Facts of the case:
In the present case, the Hon'ble Supreme Court of India was hearing an appeal
filed by M.R. Krishna Murthy (Appellant) against the order of Hon'ble High Court
of Delhi. This plea arises from happening of a misfortunate accident of the
Appellant when he was traveling from Delhi to Mussoorie in the year 1988.
Despite several operations, the appellant is suffering from a 40% permanent
disability of his left leg.
Thereafter, the appellant filed an application before the Motor Accidents Claims
Tribunal, New Delhi (MACT) for claiming the compensation against the offending
vehicle and its insurance company i.e. New India Assurance Co. Ltd
(Respondents). The MACT on 23rd May 2007, decided the quantum of compensation
and awarded Rs.4,08,000/- while taking into consideration the following:
- The loss of future income of the appellant to be Rs.2000 per month.
- Adopted the multiplier of 17, as the appellant was 17 years old at the
time of the accident.
Aggrieved by the award of MACT, the appellant filed an appeal before the Hon'ble
HC contending that the multiplier adopted by MACT is inaccurate as the appellant
was 18 years old. On 19th May 2017, the Hon'ble HC accepted this plea and
consequently, the amount of future loss of income came up to Rs.4,32,000.
Subsequently, the appeal was filed before the Hon'ble SC concerning the impugned
Citation: 2019 SCC OnLine SC 315 -
Bench: Justice A.K. Sikri and Justice S.A.Nazeer -
Date: 5th March 2019
Contentions of the appellant:
The contentions of the appellant before the Hon'ble SC were in two folds.
Firstly, the Hon'ble HC failed to take into consideration various important
factors while ascertaining the future income of the appellant viz. his family
background, education, and potential to earn in the future.
Though the appellant
was only a student at the time of the accident, his parents were practicing
advocates in the Hon'ble SC. He was studying in one of the best schools in Delhi
and wanted to pursue a career in the legal profession as of his parents.
The Hon'ble HC has erred in not considering the calibre and potential of the victim
while ascertaining the loss of future income at only Rs.2000 per month. In the
order to showcase the contended principal the appellant relied on the judgment
of N.Manjegowda v. United India Insurance Co. Ltd (2014) 3 SCC 584. 
Secondly, the appellant raised the plea for the reformation of the existing
system of payment of compensation to the victims of road accidents. The
appellant contended that the court must ensure the timely delivery of justice
along with awarding a reasonable compensation to the victim.
appellant suggested various solutions such as establishing a meditation
authority for the case of motor accidents with the aim of speedy disposal of
cases and ensuring that the compensation is received in the right hands. The
compensation shall not be given in cash but as Annuity Certificate to ensure
Questions Raised Before The Hon'ble Supreme Court
Observation And Findings Of The Hon'ble Court
- What will be factors considered for determining the amount of future
loss of income of a student?
- Why is the nature of injuries and the disabilities important while
deciding the quantum of compensation?
The Hon'ble SC after considering the catena of judgments concluded that while
deciding the amount of loss of future income, it is necessary for a court to
consider the prospect of such a victim. The court considered the fact that
though the appellant is presently a practicing advocate; his earning capacity is
impaired as he not as capable as his other companions. Further while considering
the future prospects the loss of future income was raised from Rs.2000 to
Rs.5000 per month and the multiplier of 18 was adopted. Therefore, the total
compensation awarded was Rs.10,80,000/-.
Dealing with the second set of arguments, the Hon'ble SC gave the following
suggestions to the Government of India (GOI):
- The GOI should consider enacting the Indian Mediation Act for setting up of
provisions relating to the mediation.
- The GOI shall look for the possibilities of introducing Motor Accident
Mediation Authority by making necessary amendments to the Motor Vehicles Act,
- The National Legal Service Authority will work with other authorities
including Mediation and Conciliation Project Committee, State Legal Service
Authority and other similar authorities for setting up of mediation cell and
for implementation of the guidelines issued by the Hon'ble SC in the case of
Jaiprakash v. National Insurance Company.
- To investigate the feasibility of the scheme and accessibility of the
In the present case, the Hon'ble SC tried to inculcate a progressive approach
while giving importance to the ADR mechanism for speedy disposal of cases. The
intent of the Hon'ble SC while setting up the aforementioned suggestions was to
reduce the harassment faced by the victim of such accidents due to the slow
judicial process as well as the other lacunas in the implementation of policies
in regards to the same.
On a similar line recently in August 2019, the Parliament has passed the Motor
Vehicles (Amendment) Bill, 2019 for laying down strict provisions for rash
driving, drinking, and driving, juvenile driving, etc.
Furthermore, it has enhanced the scope of Third-Party insurance and included
driver's attendant in it. The insurance compensation has increased ten times
from Rs.50, 000 to Rs.5,00,000. Moreover, the insurance companies are now liable
to pay the compensation within a month.
These steps by the Hon'ble SC and the GOI are highly commendable for having a
victim-centric approach by trying to eliminate the hardship faced by them. Now,
considering the factor of lack of proper implementation of policies in our
country it will be important to see how these suggestions will be implemented in
the near future.
- J N.Manjegowda v. United India Insurance Company Limited, (2014) 3 SCC
- Jaiprakash v. National Insurance Company, (2010) 2 SCC 607
Written By: Ms.Aaksha Sajnani
Authentication No: AG023068129196-17-820