IMPORTANT POINT
Principles for awarding just compensation.

JUDGMENT

Dipak Misra, J.-Leave granted.

2. Despite many a pronouncement in the field, it still remains a challenging situation warranting sensitive as well as dispassionate exercise how to determine the incalculable sum in calculable terms of money in cases of personal injuries. In such assessment neither sentiments nor emotions have any role. It has been stated in Davies v. Powell Duffryn Associate Collieries Ltd. [1942 AC 601] that it is a matter of Pounds, Shillings and Pence. There cannot be actual compensation for anguish of the heart or for mental tribulations. The quintessentiality lies in the pragmatic computation of the loss sustained which has to be in the realm of realistic approximation. Therefore, Section 168 of the Motor Vehicles Act, 1988 (for brevity ‘the Act’) stipulates that there should be grant of “just compensation”. Thus, it becomes a challenge for a court of law to determine “just compensation” which is neither a bonanza nor a windfall, and simultaneously, should not be a pittance.

3. In Jai Bhagwan v. Laxman Singh and others [(1994) 5 SCC 5], a three-Judge Bench of this Court, while considering the assessment of damages in personal-injury- actions, reproduced the following passage from the decision by the House of Lords in H. West & Son, Ltd. v. Shephard [(1963) 2 All ER 625] : -

“My Lords, the damages which are to be awarded for a tort are those which ‘so far as money can compensate, will give the injured party reparation for the wrongful act and for all the natural and direct consequences of the wrongful act’ [Admiralty Comrs. v. Susquehanna (Owners), The Susquehanna [(1926) All ER 124 : 1926 AC 655]]. The words ‘so far as money can compensate’ point to the impossibility of equating money with human suffering or personal deprivations. A money award can be calculated so as to make good a financial loss. Money may be awarded so that something tangible may be procured to replace something else of like nature which has been destroyed or lost. But money cannot renew a physical frame that has been battered and shattered. All that judges and courts can do is to award sums which must be regarded as giving reasonable compensation. In the process there must be the endeavour to secure some uniformity in the general method of approach. By common assent awards must be reasonable and must be assessed with moderation. Furthermore, it is eminently desirable that so far as possible comparable injuries should be compensated by comparable awards. When all this is said it still must be that amounts which are awarded are to a considerable extent conventional.”

In the said case reference was made to a passage from Clerk and Lindsell on Torts (16th Edn.) which is apposite to reproduce as it relates to the awards for non-pecuniary losses: -

“In all but a few exceptional cases the victim of personal injury suffers two distinct kinds of damage which may be classed respectively as pecuniary and non-pecuniary. By pecuniary damage is meant that which is susceptible of direct translation into money terms and includes such matters as loss of earnings, actual and prospective, and out-of-pocket expenses, while non- pecuniary damage includes such immeasurable elements as pain and suffering and loss of amenity or enjoyment of life. In respect of the former, it is submitted, the court should and usually does seek to achieve restitutio in integrum in the sense described above, while for the latter it seeks to award ‘fair compensation’. This distinction between pecuniary and non- pecuniary damage by no means corresponds to the traditional pleading distinction between ‘special’ and ‘general’ damages, for while the former is necessarily concerned solely with pecuniary losses — notably accrued loss of earnings and out-of- pocket expenses — the latter comprises not only non-pecuniary losses but also prospective loss of earnings and other future pecuniary damage.”

4. In this regard, we mayrefer with profit the decision of this Court in Nagappa