Continued employment does not bar compensation for diminished future earning capacity after retirement.

The claimant, Rakesh Surtan, aged 29 years, sustained grievous injuries in a motor accident on 15 July 2011, including fractures of both bones of the left leg, resulting in 16% permanent disability of the left lower limb.

He was employed as a Finance Manager and earned ₹21,000 per month at the time of the accident.

The Motor Accident Claims Tribunal awarded him ₹3,03,000 with interest at 9% per annum by award dated 7 June 2018.

The Insurance Company filed an appeal seeking recovery rights on the ground that the driver did not possess a valid driving licence, while the claimant filed a cross-appeal seeking enhancement, particularly compensation for loss of future earning capacity.

The Tribunal had declined to award loss of future income because the claimant continued in employment and was earning ₹36,000 per month during the proceedings.

The Court applied the principle of “just compensation” under Section 168 of the Motor Vehicles Act, requiring compensation to reflect the actual and prospective economic consequences of permanent disability.

Relying on Tata AIG General Insurance Co. Ltd. v. Dipanjan Ghosh, 2016 SCC OnLine Del 1528, it held that continued employment does not preclude compensation for future earning loss, particularly the loss likely to arise after retirement; such loss may be assessed by reference to the claimant’s income, future prospects, functional disability, and the multiplier applicable up to superannuation.

The Court also relied on Govind Singh Mauni v. Tej Bhan, 2026 SCC OnLine Del 527, and the principle in Ball v. William Hunts & Sons Ltd., (1912) AC 496, that diminished employability and reduced labour-market acceptability constitute compensable loss even where there is no immediate wage reduction.

The assessment of future prospects and multiplier was guided by National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, and Sarla Verma v. DTC, (2009) 6 SCC 121.

On the licence issue, the governing principle was that recovery rights could not be granted unless the alleged invalidity or breach was satisfactorily established through reliable evidence.

The Court rejected the Insurance Company’s claim for recovery rights because the evidence did not conclusively establish that the driver lacked a valid licence.

Although one transport official referred to irregularities in the original licence records, there was no specific written confirmation of invalidity; another senior transport officer stated that the licence had subsequently been renewed and that the driver’s record was maintained in the RTO’s computer system.

On enhancement, the Court held that the Tribunal’s reliance solely on the claimant’s continued employment and increased salary was legally insufficient.

Permanent disability may impair future employability, earning potential, or labour-market competitiveness, especially after retirement, even if there is no immediate loss of wages.

Applying that principle, the Court took the claimant’s monthly income as ₹21,000, added 40% towards future prospects, assessed functional disability at 10%, and applied a multiplier of 9, corresponding to the likely period until retirement.

The resulting loss of future earning capacity was ₹3,17,520, while the Court declined to enhance the non-pecuniary damages.

The claimant’s appeal was allowed to the extent that the compensation was enhanced from ₹3,03,000 to ₹6,20,520, comprising an enhancement of ₹3,17,520 for loss of future earning capacity, with interest at 9% per annum.

The enhanced amount was directed to be deposited before the Registrar General within six weeks and released to the claimant as a lump sum; any unreleased portion of the original award was also directed to be released with accrued interest.

Both appeals and pending applications were disposed of accordingly.