M.R. KRISHNA MURTHI versus THE NEW INDIA ASSURANCE CO. LTD. & OTHERS

23. From the conjoint reading of the aforesaid judgments, inter alia, following principles can be culled out which would be relevant for deciding the instant appeal: (i) In those cases where the victim of the accident is not an earning person but a student, while assessing the compensation for loss of future earning, the focus of the examination would be the career prospect and the likely earning of such a person in future. For example, where the claimant is pursuing a particular professional course, the poseer would be: what would have been his income had he joined a service commensurating with the said course. That can be the future earning. (ii) There may be cases where the victim is not, at that stage, doing any such course to get a particular job. He or she may be studying in a school. In such a case, future career would depend upon multiple factors like the family background, choice/interest of the complainant to pursue a particular career, facilities available to him/her for adopting such a career, the favourable surrounding circumstances to see which would have enabled the claimant to successfully pick up the said career etc. M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.] If the chosen field is employment, then the future earning can be taken on the basis of salary and allowances which are payable for such calling. In case, career is a particular profession, the future earning would depend on host of other factors on the basis of which chances to achieve success in such a profession can be ascertained. (iii) There may be cases like Deo Patodi where even a student, the claimant would have made earnings on part-time basis or would have received offer for a particular job. In such cases, these factors would also assume relevance. (iv) After ascertaining the likely earning of the victim in the aforesaid manner, the nature of injuries and disability suffered as a result thereof would be kept in mind while determining as to how much earning has been affected thereby. Here, impact of injuries on functional disability is to be seen. In case of death of victim, it would result in total loss of earning. In the case of injuries, the nature of disability becomes important. Such an exercise was undertaken in N. Manjegowda case.

24. The relevant factors which are brought on record by the learned senior counsel for the appellant are these: the appellant belongs to a family of lawyers as both his parents were senior lawyers practicing in the Supreme Court. Because of his family background, the appellant also wanted to join legal profession, even though at the time of accident, he was studying in school. Having regard to affluent family background, the appellant at the time of accident was studying in prestigious Modern School, Barakhamba Road, New Delhi. All these circumstances clearly indicated that the appellant had a bright future and, therefore, his future earnings could not be considered without keeping in view the aforesaid factors. The appellant also produced evidence in respect of his disability. This disability does not indicate much loss of prospects in earning as it is similar to N. Manjegowda case. Of course, his movements are restricted and he needs a Driver as he is not in a position to drive the car himself. This would hinder the earning capacity to some extent, though not significant extent.

25. From the judgment of the MACT, we find that, on this aspect, it has followed judgment of Arun Sondhi v. Delhi Transport Corporation, (2001) ACJ 1779 and has awarded the compensation at Rs.4,08,000/-. It has also added Rs.75,000/- on account of 40% permanent disability on the ground that apart from resulting in loss of income, it has severe impact on the life of the appellant as a whole. The figure of Rs.4,08,000/- is calculated in the following manner: “42. Learned counsel for petitioner has argued at length that a substantial amount of compensation is required to be awarded to the petitioner on account of loss of earning capacity in future. It has been stated that on account of injuries suffered in the accident the income of the petitioner has reduced to 60% of what he could have earned otherwise. I consider that this argument raised by learned counsel for the petitioner cannot be accepted. The petitioner was student at the time of accident. He started his career after around 5 years of accident. I do not say that the injuries did not have an adverse impact on the petitioner, but to quantify the same in the manner claimed by the petitioner may not be just. In this regard, I consider that the guidance can be taken from the case of Arun Sondhi v. Delhi Transport Corporation, 2001 ACJ 1779. In this case, the injured was a student of 21 years and he had suffered disability of 100%. In L.P.A. the loss of future earning was assessed at Rs.5000/- p.m. and after adopting multiplier of 16 compensation of Rs.10,80,000/ – was allowed. If the same principle is adopted and future earning is taken at Rs.5000/- p.m. and the disability of 40%, the monthly loss of income comes to Rs.2000/- p.m. or Rs.24,000/- p.a. It is a settled proposition that in the case of permanent disability the multiplier is to be adopted according to the age at the time of trial. In this case adopting this principle if the multiplier of 17 is adopted the compensation on account of loss of future income comes to Rs.24,000/- x 17 = Rs.4,08,000/-.”

