Future prospects must be added where permanent disability diminishes an injured claimant’s earning capacity.

On 24 September 2012, Mahantharaj G.M. and his wife, Vinutha G.R., were travelling in a car from Chitradurga to Bengaluru when a lorry bearing registration No. PB-05/M-2930 allegedly driven rashly and negligently collided with their vehicle near Billanakote on NH-4, causing both occupants grievous injuries and fractures.

They were treated as in-patients and later as out-patients, and both claimed permanent disabilities.

The claimants filed separate petitions under Section 166 of the Motor Vehicles Act, 1988.

Mahantharaj claimed to be a Software Engineer employed with IBM, earning approximately Rs.80,000 per month, while Vinutha claimed to be a Computer Science Engineer earning Rs.20,000 per month.

The driver-cum-owner was proceeded ex parte, while the Insurance Company contested negligence, involvement of the lorry, income, occupation and quantum, though the existence of the policy was not disputed.

The Tribunal awarded Rs.5,88,600 to Mahantharaj in MVC No.178/2013 and Rs.2,89,400 to Vinutha in MVC No.179/2013, with interest at 7.5% per annum.

The claimants appealed for enhancement, and the Insurance Company appealed against the award in Mahantharaj’s case.

Whether the compensation awarded to Vinutha required modification, particularly under the heads of loss of future income, future prospects, laid-up-period income, future medical expenses and loss of amenities?

Whether the compensation awarded to Mahantharaj required modification under the head of loss of future income due to disability, and whether loss of future prospects could be awarded despite his continued employment?

The Court applied Sections 166, 168 and 173(1) of the Motor Vehicles Act, 1988, concerning claims for compensation, the award of “just compensation” and appeals against awards of the Claims Tribunal.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, the Court held that future prospects may be added while assessing loss of earning capacity, ordinarily at 40% for a self-employed person or person on a fixed income below 40 years of age.

It also relied on New India Assurance Co. Ltd. v. Abdul, 2022:KHC-D:5415-DB, for the principle that future prospects may be considered even in injury cases involving non-amputational disability.

Under Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, the percentage of physical disability cannot automatically be equated with loss of earning capacity; the Court must assess the functional impact of the disability on the claimant’s occupation, age, education and earning capacity.

For Vinutha, the Court found that she was 29 years old, had sustained a fractured humerus and radial-nerve injury, remained hospitalised for ten days and had an assessed permanent disability of 18%.

Since no reliable proof of actual income was produced, the Court adopted the notional income of Rs.7,000 per month and added 40% towards future prospects.

Applying the multiplier of 17 and 18% disability, it calculated loss of future income as Rs.3,59,856: Rs.7,000 + 40% × 12 × 17 × 18%.

Considering the duration and seriousness of the injuries, the Court additionally awarded amounts for laid-up-period income, future medical expenses and loss of amenities, while leaving the awards for pain and suffering, medical expenses, and diet/attendant/travelling expenses undisturbed.

For Mahantharaj, the medical evidence established injuries to his right upper and lower limbs, including a dislocated hip and comminuted humerus fracture, with a stated whole-body disability of 16%.

Applying the functional-disability principles in Raj Kumar, the Court assessed his functional disability at 20%, having regard to his work as a Software Engineer, the need to sit for prolonged periods, and the effect of the hip and right-arm injuries on his occupation.

Although he continued working for the same employer, the Court accepted that the injuries adversely affected his work capacity and promotional prospects.

On his admitted approximate income of Rs.80,000 per month, it added 40% for future earning prospects, applied the 20% functional disability and multiplier of 16, and calculated future loss of income at Rs.43,00,800.

It further awarded compensation for three months’ loss of income, future medical treatment for implant removal, and enhanced loss of amenities.

Vinutha’s compensation was enhanced from Rs.2,89,400 to Rs.5,21,656, and Mahantharaj’s compensation was enhanced from Rs.5,88,600 to Rs.47,79,400, both carrying interest at 7.5% per annum from the date of the respective petitions until realisation.

The Insurance Company was directed to deposit the enhanced compensation with applicable interest within eight weeks, after which the amounts were to be released to the claimants upon application.

The remaining portion of the Tribunal’s award was left undisturbed, with no order as to costs.