# PAPPU DEO YADAV v. NARESH KUMAR AND ORS

- **Citation:** [2020] 7 S.C.R. 968
- **Court:** Supreme Court of India
- **Decided:** 2020-09-17
- **Case number:** Civil Appeal No. 2567 of 2020
- **Bench:** L. Nageswara Rao, Krishna Murari, S. Ravindra Bhat
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pappu-deo-yadav-v-naresh-kumar-and-ors-34733
- **Pages:** 29

## Headnote

Motor Vehicles Act, 1988
Motor accident - Of 20 year old man who was working as a
data entry operator/ typist - Disability (amputation of right upper
limb) of the victim was ascertained as 89% - Claim for compensation
- Claims Tribunal assessing physical disability of the victim to be
45% and taking his income to be Rs. 8000/- PM added 50% towards
future prospects and awarded compensation of Rs. 14,25,400/- -
High Court, in appeal doing away with addition to 50% towards
future prospects reassessed the compensation for loss of earning
capacity at Rs. 7,77,600/- - However, compensation amount was
enhanced to Rs. 14,36,600 by enhancing the compensation under
other heads - Appeal to Supreme Court - Held: The disability was
wrongly assessed as 45% - The severity of loss of a limb should be
judged in relation to profession, vocation or business of the victim
- There cannot be blind arithmetic formula for ready application -
The claimant being a data entry operator/ typist, loss of an arm
resulted in severe income earning impairment - However, since he
still had another arm and since is young, the extent of his disability
is assessed at 65% - High Court also erred in holding that
compensation for future prospects in cases involving serious injuries
resulting in permanent disablement could not be awarded - The
claimant is entitled to compensation for loss of future prospects @
40% - Claimants assertion about earning Rs. 12,000/- PM should
not have been discarded by Courts below - His income per month
is taken as Rs. 10,000/- - Considering the enhancement towards
loss of earning capacity and future prospects, compensation is
modified to Rs. 19,65,600/- in place of Rs. 7,77,600/- awarded by
High Court - Assessment of amounts payable under other heads is
upheld.
[2020] 7 S.C.R. 968
968
A
B
C
D
E
F
G
H
969
Partly allowing the appeal, the Court
Held: 1.1 Courts should be mindful that a serious injury not
only permanently imposes physical limitations and disabilities but
too often inflicts deep mental and emotional scars upon the victim.
The attendant trauma of the victim's having to live in a world
entirely different from the one she or he is born into, as an invalid,
and with degrees of dependence on others, robbed of complete
personal choice or autonomy, should forever be in the judge's
mind, whenever tasked to adjudge compensation claims. Severe
limitations inflicted due to such injuries undermine the dignity
(which is now recognized as an intrinsic component of the right
to life under Article 21) of the individual, thus depriving the person
of the essence of the right to a wholesome life which she or he
had lived, hitherto. From the world of the able bodied, the victim
is thrust into the world of the disabled, itself most discomfiting
and unsettling. If courts nit-pick and award niggardly amounts
oblivious of these circumstances, there is resultant affront to the
injured victim. [Para 22][996-B-D]
1.2 This court has emphasized time and again that "just
compensation" should include all elements that would go to place
the victim in as near a position as she or he was in, before the
occurrence of the accident. Whilst no amount of money or other
material compensation can erase the trauma, pain and suffering
that a victim undergoes after a serious accident, (or replace the
loss of a loved one), monetary compensation is the manner known
to law, whereby society assures some measure of restitution to
those who survive, and the victims who have to face their
lives.[Para 8][977-C-D]
Santosh Devi v. National Insurance Company Limited
(2012) 6 SCC 421 : [2012] 3 SCR 1178 - relied on.
2.1 The factual narrative discloses that the appellant, a 20year-old data entry operator (who had studied up to 12th standard)
incurred permanent disability, i.e. loss of his right hand (which
was amputated). The disability was assessed to be 89%. However,
the Tribunal and the High Court re-assessed the disability to be
only 45%, on the assumption that the assessment

## Text

_Characters 0–39,941 of 65,446. This is a partial read: ask again with offset=39941 for what follows._

A
B
C
D
E
F
G
H
968
SUPREME COURT REPORTS
[2020] 7 S.C.R.
PAPPU DEO YADAV
v.
NARESH KUMAR AND ORS.
