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The New India Assurance Co. Ltd V/S Madhukar Panchal and Others.

Company & Directors' Information:- PANCHAL PRIVATE LIMITED [Strike Off] CIN = U36100MH1941PTC003262

    First Appeal No. 14 of 2013 and Cross Objections St. No. 3192 of 2013

    Decided On, 13 January 2014

    At, High Court of Judicature at Bombay


    For Petitioner: Mr. S.M. Dange, Advocate And For Respondents: Mr. T.J. Mendon, Advocate. for 1st Respondent

Judgment Text

1. The appellant is the insurer of a vehicle involved in a road accident on the Mumbai-Goa road. That accident resulted in such multiple and severe injuries to the 1st respondent that she is now a quadriplegic, paralysed from the neck down. By its order and judgment dated 3rd/4th October 2011, the Motor Accidents Tribunal, Mumbai awarded compensation of Rs. 76,57,007/- to the 1st respondent. The insurance company has appealed. The 1st respondent has filed cross objections. We must straightaway state that the controversy before us is very narrow, limited to the award of an amount of Rs. 34,70,000/-. The remainder was made available for disbursement to the claimant/1st respondent.


On 21st May 2003, the 1st respondent ("Ms. Panchal") and some of her relatives set out on a journey by road from Kandivli, a northern suburb of Mumbai, to Goa. They left Kandivli late at night, around 9:30 pm. They were travelling in a Tata Sumo vehicle, registration number MH-04-AS-1644. The vehicle belongs to the 2nd respondent, who does not seem to have been among those travelling. The vehicle's driver was, by all accounts, an employee; the vehicle was not self-driven by any member of Ms. Panchal's group. The party took the coastal Mumbai-Goa road, Highway 66 and 17. While this is a scenic route, it demands caution as it has a number of hilly stretches and sharp bends. Just after Sangameshwar, some 430 kms from Mumbai, the road turns east towards the coast in the direction of the coastal city of Ratnagiri. At about 5:30 am on 22nd May 2003, when the vehicle was on this stretch of the road, near the village of Vandri in Sangameshwar taluka, the driver lost control. The vehicle was then moving at some considerable speed. The driver braked, but was unable to regain control of the vehicle. It collided against a tree. The impact of the collision was extreme. An offence was registered at the Devrukh Police Station.

2. Ms. Panchal was severely injured in this accident. She was rushed to the Civil Hospital at Ratnagiri. There, the doctors who examined her felt that the extent and severity of her injuries required that she be moved to Mumbai's KEM Hospital for special treatment. She was admitted to KEM Hospital on 22nd May 2003. She remained there for several months, till 17th August 2003. Over the next three years, Ms. Panchal was hospitalised several times at different hospitals. She suffered massive injuries, the most critical of which are a cervical spinal cord injury, C-4 and C-5 lamina fractures, burst fractures with anterior wedging and intracanalicular retropulsion of the C-5 vertebral body causing acute kyphotic of the cervical spine. There are other injuries as well. In short, the accident resulted in Ms. Panchal becoming a quadriplegic or tetraplegic. She is totally bed-ridden. She has lost all movement in all four limbs. From chest to foot, she is paralysed. She cannot function without assistance. Food is administered to her nasogastrically. This condition has its own additional complications, including repeated and frequent bedsores, recurrent respiratory infection and susceptibility to bilateral pneumonia.

3. At the time of the accident, Ms. Panchal was 27 years old.


4. In 2003 Ms. Panchal filed her claim application under Section 166 of the Motor Vehicles Act, 1988 ("the MV Act"). In this application, she set out the particulars of the accident and her illness. At this stage, it is necessary only to note that in her claim application Ms. Panchal stated that her monthly income was Rs. 5,000 per month. This is of some relevance in view of the subsequent evidence and the findings of the Motor Accidents Claim Tribunal ("MACT") regarding loss of income.

5. The appellant insurer did not file its defence and written statement for another eight years till 18th January 2011, when its application under Section 170 of the MV Act was (in our view, rightly) allowed and its written statement taken on file. In fact, the written statement was filed several years after Ms. Panchal filed her affidavit of evidence. The written statement, marked as Exhibit '81-B' in the record has been reproduced in its entirety in the order under appeal. It purports to deal with the affidavit of evidence as well.

6. On 25th July 2008, Ms. Panchal filed her affidavit of evidence. In this, she detailed her claim, pointing out the various periods of her hospitalization, the costs she incurred, her present condition at the time and other necessary particulars. In that affidavit she also mentioned that she was employed with M/s. Colour Copy Private Limited, Century Bazaar, Worli at a monthly salary of Rs. 7,000/-. This, too, we note because of the subsequent findings of the MACT on the question of loss of income. In her affidavit, Ms. Panchal also said that because of the accident and the condition in which it left her, her employment was terminated in June 2003. But for that termination and the accident, she would, she said, have been earning Rs. 15,000/- per month. She was a patient at different hospitals and at different times over the next four years. Her father, Mr. Madhukar Panchal, used to work as a electrician, but because he spent these four years caring for his young injured daughter, he lost his entire income of about Rs. 5,000/- per month for that period. In total, Ms. Panchal made a claim in her evidence affidavit of Rs. 75,00,000/- as general and special damages, and compensation.

