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.
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
Questions Raised before the Supreme Court:
Argument from the side of the Appellant and Respondent
- What factors will be considered when determining a student's probable
- Why is it critical to take the nature of the injuries and disability
into account when calculating the amount of compensation?
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
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
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
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.