Contractor’s Crash Compensation Cut To ₹2.76 Lakh As Karnataka HC Finds Backbone-Fracture Link And Neuro-Disability Unproven

The claimant sought compensation under Section 166 of the Motor Vehicles Act, 1988, alleging that a car hit him while he was standing beside his motorcycle on 20 October 2013.

The Tribunal found the driver negligent, awarded ₹6,40,781 with interest at 6% per annum against the driver, owner and insurer, and dismissed the claim against the previous owner.

The insurer appealed, disputing the vehicle’s involvement and the assessment of disability and compensation; the claimant filed a cross-objection seeking enhancement.

The High Court considered the insurer’s liability and the quantum of compensation.

The claim arose under Section 166 of the Motor Vehicles Act, 1988, while the insurer’s appeal was brought under Section 173(1) of that Act and the claimant’s cross-objection under Order XLI Rule 22 of the Code of Civil Procedure.

In assessing compensation, the Court considered the evidence of income, the claimant’s functional loss of earning capacity, and the causal connection between the accident and the alleged injuries and disability.

The Court rejected the insurer’s false-implication argument: the complaint was lodged within two hours of the accident, and the difference in the car’s description did not establish that the insured vehicle had been falsely implicated. The insurance endorsement showed transfer of the policy to the vehicle’s subsequent owner.

On quantum, the contracts produced by the claimant supported his work as a contractor but did not establish the full contract value as personal income; the Court assessed monthly income at ₹14,000.

It found the alleged backbone fracture and psychoneurological disability insufficiently connected to the accident, noting the absence of those findings in the discharge summary and of supporting psychological tests. It therefore reduced functional disability from 13% to 5% and calculated future loss of income at ₹1,34,400, applying a multiplier of 16.

It made no further adjustment to the other compensation heads.

It dismissed the claimant’s cross-objection, partly allowed the insurer’s appeal, and reduced total compensation from ₹6,40,781 to ₹2,75,981, with interest at 6% per annum from the date of the claim until deposit.

The insurer was directed to deposit the balance within six weeks; the deposited amount was to be transmitted to the Tribunal and the full compensation released to the claimant.