On May 14, 2008, a Bench of the Supreme Court comprising Justices S B Sinha and L S Panta United India Insurance Co. Ltd. to pay higher compensation to a woman named Sapna who had been crippled and whose marriage prospects had suffered due to an accident she suffered when she was twelve years old.

In its judgment, the Supreme Court spoke of the principles governing a claim petition for assessing the damages in case of bodily injury suffered. It said that while awarding the compensation, the Tribunal should consider all relevant factors so as to enable the insured to be put in the same position as if he had not sustained any injury.

The principle of Restitutio-in-integrum may be applied in a case of nature. Pecuniary loss and non-pecuniary loss are required to be pressed under certain heads. So far as the pecuniary loss is concerned, the same can be ascertained. What is required to be done is a balancing act by awarding such sum which, on the one hand, shall take care of the loss suffered by the claimant for the present time and future pecuniary benefits and, on the other, pecuniary advantages which from whatever source comes to them by reason of such injuries. So far as non-pecuniary loss is concerned, the same has to be assessed broadly under certain heads, namely, damages for physical pain, mental suffering etc. besides the amount spent on medical treatment, if any.

In Sapna’s case, expenditure for medical treatment was granted. The High Court, in its judgment, noticed that although the Tribunal had referred to the likely effect on the matrimonial prospects of the appellant on account of permanent disability, due regard in that behalf had not been given. The fact that she would remain crippled throughout her life was also noticed but it did not appear to the Supreme Court that any serious consideration was bestowed thereupon.

The Supreme Court said that in given cases, the courts may deviate from the structured formula. In terms of the Second Schedule, where the deceased or injured were not having any income, the statute presumes an income of or about 15,000/- per month. If having regard to the age of the appellant, the multiplier of 15 is applied, a sum of Rs.2,25,000/- would be payable.

Besides the said sum, not only some amount of compensation should be awarded under the heading of mental agony but also some provision should be made for future treatment.

In Abati Bezbaruah v. Dy. Director General, Geological Survey of India & Anr. [(2003) 3 SCC 148], it was held:

“11. It is now a well-settled principle of law that the payment of compensation on the basis of structured formula as provided for under the Second Schedule should not ordinarily be deviated from. Section 168 of the Motor Vehicles Act lays down the guidelines for determination of the amount of compensation in terms of Section 166 thereof. Deviation from the structured formula, however, as has been held by this Court, may be resorted to in exceptional cases. Furthermore, the amount of compensation should be just and fair in the facts and circumstances of each case.”

In Nagappa v. Gurudayal Singh & Ors. [(2003) 2 SCC 274] wherein a Three Judge Bench of the Supreme Court opined that the law does not permit passing of any further award after the final award but that no one can suggest that it is improper to take into account expenditure genuinely and reasonably required to be incurred for future medical expenses. Future medical expenses required to be incurred can be determined only on the basis of fair guesswork after taking into account increase in the cost of medical treatment.”

When a person becomes completely incapable of doing any work and virtually has no enjoyment for life, the same form relevant factors and, thus, requires consideration for the purpose of determining a fair and reasonable amount of compensation.

(This article is an edited extract of the judgment.)