26. As can be seen from the above, loss of future earning is assessed at Rs.2,000/- per month or Rs.24,000/- per annum. In the process, the MACT has not considered future prospects having regard to the relevant facts pointed out above which should have been taken into consideration. At the same time, it is the functional disability which has to be kept in mind. Though, not very seriously, the functional capacity has been impaired because of the disability suffered by the appellant as the appellant cannot run around like other young advocates of his age. Going by the overall circumstances, we are of the opinion that in case of M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.] the appellant, loss of future earning can be fixed at Rs.5,000/- per month i.e. Rs.60,000/- per annum on which multiplier of 18 is to be applied. Calculated in this manner, the loss future earning comes to Rs.10,80,000/-. The appellant, thus, would be paid another sum of Rs.6,54,000/- under this head along with interest as awarded by the Court below. We may place on record the statement of Mr. Arun Mohan that the appellant has volunteered to give this amount to any Government or public charitable organisation working towards road safety. We appreciate this gesture of the appellant. We leave it to the appellant to donate the amount to any particular organisation of his choice. Alternatively, it can also be given for MAMC project by the appellant. Choice would entirely be that the appellant. (II) With this, we advert to the second proposition advanced by Mr. Arun Mohan. At the outset, we would like to point out that this aspect pertains to the reforms that can be brought insofar as payment of compensation to the victims of road accidents is concerned. We would also like to commend the suggestions given by Mr. Arun Mohan to bring about such reforms which are visionary in nature. The two aspects which he has highlighted are taken up for discussion in seriatim. (A) ROAD SAFETY AND COMPENSATION:

27. Focus here is to ensure access to justice for road accident victims and also to bring about a mechanism which prevents delays and other obstacles in awarding compensation to road accident victims. The suggestion of Mr. Arun Mohan for establishing a MAMA in every District is worthy of acceptance. Whatever steps are taken by the authorities for reducing road accidents, harsh reality is that accidents would keep on happening. There may be a possibility of reducing the number of road accidents, but occurrence thereof cannot be totally eliminated. Such accidents, particularly fatal accidents, would always lead to filing of claims by the victims and/or kith and kin of victims, for compensation. Fatal accidents also trigger prosecution of the driver who was negligent and rash in driving which caused the accident. Insofar as disputes regarding claims are concerned, there is a need to resolve the same at the earliest inasmuch as compensation money may be badly needed by the claimants for so many reasons and delay may bring insurmountable sufferings of various kind. Having regard to the fact that large number of accidents are giving rise to phenomenal quantum jump in such cases, methods need to be adopted for quick resolution. Here, mediation as a concept of dispute resolution, even before dispute becomes part of adversarial adjudicatory process, would be of great significance. Advantages of mediation are manifold. This stands recognised by the Legislature as well as policy makers and need no elaboration. Mediation is here to stay. It is here to evolve. It is because of the advantages of mediation as a method here to find new grounds. It is here to prosper, as its time has come. It is now finding statutory recognition and has been introduced in few Statutes as well. Examples are the Companies Act, Insolvency and Bankruptcy Code, Commercial Courts Act etc. In these enactments provisions are made even for pre-litigation mediation by making this process mandatory. There is, in any case, umbrella provisions in the form of Section 89 of the Code of Civil Procedure which, inter alia, provides for court annexed mediation as well. Time is ripe now to have similar mechanism for settling accident claims as well. Therefore, the suggestion of establishing MAMA is laudable. We recommend to the Government to examine the feasibility of setting up MAMA by making necessary amendments in the Motor Vehicles Act itself. In fact, the way mediation movement is catching up in this country, there is a dire need to enact Indian Mediation Act as well.

28. Till the time such an amendment is made by the Parliament, National Legal Services Authority (NALSA) should take up this work as a project. A complete report/module be made about the functioning of Motor Accident Mediation Cell (MAMC). This exercise be completed within a period of two months. Thereafter, this project can be shared with all State Legal Services Authorities (SLSA) so that State Legal Services Authorities implement the same through their respective District Legal Services Authorities (DLSAs).

