Delhi High Court Enhances Compensation for Injured Appellant in Motor Accident Case: “Housewives Should Be Classified as Skilled Workers, Functional Disability Assessment Upheld”

Court’s Decision

The Delhi High Court, in an appeal under Section 173 of the Motor Vehicles Act, 1988, enhanced the compensation amount for the injured appellant in a motor accident claim. The appellant had suffered multiple fractures and permanent disability due to a bus accident caused by rash and negligent driving. The key aspects of the court’s decision were:

1. Income Calculation Correction: The Tribunal wrongly applied minimum wages for an unskilled worker despite acknowledging that housewives should be classified as skilled workers. The High Court rectified this error and used the correct income slab.
2. Functional Disability Assessment Upheld: The appellant sought 100% disability recognition for loss of earning capacity, but the court ruled that 30% disability was appropriate based on medical evidence and judicial precedents.
3. No Increase in Interest Rate: The appellant sought 12% interest per annum, but the court upheld the Tribunal’s 9% rate, considering it just and reasonable.
4. Final Compensation Enhancement: The total compensation was increased from ₹18,40,527/- to ₹18,90,000/-, with United India Insurance Co. Ltd. directed to pay the amount within 30 days.

Facts of the Case

1. The Accident:
   • On July 31, 2017, the appellant was traveling in a bus driven by the first respondent.
   • Due to rash and negligent driving, the driver lost control, causing the bus to overturn near Sainpura Hansi, NH-9.
   • Several passengers, including the appellant, suffered grievous injuries.
2. Nature of Injuries:
   • The appellant suffered multiple fractures, including:
     • Right shaft femur fracture
     • Pubic rami fracture
     • Malleolar lesion in the right leg
   • Diagnosed with a degloving injury on the right thigh
   • Permanent disability assessed at 74% in the right lower limb
3. Medical Treatment:
   • The appellant was hospitalized multiple times:
     • RML Hospital (August 1–21, 2017)
     • Apollo Hospital (August 29–September 7, 2017, October 3–6, 2017, December 22–25, 2017)
     • BLK Hospital (May 23–25, 2018)
4. FIR & Legal Proceedings:
   • FIR No. 536/2017 was registered against the bus driver under Sections 279, 304A, and 337 IPC.
   • The bus was owned by respondent No. 2 and insured by respondent No. 3 (United India Insurance Co. Ltd.).
   • The appellant filed a claim under Sections 166 and 140 of the Motor Vehicles Act, 1988.

Issues for Consideration

1. Whether the Tribunal erred in assessing the appellant’s income based on unskilled worker wages, despite recognizing that housewives perform skilled work?
2. Whether the functional disability should be assessed at 100% instead of 30%, given the appellant’s permanent injuries?
3. Whether the interest rate of 9% per annum should be increased to 12%?

Petitioner’s Arguments

1. Income Calculation Error:
   • The Tribunal acknowledged that housewives perform skilled work but still used the minimum wage of an unskilled worker (₹11,830/- per month).
   • The correct wage for a skilled worker (₹12,116/- per month) should have been applied.
2. Functional Disability at 100%:
   • The 74% disability in the right lower limb severely affects daily life and ability to work.
   • The appellant still required treatment and assistance for daily activities, justifying a 100% disability assessment for computing loss of earning capacity.
3. Higher Interest Rate Justified:
   • The interest rate of 9% was too low, and 12% per annum should be granted to fairly compensate for the delay in realization of the amount.

Respondent’s Arguments

1. Tribunal’s Calculation was Correct:
   • The insurance company defended the Tribunal’s decision, arguing that:
     • 30% disability was appropriate, considering that only one limb was affected.
     • The Tribunal had applied established legal principles in assessing compensation.
2. No Need for Interest Enhancement:
   • 9% interest per annum was reasonable and aligned with past judicial precedents.
   • No special circumstances were present to warrant an increase to 12%.

Analysis of the Law

1. Income Assessment for Housewives:
   • The court considered various precedents where housewives have been classified as skilled workers for compensation purposes.
   • The Supreme Court in Raj Kumar v. Ajay Kumar (2011) laid down that compensation must factor in loss of earning capacity based on the functional impact of disability.
2. Functional Disability Assessment:
   • While 74% disability was medically certified, functional disability should be determined based on actual impact on earning capacity.
   • The High Court found that the appellant could still perform some functions, making 100% disability unjustified.
3. Multiplier Method for Loss of Future Earnings:
   • The correct monthly wage (₹12,116/-) was applied.
   • The functional disability was upheld at 30%.
   • Future earning loss was calculated using the multiplier method:₹12,116 × 12 × (140/100) × 15 × (30/100) = ₹9,15,969.6/-

Precedent Analysis

• Raj Kumar v. Ajay Kumar (2011) – Courts must assess loss of earning capacity based on actual impact on work rather than just physical disability.
• Delhi High Court cases – Established that housewives are entitled to skilled worker wages in compensation claims.

Court’s Reasoning

1. Income Correction:
   • The Tribunal’s inconsistent approach (acknowledging skilled work but using unskilled wages) required correction.
   • The correct wage of ₹12,116/- per month was applied.
2. Functional Disability:
   • The Tribunal’s assessment of 30% was reasonable as the appellant could still function to some extent.
   • The demand for 100% disability was rejected.
3. Interest Rate Justified:
   • No valid reason was presented to justify an increase in interest from 9% to 12%.

Conclusion

The court recalculated the compensation and awarded ₹18,90,000/- as follows:

• The insurance company was directed to pay within 30 days.
• 9% per annum interest rate upheld.

Implications

• Housewives must be recognized as skilled workers for compensation purposes.
• Courts will scrutinize disability claims and apply realistic functional disability assessments.
• Fair compensation adjustments will be made when Tribunal findings are inconsistent.

This landmark decision strengthens fair assessment of compensation in motor accident cases.

Also Read – Supreme Court: “Permanent Alimony is a Full and Final Settlement”; Dismisses Plea to Include Maintenance Arrears in ₹50 Lakh Settlement, Closes Pending Family Court Case