IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
B.S. BHANUMATHI, J.
Shriram General Insurance Company Limited - Appellant
Versus
K. Sudhakar Babu and Others - Respondents
Motor Accident Civil Miscellaneous Appeal No. 1 of 2022
Decided On : 07-03-2025
(A) Motor Vehicles Act, 1988 - Section 173 - Appeal against award of Motor Accidents Claims Tribunal - Claimant injured in accident involving a Tata Ace vehicle - Tribunal awarded compensation of Rs.11,97,881/- but restricted to Rs.7,00,000/- - Appeal by insurance company challenging excess compensation and contributory negligence - Claimant's permanent disability assessed at 35% but found not to impact earning capacity - Compensation modified to Rs.2,77,277/- with interest at 7.5%. (Paras 1-20)
(B) Compensation - Assessment of loss of earning capacity - Percentage of permanent disability does not equate to loss of earning capacity - Tribunal must evaluate evidence to determine actual loss. (Paras 16-18)
Facts of the case:
The claimant, a panchayat secretary, suffered multiple injuries in an accident as a pillion rider on a motorcycle due to the rash driving of the Tata Ace vehicle. He incurred significant medical expenses and claimed Rs.7,00,000/- as compensation. The Tribunal awarded Rs.11,97,881/- but restricted it to Rs.7,00,000/-.
Findings of Court:
The Tribunal's assessment of compensation was modified, and the claimant was awarded Rs.2,77,277/- for pain, suffering, medical expenses, attendant charges, and more.
Issues: The main issues were the assessment of loss of earning capacity due to permanent disability and the appropriateness of the compensation awarded.
Ratio Decidendi: The court reiterated that the percentage of permanent disability does not directly correlate to loss of earning capacity, emphasizing the need for a thorough examination of evidence regarding the claimant's functional abilities.
Result: Appeal partly allowed, compensation modified to Rs.2,77,277/-.
JUDGMENT :
This appeal is filed under Section 173 of the Motor Vehicles Act, 1988 against the decree and award dated 22.09.2021 on the file of the Motor Accidents Claims Tribunal-cum-I Additional District Judge, Kadapa (held by IV Additional District Judge, Kadapa in FAC)
02. The appellant is the 2nd respondent. The 1st respondent is the claimant. The 2nd respondent is the 1st respondent before the Tribunal and owner-cum-driver of Tata Ace vehicle bearing No.AP-04-Y-7417.
03. The case of the claimant is briefly as follows:
The claimant was aged about 32 years and a panchayat secretary at Rachagudi Village, Vontimitta Mandal. On 01.07.2015, while he was going on a motor cycle of Subramanyam as a pillion rider, the driver of Tata Ace vehicle coming from Kadapa side in a rash and negligent manner dashed the motor cycle resulting injuries to the claimant. A case in crime No.62 of 2015 under Sections 337 and 338 I.P.C. was registered in the Sidhout Police Station. The claimant was shifted to RIMS hospital, Kadapa and from there to Sri Ramadevi Multi Super Specialty hospital as he suffered crush injury to the right knee, crush injury of right forearm, laceration at the right eyebrow and multiple abrasions over the right upper limb and nasal bleeding. The X-ray showed type-III B compound fracture of both bones of right forearm and fracture of patella with lateral condyles right femur. A surgery was conducted to his right forearm and right thigh and screws, plates and rods were inserted. He was discharged on 11.08.2015 from the Super Specialty Hospital. The petitioner incurred Rs.5,00,000/- for his treatment, transportation and attendant charges. Due to the injuries, the claimant could not move his right arm and cannot lift weights. Due to the injury to right thigh, he cannot walk freely and sit properly. He needs support of two attendants. As a panchayat secretary, his salary was Rs.21,000/- per month. He lost his increments, promotions and salary for three months.
04. The 1st respondent filed written statement admitting the averments in the petition, but contending that the claimant was riding the motor cycle in a rash and negligent manner at the time of the accident and fell down due to which he sustained injuries and moreover he did not have driving license. He further claimed that the Tata Ace vehicle was insured by the 2nd respondent who shall be liable to pay compensation, if any.
05. The 2nd respondent did not filed written statement in spite of entering appearance.
06. On behalf of the claimant, he got himself as PW1 and doctor J.Nagesh who treated him was examined as PW2. On his behalf, Ex.A1 to A8 were marked. An officer of the 2nd respondent was examined as RW1 and copy of the insurance policy was marked as Ex.B1. The 2nd respondent filed a petition under Section 170 of the Motor Vehicles Act in I.A.No.262 of 2021 and the same was allowed.
07. After hearing both parties, the Tribunal held that the claimant was a pillion rider of the motor cycle and was not riding it as contended by the respondents and that the accident occurred because of the rash and negligent driving of the 1st respondent.
08. The claimant sought compensation of Rs.7,00,000/- and the same amount was awarded as compensation under the following heads, though the Tribunal arrived at total amount of compensation payable to the claimant is Rs.11,64,534/- by restricting the compensation to the amount claimed. The Tribunal awarded the following amounts:
| Towards loss of earning | Rs.11,64,534/- |
| Towards pain and suffering | Rs.10,000/- |
| Towards medical expenses | Rs.3,347/- |
| Towards transportation charges | Rs.10,000/- |
| Towards attendant charges | Rs.10,000/- |
| Total | Rs.11,97,881/- |
| Restricted Claim | Rs.7,00,000/- |
09. Aggrieved by the said award, this appeal was preferred by the insurance company mainly on the ground of excess amount of compensation being granted under the head loss of earning due to 35% permanent disability since it has not resulted in loss of earning capacity and also that the acciden
Permanent disability percentage does not directly equate to loss of earning capacity; compensation must be assessed based on evidence of actual impact on earnings.
The main legal point established is the assessment of compensation for permanent disablement and medical treatment under the Motor Vehicles Act, based on medical evidence and relevant legal principle....
The main legal point established in the judgment is the assessment of permanent disability and loss of earning capacity in compensation cases under the Motor Vehicles Act. The court applied the princ....
Compensation under the Motor Vehicle Act must be just and reasonable, reflecting the claimant's actual loss, including permanent disability and income loss.
The loss of earning capacity of a claimant in a motor vehicle accident should be computed on the basis of loss of functional disability, and not on the basis of permanent disability.
Compensation for permanent disability must reflect the actual impact on earning capacity and consider the claimant's socio-economic background.
The court emphasized the necessity of assessing compensation based on the impact of permanent disabilities on earning capacity, reinforcing equitable principles for determining just compensation in m....
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