Supreme Court Upholds 100% Disability Compensation for Amputated Gunman

Case Title – Sarnam Singh v. Shriram General Insurance Co. Ltd. & Ors.

Case No. – Civil Appeal No. 3900 of 2023

Date of Judgment – 4th July, 2023

Forum – Supreme Court of India

Quorum – Hon’ble Mr. Justice Rajesh Bindal and Hon’ble Mr. Justice Abhay S. Oka

 

Facts of the Case –

Mr. Sarnam Singh, who worked as a gunman with M/s Bharat Hotels Ltd. met with a very serious road accident on 24.11.2013 with a tempo having registration No. UP 79T 1948 and due to the accident he received severe injuries and his right lower limb was tempted above knee, he remained hospitalized from 24.11.2013 to 5.1.2014 and had to take subsequent treatment for about one year, his permanent disability was assessed as 85% by Madan Mohan Malviya Hospital which mean that it is of long term nature with no chance of improvement, due to his such disablement, he became unable to work on the post of Gunman for defendant company hence services were terminated w.e.f 31.05.2015.

The Motor Accident Claims Tribunal (the “Tribunal”) in South District, Saket, New Delhi, awarded Mr. Singh compensation of ₹34,29,800/- from Shriram General Insurance Co. Ltd. This included compensation for pain and suffering, medical expenses, loss of amenities and loss of earning capacity assessed at 100% as he was functional disable but the Delhi High Court while hearing an appeal by the insurance company reduced it to ₹28,43,000/- taking loss of earning capacity at 80% though there was complete amputation of his right leg.

 

Legal Issues of the Case –

1. Was the Delhi High court justified to reduce the assessment of loss of earning capacity of Mr. Singh from 100% to 80% in spite of the fact of amputation in the right lower limb?
2. What is the appropriate manner in which to assess functional disability, and its impact on earning capacity, specifically in an individual with a physically demanding occupation?
3. Whether the fixation of compensation should be only with reference to percentage of physical disability or it has to be in respect of vocationally handicapped on his own occupation which was previously being performed by the victim?

 

Legal Provisions –

The legal issues arising for consideration in the present case mainly pertain to the legal provision in regard to assessment of compensation under Motor Vehicles Act, 1988 and also as to the extent of liability of Insurance Companies in road accident claims. Particular reference was made to: –

1. Section 166 of Motor Vehicles Act, 1988: Application for compensation by persons injured in accidents arising out of the use of motor vehicles.
2. Section 168 of the Motor Vehicles Act, 1988: This section deals with the powers of the Claims Tribunal to make an award determining the amount of compensation which appears to be just.
3. Principles of Compensation: The case refers to the judicial principles laid down in the earlier judgments relating to assessment of compensation on account of permanent disability effecting earning capacity as under:

Case law:

Mohan Soni v. Ram Avtar Tomar & Others (2012) 2 SCC 267– The award of compensation is required to be determined on the consideration, inter alia, of the effect of the disability on the nature of work/play activities required to be performed by an individual with disability including essential functional elements, quality and efficiency but for the accident.

4. Legal Precedents: The Supreme Court discussed various precedents in relation to the computation of compensation in the case of permanent disability, wherefrom, it is evident that it has been emphasized in every such case all along that the effect of a particular kind of disability would differ from occupation to occupation.

 

Contentions of the Appellant –

The appellant, Mr. Sarnam Singh, firmly believed that the Delhi High Court made a mistake in their ruling through his counsel. He argued that reducing his assessed loss of earning capacity to merely 80% did not accurately reflect the severe impact of his impairment. With the amputation of his right lower limb, Singh asserted he could no longer fulfil any of the physical demands of his previous occupation as an armed bodyguard. This life-altering injury had completely deprived him of his livelihood as a gunman. The functional disability should be considered a full 100% incapacity, justifying the original fair compensation granted by the Tribunal. On these solid grounds, the appellant sought a restoration of the full award amount to rightly acknowledge the total devastation of his vocational abilities.

 

Contentions of the Respondent –

The respondent, Shriram General Insurance Co. Ltd., defended the Delhi High Court’s judgment, arguing that the reduction of compensation was appropriate as supported by a disability certificate stating 85% disability. The insurance company argued that the Delhi High Court correctly adjusted the compensation to reflect this percentage and maintained that appellant’s failure to seek enhanced compensation affirmed correctness of the Delhi High Court’s judgment. They therefore asked for the appeal filed by Mr. Singh to be dismissed.

 

Court’s Analysis and Judgment –

The Supreme Court focused on what is the most fundamental matter in evaluating the extent of a functional disability in an appellant which is used as a determinant in awarding compensations. The Supreme Court relied on Mohan Soni v Ram Avtar Tomar & Others where it decided that amounts payable should be viewed through this prism because specific incidents will have different effects on different people in employment related situations such as has been found in Mr Singh’s case.

In Mr. Singh’s case, the amputation of his right leg above the knee has had a direct and total effect on his ability to function as a gunman, an occupation that inherently includes full physical mobility. The Supreme Court observed that the Delhi High Court failed to consider the 100% loss of earning capacity, which was obvious since Mr. Singh was fired because of disability. According to this, there was an error in the Delhi High Court’s reliance on physical disability percentage rather than understanding its vocational implications.

Also, there was a mathematical mistake identified by the Supreme Court in the compensation calculations carried out by the Delhi High Court. While ₹34,29,800/- is what had initially been arrived at by Tribunal as the whole compensation, for instance, it erroneously cited that figure wrongly as ₹33,34,800/- further reducing it unjustifiably. As such Mr. Singh’s appeal was allowed by the Supreme Court with its order set aside by them. Upon reinstatement of original award of ₹34,29,800/- by Tribunal; it was noted in doing so that this considered fully how much disability affects Mr. Singh’s earning potential. This decision highlighted for us how functional impairment must be evaluated from injured party’s professional attributes and obligations.

The Supreme Court declared no order as to costs bringing about the conclusion of the matter in favour of the appellant.

 

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Judgement Reviewed– by Sailab Kashyap