(Civil Appeal No. 2567 of 2020)
SEPTEMBER 17, 2020
[L. NAGESWARA RAO, KRISHNA MURARI AND
S. RAVINDRA BHAT, JJ.]
Motor Vehicles Act, 1988
Motor accident - Of 20 year old man who was working as a
data entry operator/ typist - Disability (amputation of right upper
limb) of the victim was ascertained as 89% - Claim for compensation
- Claims Tribunal assessing physical disability of the victim to be
45% and taking his income to be Rs. 8000/- PM added 50% towards
future prospects and awarded compensation of Rs. 14,25,400/- -
High Court, in appeal doing away with addition to 50% towards
future prospects reassessed the compensation for loss of earning
capacity at Rs. 7,77,600/- - However, compensation amount was
enhanced to Rs. 14,36,600 by enhancing the compensation under
other heads - Appeal to Supreme Court - Held: The disability was
wrongly assessed as 45% - The severity of loss of a limb should be
judged in relation to profession, vocation or business of the victim
- There cannot be blind arithmetic formula for ready application -
The claimant being a data entry operator/ typist, loss of an arm
resulted in severe income earning impairment - However, since he
still had another arm and since is young, the extent of his disability
is assessed at 65% - High Court also erred in holding that
compensation for future prospects in cases involving serious injuries
resulting in permanent disablement could not be awarded - The
claimant is entitled to compensation for loss of future prospects @
40% - Claimants assertion about earning Rs. 12,000/- PM should
not have been discarded by Courts below - His income per month
is taken as Rs. 10,000/- - Considering the enhancement towards
loss of earning capacity and future prospects, compensation is
modified to Rs. 19,65,600/- in place of Rs. 7,77,600/- awarded by
High Court - Assessment of amounts payable under other heads is
upheld.
[2020] 7 S.C.R. 968
968
A
B
C
D
E
F
G
H
969
Partly allowing the appeal, the Court
Held: 1.1 Courts should be mindful that a serious injury not
only permanently imposes physical limitations and disabilities but
too often inflicts deep mental and emotional scars upon the victim.
The attendant trauma of the victim's having to live in a world
entirely different from the one she or he is born into, as an invalid,
and with degrees of dependence on others, robbed of complete
personal choice or autonomy, should forever be in the judge's
mind, whenever tasked to adjudge compensation claims. Severe
limitations inflicted due to such injuries undermine the dignity
(which is now recognized as an intrinsic component of the right
to life under Article 21) of the individual, thus depriving the person
of the essence of the right to a wholesome life which she or he
had lived, hitherto. From the world of the able bodied, the victim
is thrust into the world of the disabled, itself most discomfiting
and unsettling. If courts nit-pick and award niggardly amounts
oblivious of these circumstances, there is resultant affront to the
injured victim. [Para 22][996-B-D]
1.2 This court has emphasized time and again that "just
compensation" should include all elements that would go to place
the victim in as near a position as she or he was in, before the
occurrence of the accident. Whilst no amount of money or other
material compensation can erase the trauma, pain and suffering
that a victim undergoes after a serious accident, (or replace the
loss of a loved one), monetary compensation is the manner known
to law, whereby society assures some measure of restitution to
those who survive, and the victims who have to face their
lives.[Para 8][977-C-D]
Santosh Devi v. National Insurance Company Limited
(2012) 6 SCC 421 : [2012] 3 SCR 1178 - relied on.
2.1 The factual narrative discloses that the appellant, a 20year-old data entry operator (who had studied up to 12th standard)
incurred permanent disability, i.e. loss of his right hand (which
was amputated). The disability was assessed to be 89%. However,
the Tribunal and the High Court re-assessed the disability to be
only 45%, on the assumption that the assessment for
compensation was to be on a different basis, as the injury entailed
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
A
B
C
D
E
F
G
H
970
SUPREME COURT REPORTS
[2020] 7 S.C.R.
loss of only one arm. This approach is completely mechanical and
entirely ignores realities. Whilst it is true that assessment of injury
of one limb or to one part may not entail permanent injury to the
whole body, the inquiry which the court has to conduct is the
resultant loss which the injury entails to the earning or income
generating capacity of the claimant. Thus, loss of one leg to
someone carrying on a vocation such as driving or something
that entails walking or constant mobility, results in severe income
generating impairment or its extinguishment altogether. Likewise,
for one involved in a job like a carpenter or hairdresser, or
machinist, and an experienced one at that, loss of an arm, (more
so a functional arm) leads to near extinction of income generation.
If the age of the victim is beyond 40, the scope of rehabilitation
too diminishes. These individual factors are of crucial importance
which are to be borne in mind while determining the extent of
permanent disablement, for the purpose of assessment of loss of
earning capacity. [Para 13][985-C-F]
2.2 Courts should not adopt a stereotypical or myopic
approach, but instead, view the matter taking into account the
realities of life, both in the assessment of the extent of disabilities,
and compensation under various heads. In the present case, the
loss of an arm, resulted in severe income earning impairment
upon the appellant. As a typist/data entry operator, full functioning
of his hands was essential to his livelihood. The extent of his
permanent disablement was assessed at 89%; however, the High
Court halved it to 45% on an entirely wrong application of some
'proportionate' principle, which was illogical and is unsupportable
in law. What is to be seen, is the impact of the injury upon the
income generating capacity of the victim. The loss of a limb (a
leg or arm) and its severity on that account is to be judged in
relation to the profession, vocation or business of the victim;
there cannot be a blind arithmetic formula for ready application.
The income generating capacity of the appellant was undoubtedly
severely affected. Maybe, it is not to the extent of 89%, given
that he still has the use of one arm, is young and as yet, hopefully
training (and rehabilitating) himself adequately for some other
calling. Nevertheless, the assessment of disability cannot be 45%;
it is assessed at 65% in the circumstances of this case.