7. On the pleadings filed, the Tribunal framed two issues, namely:

a) Whether the applicant proves that on 22/05/2003 at about 5.30 a.m. At Village: Bandari, Tal. Sangameshwar she sustained the injuries in an accident, which had taken place because of rash and negligent driving of Tata Sumo bearing No. MH-04-AS-1644

b) Whether the applicant is entitled to the compensation, if yes, what amount and from whom

Both were answered in the affirmative, and the Tribunal awarded a sum of Rs. 70,57,007/- to the claimant.

8. The body of evidence marshalled by Ms. Panchal before the Tribunal was formidable. As many as eleven witnesses were examined, including Ms. Panchal herself even in her tragic condition. The insurer examined but one witness. Several documents were also adduced in evidence, including copies of the F.I.R., panchanama, insurance policy, hospital papers from the Civil Hospital, Ratnagiri, hospital papers and discharge card from KEM Hospital, Mumbai, disability certificate, and more.

9. At this stage, it is necessary to note that both the applicant and the insurer filed their respective written submissions. Those were taken on file and marked as Exhibit 68 and Exhibit 90 respectively. The insurer's written submissions were signed by its advocate. This assumes importance because in its written submissions, the insurer has virtually admitted Ms. Panchal's claim of Rs. 75,00,000/- by computing the details of damages, albeit as an estimate, at Rs. 77,84,000/-. In the order under appeal, the MACT has at least twice noted this crucial circumstance.

10. We will now consider the evidentiary material placed by the parties. This case has very many unusual features. The testimony in cross-examination of the insurer's witness, one Arun Prakash, the appellant's Administrative Officer, is one such. In his cross-examination, Mr. Prakash said:

It is correct to say that the policy is comprehensive. The said policy covers the occupants of the car for the purpose of compensation. I have not brought file of this case which is with the insurance company. I do not know the development of the case right from 2003 till now.
11. On this statement, the controversy before the Tribunal was considerably narrowed to an issue of assessment of damages, the questions of insurance cover and liability to the occupants of the car for payment of compensation having thus been admitted.

12. We will, therefore, examine the evidence before the MACT. The claimant was cross-examined by the insurer. In her cross-examination, she reconfirmed that at the time of the accident she was employed with M/s. Color Copy Private Limited, Worli, Mumbai as a coordinator and that she earned Rs. 7,000/- per month. She produced her salary certificate. The rest of the cross-examination is merely a series of questions in which the insurer put its case to the claimant, and which the claimant denied. The evidence of the claimant must, therefore, be taken to be uncontroverted. In her affidavit of examination-in-chief, the claimant stated that she had been hospitalized on five separate occasions:

(a) KEM Hospital, Parel, Mumbai, from 22nd May 2003 to 17th August 2003;

(b) IBRS Hospital, Airoli, from 10th September 2003 to 3rd November 2003;

(c) Sion Hospital, from 28th February 2004 to 23rd July 2004;

(d) Wockhardt Hospital, from 29th June 2006 to 6th July 2006; and

(e) Criti-care Hospital, Airoli, from 6th July 2006 to 18th July 2006.

She also produced bills and hospital papers for all these hospitalizations.

13. The second witness for the claimant was one Dr. Prabhat Singh, the deputy medical officer at Wockhardt Hospital. He was a casualty medical officer at the relevant time. He deposed that the claimant was admitted to that hospital on 29th June 2006; that she was an indoor patient till 26th July 2006; that she is a quadriplegic; and that the hospital bill of Rs. 1,00,852/- had been paid. This witness was not cross-examined at all.

14. The third witness whose evidence was led by the claimant was Dr. Sundeep G. Mestry, a pulmonologist at the Criti-care ICU & Super-speciality Centre that he runs at Airoli. Dr. Mestry deposed that Ms. Panchal was transferred to his hospital from Wockhardt on 6th July 2006 with a case of post traumatic diaphragmatic paralysis due to cervical injury with quadriplegia. She had bilateral pneumonia. Her oxygen levels were very low. She was given medical treatment including physiotherapy. Dr. Mestry deposed that Ms. Panchal was completely bed-ridden, that she required attendance round the clock and was given food through a tube inserted into the stomach through the nose (nasogastrically). He further deposed that the bills of his hospital, totalling Rs. 58,157.69 including for purchase of medicines, were paid. These bills were marked in evidence. He also deposed that he had recommended that she undergo a stem-cell transplant of the cervical spine and that this is an expensive surgery that costs Rs. 10 to 15 lakhs. Importantly, he also deposed that she require a minimum monthly expenditure for her treatment of Rs. 10,257/- and there are practically no chances of any improvement in her condition. In addition she needs chest physiotherapy daily, at a cost of Rs. 250/- to Rs. 300/- per day; her medicine costs, in his estimation, would be in range of Rs. 3,000/- to Rs. 4,000/- per month; and diapers, hand gloves, catheters etc. would cost more. Once again, this witness was not cross-examined at all.

15. The claimant's next witness was Dr. Anil Kumar Gaur, Assistant Director of the All India Institute of Physical Medicine and Rehabilitation. He deposed to the disability certificate dated 8th April 2004 issued by him, identifying his signature on the certificate, and confirming the correctness of its contents. He, too, attested to her condition as a quadriplegic and her total dependence on care by others. Dr. Gaur was very briefly cross-examined by the insurer's Advocate. This cross-examination was totally ineffective and did not in any way shake his testimony.

16. Dr. Pravin Deokate, an Ortho Surgeon and Resident Medical Officer of the KEM Hospital was Witness No. 5 for the claimant. He deposed to the fact of her spinal cord injury and that she was unable to walk or move or even to use her wheel chair on her own. Dr. Deokate, too, was not cross-examined at all.

