Future-loss compensation for an injured student is based on skilled-worker minimum wages with future prospects.

On 17 March 2012, the appellant, aged approximately 18 years and studying in the 10th standard, was riding his motorcycle from Vapi to Surat when a Maruti car, allegedly driven rashly and negligently, collided with him.

He suffered serious injuries, including a head injury, fractures, neurological impairment, and orthopaedic disability.

The Motor Accident Claims Tribunal partly allowed his claim petition and awarded ₹7,03,200 with interest at 9% per annum from the date of filing until realization.

The claimant challenged the award seeking enhancement on the grounds of inadequate assessment of income, functional disability, actual loss of income, pain and suffering, loss of studies, and loss of amenities.

The insurer opposed the enhancement and supported the Tribunal’s assessment.

1. Whether the compensation awarded by the Tribunal required enhancement, particularly in relation to the claimant’s notional income and future prospects.

2. Whether the claimant’s functional disability ought to be reassessed in light of the neurological and orthopaedic medical evidence.

3. Whether the claimant was entitled to enhanced compensation for actual loss of income, pain and suffering, special diet, attendant charges, transportation, loss of one academic year, and loss of amenities.

4. What amount of enhanced compensation and interest should be awarded.

The Court applied the principle that compensation under the Motor Vehicles Act must be “just compensation” and must reflect the claimant’s actual and prospective loss arising from the accident.

In assessing the future loss of income of a young claimant without established earnings, the Court adopted the minimum wages applicable to a skilled worker at the time of the accident, namely ₹4,710 per month.

It added 40% towards future prospects in accordance with National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680.

Permanent physical or medical disability is not automatically equivalent to functional disability; functional disability must be assessed by considering the nature of the injuries and their impact on the claimant’s earning capacity and daily life.

For an 18-year-old claimant, the Court applied a multiplier of 18 in computing future loss of income.

The Court held that the Tribunal had undervalued the claimant’s income by fixing it at ₹3,000 per month.

Since the claimant was a student and had no proved actual income, the Court adopted the prevailing minimum wage for a skilled worker, ₹4,710 per month, and increased it by 40% for future prospects, resulting in a monthly figure of ₹6,594.

The medical evidence established permanent neurological disability of 38.44% and orthopaedic disability of 45%, with right-sided hemiparesis, difficulty in walking, limping, impaired dexterity, speech difficulties, headaches, vertigo, and memory loss.

Considering the combined effect of these injuries on his functional capacity and everyday life, the Court increased functional disability from 35% to 40%.

Applying the multiplier of 18, it calculated future loss of income at ₹5,69,808.

The Court further awarded nine months’ actual loss of income, enhanced compensation for pain and suffering and for special diet, attendant charges and transportation, and granted separate amounts for loss of one academic year and loss of amenities.

The total compensation was enhanced from ₹7,03,200 to ₹11,67,198, comprising ₹5,69,808 for future loss of income, ₹3,05,000 for medical expenses, ₹42,390 for actual loss of income, ₹1,00,000 for pain, shock and suffering, ₹25,000 for special diet, attendant charges and transportation, ₹25,000 for loss of study, and ₹1,00,000 for loss of amenities.

The appellant was accordingly awarded additional compensation of ₹4,63,998, together with interest at 9% 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 before the Tribunal within six weeks, after which the Tribunal was to disburse the awarded amount to the appellant following due verification.