[Para 20][995-A-D]
A
B
C
D
E
F
G
H
971
Neerupam Mohan Mathur v. New India Assurance
Company (2013) 14 SCC 15 : [2013] 8 SCR 15; Jakir
Hussein v. Sabir (2015) 7 SCC 252 : [2015] 2 SCR
460; Anthony Alias Anthony Swamy v. Managing
Director, K.S.R.T.C (2020) SCC OnLine SC 493; Raj
Kumar v. Ajay Kumar (2011) 1 SCC 343 : [2010] 13
SCR 179; Nagarajappa v. Divisional Manager,
Oriental Insurance Company Limited (2011) 13 SCC
323 : [2011] 6 SCR 70; Syed Sadiq & Ors. v. Divisional
Manager, United Insurance Company Limited (2014) 2
SCC 735; Arvind Kumar Mishra v. New India Assurance
Co. Ltd. (2010) 10 SCC 254 : [2010] 11 SCR 857;
Mohan Soni v. Ram Avtar Tomar (2012) 2 SCC 267 :
[2012] 2 SCR 921; Sandeep Khanduja v. Atul Dande
(2017) 3 SCC 351 - relied on.
3. The High Court clearly erred in holding that
compensation for loss of future prospects could not be awarded.
In addition to loss of future earnings (based on a determination
of the income at the time of accident), the appellant is also entitled
to compensation for loss of future prospects, @ 40% . There
was no justification for the High Court to have read the previous
rulings of this court, to exclude the possibility of compensation
for future prospects in accident cases involving serious injuries
resulting in permanent disablement. Such a narrow reading of
Pranay Sethi (2017) 16 SCC 860 is illogical, because it denies
altogether the possibility of the living victim progressing further
in life in accident cases - and admits such possibility of future
prospects, in case of the victim's death. [Paras 12 and 7]
Jagdish v. Mohan & Ors. (2018) 4 SCC 571 : [2018] 3
SCR 20; Parminder Singh v. New India Assurance Co.
Ltd. (2019) 7 SCC 217 : [2019] 8 SCR 986; K. Suresh v.
New IndiaAssurance Co. Ltd. (2012) 12 SCC 274 : [2012]
11 SCR 414; Kajal v. Jagdish Chand (2020) 4 SCC
413 - relied on.
*National Insurance Company Ltd. v. Pranay Sethi &
Ors. (2017) 16 SCC 860; Anant s/o of Sidheshwar Dukre
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
A
B
C
D
E
F
G
H
972
SUPREME COURT REPORTS
[2020] 7 S.C.R.
v. Pratap s/o Zhamnnappa Lamzane & Anr. (2018) 9
SCC 450 : [2018] 10 SCR 11 - referred to.
4. The courts below needlessly discounted the evidence
presented by the appellant in respect of the income earned by
him. Working in the informal sector as he did, i.e. as a typist/
data entry operator in court premises in Delhi, his assertion about
earning ` 12,000/- could not be discarded substantially, to the extent
of bringing it down to ` 8,000/- per month. Such self employed
professionals, it is noticeable, were not obliged to file income tax
returns for AY 2011-2012, when no levy existed for anyone earning
less than ` 1,60,000/- per annum. If one takes into account
contemporary minimum wages for skilled workers (which was
in the range of ` 8,500/-) the realistic figure would be
` 10,000/- per month. Adding future prospects at 40%, the income
should be taken as ` 14,000 for the purpose of calculation of
compensation. Accordingly, this court finds that the compensation
payable for the disability of loss of an arm (assessed at 65%) would
be ` 19,65,600/- (i.e., ` 14,000/- × 12 × 65% × 18) or Rupees
Nineteen lakhs sixty five thousand six hundred only. [Para 21]
[996-A]
5. The High Court's assessment of amounts payable under
other heads (such as compensation for medical expenses,
compensation for pain and suffering, compensation for special
diet and attendant, conveyance charges, loss of amenities and
enjoyment of life, disfigurement and loss of income during
treatment), do not call for interference. In view of the above
conclusions, the impugned judgment is hereby modified; the sum
of ` 19,65,600/- shall be substituted in place of the amount of
` 7,77,600/-, considering the enhancement towards loss of
earning capacity and future prospects. [Para 23][996-D-F]
Case Law Reference
(2017) 16 SCC 860
referred to
Para 3
[2018] 10 SCR 11
referred to
Para 4
[2012] 3 SCR 1178
relied on
Para 8
[2018] 3 SCR 20
relied on
Para 9
A
B
C
D
E
F
G
H
973
[2019] 8 SCR 986
relied on
Para 10
[2012] 11 SCR 414
relied on
Para 10
(2020) 4 SCC 413
relied on
Para 11
[2013] 8 SCR 15
relied on
Para 14
[2015] 2 SCR 460
relied on
Para 15
[2010] 13 SCR 179
relied on
Para 16
[2011] 6 SCR 70
relied on
Para 16
(2014) 2 SCC 735
relied on
Para 17
[2010] 11 SCR 857
relied on
Para 18
[2012] 2 SCR 921
relied on
Para 18
2017 (3) SCC 351
relied on
Para 19
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2567
of 2020.
