Loss of future earning capacity is compensable post-retirement despite continued employment and salary protection during service.

In brief

The question

1. Whether the functional disability should be assessed higher than 50% given the 73% physical disability and impact on career progression.

The court held

Functional disability is assessed at 60%; Future prospects of 15% are applicable; The multiplier is fixed at 9; and Interest is increased to 9% per annum.

It also directed

The court allowed the appeal in part, enhancing the total compensation to ₹53,21,870 and directing the Insurance Company to deposit the enhanced amount of ₹16,64,254 within six weeks.

01Facts

On July 24, 2005, the appellant, a General Manager at Punjab National Bank (PNB), sustained grievous injuries when a UPSRTC bus hit his vehicle.

¶ 2

The Motor Accident Claims Tribunal (MACT) awarded ₹29,57,616 with 7.5% interest.

¶ 1

The appellant suffered 73% permanent disability in his right lower limb.

¶ 3(vi)

Despite the injuries, the appellant continued in service until superannuation in 2010, though he claimed the disability prevented him from attending interviews for the post of Executive Director.

¶ 10

He appealed for enhancement regarding the multiplier, future prospects, benchmark income, and medical expenses.

¶ 3

02Issues

i.1. Whether the functional disability should be assessed higher than 50% given the 73% physical disability and impact on career progression.

¶ 3(vi) / 14

ii.2. Whether the claimant is entitled to future prospects of 15% despite remaining in service until retirement.

¶ 10 / 10.3

iii.3. Whether the appropriate multiplier should be 9 or 11 for a claimant aged 55 years.

¶ 15

iv.4. Whether medical expenses based on photocopies are admissible if originals were submitted for departmental reimbursement.

¶ 12

03Law Applied

The court applied the principles of "just compensation" under Section 168 of the Motor Vehicles Act.

¶ 10.2

It relied on National Insurance Co. Ltd. v. Pranay Sethi [2017] regarding the standardization of future prospects (15% for ages 50–60).

¶ 10.3

It relied on Sarla Verma v. DTC [2009] for the multiplier scale.

¶ 10.2

It followed Raj Kumar v. Ajay Kumar [2011], which distinguishes between physical disability and functional loss of earning capacity.

¶ 14.5

It followed Govind Singh Mauni v. Tej Bhan [2026], which establishes the right to compensation for loss of "marketability of labour" post-retirement even if salary was protected during service.

¶ 10.2 / 10.3

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

Motor Vehicles Act, 1988 Section 168

04Reasoning

The court found that although the appellant's salary was protected until retirement, his "marketability of labour" and prospects for promotion were diminished by a 73% limb disability.

¶ 10.2

Connecting this to Raj Kumar, the court increased the functional disability assessment from 50% to 60%.

¶ 14.7

It corrected the benchmark income to ₹44,082 per month based on ITRs after tax deductions.

¶ 11.5

Following Pranay Sethi, the court granted 15% future prospects, noting that disability impacts post-retirement earning potential.

¶ 15.7

For the multiplier, the court maintained the factor of '9' as per the retirement age of 60, rejecting the plea for '11'.

¶ 15.9

Regarding medical bills, the court accepted claims for ₹1,09,000 previously rejected for lack of originals, noting they were submitted to the employer.

¶ 12.6

05Holding

Functional disability is assessed at 60%; Future prospects of 15% are applicable; The multiplier is fixed at 9; and Interest is increased to 9% per annum.

¶ 14.7, 10.3, 15.9, 16

The court allowed the appeal in part, enhancing the total compensation to ₹53,21,870 and directing the Insurance Company to deposit the enhanced amount of ₹16,64,254 within six weeks.

¶ 16, 17-18

LawLens.Delhi High Court

Original Court PDF