Future loss of earning capacity must be awarded despite continued employment and lack of immediate salary reduction.

In brief

The question

1. Whether the Tribunal erred in calculating the monthly income and omitting future prospects while assessing the loss of future earning capacity

The court held

The court held that the appellant is entitled to 50% future prospects and full medical expenses despite conditional reimbursement from his employer

It also directed

The High Court partly allowed the appeal, modifying the award to a total of ₹10,60,446, resulting in an enhancement of ₹9,60,746. The Insurance Company was directed to deposit the additional amount with 9% interest from the date of the claim petition within six weeks

01Facts

On October 14, 2003, the appellant, a 35-year-old Switch Board Operator at GEB earning ₹6,000/month, sustained grievous injuries when a rashly driven Luxury Bus (GJ-20-T-9833) lost control and struck him

pp. 1-2

The Motor Accident Claims Tribunal (MACT), Bhuj-Kachchh, awarded ₹99,700 with 9% interest

p. 1, 3

The appellant challenged this on grounds of quantum, specifically arguing that the Tribunal failed to account for future prospects, wrongly reduced his monthly income for calculation, and erroneously denied medical expenses totaling ₹5,37,666 despite a GETCO certificate (Exh. 54) confirming expenditures

pp. 4-5, 9

02Issues

i.1. Whether the Tribunal erred in calculating the monthly income and omitting future prospects while assessing the loss of future earning capacity

pp. 6-7

ii.2. Whether a claimant is entitled to compensation for future loss of income even if there is no immediate reduction in salary or employment status post-accident

pp. 7-8

iii.3. Whether the Tribunal was justified in discarding medical bills/certificates on technical grounds of non-examination of the author

pp. 9-10

03Law Applied

The Court applied the definition of "net income" (Gross Income minus Tax) from Sarla Verma v. Delhi Transport Corporation

p. 6

It relied on National Insurance Company Ltd. v. Pranay Sethi, Sidram v. United India Insurance and Sandip Khanuja v. Atul Dande to grant a 50% addition for future prospects

p. 4, 7

For the principle that loss of earning capacity (including promotional prospects) persists despite continued employment, the Court cited Soni Sharma v. Oriental Insurance Company Limited

pp. 7-8

Regarding evidence, it applied Union of India v. T.R. Verma, established by the Constitutional Bench, holding that Tribunals are not bound by the strict provisions of the Evidence Act

p. 10

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 173

04Reasoning

The Court found the Tribunal’s reduction of the appellant’s income to one-fourth for calculation purposes was legally unsustainable; the net income should have been assessed at ₹5,960 after professional tax

p. 6

Applying the settled law in Pranay Sethi, the Court added 50% for future prospects and utilized a multiplier of 16 based on the age of 35

p. 7, 9

Crucially, the Court rejected the Insurance Company’s argument that continued employment precluded compensation for future loss, noting that physical impairment inherently affects efficiency and career progression

pp. 7-8

Regarding medical costs, the Court held the Tribunal committed a manifest error by ignoring the GETCO certificate (Exh. 54). Since the reimbursement by the department was conditional upon refunding it from the court award, the claimant was entitled to the full amount of ₹5,37,666

pp. 9-11