From the Judgment and Order dated 13.09.2018 of the High Court
of Delhi at New Delhi in MAC. APP. 117/2018.
Mrs. Mona K. Rajvanshi, Ms. G. Indira, Jatinder Kamra, A. K.
De, Pramit Saxena, Zahid Ali and Ms. Ananya De, Advs. for the appearing
parties.
The Judgment of the Court was delivered by
S. RAVINDRA BHAT, J.
1. The appellant questions a decision of the High Court of Delhi1.
On 18.05.2012, the appellant was injured in a motor accident while
travelling to Hapur as a passenger in a bus, having paid the requisite
fare. At about 1.30 pm when the bus reached village Sadikpur, PSHafizpur, Hapur, Uttar Pradesh, the driver of the offending bus (the first
respondent) sought to overtake the bus in which the appellant was
travelling, from the wrong side, and zipped the appellant's bus, scratching
it. This rash and negligent act caused a dent in the bus where the appellant
was seated, as a result of which he suffered injuries. The appellant was
removed to Dr. Khan's Rehan hospital and thereafter, AIIMS Trauma
Center. The appellant claimed compensation, impleading the owner, the
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
1 dated 13.09.2018, in M.A.C. APP. 520/ 2016
A
B
C
D
E
F
G
H
974
SUPREME COURT REPORTS
[2020] 7 S.C.R.
driver of the vehicle, and the insurer. During the course of proceedings
before the Motor Accident Claims Tribunal, he applied for ascertainment
of his disability. The disability report (Ex. PW-l/9 dated 01.04.2014 issued
by Pandit Madan Mohan Malviya Hospital, during the motor vehicles
compensation claim proceedings) showed that he suffered 89% disability
in relation to his right upper limb, which had to be amputated. The report
also went on to say that the condition was "non progressive, not likely
to improve. Reassessment is not recommended". A first information
report (FIR) regarding the accident was registered (FIR No. 57/12), as
case Crime No. 255/12, Hazifpur Police Station, Hapur, Uttar Pradesh,
under Sections 279 and 338 of the Indian Penal Code, 1860.
2. The appellant, at that time unmarried, was working as a data
entry operator/typist at Tis Hazari Courts. Prior to the injury, he earned
an amount of 12,000 per month. He had applied for grant of compensation
under Sections 166 and 140 of the Motor Vehicles Act, 1988, (hereafter
"the Act") claiming a sum of 50 lakhs with interest at the rate of 12%
per annum against the first respondent, (the driver of the bus at the time
of the accident), the second respondent (owner of the vehicle), and third
respondent (the insurer). The Motor Accident Claims Tribunal (hereafter
the "Tribunal") rejected the insurer's objection regarding its jurisdiction
and further held that the appellant had suffered serious injuries due to
rash and negligent driving of the respondent. It awarded compensation
in the following terms:
1.
Compensation for medical expenses
11,000
2.
Compensation for pain and suffering
30,000
3.
Compensation for special diet, attendant and
conveyance charges
30,000
4.
Loss of future earning capacity/ income
11,66,400
5.
Loss of amenities and enjoyment of life
15,000
6.
Compensation for disfigurement
25,000
7.
Loss of income during treatment
48,000
8.
Future medical expenses
1,00,000
9.
TOTAL
14,25,400
3. While assessing loss of earning capacity, the Tribunal took the
appellant's income to be 8000 per month, and added 50% towards future
prospects. At the time of the accident, the appellant was only 20 years
of age. Therefore, a multiplier of 18 was applied. The physical disability
was assessed to be 45%, by the Tribunal. The High Court, to which the
claimant appealed (and the insurer cross appealed), revised this head of
A
B
C
D
E
F
G
H
975
compensation by doing away with the addition of 50% towards future
prospects, and reassessed the compensation for loss of earning capacity
as 7,77,600 (8000 x 12 x 45% x 18). The total compensation was
reassessed by the High Court to be 14,36,600, after enhancing the
compensation for disfigurement, diet, attendant and conveyance, loss of
amenities and enjoyment of life, and pain and suffering. Further, an interest
of 9% per annum was imposed. In reducing the amount awarded for
loss of future prospects, the High Court noticed this court's judgments in
National Insurance Company Ltd. v. Pranay Sethi & Ors.2 and
Jagdish v. Mohan & Ors3 both by three-judge benches of this court.