17. Witness No. 6 for the applicant was Dr. Joji Joseph, a physiotherapist from Mulund. This witness deposed that Ms. Panchal was given physiotherapy for which she was charged Rs. 350/- per day and that being a quadriplegic, she would need physiotherapy for her life. The witness deposed having till then received Rs. 4,72,500/- as fees and identified 56 receipts issued against these payments, attesting to their correctness. The cross-examination on behalf of the insurer was also ineffective: the witness denied that Ms. Panchal did not require continued physiotherapy. The witness also denied that the physiotherapy bills were inflated.

18. Witnesses Nos. 7, 9, 10 and 11 for the applicant were, respectively: (i) Ms. Ashwini Kiran Keer, Nurse; (ii) Mrs. Lalita Chandrakant Pawar, Attendant; (iii) Lucy Fernandes, Attendant; and (iv) Mrs. Ambika Hanuman Barale, Attendant.

19. So far as the evidence of the nurse Ashwini Keer is concerned, she deposed that the applicant was, because of the accident and her quadriplegic condition, bed-ridden. As a result, she developed bedsores. The witness, Ms. Keer, dressed her bedsore injuries during three different periods and gave her nursing attention. For this she was paid Rs. 200/- per day. In all, an amount of Rs. 96,000/- was paid to her, and in respect of which she issued receipts. These receipts were marked in evidence. The cross-examination of this witness was ineffective. It does not in any way shows that Ms. Panchal does not receive nursing attention or care from the witness or that the witness was not paid for these services.

20. The evidence of the three attendants, namely, Ms. Lalita Pawar (witness No. 9), Lucy Fernandes (witness No. 10) and Ms. Ambika Barale (witness No. 11) is in similar terms, to the effect that Ms. Panchal having suffered serious injuries, was disabled and confined to bed; that she was unable to move or to handle her daily routine; and required round-the-clock attention from attendants. All these three witnesses were her attendants at different times. They provided this care to Ms. Panchal and were paid for their services. All of them issued receipts. All these receipts were marked in evidence. Ms. Pawar was paid an amount of Rs. 63,150/-; Ms. Fernandes was paid Rs. 1,24,500/-; and Ms. Barale was paid Rs. 63,450/-. The cross-examination of all these witnesses are identical. The insurer merely put its case to the witnesses, viz., that the witnesses did not render service to Ms. Panchal, and that they had not received payments from her but had issued false receipts. Both these suggestions were duly denied by the witnesses.

21. Witness No. 8 for the applicant was one Hira Lohichand Thakur, Manager of Color Copy India Services. He confirmed that Ms. Panchal was working in that company as a service coordinator. He identified the signature on the salary certificate produced by Ms. Panchal as being that of the Administrative Manager of the company. He also confirmed that the company had terminated her services and identified the signature of the Administrative Manager on the letter of termination. Once again, the cross-examination of this witness, too, was wholly ineffective and consisted of nothing more than putting a case to the witness and which the witness denied.

22. The only evidence led by the insurer was that of one Arun Prakash. He said that since 2010 he was working with the respondent-insurer as a Administrative Officer. He produced a true copy of the insurance policy along with its terms and conditions, as also the standard tariff for private car insurance. These were taken on record and marked in evidence. The cross-examination of this witness by the Advocate of Ms. Panchal was short, but effective. Mr. Prakash confirmed that the insurance policy was comprehensive and it covered the occupants of the car for the purpose of compensation. He did not have the insurance company's file pertaining to this case with him and also did not know all the developments in the case from 2003 till then.

23. An overall assessment of the evidence before the MACT is that the claimant was able to lead evidence that was comprehensive and entirely undisturbed in cross-examination. There was evidence of the accident, of Ms. Panchal's injuries, of her hospitalization, of the continuous care that she needs, of the expenses she incurred, and of her condition. We find that the evidence is, with one solitary exception, meticulously recorded. Ms. Panchal produced her salary certificate showing her salary of Rs. 7,000/-. An independent witness identified the signature on the salary certificate. Given that the MACT, like other Tribunals, is not bound by the rigid and strict rules of evidence, we believe that the Tribunal ought to have taken a broader view of the matter, and considering that Ms. Panchal's salary certificate was attested to and the signature thereon identified by a current employee of the company in question, should have allowed that document to be fully marked in evidence as proved. It is true that the author of that salary certificate, viz., the person who issued it, was not called as a witness although available. This, however, is too technical a view. It is difficult, in our view, to agree with the MACT in its finding that Ms. Panchal was not able to prove the salary she was drawing at the time of her accident.

24. The cross-examination by the insurance company of the claimant's witnesses was entirely ineffective and did nothing to damage the credibility of any of these witnesses or to adversely affect the veracity of the claim. The insurance company's witness, in the cross-examination, candidly admitted that the existing insurance policy of the vehicle covered compensation claims by the vehicle's passengers. That being so, the only question that remained was as to the assessment of damages payable to the claimant.

25. At this stage, we must once again make reference to the written submissions or written arguments filed on behalf of the insurer. These were marked as Exhibit 90 by the MACT and are at pages 1329 to 1336 of the record and proceedings (File C-2). In these written arguments, signed by its Advocate, there is a virtual admission of the claimant. The insurer estimated a total of Rs. 74,87,000/- as compensation payable to Ms. Panchal. It is, in our view, important to discuss various statements made in the signed written arguments, and we do so in the following paragraphs. Since these written arguments may not be readily available for the record, we have taken the liberty of annexing a copy to this judgment.

