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Case Comment: M.R. Krishna Murthi v/s New India Assurance Co.Ltd

M.R. Krishna Murthi v/s New India Assurance Co. Ltd:

Facts of the Case:
In this case the appellant was about 18 years when he met with an accident on 26-05-1988 due to negligence of the driver of the other car. As a result, the appellant suffered grievous injuries. Almost three surgeries were performed during the ensuing six years. The net result of this accident was that appellant suffered permanent disability to the extent of 40%.

Right after the accident, an accident claim case was instituted before the Motor Accidents Claims Tribunal, seeking compensation under section 166 and 140 of the Motor Vehicle Act, 1988. Following that, the appellant filed a claim with the New Delhi-based Motor Accidents Claims Tribunal (MACT), demanding compensation from the accused vehicle and its insurer, New India Assurance Co. Ltd. (Respondents).

The MACT decided on the amount of compensation to be paid on May 23, 2007, and gave Rs.4,08,000/-, Considering the following factors:
  • The appellant's future earnings will be reduced by Rs.2000 per month.
  • Because the appellant was 17 at the time of the accident, the multiplier of 17 was used.
The appellant, who was unhappy with MACT's judgement, filed an appeal with the Hon'ble HC, stating that MACT applied the improper multiplier because the appellant was just 18 years old. On May 19, 2017, the Hon'ble HC granted this petition, raising the total amount of projected income loss to Rs.4,32,000. Following that, an appeal was filed at the Hon'ble Supreme Court against the contested verdict.

Issues Raised:
Questions Raised before the Supreme Court:
  1. What factors will be considered when determining a student's probable income loss?
  2. Why is it critical to take the nature of the injuries and disability into account when calculating the amount of compensation?
Argument from the side of the Appellant and Respondent
The appellant's arguments in front of the Supreme Court were separated into two groups. To commence with, the Hon'ble HC overlooked a number of important factors in calculating the appellant's potential earnings, such as his family history, education, and earning capacity. Despite the fact that the appellant was just a student at the time of the incident, both of his parents were Supreme Court lawyers.

He was a student at one of Delhi's best colleges and, like his parents, desired to be a lawyer. The Hon'ble HC failed in not considering the victim's quality and aptitude when assessing the lost future income at just Rs.2000 per month. In order to underline the asserted principle, the appellant cited the case of N.Manjegowda v. United India Insurance Co. Ltd.

Second, the appellant stated that the existing method of paying victims of traffic accidents should be changed. The appellant contended that the court must guarantee that justice is served promptly, and that the victim is fairly compensated. The appellant also requested a number of changes, including the creation of a motor vehicle accident mediation body to speed up case settlement and guarantee that compensation reaches the right persons. The compensation will be provided in the form of an Annuity Certificate rather than cash to ensure complete payment.

Judgement by the Hon'ble Supreme Court
After analyzing a number of cases, the Supreme Court concluded that a court must consider the victim's prospects when estimating the amount of future income lost. While the appellant is now a practicing lawyer, the court recognized that his earning potential is restricted since he is not as skilled as his contemporaries. When considering future prospects, the loss of future income was raised from Rs.2000 to Rs.5000 per month, and a multiplier of 18 was applied. As a consequence, a total of Rs.10,80,000/- in compensation was granted.

The Supreme Court of India (SC) gave the following recommendations to the Government of India (GOI) in response to the second set of arguments:

The Indian government should explore enacting the Indian Mediation Act to provide procedures for mediation, and the Indian government will look into the potential of changing the Motor Vehicles Act of 1988 to create a Motor Accident Mediation Authority

The National Legal Service Authority will collaborate with other authorities such as the Mediation and Conciliation Project Committee, State Legal Service Authority, and other similar bodies to establish a mediation cell and implement the guidelines issued by the Hon'ble Supreme Court in the case of Jaiprakash v. National Insurance Company.

To look at the scheme's viability and the annuity certificate's accessibility.

The Supreme Court aimed to inculcate a progressive thinking while emphasizing the importance of the ADR mechanism in promptly settling disputes in this case. The purpose of the Hon'ble SC's recommendations was to reduce the harassment that victims of such occurrences face as a result of the prolonged judicial process and other faults in policy implementation.

In a similar spirit, Parliament has passed the Motor Vehicles (Amendment) Bill, 2019, which includes punitive penalties for reckless driving, drinking and driving, juvenile driving, and other offences. It has also extended the coverage of third-party liability insurance to include the driver's companion.

The insurance compensation has increased tenfold from Rs.50, 000 to Rs.5,00,000. Furthermore, insurance companies must now pay compensation within one month. The Hon'ble Supreme Court and the Government of India's measures are commendable for taking a victim-centred approach and striving to ameliorate the suffering they face. Given our country's lack of effective policy implementation, it will be crucial to monitor how these suggestions are carried out in the near future.

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