Interest is payable on compensation for future loss of income due to disability.

The claimant sustained abdominal and chest injuries in a road accident on 12 May 2024 involving a lorry.

The Tribunal awarded total compensation of ₹11,86,653, including ₹5,54,400 for loss of future income, and applied a functional disability of 20%.

The claimant appealed under Section 173(1) of the Motor Vehicles Act, 1988, seeking enhancement.

1. Whether the Tribunal’s assessment of the claimant’s income and functional disability required revision for calculating loss of future income.

2. Whether the claimant was entitled to future prospects and interest on the compensation awarded for loss of future income.

The appeal was brought under Section 173(1) of the Motor Vehicles Act, 1988.

In assessing compensation for loss of future income, the Court applied a multiplier-based calculation using the claimant’s monthly income, age-related multiplier and functional disability. It treated the 2024 notional monthly income as ₹17,000, applied a multiplier of 14 for a claimant aged 43, assessed functional disability at 30%, and added 25% for future prospects.

The Court also held that interest was payable on the amount awarded for loss of future income; it cited no precedent for these principles.

The Court found that the Tribunal had used monthly income of ₹16,500, although the applicable notional income for 2024 was ₹17,000.

The medical evidence recorded spleen removal and significant impairment, while the doctor assessed whole-person impairment at 95%; considering that evidence, the Court increased functional disability from 20% to 30%.

It added 25% future prospects and calculated loss of future income as ₹21,250 × 12 × 14 × 30%, resulting in ₹10,71,000.

It found no basis to deny interest on this head of compensation.

The claimant was awarded an additional ₹5,16,600, being the difference between the revised loss-of-future-income award of ₹10,71,000 and the Tribunal’s award of ₹5,54,400, with interest at 6% per annum from the date of petition until realization.

The Court also directed that interest at 6% per annum be paid on the full ₹10,71,000 awarded for loss of future income.

The insurer was directed to deposit the enhanced compensation with interest within six weeks; 50% of the enhanced compensation was ordered released to the claimant, with the balance placed in a three-year fixed deposit.