(a) In paragraph 1, the insurer admits the applicant's age at the time of the accident, the fact of the accident and, importantly, that this is a case of res ipsa loquitur, and that it is not necessary for Ms. Panchal to prove negligence at all.

(b) In paragraph 2, the insurer accepts that Ms. Panchal's salary at the time of accident was Rs. 7,000/- and takes this as base for calculation of loss of future income. Promotional prospects have not been taken into account on the argument that there is no cogent evidence to this effect. Given her age and since the claimant was entirely disabled, the insurer has accepted a multiplier of 18 on the basis of the formula in Sarla Varma & others V/s. Delhi Transport Corporation and Another. : (2009) 3 S.C.C. 121 The insurer has calculated the loss of future income at the rate of Rs. 15,00,000/- being Rs. 7,000/- x 12 x 18.

(c) On the aspect of pain and suffering, the insurer in its signed written arguments relied on the decision of a Division Bench of this Court in New India Assurance Company Limited V/s. Shweta Dilip Mehta and others : I (2010) ACC 318 (DB) On that basis, the insurer has accepted an amount of Rs. 4,00,000/- under this head.

(d) The medical expenses, taken at Rs. 24,00,000/-, have been accepted as an admitted figure on humanitarian grounds, even though the insurer points out that some expenses have not been satisfactorily proved. However, considering the severity of the injuries, these expenses were not disputed by the insurer.

(e) The claim included an amount of Rs. 2,60,000/- towards expenses on a special diet at home. In its signed written arguments, the insurer stated that this was probably an over-estimation. However, and notwithstanding that the amount was not satisfactorily proved, it accepted an amount of Rs. 1,50,000/- on this account. Similarly, it said that ambulance charges though claimed at Rs. 1,00,000/-, were admitted to the extent of Rs. 50,000/-.

(f) The insurer also accepted future inevitable expenses of attendant, conveyance, physiotherapy and recurring medical and sanitary expenses at Rs. 2,30,000/- per annum. In its written arguments, the insurer stated that it would need to provide Rs. 29 lakhs towards meeting this monthly requirement, and submitted that this amount of Rs. 29 lakhs be deposited in a nationalized bank as the same would then, at a interest rate of 8% per annum, generate Rs. 2,30,000/- per annum. This amount, in turn, could be directly credited to the claimant's bank account pro rata on a monthly basis for the duration of her lifetime. On her demise, the balance amount, the insurer submitted, should be ordered to be refunded back to the insurer.

(g) Similarly, as to the question of loss of income and on the basis of its previous expenses of an amount of Rs. 15 lakhs in this regard, the insurer submitted that this amount should also be deposited in a nationalized bank at a interest rate of 8% per annum. This would yield an annual income of Rs. 1,20,000/- (more than the Rs. 84,000/- per annum claimed by Ms. Panchal) and this would be credited to her bank account pro rata on a monthly basis for the duration of her lifetime. The balance on her demise should, it was submitted, be ordered to be refunded back to the insurer.

(h) In paragraph 8 of the signed written arguments, the insurer thus arrived at a total compensation of Rs. 77,84,000/-. This includes the two deposits of Rs. 29 lakhs and Rs. 15 lakhs each. The computation made by the insurer was as follows:

8. Now come to the aspect of compensation as follows:

Appended to the written arguments is a detailed break-down of the various expenses claimed upto July 2011.

26. We have, with the assistance of Mr. Dange, learned Advocate for the Appellant and Mr. Mendon, learned Advocate for the Respondents, scrutinized the record and material before us, as also the judgment under appeal. The record and proceedings runs into over 1400 pages spread over several volumes. In its order, the Tribunal has carefully considered all the evidentiary material, including the testimony of various witnesses and, importantly, the effect of the written arguments submitted by the insurer. We have no reason to depart from the view taken by the Tribunal except on the limited grounds discussed below.

27. We must differ with the MACT is in its acceptance of an amount of Rs. 12,70,000/- said to have been borrowed by the claimant and her family from outside sources to meet her expenses. The MACT has considered this as a special case and has awarded this amount. In our view, this amount cannot be accepted and will have to be deducted. In the memo of appeal, the insurer has strongly disputed this award under the head "money borrowed of Rs. 12,70,000/-".

28. The insurer has also disputed two other amounts, namely, an amount of Rs. 22,00,000/- awarded by the MACT towards future medical expenses and an amount of Rs. 5,00,775/- awarded under the head "attendants". We will consider the first item separately, below. So far as the second item is concerned, we are unable to understand the objection. The MACT awarded a total amount of Rs. 5,00,775/- towards all attendants and nurses. The charts annexed to the written arguments show expenses on attendants totaling to Rs. 6,12,950/- for the period from 2003 to 2010 and an additional amount of Rs. 1,27,500/- for the period June 2010 to July 2011. For the period 2003 to 2010, the expenses on attendants and nurses have been itemized (at page 1335 of the record and proceedings, internal page 2 of the Annexure to the signed written arguments) by name of attendant/nurse. So far as the expenses of Ms. Lucy Fernandes and Ms. Seema Panwalkar are concerned, the difference in the amounts disputed and admitted is trivial. There is no difference at all as regards the expenses said to have been incurred on Ms. Manisha Ahire and Ms. Sarita Dhake. As far as Ms. Ambika Borale and Ms. Lalita Pawar are concerned, the MACT has taken a figure of Rs. 20,550/- for each, while the insurer accepted the amounts of Rs. 1,17,900/- and Rs. 1,17,150/- respectively, i.e., higher amounts than those awarded. The figures taken by the MACT are based on the available documents and records before it. We see no reason to interfere with that part of the impugned order.

