Accident-caused premature retirement entitles claimants to future-earnings compensation based on 50% of salary.

On 8 November 2000, the claimant-appellant was travelling as a pillion rider on a scooter when a motorcycle driven by Respondent No. 1 allegedly collided with the scooter from behind in a rash and negligent manner.

The appellant suffered a fracture of the shaft of the right femur and underwent treatment at several military hospitals, including surgery at the Command Hospital, Calcutta.

The appellant, who was serving in the Indian Army, was prematurely retired on medical grounds due to the disability arising from the fracture, after completing approximately 17 years of service; the relevant certificate was marked as Ext. 15.

The Motor Accident Claims Tribunal, Kalahandi, awarded total compensation of ₹2,08,100 with interest at 7% per annum, including ₹19,100 towards loss of earning for the remaining seven years of service.

The Tribunal calculated the loss by treating the claimant’s salary as ₹9,227 per month and deducting an assumed pension of ₹9,000 per month.

The claimant filed the present appeal under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement, principally on the ground that the loss of future earning capacity had been incorrectly assessed.

Whether the Tribunal erred in assessing the claimant’s loss of future earnings by deducting an assumed pension of ₹9,000 per month from his pre-accident salary of ₹9,227 per month, without supporting evidence?

Whether the claimant was entitled to enhanced compensation for the remaining seven years of service on account of his premature medical retirement caused by the accident-related disability?

What further compensation and interest should be awarded to the claimant?

The appeal was governed by Section 173 of the Motor Vehicles Act, 1988, which permits an aggrieved party to challenge an award of the Motor Accident Claims Tribunal.

The applicable compensation principle is that an injured claimant is entitled to damages for proved loss of future earning capacity resulting from accident-related disability, including the financial consequences of premature retirement.

The Court further applied the principle that any deduction on account of pensionary benefits must be supported by evidence and cannot be based on an unproved or arbitrary assumption.

In assessing the loss, the Court considered that the claimant would, at most, have received pension equivalent to approximately 50% of his last salary and therefore suffered a corresponding loss of 50% of his monthly salary for the remaining seven years of service.

The Court accepted Ext. 15 as demonstrating that the claimant’s premature retirement was attributable to the permanent disability caused by the fracture sustained in the accident.

It held that the Tribunal’s deduction of ₹9,000 per month towards pension was unsupported because the insurer had produced no evidence establishing either the claimant’s entitlement to or actual receipt of pension in that amount.

Since the claimant’s established salary was ₹9,227 per month, the Court considered that the Tribunal should not have treated the pension as nearly equal to the salary.

Applying the general approach that pension would be approximately 50% of the last salary, the Court found that the claimant had suffered a loss of 50% of his monthly salary for the seven years of service remaining at the time of premature retirement.

Although the judgment records a mathematical computation that is internally inconsistent, the parties ultimately agreed that a consolidated enhancement of ₹5,00,000, together with ₹50,000 towards interest, would be acceptable.

By consent of the parties, the insurer was directed to deposit a further consolidated sum of ₹5,50,000, comprising ₹5,00,000 towards enhanced compensation and ₹50,000 towards interest, within eight weeks before the Tribunal.

The amount was directed to be disbursed to the claimant in accordance with the Tribunal’s award.

The appeal was accordingly disposed of.