Future earning potential of professional students must reflect career prospects, not limited to minimum wages.

On May 28, 2000, Karan Pal Singh, a 22-year-old third-year Mechanical Engineering student with a diploma in Plastic Engineering and AutoCAD certification, died following a motor accident caused by a rashly driven truck insured by Respondent No. 3.

The Motor Accident Claims Tribunal (MACT) assessed his notional income at ₹3,000 per month, applied a multiplier of 11, and awarded ₹2,23,000.

On appeal, the High Court of Punjab and Haryana enhanced the notional income to ₹6,000 per month and applied a multiplier of 18, totaling ₹13,44,000, but denied "future prospects" and "personal expense deductions" citing the income as notional.

The mother (substituted by her daughter as L.R.) appealed to the Supreme Court seeking a higher assessment of income and inclusion of future prospects.

1. Whether the notional income of a meritorious engineering student should be equated to that of an unskilled worker or fixed at a higher standard reflecting professional potential.

2. Whether future prospects and deductions for personal expenses are applicable when the income of the deceased is determined on a notional basis.

3. Whether the compensation awarded under conventional heads and property damage was just and reasonable.

The Court applied the principles of "just and reasonable compensation" under the Motor Vehicles Act, 1988.

It relied on Sarla Verma v. Delhi Transport Corporation (2009) to determine the correct multiplier and personal expense deductions.

National Insurance Co. Ltd. v. Pranay Sethi (2017) was relied upon to grant 40% future prospects and standardize conventional heads (loss of estate, consortium, and funeral expenses).

The Court followed Navjot Singh v. Harpreet Singh (2020) and Arvind Kumar Mishra v. New India Assurance Co. Ltd. (2010) which established that the notional income of professional students must reflect their academic merit rather than minimum wages.

The Court observed that the High Court and Tribunal undervalued the deceased’s potential by ignoring his specific qualifications, including a first-class diploma and progress in a professional degree.

Citing Navjot Singh, the Court held that a degree student’s notional income cannot be equated to an unskilled worker's minimum wage; consequently, the Court raised the notional income to ₹12,000 per month for an accident occurring in the year 2000.

The Court corrected the High Court’s legal error in denying future prospects, clarifying that per Pranay Sethi, 40% future prospects must be added even to notional income for victims under 40 years of age.

One-half was deducted for personal expenses as the deceased was a bachelor, and the multiplier of 18 was maintained while revising non-pecuniary heads upward to align with Pranay Sethi and Magma General Insurance.

The Supreme Court allowed the appeal, enhancing the total compensation from ₹13,44,000 to ₹19,25,070 with interest at 7.5% per annum, holding Respondents jointly and severally liable.