4. The appellant argues that the impugned judgment is in material
error, in misreading this court's judgments in Pranay Sethi & Ors4 which
was later followed in Jagdish5 by a three judge Bench, which had ruled
that the benefit of future prospects should not be confined only to those
who have a permanent job and would extend to self-employed individuals,
and in case of self- employed persons an addition of 40% of established
income should be made where the age of the victim at the time of the
accident was below 40 years. It was urged that the decision in Anant s/
o of Sidheshwar Dukre v. Pratap s/o Zhamnnappa- Lamzane & Anr.6
relied on by the High Court, did not assess future prospects. However,
that per se did not preclude claims by persons incurring permanent
disablement as a consequence of motor accidents, from seeking such
heads of compensation. It is urged that the High Court misread and
created a distinct category of cases where addition in income towards
"future prospects" can only be given in case of death, and not for injury,
which cannot be the intention of this court as no such observation is
made. It was argued that the High Court should have reassessed and
not reduced 'the loss of future earning capacity' of the appellant from
11,66,400/- (determined by the tribunal) to 7,77,600/- on the wrongly
depressed income of 8000/-. Learned counsel submitted that the
assessment of monthly income should have been Rs.12,000/- and not
Rs.8,000/. It was submitted that the courts below ignored the fact that in
2012, persons earning Rs.12, 000/- per month did not have to file income
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
2 (2017) 16 SCC 860.
3 (2018) 4 SCC 571
4 Supra n.2
5 Supra n.3
6 2018 (9) SCC 450
A
B
C
D
E
F
G
H
976
SUPREME COURT REPORTS
[2020] 7 S.C.R.
tax returns or pay tax. The High Court further erred in assessment of
physical permanent disability of injured as 45%, even though it was 100%.
5. Counsel for the insurer, who contested the appeal, urged this
court not to interfere with the impugned judgment, and stated that the
assessment of compensation was made by the High Court in conformity
with this Court's decisions. It was highlighted that permanent disability
of loss of one arm, cannot lead to loss of earning capacity of up to 90%
and consequently, the assessment of compensation on the head of loss
of earning capacity was correctly fixed at 45%. He also argued that as
far as income is concerned, although the appellant relied on the
independent testimony of a lawyer (who stated that he used to pay him
about 300/- per day), there was no proof of payment of income tax to
support the claim that the appellant earned 12,000/- per month. The
production of the PAN card ipso facto did not establish income at the
level claimed. Further, the counsel urged that the impugned judgment
correctly appreciated the law, and loss of alleged future earning capacity
was turned down.
6. The principle consistently followed by this court in assessing
motor vehicle compensation claims, is to place the victim in as near a
position as she or he was in before the accident, with other compensatory
directions for loss of amenities and other payments. These general
principles have been stated and reiterated in several decisions.7
7. Two questions arise for consideration: one, whether in cases of
permanent disablement incurred as a result of a motor accident, the
claimant can seek, apart from compensation for future loss of income,
7 Govind Yadav v. New India Insurance Co. Ltd. [Govind Yadav v. New India Insurance
Co. Ltd., (2011) 10 SCC 683. This court referred to the pronouncements in R.D.
Hattangadi v. Pest Control (India) (P) Ltd., (1995) 1 SCC 551; Nizam's Institute of
Medical Sciences v. Prasanth S. Dhananka (2009) 6 SCC 1; Reshma Kumari v. Madan
Mohan (2009) 13 SCC 422; Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343. Govind
Yadav spelt out these principles by stating that the courts should,
"in determining the quantum of compensation payable to the victims of accident,
who are disabled either permanently or temporarily. If the victim of the accident suffers
permanent disability, then efforts should always be made to award adequate
compensation not only for the physical injury and treatment, but also for the loss of
earning and his inability to lead a normal life and enjoy amenities, which he would have
enjoyed but for the disability caused due to the accident."
These decisions were also followed in ICICI Lombard General Insurance Co. Ltd. v.
Ajay Kumar Mohanty, (2018) 3 SCC 686.
A
B
C
D
E
F
G
H
977
amounts for future prospects too; and two, the extent of disability. On
the first question, the High Court no doubt, is technically correct in holding
that Pranay Sethi8 involved assessment of compensation in a case where
the victim died. However, it went wrong in saying that later, the threejudge bench decision in Jagdish9 was not binding, but rather that the
subsequent decision in Anant10 to the extent that it did not award
compensation for future prospects, was binding. This court is of the
opinion that there was no justification for the High Court to have read
the previous rulings of this court, to exclude the possibility of compensation
for future prospects in accident cases involving serious injuries resulting
in permanent disablement. Such a narrow reading of Pranay Sethi11 is
illogical, because it denies altogether the possibility of the living victim
progressing further in life in accident cases - and admits such possibility
of future prospects, in case of the victim's death.
8. This court has emphasized time and again that "just
compensation" should include all elements that would go to place the
victim in as near a position as she or he was in, before the occurrence of
the accident. Whilst no amount of money or other material compensation
can erase the trauma, pain and suffering that a victim undergoes after a
serious accident, (or replace the loss of a loved one), monetary
compensation is the manner known to law, whereby society assures
some measure of restitution to those who survive, and the victims who
have to face their lives. In Santosh Devi v. National Insurance
Company Limited12, this Court held that:
"14. We find it extremely difficult to fathom any rationale for
the observation made in paragraph 24 of the judgment in
Sarla Verma's case that where the deceased was self-employed
or was on a fixed salary without provision for annual
increment, etc., the Courts will usually take only the actual
income at the time of death and a departure from this rule
should be made only in rare and exceptional cases involving
special circumstances. In our view, it will be nave to say that
the wages or total emoluments/income of a person who is selfemployed or who is employed on a fixed salary without
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
8 Supra n.2
9
Supra n.3
10 Supra n.6
11 Supra n.2
12 (2012) 6 SCC 421
A
B
C
D
E
F
G
H
978
SUPREME COURT REPORTS
[2020] 7 S.C.R.
provision for annual increment, etc., would remain the same
throughout his life.
