Future prospects must be included when assessing compensation for permanent functional disability.

The appellant, an injured claimant and driver, challenged the judgment and award dated 27 February 2013 passed by the Motor Accident Claims Tribunal, Godhra, in Motor Accident Claim Petition No. 1171 of 1997 under Section 173 of the Motor Vehicles Act, 1988.

The claimant contended that the Tribunal had inadequately assessed compensation under heads including loss of income, pain and suffering, medical expenses, transportation, special diet and attendant charges.

The High Court noted that the accident, involvement of the vehicle, and liability of the owner and insurer were not disputed.

The claimant had sustained functional disability assessed at 22.5%, and the principal surviving issue was the non-grant of future prospects in computing compensation.

Whether the compensation awarded by the Tribunal was inadequate and required enhancement under the various heads of damages

Whether the claimant, who sustained 22.5% functional disability, was entitled to an addition towards future prospects while calculating loss of future income

Whether the enhanced compensation should carry interest at 9% per annum from the date of filing of the claim petition until realisation

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

It reiterated that the Motor Vehicles Act is a beneficial legislation and that compensation must be just, fair, reasonable and equitable, assessed through a liberal and pragmatic approach rather than a narrow or niggardly one.

Relying on Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, as reproduced and applied in M. Paramesh v. VRL Logistics Ltd., 2026 INSC 655, the Court held that physical or medical disability cannot automatically be equated with loss of earning capacity; the effect of the disability on the claimant’s actual earning capacity must be assessed with reference to his occupation, functions and circumstances.

The Court further treated future prospects as an integral component of just and fair compensation in an appropriate disability claim.

The High Court found that the Tribunal had erred in assessing the compensation and that the claimant’s 22.5% functional disability, considered in the context of his occupation as a driver, warranted recognition in calculating future loss of income.

Applying the principles in Raj Kumar and M. Paramesh, the Court held that the issue was not merely the percentage of medical disability but its functional impact on earning capacity.

It accordingly recalculated compensation as follows: Rs. 3,98,412 for future loss of income, Rs. 36,000 for actual loss of income, Rs. 25,000 for pain, shock and suffering, Rs. 10,000 for medical expenses, and Rs. 25,000 towards special diet, attendant charges and transportation, totalling Rs. 4,62,012.

After deducting the Rs. 1,19,220 already awarded, the additional compensation was quantified at Rs. 3,42,792.

The claimant was held entitled to additional compensation of Rs. 3,42,792, together with interest at 9% per annum from the date of filing of the claim petition until realisation.

The Insurance Company was directed to deposit the enhanced amount, with interest, before the concerned Tribunal within eight weeks of receiving the order.

The remaining directions of the Tribunal were confirmed, and the Tribunal was directed to disburse the awarded amount to the claimant after verification, compliance with procedure, and deduction of any unpaid court fees.