G.S. Patel, J.

I

1. The appellant is the insurer of a vehicle involved in a road accident on the Mumbai-Goa road. That accident resulted in such multiple and severe injuries to the 1st respondent that she is now a quadriplegic, paralysed from the neck down. By its order and judgment dated 3rd/4th October 2011, the Motor Accidents Tribunal, Mumbai awarded compensation of Rs.76,57,007/- to the 1st respondent. The insurance company has appealed. The 1st respondent has filed cross objections. We must straightaway state that the controversy before us is very narrow, limited to the award of an amount of Rs.34,70,000/-. The remainder was made available for disbursement to the claimant/1st respondent.

II

2. On 21st May 2003, the 1st respondent (“Ms Panchal”) and some of her relatives set out on a journey by road from Kandivli, a northern suburb of Mumbai, to Goa. They left Kandivli late at night, around 9:30 pm. They were traveling in a Tata Sumo vehicle, registration number MH-04-AS-1644. The vehicle belongs to the 2nd respondent, who does not seem to have been among those travelling. The vehicle’s driver was, by all accounts, an employee; the vehicle was not self-driven by any member of Ms. Panchal’s group. The party took the coastal Mumbai-Goa road, Highway 66 and 17. While this is a scenic route, it demands caution as it has a number of hilly stretches and sharp bends. Just after Sangameshwar, some 430 kms from Mumbai, the road turns east towards the coast in the direction of the coastal city of Ratnagiri. At about 5:30 am on 22nd May 2003, when the vehicle was on this stretch of the road, near the village of Vandri in Sangameshwar taluka, the driver lost control. The vehicle was then moving at some considerable speed. The driver braked, but was unable to regain control of the vehicle. It collided against a tree. The impact of the collision was extreme. An offence was registered at the Devrukh Police Station.

3. Ms Panchal was severely injured in this accident. She was rushed to the Civil Hospital at Ratnagiri. There, the doctors who examined her felt that the extent and severity of her injuries required that she be moved to Mumbai’s KEM Hospital for special treatment. She was admitted to KEM Hospital on 22nd May 2003. She remained there for several months, till 17th August 2003. Over the next three years, Ms Panchal was hospitalised several times at different hospitals. She suffered massive injuries, the most critical of which are a cervical spinal cord injury, C-4 and C-5 lamina fractures, burst fractures with anterior wedging and intracanlicular retropulsion of the C-5 vertebral body causing acute kyphotic of the cervical spine. There are other injuries as well. In short, the accident resulted in Ms. Panchal becoming a quadriplegic or tetraplegic. She is totally bed-ridden. She has lost all movement in all four limbs. From chest to foot, she is paralysed. She cannot function without assistance. Food is administered to her nasogastrically. This condition has its own additional complications, including repeated and frequent bedsores, recurrent respiratory infection and susceptibility to bilateral pneumonia.

4. At the time of the accident, Ms. Panchal was 27 years old.

III

5. In 2003 Ms. Panchal filed her claim application under Section 166 of the Motor Vehicles Act, 1988 (“the MV Act”). In this application, she set out the particulars of the accident and her illness. At this stage, it is necessary only to note that in her claim application Ms. Panchal stated that her monthly income was Rs.5,000 per month. This is of some relevance in view of the subsequent evidence and the findings of the Motor Accidents Claim Tribunal (“MACT”) regarding loss of income.

6. The appellant insurer did not file its defence and written statement for another eight years till 18th January 2011, when its application under Section 170 of the MV Act was (in our view, rightly) allowed and its written statement taken on file. In fact, the written statement w