15. The rise in the cost of living affects everyone across the
board. It does not make any distinction between rich and poor.
As a matter of fact, the effect of rise in prices which directly
impacts the cost of living is minimal on the rich and maximum
on those who are self-employed or who get fixed income/
emoluments. They are the worst affected people. Therefore,
they put extra efforts to generate additional income necessary
for sustaining their families.
16. The salaries of those employed under the Central and
State Governments and their agencies/instrumentalities have
been revised from time to time to provide a cushion against
the rising prices and provisions have been made for providing
security to the families of the deceased employees. The salaries
of those employed in private sectors have also increased
manifold. Till about two decades ago, nobody could have
imagined that salary of Class IV employee of the Government
would be in five figures and total emoluments of those in higher
echelons of service will cross the figure of rupees one lac.
17. Although, the wages/income of those employed in
unorganized sectors has not registered a corresponding
increase and has not kept pace with the increase in the salaries
of the Government employees and those employed in private
sectors but it cannot be denied that there has been incremental
enhancement in the income of those who are self-employed
and even those engaged on daily basis, monthly basis or even
seasonal basis. We can take judicial notice of the fact that
with a view to meet the challenges posed by high cost of living,
the persons falling in the latter category periodically increase
the cost of their labour. In this context, it may be useful to
give an example of a tailor who earns his livelihood by
stitching cloths. If the cost of living increases and the prices
of essentials go up, it is but natural for him to increase the
cost of his labour. So will be the cases of ordinary skilled and
unskilled labour, like, barber, blacksmith, cobbler, mason etc.
18. Therefore, we do not think that while making the
observations in the last three lines of paragraph 24 of Sarla
A
B
C
D
E
F
G
H
979
Verma's judgment, the Court had intended to lay down an
absolute rule that there will be no addition in the income of a
person who is self-employed or who is paid fixed wages.
Rather, it would be reasonable to say that a person who is
self-employed or is engaged on fixed wages will also get 30
per cent increase in his total income over a period of time
and if he / she becomes victim of accident then the same
formula deserves to be applied for calculating the amount of
compensation."
9. In Jagdish13 the victim, a carpenter, suffered permanent
disablement, and his claim for compensation including for loss of future
prospects was considered by a three-judge bench (which included,
incidentally, the judges who had decided Pranay Sethi14). This court
held that:
"13. In the judgment of the Constitution Bench in Pranay
Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017)
16 SCC 680], this Court has held that the benefit of future
prospects should not be confined only to those who have a
permanent job and would extend to self-employed individuals.
In the case of a self-employed person, an addition of 40% of
the established income should be made where the age of the
victim at the time of the accident was below 40 years. Hence,
in the present case, the appellant would be entitled to an
enhancement of Rs 2400 towards loss of future prospects.
14. In making the computation in the present case, the court
must be mindful of the fact that the appellant has suffered a
serious disability in which he has suffered a loss of the use of
both his hands. For a person engaged in manual activities, it
requires no stretch of imagination to understand that a loss
of hands is a complete deprivation of the ability to earn.
Nothing-at least in the facts of this case-can restore lost
hands. But the measure of compensation must reflect a genuine
attempt of the law to restore the dignity of the being. Our
yardsticks of compensation should not be so abysmal as to
lead one to question whether our law values human life. If it
does, as it must, it must provide a realistic recompense for the
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
13 Supra.n.3
14 Supra n.2
A
B
C
D
E
F
G
H
980
SUPREME COURT REPORTS
[2020] 7 S.C.R.
pain of loss and the trauma of suffering. Awards of
compensation are not law's doles. In a discourse of rights,
they constitute entitlements under law. Our conversations
about law must shift from a paternalistic subordination of the
individual to an assertion of enforceable rights as intrinsic
to human dignity.
15. The Tribunal has noted that the appellant is unable to
even eat or to attend to a visit to the toilet without the assistance
of an attendant. In this background, it would be a denial of
justice to compute the disability at 90%. The disability is
indeed total. Having regard to the age of the appellant, the
Tribunal applied a multiplier of 18. In the circumstances, the
compensation payable to the appellant on account of the loss
of income, including future prospects, would be Rs 18,14,400.
In addition to this amount, the appellant should be granted
an amount of Rs 2 lakhs on account of pain, suffering and
loss of amenities. The amount awarded by the Tribunal towards
medical expenses (Rs 98,908); for extra nourishment (Rs
25,000) and for attendant's expenses (Rs 1 lakh) is
maintained. The Tribunal has declined to award any amount
towards future treatment. The appellant should be allowed
an amount of Rs 3 lakhs towards future medical expenses.
