HC orders monthly payment of compensation to accident victim

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hcAwarding a fixed compensation for future medical expenses of accident victims can be avoided in extreme cases where the victim is completely incapacitated, the Bombay High Court said while directing monthly financial aide to a woman rendered quadriplegic after a road accident.

A division bench of Justices A S Oka and G S Patel held that instead of awarding a lump sum amount towards future medical expenses, a monthly amount can be fixed in serious cases where the victim’s longevity is unknown.

The bench was recently hearing an appeal filed by New India Assurance Ltd challenging compensation of Rs. 36,86,000 awarded to 39-year-old Shruti Panchal by the Motor Accidents Tribunal (MACT) in October 2011.

While the tribunal had awarded Shruti a total compensation of Rs. 76,57,000, the insurance company was only challenging Rs. 36,86,000 of this amount which was awarded for future medical expenses and money borrowed by her family.

In May 2003, the victim and her family members, who were travelling in a Tata Sumo to Goa, met with a road accident near Ratnagiri. Shruti was severely injured and the accident rendered her paralysed from chest to foot. According to doctors her condition is unlikely to improve.

The insurance company in its appeal said that it was ready to deposit Rs. 20,000 each month in the victim’s account for her medical expenses till she is alive.

The High Court while accepting this suggestion said, “Given the victim’s condition, her longevity is unknown. Awarding a fixed sum at this stage may not ensure to her benefit over an extended period of time. Adoption of such a course of payment (as suggested by the insurer) is proper in cases that lie in the extremity where the claimant is wholly incapacitated and suffers from a 100 per cent disability.”

The High Court reduced the total compensation awarded to Shruti to Rs. 41,86,000. In addition to this amount, the insurer shall make a deposit of Rs. 44 lakh with the MACT which in turn shall invest the amount in a fixed deposit at an interest rate of not below 8 per cent per annum.

“The entire interest amount shall be credited to the victim’s account on a monthly basis towards her medical expenses. This arrangement shall continue during her lifetime. On her demise, the entire principal amount shall be returned to the insurer,” the court ordered.