29. When this matter was first argued before us, our attention was not drawn to the insurer's written submissions filed before the MACT. No arguments were advanced on that basis. On a closer scrutiny of the record and on finding that the MACT had relied quite extensively on these written submissions, we drew the attention of learned counsel for the parties to those written submissions and invited them to address us further. We heard parties yet again on 10th and 19th December 2013. At this time, Mr. Dange, learned advocate for the appellants, said he had instructions to disown these written submissions completely, and to state that these had been filed without authorisation from the appellants. This submission was made only belatedly, at a very late stage, and only when we drew the attention of learned advocates to these written arguments, pointing out that they formed part of the record and proceedings. No submissions were advanced on these written arguments when we first heard the matter. There is no reference to them in the memo of appeal. Thus, while we sympathies with Mr. Dange for the predicament in which he finds himself, we cannot possibly accept his submission. No such submission was made before the MACT. No application was made for withdrawal of those written submissions. Even in the grounds of appeal now before us, the appellant-insurer has not disavowed its written submissions even though these have been referred to at least in three places in the judgment under appeal. Those references are not only by description but also by the exhibit number assigned to the written submissions. At one place, the MACT has commented that the claim has been "practically admitted" (para 9). There is yet another reference to the written submissions in para 20, and yet another in para 15 (though the exhibit number there has been mistakenly stated as Ex. 19 instead of Ex. 90). Indeed, in para 15 the MACT has extracted a portion of the written submissions and rendered a finding on that basis on the all-important first issue framed. The failure to challenge these findings based on the insurer's written submissions is a telling circumstance, one that makes it impossible to accept Mr. Dange's submission at this stage.

30. We are also unable to comprehend how the submissions in respect of the claim for ongoing medical expenses and future income can be said to be against the insurer's interests. If anything, they are sensible and practical and ensure that the claimant's needs are met without putting the insurer to loss.

31. More surprising to us is the opposition to those submissions from the claimant. We must note that in the cross-objections, there are two principal grounds of challenge: first, to the MACT's refusal to accept the claim for loss of income; and second, the absence of any provision for her future medical needs. Both these are fully secured by the proposal in the written submissions.

32. We must, therefore, consider whether those suggestions and submissions made by the insurer in its written submissions are worthy of acceptance in regard to two heads of claim, viz., (1) the loss of income; and (2) the provision for ongoing medical expenses. Briefly stated, the submissions are as follows: the insurer accepts Ms. Panchal's evidence that she was earning Rs. 7,000 per month. It submits that an amount of Rs. 15 lakhs be invested at a return of 8% per annum, the annual interest accruing to be credited to Ms. Panchal's account on a pro rata monthly basis for the duration of her lifetime. A similar suggestion is made in respect of Ms. Panchal's ongoing medical and other care giving expenses, the suggested capital investment being in the amount of Rs. 29 lakhs.

33. In paragraph 31 of the impugned order, the Tribunal has wholly rejected Ms. Panchal's claim for loss of income/earnings. In paragraph 43, it has also rejected the claim for loss of future earnings. We believe these findings are erroneous. There was no reason to disbelieve the evidence of Ms. Panchal that she was earning Rs. 7,000/- at the time of accident. She produced her salary certificate. Another employee from her company identified the signature on that salary certificate as being that of an officer of her employer. It is true that the signatory of that salary certificate was not called as a witness. It seems to us, however, that this is a needlessly technical view of the matter.

34. In its signed written arguments, the insurer expressly accepted this figure and made an extremely fair offer of keeping a substantial amount of Rs. 15 lakhs deposited with a nationalized bank at 8% interest, so that the claimant would be assured of receiving at least Rs. 1,20,000/- per annum, i.e., Rs. 10,000/- per month, towards these heads of claim.

35. As regards the item of future medical expenses, the MACT awarded an amount of Rs. 22,00,000/-. There is no doubt from the evidence and material on record that the applicant is going to need continuous medical attention. Paraplegics and quadriplegics are particularly vulnerable to a host of infections and ailments. They require special beds, special attention and special treatment. Quadriplegia is a paralysis of the body from neck downward. Such a person is wholly dependent on extra and additional items of medical and personal care as he or she is quite unable to attend to her even most daily basic functions. There is no doubt that the claimant is going to incur ongoing medical expenses, including for water beds to prevent bedsores, catheters, feeding tubes, diapers, hand gloves etc. The MACT arrived at its award of Rs. 22 lakhs taking into account her need for 24-hour attention and care, medication and routine monthly expenses. In arriving at this figure, there is an element of guess work. The MACT took into account the claimant's age and applied the multiplier of 18.

36. As against this, we have to assess the estimate given by the insurer itself that the claimant would need about Rs. 2,30,000/- per annum to meet these expenses. To this end, it offered to deposit an amount of Rs. 29 lakhs with the nationalized bank. At a interest rate of 8% per annum, this would yield Rs. 2,30,000/- annually, and this amount could be credited to the claimant's bank account on a monthly pro rata basis, i.e., an amount of about Rs. 20,000/- per month.

