SC : Include future loss of income in accident payout

If a person suffers permanent disability in an accident caused by a vehicle, then the compensation due to him should be computed taking into account not only his present earnings but also future loss of income, the Supreme Court has ruled.

 

The Supreme Court distinguished between a claim for damages and compensation and said damages were given for an injury whereas

compensation stood on a slightly higher footing.

While damages were given for atonement of the injury caused, the intention behind compensation was to put back the injured party as much as possible in the same position, if the injury had not taken place, by way of grant of pecuniary relief, it said.

 

The case before a bench of Justices G. S. Singhvi and A. K. Ganguly was of a painter, Yadava Kumar, who in a road accident in Karnataka suffered a 30-40% permanent disability preventing him from resuming his profession or even taking up manual labor.

The high court had granted him a compensation of Rs.72,000 rejecting his plea to consider the future loss of income as he could no longer do painting jobs.

 

The Supreme Court took a serious view of this in the compassionate approach of the high court. Justice Ganguly writing the judgment for the bench said: “In this case, the approach of the high court in totally refusing to grant any compensation for loss of future earnings is not a correct one.”

 

While ordering the National Insurance company to pay Kumar Rs,2 lakh, which was computed by the Supreme Court after taking into account future loss of earnings, Justice Ganguly said: “In the determination of the quantum of compensation, the court must be liberal and not niggardly in as much as in a free country, the law must value life and limb on a generous scale.”

 

It added: “It goes without saying that in matters of determination of compensation, both the Motor Accident Claims Tribunal and the courts are statutorily charged with the responsibility of fixing just compensation. Indeed, the determination of a ‘just compensation’ cannot be equated to a bonanza. At the same time, the concept of just compensation suggests the application of fair and equitable principles and a reasonable approach on the part of the tribunals and courts”.

 

                                                     Published in The Insurance Times, October 2010