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

“Justice Delayed is Justice Denied”

– William Ewart Gladstone

The above quoted maxim emphasises 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 judgement and try 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 judgement. The case being dealt
with is M.R. Krishna Murthi vs The New India Assurance Co. Ltd 1 and was decided by
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 permanent disability of
40%, as per the disability certificate issued in 2005 by the District Government Hospital.
Then the appellant filed an application before MACT2 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.

Reasoning:

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Civil Appeal No. 2476-2477 of 2019

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Motor Accident Claims Tribunal
While deciding this case, 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 into 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 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.

Analysis:

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 of mediation for dispute resolution. This approach of
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 settlement, but creates an atmosphere which 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 Government to examine the feasibility of setting up MAMA3. 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 specialised training
depending on the kind of dispute to be handled in process of mediation.

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Motor Accident Mediation Authority
However, there are several benefits of Mediation itself. We know that delay in adjudication
process have 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 judgement, the Court has emphasised 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% sufferers do not have access to justice.
It shows that most people have been deprived of the benefits of a beneficial legislation. It is
somehow defeating the purpose of the Act. 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 lack of proper direction or order to fix this problem at the lower judiciary.

Conclusion:

India has the largest number of road accidents in the world. MACT has a mountain of
pending cases. So, the judgement is landmark due to its significance. Use of mediation has
been explored but not practiced with consistency. Mediation as a concept for dispute
resolution 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 a
beneficial legislation and the judgement reflects this also. Definitely, this case will mark its
impact in deciding the future cases also. Supreme Court has tried to make the accident claim
case journey easier. Judiciary must take such realistic moves in other cases also.

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Act No. 59 of 1988