29. There is Mediation and Conciliation Project Committee (MCPC) in the Supreme Court which takes various policy decisions for better working of mediation, including court annexed mediation. Broadening the structure of MCPC, so as to have proper coordination with High Court Mediation Centers as well as Mediation Centers at District Court Level is achieved. Thus, NALSA can even consider entrusting the project of MAMC to MCPC as well. M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.]

30. In a book titled ‘Road Accidents: Prevention, Attention and Compensation’, authored by Mr. Arun Mohan, Senior Advocate various aspects pertaining to access to justice to road victims are deliberated upon. There is a specific chapter on the establishment of MAMA which can be of immense help to the NALSA for preparing and finalizing the project. NALSA would be well-advised to take into consideration the suggestions and proposals given in that book. It may, inter alia, make a provision for the accident investigator to compulsorily send a copy of report to MAMC or email to National Road Safety Council. Forwarding the copy to MAMC shall facilitate mediation, on the other hand giving information to National Road Safety Council would help the council to take measures for preventing such accidents in future. (B) FAST TRACKING DISPOSAL OF CASES BY MACTs:

31. Establishment of MAMA/MAMC is for the purpose of resolving the claims before the case is filed in the MACT. It is a matter of common knowledge that for amicable settlement of the cases pending before MACT, ADR in the form of Lok Adalat is resorted to, which has achieved tremendous success over a period of time. These Lok Adalats are also organised by the Legal Services Authorities. Settlement of cases by Lok Adalats have their own pros and cons. Be as it may, resort to Lok Adalat should continue because of its own advantages.

32. Notwithstanding, the aforesaid ADR methods, adjudicatory process before the MACTs is indispensable. There cannot be a guarantee that 100% cases would be settled through mediation or Lok Adalat. Therefore, there is a dire need for deciding these cases without delays and within reasonable period. The Delhi High Court has given few judgments providing for mechanism to speed up the disposal of such cases and to ensure that schemes are settled within a period of 90/120 days from the date of accident. In nutshell, these directions include that on the occurrence of accident, the police which comes into the picture in the first instance, should complete the investigation and along with filing of FIR before the concerned Court of Metropolitan Magistrate, copies are sent to MACT as well as Insurance Company also. Insurance Company is supposed to look into the same to find out as to whether the claim is payable and within 30 days it should respond to MACT and once all these documents are before the MACT in the form of evidence etc. as well it would enable the MACT to decide the case within 30 days. The case where entire procedure is articulated is judgment dated 16th December, 2009 in FAO No. 843 of 2003. This Court has also given its imprimatur in Jaiprakash v. National Insurance Company (SLP(Civil) No. 11801-11804 of 2005) in its order dated 13th May, 2016 in the following manner: “Insofar as the said suggestion is concerned, learned Solicitor General drew our attention to the response filed before us on behalf of the General Insurance Council, in particular paragraph 4, which states that presently the procedure suggested in Paragraph 23 is being followed by the Insurance Companies in Delhi by way of a Scheme called “Claims Tribunal Agreed Procedure” which was formulated by the Delhi High Court in the judgment dated 16.12.2009 passed in FAO No.843 of 2003 in Rajesh Tyagi & Ors. v. Jaibir Singh 3 & Ors. It is also mentioned therein that Tribunal as well as the Legal Service Authority are taking effective steps to implement the said procedure, which is being carried out in the National Capital Territory of Delhi. In paragraph 5, it is further submitted that since this procedure has been successful in Delhi it can be extended on pan India basis. The agreed procedure has also been filed as Annexure R5 with the response filed on behalf of the General Insurance Council. “We have also perused the procedure, which has been placed before us as Annexure R5 with the response which, in our view, appears to be a comprehensive one and that we can issue further directions to the Registrar General of the Delhi High Court to ensure that procedure is strictly followed insofar as Delhi is concerned and also circulate the said procedure to all the other High Courts and the Registrar General of all the other High Courts are directed to ensure that the said procedure is implemented through the Motor Accidents Claims Tribunals in coordination with the Legal Service Authorities as well as the Director General of Police of the States concerned. The Registry of the Supreme Court is directed to forward a copy of this order along with Annexure R5 (pages 32 to 46 in the response filed on behalf of the General Insurance Council) to all the High Courts including the Delhi High Court to ensure compliance of the present order.” M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.]

