We have already discussed the types of damages, MACT Claim and the method of computation of compensation in MACT cases in our articles Computation of Compensation, MACT Claim and Compensation in MACT Cases respectively. In this article, we shall be discussing the case laws related to the MACT cases.
Major Case Laws
The Hon’ble Supreme Court, in this case, introduced the multiplier equation to calculate the amount of compensation. In this case, dissatisfied with the quantum of compensation, the appellants filed an appeal. The Delhi High Court by its judgment dated 15.02.2007 allowed the said appeal in part was of the view that though in the claim petition the pay was mentioned as Rs.3,402 plus other benefits, the pay should be taken as Rs.4,004/- per month as per the evidence. Having regard to the fact that the deceased had 22 years of service left at the time of death and would have earned annual increments and pay revisions during that period, it held that the salary would have at least doubled (Rs.8008/- per month) by the time he retired. It, therefore, determined the income of the deceased as Rs.6006/- per month, being the average of Rs.4,004/- (salary which he was getting at the time of death) and Rs.8,008/- (salary which he would have received at the time of retirement). Having regard to a large number of members in the family, the High Court was of the view that only one fourth should be deducted towards personal and living expenses of the deceased, instead of the standard one-third deduction. The Hon’ble Supreme Court stated that,
“The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants whichever is higher) and by the calculation as to what capital sum if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last. It is necessary to reiterate that the multiplier method is logically sound and legally well-established. There are some cases which have proceeded to determine the compensation on the basis of aggregating the entire future earnings for over the period the life expectancy was lost, deducted a percentage therefrom towards uncertainties of future life and award the resulting sum as compensation. This is clearly unscientific. For instance, if the deceased was, say 25 years of age at the time of death and the life expectancy is 70 years, this method would multiply the loss of dependency for 45 years – virtually adopting a multiplier of 45 – and even if one-third or one-fourth is deducted therefrom towards the uncertainties of future life, and for immediate lump sum payment, the effective multiplier would be between 30 and 34. This is wholly impermissible.”
in this Case The Supreme court stated that “The provision of the Motor Vehicles Act, 1988 ..makes it clear that the award must be just, which means that compensation should, to the extent possible, fully and adequately restore the claimant to the position prior to the accident. …… A person is not only to be compensated for the physical injury, but also for the loss which he suffered as a result of such injury. This means that he is to be compensated for his inability to lead a full life, his inability to enjoy those normal amenities which he would have enjoyed but for the injuries, and his inability to earn as much as he used to earn or could have earned.”
The Hon’ble Apex Court particularly has laid down that non-pecuniary damages cannot be quantified but must be taken into account while providing damages.
In a motor accident, the appellant sustained fractures on both the legs, thereby suffering permanent disability to some extent. The Hon’ble Supreme Court held that:
“where the claimant suffers permanent disability as a result of injuries, the assessment of compensation under the head of loss of future earnings would depend upon the effect and impact of such permanent disability on his earning capacity. The Tribunal should not mechanically apply the percentage of permanent disability as the percentage of economic loss or loss of earning capacity. In most of the cases, the percentage of economic loss, that is, the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability. Some Tribunals wrongly assume that in all cases, a particular extent (percentage) of permanent disability would result in a corresponding loss of earning capacity, and consequently, if the evidence produced show 45% as the permanent disability, will hold that there is 45% loss of future earning capacity. In most of the cases, equating the extent (percentage) of loss of earning capacity to the extent (percentage) of permanent disability will result in the award of either too low or too high a compensation.
What requires to be assessed by the Tribunal is the effect of the permanent disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency). We may however note that in some cases, on appreciation of evidence and assessment, the Tribunal may find that the percentage of loss of earning capacity as a result of the permanent disability, is approximately the same as the percentage of permanent disability in which case, of course, the Tribunal will adopt the said percentage for determination of compensation.”
The Hon’ble Court was of the view that the award must reflect that the different circumstances have been taken into consideration. In the instant appeal, the award doesn’t reflect any of the above-mentioned criterions.
5. Ankur Kapoor Thr. Gpa vs Oriental Insurance Company Ltd., CIVIL APPEAL NO.17998 of 2017(Arising from SLP (C) No.4841/2016)
The Appellant had met with an accident in 2000 and had sustained grievous injuries on his right arm which resulted in permanent disability to the extent of 50% The Hon’ble Supreme court stated
“He was just 22 years of age at the time of the accident and was unmarried. It is unfortunate that he had to suffer at this young age when he was thinking of his bright future life. Having regard to the material on record, we award Rs.3, 00,000/-(Rupees Three Lacs only) towards pain, agony and trauma as a consequence of injuries, and Rs.3,00,000/-(Rupees Three Lacs only) towards loss of amenities(including loss of prospects of marriage) and Rs.3,00,000/-(Rupees Three Lacs only) towards loss of expectation of life.”
The compensation was increased from Rs 8,80,000/- to Rs 22,00,000/-