Motor Accident Claim Cases: Analysis in the light of a landmark judgment

The authors of this blog are Komal and  Rajeev Ranjan Central University Of South Bihar Ba Llb (Hons.) (4th Semester).

“Justice Delayed is Justice Denied”
                                                      William Ewart Gladstone
The above-quoted maxim emphasizes the meaning of delayed justice. It takes years in the settlement of cases in our judicial system. In this article, we present a recent example when the Apex Court of our country gave a landmark judgment and tried to resolve the issue of delayed practice in deciding the motor accident claims cases. We also most humbly put forward some more reforms needed and some lacunas in the judgment. The case dealt with is M.R. Krishna Murthi vs The New India Assurance Co. Ltd[1] and was decided by the Hon'ble Supreme Court on 5 March 2019.

Facts of the case
In this case, the appellant M.R Krishna Murthi is a practicing advocate. In 1988, at the age of 18 years, he met with an accident in which his entire left leg was crushed. Thereafter, he had to undergo numerous surgeries and his treatment continued for over 6 years. As a result of the aforesaid accident of such severity, the appellant is now suffering a permanent disability of 40%, as per the disability certificate issued in 2005 by the District Government Hospital. Then the appellant applied MACT[2] claiming compensation. The MACT at Patiala House Court Complex, New Delhi, in 2007 attributed negligence of the driver of the Ambassador car which had hit the appellant’s vehicle. MACT awarded compensation of Rs. 8,48,000 to the appellant. Aggrieved by the quantum of compensation, the appellant filed an appeal before the High Court contending that MACT had failed to take into account the disability certificate but this contention was rejected by the High Court. Thereafter, the appellant filed a review petition in which he contended that an error was committed by MACT as it had applied the multiplier of 17 instead of 18 in calculating compensation. This plea was accepted by the High Court and multiplier of 18 was applied which enhanced the compensation by Rs. 24000. After that, the appellant approached the Supreme Court with the plea seeking reform in the motor vehicle accident claim system.

While deciding this case, the Supreme Court pointed out that all injuries do not result in loss of earning capacity and the percentage of loss of earning capacity is not the same as the percentage of permanent disability. The same permanent disability may result in a different percentage of loss of earnings based on the profession, education, age etc. Also, that the loss of earning capacity has to be assessed by MACT and not by the doctor treating the injured claimant. The court further discussed the various conditions which have to be considered while calculating the compensation to be granted in such cases like whether the victim was earning at the time of an accident or not, family background, future earnings, career, nature of injuries and difficulties to be faced in the future etc. The court discussed all this in order to lessen the ambiguity arising due to the varying facts of each case.

This case deals with several aspects. The Supreme Court after applying the aforementioned reasoning enhanced the compensation by Rs. 6,54,000. The focus of the Hon’ble Supreme Court on the functional disability in calculating the quantum of compensation is admirable because it is the functional disability which affects the earning capacity of an aggrieved person. The Court has demarcated the difference between permanent disability and functional disability in the context of determining the loss of future income.
The Court has accepted the reforms suggested by the Learned Senior Counsel Mr. Arun Mohan. The Court admits the need for mediation for dispute resolution. This approach of the Court is estimable. Mediation refers to the method of alternative dispute resolution where a neutral third person attempts to make the parties settle the dispute. In mediation, the mediator does not propose a settlement but creates an atmosphere that enables parties to propose and settle the dispute. This has significant implications on the legitimacy of the process and a sense of complete control of the parties over the dispute and its resolution. The Court recommended the Government to examine the feasibility of setting up MAMA[3]. The Court also expresses a dire need to enact Indian Mediation Act as well. We believe our legal system does not just need mediation legislation, rather, the disputes should be seen holistically. Some other methods of Alternative Dispute Resolution (ADR) should also be considered and the Court should have pointed them out. Mostly, in this case, the Court has limited its direction and order to the suggestions of Mr. Arun Mohan. Also, there is no specialized training depending on the kind of dispute to be handled in the process of mediation.
However, there are several benefits of Mediation itself. We know that delay in the adjudication process has several impacts on the victim. The lengthy processes affect them physically, economically, and mentally too. One very important point dealt very well by the Hon’ble Court is that the ultimate payout does not reach the recipient completely.
In the judgment, the Court has emphasized more on the fast track disposal of the case. One thing worth pointing out is that the Motor Vehicles Act[4] is a beneficial legislation and as mentioned by the Petitioner Counsel, more than 90% of sufferers do not have access to justice. It shows that most people have been deprived of the benefits of beneficial legislation. It is somehow defeating the purpose of the Act. The Supreme Court may have considered this fact more strongly. Another is about the adequacy of compensation. Aggrieved parties should be provided with adequate compensation at the MACT level so that they need not require appealing to the Higher Courts for this very reason. In the instant case also, the appellant had to approach the Higher Courts for the enhancement of the quantity of compensation. There appears a lack of proper direction or order to fix this problem at the lower judiciary.

India has the largest number of road accidents in the world. MACT has a mountain of pending cases. So, the judgment is a landmark due to its significance. The use of mediation has been explored but not practiced with consistency. Mediation is a concept for dispute resolution that is less technical, quick, and cheaper in an accident claim case. Adequate compensation is essential for providing financial support to and for the rehabilitation of the victims and their dependents. Motor Vehicles Act is not only a penal statute but is also beneficial legislation and the judgment reflects this also. Definitely, this case will mark its impact in deciding the future cases also. The Supreme Court has tried to make the accident claim case journey easier. Judiciary must take such realistic moves in other cases also.

[1] Civil Appeal No. 2476-2477 of 2019
[2] Motor Accident Claims Tribunal
[3] Motor Accident Mediation Authority
[4] Act No. 59 of 1988