37. In our view, the MACT ought to have accepted both suggestions that emanated from the insurer. We find no prohibition in the Motor Vehicles Act, or in any decision of the Supreme Court, from adopting such a course. There are powerful and compelling reasons to accept the suggestion for making interest-bearing deposits of Rs. 15 lakhs and Rs. 29 lakhs towards loss of future income and to meeting future medical expenses respectively. In Ms. Panchal's present condition, her longevity is unknown. Awarding a fixed sum at this stage, when she is in her mid-thirties, may not enure to her benefit over an extended period of time. Capital funds awarded would have to be entrusted to others for Ms. Panchal's benefit; she herself is in no position to supervise their deployment or utilisation. We do not propose the adoption of such a course in every case; we choose to restrict ourselves to cases that lie at the extremity, where the claimant is wholly incapacitated and suffers from a 100% disability, as quadriplegics do. In our view, a suitable formulation must be evolved to meet the ongoing needs of a claimant in such a situation and also to provide a sum representing her or his loss of future income. These are amounts that should be made available to the claimant for the duration of her natural life. There is no reason why a claim awarded under "ongoing medical expenses" or "loss of future income" for a person under a complete disability should enure to the benefit of the claimant's heirs. These are amounts meant to be used for the claimant's ongoing care and survival.

38. In Raj Kumar V/s. Ajay Kumar and Another : 2011 (1) A.C.J. 1 the Supreme Court delineated the principles governing the grounds of assessment in such cases. Compensation in personal injury cases may be awarded under diverse heads. Firstly, an pecuniary or special damages, expenses relating to treatment, hospitalization, medicines, transportation, food, etc.; loss of earning and other gains, which would in turn include loss of earning during the period of treatment and loss of future earnings; and future medical expenses. In addition, compensation of non-pecuniary damages, i.e., general damages are ordered for suffering and trauma, loss of amenities (or loss of prospect of marriage) and loss of expectation of life. There is no dispute about these principles as far as the award of the MACT on the ground of pain and suffering, loss of amenities of life and prospects of marriage, and loss of expectation of life are concerned. The MACT awarded Rs. 5 lakhs under each of these heads, totalling Rs. 15 lakhs.

39. Loss of future income and compensation to meet recurring inevitable future medical expenses are valid heads under which compensation can be awarded. In the case of paraplegia, a Division Bench of this Court in Shweta Dilip Thakur held that compensation on these grounds is appropriate. The ratio of that decision of the Supreme Court, as also of the decision in Raj Kumar, were again adopted in a recent judgment delivered by one of us (A.S. Oka, J.) in the case of Dr. Dattatreya Laxman Shinde V/s. Nana Raghunath Hire : 2013 ACJ 474

40. In Kavita V/s. Deepak and others : 2012 ACJ 2161 the Supreme Court had before it a very similar case where the injured had become vegetative and required constant care, and also had to be fed through feeding pipes or tubes. In that case, the Tribunal awarded an amount of Rs. 4,00,000/-. The High Court enhanced the compensation to Rs. 16,76,480/-. Relying on its previous decisions, including those of the Supreme Court in Raj Kumar and the leading case of R.D. Hattangadi V/s. Pest Control (India) Private Limited : 1995 ACJ 366 the Supreme Court further enhanced the compensation to Rs. 34,38,747/-. The Court emphasized the need to strike a balance between competing demands: the claim, likely to be exaggerated, and its refutation or denial or, at any rate, an acceptance of but a niggardly sum. Such is the balance we, too, must strike; and it is indeed heartening to note that our task is much eased by the eminently fair and reasonable approach of the insurer in this case. We cannot overlook the fact that the claimant does not come from a affluent background. It will be very hard for her to raise the resources required for her ongoing medical expenses. We believe that this must be borne in mind while assessing the total amount of compensation to be awarded.

41. There is one other aspect of the matter that deserves mention. In Dr. Dattatreya Laxman Shinde, this Court commented adversely on the conduct of the insurance company and its Advocate before it. In the present case, the fair, reasonable and humanitarian approach of the insurer, and, in particular, its Advocate before the MACT, Ms. Vidula Wagale are gratifying. They should serve as exemplars to all insurers in such cases of extreme hardship and tragedy. It is true that the written statement was much delayed. But thereafter, there has been no unnecessary or prolonged cross-examination of witnesses. Needless disputes were raised. The signed written arguments, are, as we have noted, eminently fair and reasonable in their approach. Even in the grounds of appeal, the insurer has not challenged the compensation awarded by the MACT in its entirety but has restricted itself to only a few heads of compensation. In at least two of its submissions, we are inclined to agree with the insurer company given the fairness of its approach.

42. Mr. Mendon relied on the decision of a Division Bench of this Court in Padmadevi Shankarrao Jadhav v. Kablasing Gormilsing Sardarji : 1985 ACJ 382, para 9 in response to our query regarding the suggestions made in the insurer's written arguments before the MACT. According to him, this decision is an authority for the proposition that compensation can never be granted wholly on the basis of the interest the lump sum will derive, as this is unscientific. An identical view was taken by the same Division Bench in Maharashtra State Road Transport Corporation v. Babalal Daud Mulani : 1985 ACJ 282, paras 10 and 11 We are unable to accept Mr. Mendon's submissions. Padmadevi and Babalal Mulani are both decisions relating to claims that arose out of an accidental deaths. The submission before the court in those two cases was not that claimants needed ongoing treatment and would have to incur continuous expenses, or even that the claimants had need for an amount representing earnings, but only that in deciding the quantum of the lump-sum or capital amount to be awarded, regard must be had to the interest that capital amount would fetch. This argument was rightly repelled. Indeed, we are in complete agreement with both decisions. Neither has, however, any applicability to the case at hand where we are attempting to provide for ongoing expenses and income during the claimant's lifetime and only in a case of a 100% disability.

