Court holds that continued employment after accident does not erase loss of earning capacity; awards additional Rs.4.88 lakh with 7.5% interest.
The Gujarat High Court has ruled that a claimant who returns to work after a road accident cannot be denied compensation for future loss of earnings merely because he remained in service. Setting aside the Motor Accident Claims Tribunal’s use of a “split multiplier” of 5, the Court held that the proper multiplier in the case was 16, based on the claimant’s age of 35 years.
Justice J.C. Doshi delivered the judgment in the appeal filed by Rakeshkumar Navnitlal Shah, who had suffered serious injuries in a road accident while employed with Maghmani Organic Limited. The claimant had sustained multiple fractures, including an open grade 3 fracture of the lower end of the femur, multiple fractures of the foot with crush injury, and multiple rib fractures. Medical records showed that he underwent major treatment, including an Ilizarov procedure, and was assessed with 60% physical impairment. On his own admission, his functional disability for the body as a whole was 30%.
The Tribunal had awarded compensation of Rs.3,26,795, but had applied a split multiplier of 5 on the reasoning that the claimant had resumed service after recovery and therefore did not suffer future financial loss. The High Court found this approach legally incorrect.
Relying on Supreme Court precedents including Pranay Sethi, Raj Kumar v. Ajay Kumar, Sandeep Khanuja, Mohd. Sabeer, N. Jayasree, Sumathi, and Preetha Krishnan, the Court reiterated that split multiplier is not to be applied routinely and is permissible only in exceptional circumstances supported by cogent reasons. The Court observed that mere continuation in existing employment does not mean there is no loss of earning capacity. Even if the claimant continues in the same job, permanent disability may reduce mobility, efficiency, and prospects of alternative employment.
The Court further held that compensation must be assessed on the basis of the effect of permanent disability on earning capacity, not simply on the fact of continued employment. Since the claimant was 35 years old, the appropriate multiplier was 16. The Court also held that the claimant was entitled to 40% future prospects in view of his income and the nature of employment, and that the award for pain, shock and suffering was too low considering the severity of the injuries and prolonged hospitalization.
Reworking the compensation, the High Court enhanced the total award to Rs.8,15,400, resulting in an additional compensation of Rs.4,88,605 over and above what had already been granted by the Tribunal. The enhanced amount will carry interest at 7.5% per annum from the date of the claim petition until realization.
The Insurance Company has been directed to deposit the enhanced amount with accrued interest before the Tribunal
Bottom Line :
Motor Vehicles Act - Injury claim - Split multiplier cannot be applied merely because injured claimant continued in service after accident - Even if claimant remains in employment, functional disability reducing earning capacity and future employment prospects must be compensated by applying regular multiplier based on age, along with future prospects.
Rakeshkumar Navnitlal Shah v. Hirenkumar Kiritkumar Shah, (Gujarat) : Law Finder Doc id # 2986961