The appellant is thus awarded a total sum of Rs 25,38,308 by
way of compensation. The appellant would be entitled to
interest at the rate of 9% p.a. on the compensation from the
date of the filing of the claim petition. The liability to pay
compensation has been fastened by the Tribunal and by the
High Court on the insurer, owner and driver jointly and
severally which is affirmed. The amount shall be deposited
before the Tribunal within a period of 6 weeks from today
and shall be paid over to the appellant upon proper
identification."
10. The recent decision in Parminder Singh v. New India
Assurance Co. Ltd15, involved an accident victim who underwent surgery
for hemiplegia16. According to the treating medic, he could not work as
a labourer or perform any agricultural work, or work as a driver (as he
15 (2019) 7 SCC 217
16 Weakness of one half of the body on the left side; in this case, caused by an accident.
A
B
C
D
E
F
G
H
981
was wont to); the assessment of his disability was at 75%, and of a
permanent nature. The court held that:
"5.2. On the basis of the affidavit filed by the employer of the
appellant, we accept that the income of the appellant was Rs
10,000 p.m. at the time of the accident, for the purpose of
computing the compensation payable to him.
5.1. The appellant has however, produced an affidavit by his
employer in this Court. As per the said affidavit, the appellant
was earning Rs 10,000 p.m. at the time of the accident.
5.3. Taking the income of the appellant as Rs 10,000 p.m.,
with future prospects @ 50% as awarded by the High Court,
the total income of the appellant would come to Rs 15,000
p.m.
5.4. The appellant was 23 years old at the time when the
accident occurred. Applying the multiplier of 18, the loss of
future earnings suffered by the appellant would work out to
Rs 15,000 × 12 × 18 = Rs 32,40,000.
*********
*********
**********
5.7. In K. Suresh v. New India Assurance Co. Ltd (2012) 12
SCC 274, this Court held that17:
"10. It is noteworthy to state that an adjudicating authority,
while determining the quantum of compensation, has to
keep in view the sufferings of the injured person which
would include his inability to lead a full life, his incapacity
to enjoy the normal amenities which he would have enjoyed
but for the injuries and his ability to earn as much as he
used to earn or could have earned. Hence, while
computing compensation the approach of the Tribunal or
a court has to be broad-based. Needless to say, it would
involve some guesswork as there cannot be any
mathematical exactitude or a precise formula to determine
the quantum of compensation. In determination of
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
17 at page 279, para 10
A
B
C
D
E
F
G
H
982
SUPREME COURT REPORTS
[2020] 7 S.C.R.
compensation the fundamental criterion of "just
compensation" should be inhered."
******** *********
********
5.9. In the present case, it is an admitted position that it is not
possible for the appellant to get employed as a driver, or do
any kind of manual labour, or engage in any agricultural
operations whatsoever, for his sustenance. In such
circumstances, the High Court has rightly assessed the
appellant's functional disability at 100% insofar as his loss
of earning capacity is concerned. The appellant is, therefore,
awarded Rs 32,40,000 towards loss of earning capacity."
11. Yet later and more recently in an accident case, which tragically
left in its wake a young girl in a life-long state of paraplegia, this court, in
Kajal v. Jagdish Chand,18 reiterated that in addition to loss of earnings,
compensation for future prospects too could be factored in, and observed
that:
"14. In Concord of India Insurance Co. Ltd. v. Nirmala Devi
[Concord of India Insurance Co. Ltd. v. Nirmala Devi, (1979)
4 SCC 365 : 1979 SCC (Cri) 996 : 1980 ACJ 55] , this Court
held : (SCC p. 366, para 2)
"2. ... the determination of the quantum must be liberal,
not niggardly since the law values life and limb in a free
country in generous scales."
15. In R.D. Hattangadi v. Pest Control (India) (P) Ltd. [R.D.
Hattangadi v. Pest Control (India) (P) Ltd., (1995) 1 SCC
551 : 1995 SCC (Cri) 250], dealing with the different heads
of compensation in injury cases this Court held thus : (SCC
p. 556, para 9)
"9. Broadly speaking while fixing the amount of compensation
payable to a victim of an accident, the damages have to be
assessed separately as pecuniary damages and special
damages. Pecuniary damages are those which the victim has
actually incurred and which are capable of being calculated
in terms of money; whereas non-pecuniary damages are those
which are incapable of being assessed by arithmetical
18 (2020) 4 SCC 413.
A
B
C
D
E
F
G
H
983
calculations. In order to appreciate two concepts pecuniary
damages may include expenses incurred by the claimant: (i)
medical attendance; (ii) loss of earning of profit up to the
date of trial; (iii) other material loss. So far as non-pecuniary
damages are concerned, they may include : (i) damages for
mental and physical shock, pain and suffering, already
suffered or likely to be suffered in the future; (ii) damages to
compensate for the loss of amenities of life which may include
a variety of matters i.e. on account of injury the claimant
may not be able to walk, run or sit; (iii) damages for loss of
expectation of life i.e. on account of injury the normal
longevity of the person concerned is shortened; (iv)
inconvenience, hardship, discomfort, disappointment,
frustration and mental stress in life."
