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2024 Supreme(AP) 1513

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Ravi Nath Tilhari and Nyapathy Vijay, JJ.
Oriental Insurance Co. Ltd. – Appellant
Versus
Shaik Mohammad Mustafa and another – Respondent
MACMA No.2931 of 2013 and Cross-Objection IA No.1 of 2024
Decided On : 10-09-2024

Advocates:
Advocate Appeared:
For the Appellant : Gudi Srinivasu
For the Respondent: N. Chandra Sekhar Reddy

The principle of just compensation emphasizes that claimants should receive fair and reasonable compensation, reflecting their future earning potential and the severity of injuries sustained.

Headnote:(A) MOTOR VEHICLES ACT, 1988 - Sections 140, 166, and 173 - Challenge to award by Insurance Company - Compensation dispute - Determination of monthly income - The court found the fixation of Rs.15,000/- per month as reasonable, given the claimant's educational background - Court emphasized that the amount should reflect just and fair compensation, not limited to claimed amounts. (Paras 6, 30, 31)

(B) Compensation - Just compensation - The principle that claimants should receive compensation that is fair and reasonable is reinforced; it cannot be merely a pittance or excessive. (Paras 10, 25)

Facts of the case:
The applicant sustained severe injuries in a motorcycle accident resulting in the amputation of his left leg, affecting his future career prospects. He was 20 years old and a B.Tech student at the time of the accident, claiming Rs.30,00,000/- in compensation. (Para 4)

Findings of Court:
The Tribunal awarded Rs.30,00,000/- based on a monthly income of Rs.15,000/-, with a multiplier of 18 resulting in a total compensation of Rs.36,44,000/-. The appeal by the Insurance Company questioned the income assessment but was dismissed. (Paras 28, 33)

Issues: The court addressed whether the compensation awarded was just and fair. (Para 16)

Ratio Decidendi: The court ruled that the award of compensation must align with the principle of fairness and that evidence does not counter the claimant's assessed income. Use of proper multipliers is essential to achieving just compensation. (Paras 19, 22)

Result: Appeal dismissed; cross-objections granted, enhancing compensation to Rs.36,44,000/- with interest at 7.5%. (Para 33)

Judgement Key Points

Key Points: - The judgment upholds Rs.15,000 per month as notional income for a young engineering student with future prospects (!) (!) (!) . - It corrects the multiplier to 18 for a 20-year-old with 85% permanent disability, resulting in Rs.27,54,000 under loss of future earnings (instead of 17) (!) (!) (!) . - It reiterates that just and fair compensation should be awarded and cannot be limited to the amount claimed, even if there is no cross-appeal, citing MV Act principles and Sarla Verma lineage (!) (!) (!) .

What is the appropriate monthly income to determine just compensation in a motor accident claim where the claimant is a student with future career prospects?

What is the correct multiplier to apply for calculating future earning when the claimant sustains permanent disability at a young age?

What is the court’s stance on awarding just and fair compensation beyond the exact amount claimed by the petitioners in MV Act appeals?


Table of Content
1. factual basis of compensation claim. (Para 2 , 4)
2. tribunal awards compensation based on assessed income. (Para 3)
3. determination of responsibility for accident. (Para 5 , 10 , 12)
4. claims and evidence considered by tribunal. (Para 6 , 8 , 11)
5. arguments on income determination. (Para 13 , 14 , 20)
6. impact of injury on career opportunities. (Para 16 , 17 , 22)
7. legal principles guiding compensation assessment. (Para 18 , 19 , 25)
8. final adjustments in compensation amount. (Para 29 , 30 , 31)
9. conclusion and order of the court. (Para 33 , 34)

JUDGMENT :

RAVI NATH TILHARI, J :

Heard Sri Gudi Srinivasu, learned Counsel for the appellant and Sri N. Chandra Sekhar Reddy, learned Counsel for the claimants/respondents.

2. This appeal under Section 173 of the MOTOR VEHICLES ACT , 1988 (for short, "the M.V Act") was filed by the Oriental Insurance Company Limited challenging the award dated 12.04.2013 in Original Petition No.302 of 2012 (in short, "O.P"), passed by the VI Additional District Judge, Ananthapur at Gooty.

3. The claimants-respondents have filed the cross-objections for enhancement of the compensation amount. There is some delay in filing the cross-objections. They have filed IA No.3 of 2017 (MACMA MP No.36219 of 2017) for condonation of delay. The cause shown in the affidavit for the delay in filing the cross-objection is condoned.

4. The respondent No.1 Shaik Mohammad Mustafa, is the applicant/claimant in OP No.302 of 2012. The OP was filed under Sections 140 and 166 of the M.V. Act for grant of compensation of Rs.30,00,000/- for the fatal injuries sustained by him in a motor accident on 21.07.2008 at about 9.45 a.m., near Blue Moon Hotel, Gooty, Anantapur Road within the limits of Gooty Police Station. The 1st respondent's case was that he was aged about 20 years, at the time of the accident. He studied upto B.Tech, in SKD Engineering College, Gooty. He was brilliant, intelligent and meritorious student and had high hopes on his future by appearing campus recruitments after completion of his Engineering Graduation. Due to the fatal injuries so sustained in the road accident, he could not attend for campus recruitment for better jobs since he was unable to move freely. Due to the fatal crush injuries in the accident his left leg was amputated upto femur. He was facing difficulty to attend his day-to-day personal work, studies and for searching of job. He became completely dependent upon others for his survival. The accident was caused when he was the pillion rider of the motorcycle and Noor Mohammad was driving the motor cycle slowly and carefully on the extreme left side of road by following traffic rules, and when they reached near Blue Moon Hotel, Gooty on Gooty-Anantapur Road, the driver of the offending lorry Bearing No.AP-02-W-7586 drove it from their behind in a rash and negligent manner without blowing horn, and hit against their motor cycle from behind. As a result, the applicant and the rider of the motor cycle fell down from the motor cycle; the lorry passed over the motorcycle and also on left leg of the applicant; thereby his left leg was crushed upto knee. The applicant also sustained multiple injuries all over body and his motor cycle was badly damaged.

5. The 2nd respondent herein, 1st respondent in the O.P., remained ex parte.

6. The 2nd respondent in O.P. Insurance Company, present appellant, filed written statement denying the averments of the claim petition. Plea was taken that the accident was caused due to rash and negligent driving of the rider of the motor cycle and that there was no rash or negligent driving on the part of the driver of the offending lorry. The rider of the motor cycle so also the driver of the offending lorry had no driving license at the time of accident. The plea was also taken that the offending vehicle had also no valid permit, fitness certificate etc., at the time of accident and that the amount of compensation claimed was excessive.

7. The Tribunal fram

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