43. The total compensation awarded by the MACT is set out in the following tabulation. We have added serial numbering for convenience.

44. The Tribunal awarded interest on a sum of Rs. 49,57,007/-, i.e., the total compensation of Rs. 76,57,000/- minus the amounts of Rs. 22 lakhs in item 27 and the amount of Rs. 5 lakhs in item 32 towards loss of amenities in life and prospects of marriage. Now the from the tabulation above two items will have to be excluded, viz., future medical expenses (item 27, in the sum of Rs. 22 lakhs) and money borrowed (item 29, in the sum of Rs. 12.70 lakhs). Excluding these items, therefore, the total compensation will thus be Rs. 41,86,007/-. For the purposes of calculation of interest a further sum of Rs. 5,00,000/- under the head of loss of amenities of life and prospects of marriage will have to be deducted. The applicant will, therefore, be entitled to interest on an amount of Rs. 36,86,007/-.

45. Additional compensation will need to be awarded as submitted by the insurer for loss of income and future income. The item of future medical expenses will need to be substituted in the manner set out below.

46. By an order dated 1st February 2013, this Court noted that the challenge was restricted to an amount of Rs. 34,70,000/- with interest thereon at the rate of 7.5% from the date of the Claim Application. The rest of the amount awarded was available for disbursement. From this amount of Rs. 34,70,000/-, we have disallowed the claim for Rs. 12,70,000/- and substituted the remaining claim for Rs. 22,00,000/- with the order of a refundable deposit towards inevitable expenses in the amount of Rs. 29,00,000/-.

47. In the result, the following order is passed:

(a) The total compensation, therefore, payable to the claimant/respondent shall be Rs. 41,86,007/-. Out of this amount, a sum of Rs. 36,86,007/- shall carry interest as directed by the Tribunal under the impugned Award.

(b) In addition, the appellant shall pay to the claimant/respondent an amount of Rs. 9,52,000 representing loss of past income for 136 months from June 2003, when Ms. Panchal lost her employment to December 2013, at the rate of Rs. 7,000 per month. The claimant will also be entitled to interest at the rate of 7.5% per annum from the date of this order till payment.

(c) The amount in terms of clauses (a) and (b) of this order shall be permitted to be withdrawn by the claimant/1st respondent.

(d) In addition to the amount specified in clauses (a) and (b) above, the appellant shall, within 12 weeks from today, make a deposit of Rs. 44 lakhs being Rs. 29 lakhs towards the claimant's inevitable future medical and care giving expenses and Rs. 15 lakhs on account of loss of future income with the MACT. The Tribunal shall invest the amount of Rs. 44 lakhs so deposited with any nationalised or scheduled bank in a fixed deposit at an interest rate of not below 8% per annum. This deposit shall be made for such period as to ensure this rate of interest, and shall be renewed the deposit periodically to maintain that rate of interest. In the event that there is any shortfall in this interest rate of 8% per annum, the appellant shall make good the difference for the period in question, and this order will be executable as a decree to the extent of that shortfall, if any. The entire interest (and the shortfall, if any), as also any interest earned at a rate higher than 8% per annum, shall be directly credited to the claimant's bank account on a pro-rata monthly basis. This arrangement will continue during the claimant's lifetime. On her demise, the entire principal amount and interest following the month of the claimant's demise shall be returned to the appellant.

(e) The excess amount, if any, deposited by the appellants shall be adjusted toward the amount payable in terms of clause (d) above.

48. Parties shall be at liberty to apply if there is any change in circumstances.

49. There will be no order as to costs.

50. The appeal and cross-objections are disposed of in these terms.

Before The Motor Accident Claims Tribunal, Mumbai
Application No. 2528 of 2003

Miss Shruti Madhukar Panchal



Hemlata A. Mastakar

...Opp. Party

The New India Assurance Co. Limited...Insurer

Written Arguments On Behalf of Insurer

51. It is an admitted fact that the applicant was a girl of 28 years, was a occupant in Tata Sumo and therefore being an occupant in the said vehicle which as per the FIR admittedly dashed the tree and on the basis of the trend of the case law available on the point, it is taken that applicant has not to prove negligence at all as a matter of 'res ipsa locutor' and therefore the insurer do not prefer to deal on the aspect of FIR and spot panchanama on the aspect of negligence.

52. Another governing feature of the matter is that the applicant was working with Colour Copy India Pvt. Ltd. on a monthly salary of Rs. 7,000 and it is part of admitted fact that nothing has been brought on record by the applicant as to what was the likely trend of promotional prospects and as nothing stands established, for the purpose of calculation an amount of Rs. 7,000 per month is taken as the base for calculation of loss of future income. As applicant is in the prime age bracket, a multiplier of 18 years shall have to be taken. The calculation of loss of future income therefore shall work thus 7000 x 12 x 18 = Rs. 15,00,000.

