Motor accident compensation must account for prevailing minimum wages and future prospects.

On 5 April 2012, the claimant, Sumliben Ramubhai Ninama, was walking along the roadside when a Max Jeep, allegedly driven rashly and negligently by respondent No. 1, ran over her right foot, causing grievous injuries.

She filed Motor Accident Claim Petition No. 79 of 2013 before the Motor Accident Claims Tribunal (Auxiliary), Dahod. Respondent No. 3–Insurance Company contested the claim, while respondents Nos. 1 and 2 proceeded ex parte.

The Tribunal awarded ₹1,85,620 with interest at 9% per annum from the date of filing until 6 October 2014 and at 7% per annum from 20 November 2024 until realization.

The claimant appealed solely on the issue of quantum and the reduction/denial of interest for the intervening period.

Whether the claimant’s monthly income ought to have been assessed at the applicable minimum wage instead of ₹4,000, and whether future prospects were required to be added in computing the loss of earning capacity?

Whether the claimant was entitled to compensation based on the reassessed income for actual loss of income and future loss of income?

Whether the Tribunal was justified in reducing or withholding interest between 7 October 2014 and 20 November 2024 on the ground of delay in leading evidence?

The Court applied the principle that, where actual income is not established by cogent evidence, the claimant’s income may be assessed with reference to the applicable minimum wages prevailing on the date of the accident.

It relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, and Sidram v. Divisional Manager, United India Insurance Co. Ltd., (2023) 3 SCC 439, for adding 40% to the income of a claimant aged about 38 years towards future prospects.

The Court applied the multiplier method, using the functional disability of 14% and a multiplier of 15, to calculate future loss of income.

It further held that interest could not be reduced where the claimant had not caused procedural delay, particularly when the affidavit was filed soon after the issues were framed.

The Court found that the claimant’s asserted income of ₹6,000 per month was unproved, but held that the Tribunal’s assessment of ₹4,000 was below the notified minimum wage for a skilled worker, which was ₹4,980 in April 2012. It therefore rounded the monthly income to ₹5,000.

Since the claimant was approximately 38 years old, the Court added 40% for future prospects, resulting in a monthly income of ₹7,000.

Applying the undisputed functional disability of 14%, a multiplier of 15, and the annualization formula, it calculated future loss of income at ₹1,76,400.

The actual loss of income for three months was correspondingly reassessed at ₹15,000.

The Court did not interfere with the amounts awarded under the other heads because those awards were not challenged.

On interest, the Court noted that the Tribunal’s order below Exhibit 1 was unsigned and that the issues had been framed only on 23 October 2024, followed by the claimant’s affidavit on 20 November 2024. Since the claimant had acted promptly after framing of the issues, no delay was attributable to her, making the Tribunal’s reduction of interest unsustainable.

The total compensation was enhanced from ₹1,85,620 to ₹2,23,900, comprising ₹1,76,400 for future loss of income, ₹15,000 for actual loss of income, ₹10,000 for medical expenses, ₹15,000 for special diet, attendant and transportation charges, and ₹7,500 for pain, shock and suffering.

The claimant was granted additional compensation of ₹38,280.

The entire awarded amount, including the additional compensation, was directed to carry interest at 9% per annum from the date of filing of the claim petition until realization, without the intervening reduction or closure of interest.

Respondent No. 3–Insurance Company was directed to deposit the additional compensation with interest within six weeks, after which the Tribunal was to disburse the amount to the claimant subject to deduction of deficit court fees, if any, and due verification.