenses to be Rs 53,250, solely based on the medical bills. It also awarded Rs 30,000 for pain and suffering, Rs 50,000 for loss of marriage prospects, and increased the amount for loss of amenities prospects to Rs 80,000, and Rs 25,000 for future treatments. This amounted to a total additional compensation of Rs 5,75,883 with 7 per cent interest.

However, the appellant found the compensation inadequate and appealed to the Supreme Court.

Court Observation

The Supreme Court noted that the facts were similar to some recent decisions, and referred to them (decision in Sona (minor) v. Manual C.M.) and (decision in National Insurance Company Limited vs. Pranay Sethi & Others). It confirmed the use of the multiplier of 15, Rs 3,620 monthly income, and 40 per cent future prospects, but noted that the High Court had mistakenly relied solely on actual medical bills, which did not include several other out-of-pocket expenses that occurred during the boy’s hospital stay and the future medical expenses.  

Court Judgement

The apex court revised the compensation, significantly enhancing the amount for pain and suffering to Rs 3 lakh, loss of marriage prospects to Rs 3 lakh, attendant charge to Rs 40,000, and future medical expenses to Rs 50,000, which made the total compensation around Rs 15.13 lakh.

Here is the compensation calculation:

Annual Income  = (Rs 3,620 x 12) = Rs 43,440

Future Prospects = (43,440 + 40% (17,376) = Rs 60,816

Multiplier of 15 = (60,816 x 15) = Rs 9,12,240

So the loss of future earnings or towards disability came out to be (9,12,240 x 77.1%) = Rs 7,03,337.04

The Court then added:

Pain and suffering = Rs 3,00,000

Loss of Amenities = Rs 80,000

Attendant charges = Rs 40,000

Loss of marriage prospect = Rs 3,00,000

Special diet and transportation = Rs 40,000

Future Medical Expenses = Rs 50,000

The total of all this becomes Rs 15,13,337.04.

The Supreme Court then modified the impugned order of the high court and directed the insurance company to pay an additional amount of Rs 7,64,454 (it is excluding the amount that was directed to be paid by the Kerala High Court). The Court ordered this amount to be paid within eight weeks from the date of the judgement along with the 8 per cent annual interest.