33. Vide order dated 6th November, 2017 in Jaiprakash case, this Court modified its order dated 13th May, 2016 and directed all States to implement the Modified Claims Tribunal Agreed Procedure formulated by Delhi High Court on 12th December, 2014. The copy of the Modified Claims Tribunal Agreed Procedure was directed to be circulated to the Registrar General of each High Court for necessary compliance. The relevant part of the said order is reproduced hereunder: “It is also pointed out by learned amicus curiae that the order passed by Justice Midha referred to in our order of 13th May, 2016 was actually modified by Justice Midha on 12th December, 2014. The order dated 13th May, 2016 will, therefore, stand modified to the extent that Justice Midha has himself modified his earlier order on 12th December, 2014. The Registry will send a copy of this order as well as the order passed by Justice Midha on 12th December, 2014 to the Registrar General of each High Court for necessary information and compliance.”

34. This needs to be followed at All India Level. NALSA should take up and monitor the same as well in coordination and cooperation with various high courts to facilitate the same. (C) Ensuring receipt of compensation in the safe hands of victims and/or kiths and kins of victims:

35. Mr. Arun Mohan has suggested that Government may frame procedures and schemes in this behalf. In particular LIC/RBI can provide for availability of annuity services in consultation with Pension Fund Regulatory and Development Authority and the commercial banks/ insurance companies. To facilitate the same, the learned senior counsel has given two flowcharts, one under the existing law and the other on establishment of MAMA. The details for framing such procedure and schemes are given in the book of Mr. Arun Mohan referred to above. We impress upon the Government to look into the feasibility of framing such schemes and for the availability of annuity certificates. This exercise may be done within the period of six months and decision be taken thereupon.

36. In addition, we would also like to mention that the Delhi High Court (speaking through J.R. Midha, J.) in Rajesh Tyagi v. Jaiveer Singh and Others (FAO No. 842 of 2003) undertook the exercise of framing Motor Accident Claims Annuity Deposit Scheme (MACAD Scheme) in cooperation with Indian Banks Association. Purpose of involving the banks was to ensure that the Scheme is implemented through the banks. In its order dated 7th December, 2018 passed in the aforesaid case, the learned Judge recorded that 21 banks had taken decision to implement MACAD Scheme which was approved by the Court on 1st May, 2018. Operative documents of these 21 banks were taken on record. The court directed that sets of these operative documents be furnished to the Registrar General of the High Court so that these are circulated to all the MACTs. Further, directions for implementation of the said Scheme are given. Therefore, we would like to reproduce order dated 7th December, 2018 in its entirety. “1. Mr. Lalit Bhasin, learned counsel for Indian Bank Association has handed over copies of the operative documents of 21 Banks which have implemented Motor Accident Claims Annuity Deposit Scheme (MACAD Scheme) approved by this Court on 01st May, 2018. The compilations of the operative documents of 21 banks are taken on record. Learned counsel for the Indian Bank Association shall furnish the sets of the operative documents to the Registrar General for being circulated to all the Claims Tribunals. 2. The Registrar General is directed to circulate the aforesaid compilation to all the Claims Tribunals for being implemented forthwith. The Claims Tribunals shall disburse the awarded amount to the claimants in a phased manner in terms of the order dated 01st May, 2018 and the award amount be disbursed through MACAD Scheme. 3. All the Banks are directed to appoint a Nodal Officer within four weeks. Learned counsel for the IBA shall compile the list of all the Nodal Officers of the Banks with their respective addresses, phone numbers as well as e-mail addresses and submit the same to the Registrar General who shall circulate the list of Nodal Officers to all the Claims Tribunals. The Nodal Officer of each Bank shall ensure the implementation of the MACAD Scheme by their branches. The Claims Tribunal shall send the copy of the disbursement order by e-mail to the Nodal Officer of that Bank who shall ensure the disbursement by M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.] the Bank within three weeks of the receipt of the e-mail. 4. The Indian Bank Association and Delhi State Legal Services Authority shall give adequate publicity to MACAD Scheme in the print as well as digital media. 5. Claims Tribunal Agreed Procedure in terms of the order dated 15th December, 2017 is further modified to incorporate the directions contained in orders dated 18th January, 2018, 09th March, 2018, 01st May, 2018, 20th July, 2018 and 07th September, 2018. The Modified Claims Tribunal Agreed Procedure is annexed to this order. 6. The Registrar General shall circulate the Modified Claims Tribunal Agreed Procedure to all the Claims Tribunals. The Claims Tribunals, Delhi Police and Insurance Companies are directed to implement the Modified Claims Tribunal Agreed Procedure with effect from 01st January, 2019. 7. Learned amicus curiae submits that the Committee is deliberating upon the issues referred to it by this Court. Let the final report of the Committee be submitted before this Court on the next date of hearing. 8. List for reporting compliance on 08th February, 2019 at 02:30 P.M. 9. This Court appreciates the assistance rendered by Mr. Lalit Bhasin, learned counsel for Indian Bank Association for implementation of MACAD Scheme. 10. Copy of this order along with Modified Claims Tribunal Agreed Procedure be sent to the Registrar General of this Court, National Legal Services Authority (NALSA), Delhi State Legal Services Authority (DSLSA), Delhi Police as well as General Insurance Council (5th Floor, Building No.14, National Insurance Building, Jamshedji Tata Road, Churchgate, Mumbai-400020). General Insurance Council shall circulate this order to all the Insurance Companies. 11. Copy of this order be given dasti to learned counsel for the parties as well as learned counsel for IBA and Delhi Police under signature of Court Master.”

