High Court May Not Apply Workmen’s Compensation Parameters in Motor Accident Claim; Tribunal Award Restored

A bench of Justice K. Vinod Chandran and Justice N.V. Anjaria heard an appeal by the original claimant against the Karnataka High Court’s order which had partly allowed an insurer’s challenge and reduced the compensation awarded by the Motor Accident Claims Tribunal. The principal issues before the Supreme Court were whether the High Court could apply parameters under the Workmen’s Compensation Act, 1923 to reassess the claimant’s income when the Tribunal had fixed income under Section 166 of the Motor Vehicles Act, 1988, and whether future prospects ought to have been added.

The Court allowed the appeal, set aside the High Court’s judgment of 23 January 2020 and restored the Tribunal’s award. The bench held that once a claimant elected the remedy under the Motor Vehicles Act and the Tribunal adjudicated compensation by fixing income, the High Court could not fall back on the Workmen’s Compensation Act to reduce the award. The Court, in its reasoning, observed: The judgment also recorded that "it was not permissible in law for the High Court to apply the parameters under the Workmen’s Compensation Act, 1923" and concluded that "the compensation awarded by the Tribunal on the basis of income of Rs.9,000/- has to be restored." The Court declined to entertain the claimant’s separate plea for addition of future prospects because the claimant had not appealed against the Tribunal’s judgment; the insurer alone had approached the High Court.

Background The dispute arose from a road accident on 1 December 2015 in which the appellant, then aged about 23 and employed as a loader in a lorry, suffered severe injuries requiring amputation below the right knee. The claimant’s medical evidence recorded 70% disability of the left lower limb and the Tribunal assessed whole body disability at 85%. The claimant asserted monthly wages of Rs.15,600; the Tribunal accepted a monthly income of Rs.9,000 and, applying a multiplier of 18, awarded Rs.19,35,400 under various heads including future loss of income, pain and suffering, and future medical treatment.

The New India Assurance Co. appealed to the Karnataka High Court which reduced the monthly income to Rs.8,000 by reference to the Workmen’s Compensation Act and applied a 60% factor for injury, thereby reducing the award to Rs.10,41,022. The Supreme Court found that this approach conflicted with this Court’s earlier decision in National Insurance Co. Ltd. v. Mastan & Anr., which explained that Section 167 of the Motor Vehicles Act gave the claimant an exclusive option to proceed under either the MV Act or the Workmen’s Compensation Act but not both. Following that precedent, the Supreme Court held that the High Court erred in substituting the Tribunal’s finding on income with criteria from the Workmen’s Compensation Act. Accordingly, the High Court’s order was set aside and the Tribunal’s award of Rs.19,35,400 was restored. No interim directions were recorded; the appeal was allowed. The Court did not adjudicate the claimant’s contention on future prospects because it was not contested before the Tribunal by way of appeal.

Case No.: Civil Appeal No.12567/2024 Case Title: MOHAMMED MASOOD v. THE NEW INDIA ASSURANCE CO. LTD. & ANR. Appearances: For the Petitioner(s): Counsel not indicated in the judgment For the Respondent(s): Counsel not indicated in the judgment