Continued employment does not bar compensation for future loss of earning capacity.

On 4 March 2004, the claimant, Jyotsnaben, was hit by a Yamaha motorcycle allegedly driven rashly and negligently by respondent No. 1 while she was proceeding towards a shop after parking her vehicle. She sustained grievous fracture injuries and underwent surgical treatment.

The Motor Accident Claims Tribunal, Auxiliary, Bhuj, partly allowed MACP No. 580 of 2004 and awarded ₹28,000 with interest at 7.5% per annum.

The claimant appealed against the award, challenging the quantum of compensation.

At the time of the accident, she was a Senior Clerk earning a gross monthly salary of ₹10,800. Her salary slip showed deductions of ₹100 towards income tax, ₹60 towards professional tax and ₹1,000 towards GPF.

She had 25% physical disability, and the parties had consented before the Tribunal to assess her functional disability at 12%.

The Tribunal had rejected future loss of income because her salary had not diminished after the accident.

Whether the claimant’s monthly income for computing compensation should be calculated after deducting only income tax and professional tax, while excluding the GPF contribution from the deductions?

Whether 30% future prospects should be added to the claimant’s income, having regard to her age of 49 years?

Whether the claimant was entitled to compensation for future loss of income despite continuing in employment and suffering no reduction in salary after the accident?

Whether the compensation awarded under actual loss of income, pain, shock and suffering, and special diet, attendant charges and transportation required enhancement?

The Court applied the principles governing computation of compensation under the Motor Vehicles Act, 1988.

Under Sarla Verma v. Delhi Transport Corporation, only income tax and professional tax are deductible from gross salary for determining income, whereas compulsory or contributory savings such as GPF are not to be deducted.

Relying on National Insurance Co. Ltd. v. Pranay Sethi and Sidram v. The Divisional Manager, United India Insurance Co. Ltd., the Court held that 30% may be added towards future prospects for a claimant aged 49 years.

Applying Soni Sharma v. Oriental Insurance Co. Ltd., the Court held that continuation in service or absence of an immediate reduction in salary does not by itself exclude compensation for loss of earning capacity or future loss of income; promotional and earning prospects may be assessed on reasonable probabilities.

Compensation must be just and proportionate to the established disability, income, treatment and consequential losses.

The Court reassessed the claimant’s income at ₹10,640 per month by deducting ₹160 towards income tax and professional tax from the gross salary of ₹10,800, while excluding the ₹1,000 GPF contribution in accordance with Sarla Verma.

Since the claimant was 49 years old, the Court added 30% towards future prospects, resulting in a monthly income of ₹13,832.

It accepted the 12% functional disability agreed before the Tribunal and applied a multiplier of 13.

Relying on Soni Sharma, the Court rejected the insurer’s argument that the claimant had suffered no future loss merely because her salary had increased after the accident. It reasoned that loss of earning capacity and career or promotional prospects may subsist despite continued employment.

Accordingly, it awarded ₹2,58,935 for future loss of income, calculated as ₹13,832 × 12% × 12 × 13.

The Court further enhanced compensation for pain, shock and suffering from ₹7,500 to ₹15,000, and for special diet, attendant charges and transportation from ₹6,000 to ₹15,000, considering the grievous fractures, surgery, hospitalisation and subsequent treatment.

Actual loss of income was enhanced to ₹21,280 for two months, calculated at ₹10,640 per month.

The medical-expense award of ₹5,000 was left undisturbed.

The claimant’s total compensation was enhanced from ₹28,000 to ₹3,15,215, comprising ₹2,58,935 for future loss of income, ₹21,280 for actual loss of income, ₹5,000 for medical expenses, ₹15,000 for pain, shock and suffering, and ₹15,000 for special diet, attendant charges and transportation.

The claimant was therefore granted additional compensation of ₹2,87,215 with interest at 7.5% per annum from the date of filing of the claim petition until realization.

The insurance company was directed to deposit the additional amount with interest within six weeks, after which the Tribunal was directed to disburse the compensation subject to verification and deduction of any deficit court fee.