37. Thus, direction for implementation of the ‘Claims Tribunal Agreed Procedure’ which is substituted by modified procedure, as noted above, are already there. However, we find that there is no proper implementation thereof by the Claims Tribunals. We, thus, direct that there should be programmes from time to time, in all State Judicial Academies to sensitizing the presiding officers of the Claims Tribunals, Senior Police Officers of the State Police as well as Insurance Company for the implementation of the said Procedure.

38. The Modified Claims Tribunal Agreed Procedure as approved by High Court of Delhi in its aforesaid order dated 7th December, 2018 has the propensity to ensure speedy disposal of MACT cases. Likewise, Operative Documents of 21 documents which have implemented Annuity Deposit Scheme can ensure that compensation is delivered to the persons for whom it is meant. It has the element of annuity payments as well. There is, therefore, a need to implement the MACAD Scheme by the Claims Tribunals in the entire country. We direct accordingly. We also direct 21 banks to implement its operative documents on All India basis.

39. We sum up the various directions/recommendations hereinbelow: (a) We impress upon the Government to also consider the feasibility of enacting Indian Mediation Act to take care of various aspects of mediation in general. (b) The Government may examine the feasibility of setting up MAMA by making necessary amendments in the Motor Vehicles Act. For this purpose, it can consider the two flow charts given by the appellant. (c) In the interregnum, NALSA is directed to set up Motor Accident Mediation Cell which can function independently under the aegis of NALSA or can be handed over to MCPC. Such a project should be prepared within a period of two months and it should start functioning immediately thereafter at various levels as suggested in this judgment. We reiterate the directions contained in order dated November 6, 2017 in Jai Prakash case for implementation of the latest Modified Claims Tribunal Agreed Procedure. For ensuring such implementation, NALSA is directed to take up the same in coordination and cooperation with various High Courts. MACAD Scheme shall be implemented by all Claim Tribunals on All India basis. 21 Banks, Members of Indian Banks Assocation, who had taken decision to implement MACAD Scheme would do the same on All India basis. (d) We impress upon the Government to look into the feasibility of framing necessary schemes and for the availability of annuity certificates. M.R. KRISHNA MURTHI v. THE NEW INDIA ASSURANCE CO. LTD. & OTHERS [A. K. SIKRI, J.] This exercise may be done within the period of six months and decision be taken thereupon. (e) Likewise, we direct that there should be programmes from time to time, in all State Judicial Academies, to sensitizing the Presiding Officers of the Claims Tribunals, Senior Police Officers of the State Police as well as Insurance Company for the implementation of the said Procedure. The appeals are disposed of in the aforesaid manner. Nidhi Jain Appeals disposed of.