Can’t Apply Parameters Of Workmen’s Compensation Act For Fixing Income When Compensation Is Fixed By Tribunal Under Motor Vehicles Act: Supreme Court

The appeal before the Apex Court preferred by the original claimant was directed against the judgment of the Karnataka High Court whereby the High Court allowed in part the appeal of the insurance company, reducing the amount of compensation, and giving consequential directions.

The Division Bench of Justice K. Vinod Chandran and Justice N.V. Anjaria held, “It was not permissible in law for the High Court to apply the parameters under Workmen’s Compensation Act, 1923 regarding fixing of income when the compensation was assessed and fixed by the Tribunal in a claim petition under Section 166 of the M.V. Act by applying principles under the said Act.”

Advocate Shekhar G Devasa represented the Appellant, while Advocate Salil Paul represented the Respondent.

Factual Background

The appellant-claimant suffered serious injuries in the vehicular accident which took place in the year 2015. He was a loader in a lorry. The lorry, driven at a high speed and in a negligent manner, dashed with an unknown ongoing vehicle. The appellant sustained injuries in the right leg and his leg was required to be amputated below the knee. A claim petition under Section 166 of the Motor Vehicles Act, 1988 came to be filed before the Motor Accident Claims Tribunal (Tribunal) seeking compensation of Rs 35 lakh.

While assessing the compensation for the 23-year-old injured appellant, the Tribunal took the monthly income of the appellant-claimant to be Rs 9,000 at the time of the accident. However, the claimant asserted his monthly wages to be Rs.15,600. The Tribunal took the disability for the whole body to be 85% and awarded a final compensation totalling Rs.19,35,400. The High Court reduced the compensation and held that, since under the Workmen’s Compensation Act, 1923, the maximum income that could be considered is Rs 8,000, the said figure should have been adopted towards the income of the injured appellant.

Reasoning

The Bench was of the view that the Tribunal, having determined the compensation on that basis, the High Court misdirected itself in applying the criteria under the provisions of the Workmen’s Compensation Act, 1923, to take the view that the income of the appellant-claimant was liable to be considered at Rs 8,000. The High Court consequently reduced the compensation.

The Bench further held that the issue at hand stood answered in National Insurance Company Limited vs. Mastan (2017) wherein it was held that once the remedy under the Motor Vehicles Act, 1988 was elected to be pursued by the claimant and the Tribunal adjudicated the compensation by applying the criteria and fixing the income, falling back upon the parameters under the Workmen’s Compensation Act, was not permissible. The insurer could not have raised such a defence seeking to apply the provisions of the Workmen’s Compensation Act. Both remedies are different, the Bench affirmed.

“In the aforesaid view, the reasons supplied by the High Court in paragraph 10 and consequential reduction in the compensation could not be permitted to stand. The compensation awarded by the Tribunal on the basis of income of Rs.9,000/-has to be restored”, it asserted.

Thus, allowing the appeal, the Bench set aside the judgment of the High Court and restored the Tribunal’s award.

Cause Title: Mohammed Masood v. The New India Assurance Co. Ltd. (Neutral Citation: 2025 INSC 1179)

Appearance

Appellant: Advocates Shekhar G Devasa, Manish Tiwari, Thashmitha Muthanna, Shashi Bhushan Nagar, M/S. Devasa & Co.

Respondent: Advocates Salil Paul, Sahil Paul, AOR Manjeet Chawla, Advocates Sandeep Dayal, Kiran Bala Agarwal, AOR Lzafeer Ahmad B. F., Advocates Imtiaz Bantwal, Sachin Dubey, Shubham Arun

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