16. In Raj Kumar v. Ajay Kumar [Raj Kumar v. Ajay Kumar,
(2011) 1 SCC 343 : (2011) 1 SCC (Civ) 164 : (2011) 1 SCC
(Cri) 1161] , this Court laid down the heads under which
compensation is to be awarded for personal injuries : (SCC
p. 348, para 6)
"6. The heads under which compensation is awarded in
personal injury cases are the following:
Pecuniary damages (Special damages)
(i) Expenses relating to treatment, hospitalisation,
medicines, transportation, nourishing food, and
miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the injured
would have made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(b) Loss of future earnings on account of permanent
disability.
(iii) Future medical expenses.
Non-pecuniary damages (General damages)
(iv) Damages for pain, suffering and trauma as a
consequence of the injuries.
(v) Loss of amenities (and/or loss of prospects of marriage).
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
A
B
C
D
E
F
G
H
984
SUPREME COURT REPORTS
[2020] 7 S.C.R.
(vi) Loss of expectation of life (shortening of normal
longevity).
In routine personal injury cases, compensation will be
awarded only under heads (i), (ii)(a) and (iv). It is only in
serious cases of injury, where there is specific medical
evidence corroborating the evidence of the claimant, that
compensation will be granted under any of the heads (ii)(b),
(iii), (v) and (vi) relating to loss of future earnings on account
of permanent disability, future medical expenses, loss of
amenities (and/or loss of prospects of marriage) and loss of
expectation of life."
17. In K. Suresh v. New India Assurance Co. Ltd. [K. Suresh
v. New India Assurance Co. Ltd., (2012) 12 SCC 274 : (2013)
2 SCC (Civ) 279 : (2013) 4 SCC (Cri) 638] , this Court held
as follows : (SCC p. 276, para 2)
"2. ... 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."
******* ********
*********
Loss of earnings
20. Both the courts below have held that since the girl was
a young child of 12 years only notional income of Rs
15,000 p.a. can be taken into consideration. We do not
think this is a proper way of assessing the future loss of
income. This young girl after studying could have worked
and would have earned much more than Rs 15,000 p.a.
Each case has to be decided on its own evidence but taking
notional income to be Rs 15,000 p.a. is not at all justified.
The appellant has placed before us material to show that
A
B
C
D
E
F
G
H
985
the minimum wages payable to a skilled workman is
Rs 4846 per month. In our opinion, this would be the
minimum amount which she would have earned on
becoming a major. Adding 40% for the future prospects, it
works to be Rs 6784.40 per month i.e. 81,412.80 p.a.
Applying the multiplier of 18, it works out to Rs
14,65,430.40, which is rounded off to Rs 14,66,000."
12. In view of the above decisive rulings of this court, the High
Court clearly erred in holding that compensation for loss of future
prospects could not be awarded. In addition to loss of future earnings
(based on a determination of the income at the time of accident), the
appellant is also entitled to compensation for loss of future prospects, @
40% (following the Pranay Sethi principle).
13. The factual narrative discloses that the appellant, a 20-yearold data entry operator (who had studied up to 12th standard) incurred
permanent disability, i.e. loss of his right hand (which was amputated).
The disability was assessed to be 89%. However, the tribunal and the
High Court re-assessed the disability to be only 45%, on the assumption
that the assessment for compensation was to be on a different basis, as
the injury entailed loss of only one arm. This approach, in the opinion of
this court, is completely mechanical and entirely ignores realities. Whilst
it is true that assessment of injury of one limb or to one part may not
entail permanent injury to the whole body, the inquiry which the court
has to conduct is the resultant loss which the injury entails to the earning
or income generating capacity of the claimant. Thus, loss of one leg to
someone carrying on a vocation such as driving or something that entails
walking or constant mobility, results in severe income generating
impairment or its extinguishment altogether. Likewise, for one involved
in a job like a carpenter or hairdresser, or machinist, and an experienced
one at that, loss of an arm, (more so a functional arm) leads to near
extinction of income generation. If the age of the victim is beyond 40,
the scope of rehabilitation too diminishes. These individual factors are of
crucial importance which are to be borne in mind while determining the
extent of permanent disablement, for the purpose of assessment of loss
of earning capacity.
14. In Neerupam Mohan Mathur v. New India Assurance
Company19, this court considered the case of a victim, whose injury
PAPPU DEO YADAV v. NARESH KUMAR AND ORS.
[S. RAVINDRA BHAT, J.]
19 (2013) 14 SCC 15
A
B
C
D
E
F
G
H
986
SUPREME COURT REPORTS
[2020] 7 S.C.R.
was assessed to 70% as loss of earning capacity for amputation of the
arm; he was a postgraduate diploma holder in mechanical engineering,
32 years of age and earning about 3000/- per month. This court held,
approving the High Court's order (which had adopted the formula from
the Workmen's Compensation Act, to determine 70% for the purpose of
deciding loss of earning capacity) as follows:
"12.