53. Now to come to the aspect of pain and suffering and for the said purpose the case was reported in 2010 TAC page 308 decided by the Division Bench of Mumbai High Court presided over by Hon. J.S.A. Bobade and Hon. J. Kathawala, this insurers specifically want to rely on this citation as this citation pertains to paraplegia but of the recent time whereas Hattangadi's case was a matter of about 22 years back and to keep in touch with the pragmatic approach nearer the practicability an amount of Rs. 4 lakhs as suggested in the said judgment towards paid and suffering and another amount of Rs. 3 lakhs towards loss of amenities of life is taken in seriatim for the purpose of ease of calculation and as the matter came to be decided by the end of the year 2009 and reported in April 2010 TAC as aforesaid. Lest it be said that this amount of Rs. 3 lakhs stated herein earlier includes loss of marriage prospects, more particularly dealt with the said Division Bench and therefore a separate calculation under the said caption of loss of marriage prospects is taken as dealt with, taken care of and therefore not separately calculated by the insurer herein.

54. As regards the medical expenses, the break up given by learned advocate for applicant as regards hospital charges, medical bills, doctor/nurse and attendant is taken as it is which comes to Rs. 24 lakhs and is taken as admitted figure on humanitarian ground though this insurer is aware and has not loss sight of the fact that expenses paid to attendant and certain portions relating to doctor though not proved by applicant and the relevant documents though not exhibited, considering the severity of the injuries are not disputed by this insurer.

55. Learned Advocate for applicant has given three captions i.e. a special diet at hospital and special diet at home which comprises of about Rs. 2,60,000/- is apparently an over estimation, admittedly not given in writing by any of the treating doctor but considering the severity, longevity and treatment density particularly in the year 2003 to 2007, irrespective of proof Rs. 1,50,000 if taken shall be the judicious calculation as regards special diet.

Now to come to the aspect of conveyance though applicant is admittedly patient of Quadriplegia, applicant has not provided details of ambulance charges which may be taken to be comprimising comprising of Rs. One Lakh and therefore in the humble submission of this insurer Rs. 50,000 towards conveyance appeared judicious.

56. Now to come to the aspect of future in

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evitable expenses which are perenial in nature and the same can be summed up as

Expenses (Rs. )


1) Attendant

Rs. 60,000

2) Conveyance

Rs. 60,000

3) Physiotherapy

Rs. 40,000

4) Recurring medical & sanitary expenses

Rs. 70,000


Rs. 2,30,000

The applicant thus needs Rs. 2,30,000 p.a. to meet expenses as above. To meet this requirement the insurer needs to provide Rs. 29,00,000. The same should be deposited in Nationalized Bank. There interest @ 8% on the same will amount to Rs. 2,30,000 which the application will get credited to her Bank account regularly proreta on monthly basis directly till survival and Rs. 29,00,000 should be refunded back to insurer as cause of action dies with the person. 57. And in addition in case of calculating future income based on proof of income provided by the applicant the calculation is as Rs. 7,000/- x 12 x 18 = Rs. 15,00,000/-. The maximum multiplier is considered for calculation as per settled law. To meet this amount of Rs. 84,000 p.a. the insurer needs to provide Rs. 15 lakhs which in turn will be invested in Nationalized Bank at 8% and interest of Rs. 1,20,000/- p.a. instead of Rs. 84,000 will be credited to her Bank account proreta on monthly basis till survival. The insurer submit that the applicant in this case is single and hence there is no dependability, with the result the said amount of Rs. 15 lakhs will remain with motor accident claim tribunal, Mumbai as deposit in perpetuity and applicant based on the receipt of interest of Rs. 1,20,000 p.a. will be in a position to recover the loss of income due to accidental injuries. Needless to say here that the amount of Rs. 15 lakhs should be refunded back to the insurer. The insurer mentions here that the insurer is liable to compensate/reimburse the losses incurred by the applicant due to the accident not necessarily pay lump sum. Hence this amount of Rs. 15 lakhs should be treated as deposit and not lump sum compensation payable to the applicant. Insurer say this because the interest earned annually is applicant's compensation. This is applicable as this is injury case and the applicant is single with no dependants. The compensation is always exclusively for the applicant in all injury cases. Now come to the aspect of compensation as follows: Insurer further submits that interest @ 6 percent may be awarded on Rs. 33,84,000/- admittedly described by the Division Bench of Mumbai High Court. The amount of Rs. 29 and 15 lakhs shall be treated as 'deposit' and therefore shall entail your honour to grant disbursement of interest for the well being and compensation as future inevitable expenses and loss of future income. The deposit amount should be retained by the tribunal in perpetuity as a custodian of the said fund. No interest should be awarded on these deposit amounts. At the cost of repetition this insurer intents to stress the point that in case of demise of the applicant both the deposits should be refunded to the insurer and therefore the said amounts shall not be disbursed to the applicant as it shall go beyond the control of the tribunal to refund the same when due. As these are for meeting future expenses and future income pertaining to injury case as the cause of action dies with the person and therefore the refund to the insurer shall become due and shall not stand handed over to anybody other than insurer under any circumstances. This insurer furnishes herewith the xerox copies of following citation: (I) 2010 TAC page 308 Mumbai High Court. (II) 2009 TAC (PART I) page 848 of J & K which bases its observation on the basis of judgment given by supreme court in Hatangadi's case and therefore binding on the tribunal. Mumbai Dated 8th August 2011 Vidula Wagle Advocate for the insurer Total expenses incurred From June 2010-July 2011 Rs. 4,94,633.00