Court’s Decision
The Telangana High Court allowed the appeal by enhancing the compensation from ₹1,36,000 to ₹11,82,925 with interest at 7.5% per annum, holding that the appellant’s functional disability must be taken as 100% in light of overwhelming medical evidence, despite the absence of a formal disability certificate. The Court directed the insurance company to deposit the amount within 8 weeks.
Facts
The case arose from a road accident on 8 May 2005 when the appellant, while travelling in a jeep with his daughter and nephew, was hit by a lorry driven rashly. The impact caused grievous injuries, resulting in the death of his daughter and rendering the appellant bedridden. The claimant suffered major head injuries and neurological damage leading to loss of memory and impaired brain function. Despite seeking ₹8,00,000 in compensation, the Motor Accidents Claims Tribunal (MACT) awarded only ₹1,36,000, prompting the present appeal.
Issues
- Whether the Tribunal erred in determining only 25% disability despite clear medical evidence indicating total functional disability.
- Whether the Tribunal wrongly deducted 1/3rd of the income towards personal expenses in an injury case.
- Whether the notional monthly income of ₹3,000 fixed by the Tribunal was adequate in the absence of concrete proof of income.
Petitioner’s Arguments
The appellant contended that:
- He was 100% functionally disabled and unable to perform daily activities due to neurological damage.
- The Tribunal erred in applying deductions for personal expenses, which are relevant only in death cases.
- His income from cloth business was wrongly undervalued at ₹3,000 per month; it should have been ₹8,000.
Respondent’s Arguments
The Insurance Company argued that:
- The disability percentage was not certified by an official disability certificate and was rightly taken as 25% by the Tribunal.
- The compensation awarded was fair based on the materials and evidence on record.
- There was no documentary evidence to support the claim of income at ₹8,000 per month.
Analysis of the Law
The Court emphasized that functional disability must be distinguished from formal physical disability and can be assessed through substantive medical evidence. In this case, the treating doctor’s deposition, discharge summaries, and records from Yashoda Hospital clearly indicated complete dependency and loss of brain function.
Further, the Court held that personal expense deductions are inapplicable in injury claims, as the loss is to the injured person’s earning capacity and not dependent beneficiaries. The Court also noted that income of a self-employed cloth trader cannot be equated with that of an unskilled laborer, even in the absence of documents.
Precedent Analysis
The Court relied on:
- National Insurance Co. Ltd. v. Pranay Sethi, (2017) 6 SCC 170 – to include 40% towards future prospects in loss of earning capacity.
- Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 – for applying the correct multiplier of 16 for a 32-year-old.
- Rajesh v. Rajbir Singh, 2013 ACJ 1403 – to justify increasing the interest rate to 7.5% per annum.
Court’s Reasoning
The Court found that the entire evidence proved complete dependence and lack of cognitive function, which justified treating the appellant as 100% disabled. It faulted the Tribunal for rejecting this on the mere ground of no formal certificate, especially when the petitioner was illiterate and incapable of navigating bureaucratic hurdles. The income was reasonably assessed at ₹4,000/month with 40% future prospects, and the standard multiplier was applied. The Court also corrected the Tribunal’s error in deducting personal expenses.
Conclusion
The Court enhanced the compensation to ₹11,82,925 with 7.5% annual interest from the date of the petition till realisation, holding that:
“Merely because the appellant being an illiterate person and disabled person could not obtain disability certificate, does not disentitle him to seek just compensation.”
Implications
This judgment underscores the judiciary’s progressive approach to functional disability, especially for accident victims lacking formal documents. It affirms that substantive evidence can override procedural lapses and that tribunals must adopt a liberal interpretation of compensation principles to deliver justice.
FAQs
Q1: Can a disability certificate be dispensed with in accident compensation cases?
Yes. As per this judgment, if medical evidence is clear and credible, courts can assess functional disability without a formal disability certificate.
Q2: Is deduction for personal expenses allowed in injury compensation claims?
No. The Court held that personal expense deductions apply only in death cases, not in cases involving injured claimants.
Q3: How is compensation calculated in disability cases without income proof?
Courts use reasonable estimates based on profession, age, and medical impact. Here, income was reasonably fixed based on the appellant’s business claims and judicial precedents.
Cases Referred
- National Insurance Co. Ltd. v. Pranay Sethi, (2017) 6 SCC 170 – For 40% future prospects.
- Sarla Verma v. DTC, (2009) 6 SCC 121 – For multiplier method.
- Rajesh v. Rajbir Singh, 2013 ACJ 1403 – For 7.5% interest award.
