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Divya vs. The National Insurance Co. Ltd. & Anr.

Civil Appeal · 2022 INSC 1108Decided 18 Oct 2022
Civil Appeal No. 7605 of 2022
B.R. Gavai · C.T. Ravikumar

Background

In 1998, the appellant, then a two-year-old child, was travelling in an autorickshaw with her parents in Chennai when a car driven rashly and negligently collided with it, causing her very serious, life-altering injuries. Her compensation claim (limited to Rs. 30 lakhs) was initially dismissed by the Motor Accidents Claims Tribunal on the technical ground that the car had been sold before the accident and the actual owner was not impleaded. The Madras High Court, on appeal, referred her to a Medical Board, which, examining her nearly two decades later, assessed her locomotive disability at 75% and neuro-physical disability at 40% (effectively close to 100% overall disability), and the High Court set aside the Tribunal's dismissal and awarded Rs. 13,34,000 with 7.5% interest. Dissatisfied with the quantum, the appellant sought enhancement before the Supreme Court.

Decision Breakdown

The Court, applying the principle of "just compensation" under Section 168 of the MV Act and drawing on precedents like Kajal v. Jagdish Chand and Rajkumar v. Ajay Kumar, reviewed each head of compensation. It upheld the High Court's chosen multiplier of 15 for victims injured before age 15 (settling an inconsistency between conflicting precedents by following the three-judge bench in Reshma Kumari's case). It substantially enhanced compensation under several heads: attendant charges were recalculated using the multiplier method (from Rs. 1 lakh to Rs. 18 lakhs, a net increase of Rs. 17 lakhs) given her lifelong need for two attendants; pain, suffering and loss of amenities were raised by Rs. 3 lakhs (since disability above 90% warrants at least Rs. 6 lakhs under this head per precedent); Rs. 3 lakhs was newly granted for loss of marriage prospects (previously nil); future medical treatment was increased by Rs. 1 lakh; and an additional Rs. 90,000 was granted for special dietary needs. This resulted in a total enhancement of Rs. 24,90,000, with directions that the insurance company deposit the amount with 7.5% interest, part to be kept as a protected fixed deposit for the appellant's ongoing care and part released to the family, given the two decades of expenses already incurred.

Lesson Learnt

In cases of severe, near-total permanent disability caused by a motor accident, courts will scrutinize each head of compensation (attendant care, pain and suffering, marriage prospects, future medical needs) individually against established precedent rather than accept a lump-sum figure, and can enhance an award well beyond the amount originally claimed to ensure truly "just compensation," while also directing safeguards (like fixed-deposit protections) for how large awards to vulnerable claimants are disbursed.

Official source (sci.gov.in)View Judgment (PDF)

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