Pay protection does not bar compensation for future income loss after accident-induced occupational downgrade.

The appellants, Chandrakanth and Mahantesh, were employees of the North Eastern Karnataka Road Transport Corporation (NEKRTC), working respectively as a driver-cum-conductor and driver.

They sustained injuries in a motor-vehicle accident on 16 April 2016 involving an NEKRTC bus and a lorry.

Following the accident, both claimants were medically disqualified from performing driving duties and were reassigned as Attenders, although their existing pay was protected.

The claimants filed MVC Nos. 2/2017 and 1/2017 before the Additional MACT, Shahapur, seeking compensation.

The Tribunal awarded ₹2,06,000 to the claimant in MVC No. 2/2017 and ₹1,61,000 to the claimant in MVC No. 1/2017, with interest at 6% per annum.

It declined to award compensation for loss of future income because the claimants continued to receive the same salary.

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

Whether the Tribunal was justified in denying compensation for loss of future income merely because the claimants’ salaries were protected after their reassignment to lower-category duties?

Whether the compensation awarded under the heads of attendant charges, food and nourishment, and other incidental expenses required enhancement in view of the injuries and periods of hospitalisation?

The Court applied Section 173(1) of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

It applied the principle that compensation for permanent or functional disability is not confined to an actual present reduction in salary; the court must also consider the claimant’s loss of earning capacity, career progression, employment-related benefits, and future prospects.

Pay protection does not by itself eliminate loss of future income where accident-related disability causes a claimant to lose the ability to perform the skilled occupation for which he was employed.

The Court further applied the principle that functional disability may be assessed differently from medical disability, depending on the effect of the injuries on the claimant’s actual occupation.

In the present case, it fixed functional disability at 15% for both claimants.

The Court held that the Tribunal had placed excessive reliance on the fact that the claimants continued to receive their previous salaries.

Although their pay was protected, both claimants had been removed from their respective driving positions and assigned the lower-category post of Attender.

Their driving skills, promotional prospects, occupational benefits, and ability to continue working as skilled drivers had consequently been impaired.

The reassignment itself demonstrated functional disability, notwithstanding the absence of an immediate salary reduction.

Accordingly, the Court assessed functional disability at 15% for the purpose of determining loss of future income.

However, because the Tribunal had not assessed the claimants’ monthly income and the record was insufficient to calculate the precise loss, the Court remitted that limited issue to the Tribunal for determination on the basis of evidence.

The Court also considered the periods of hospitalisation—15 days in MVC No. 2/2017 and 9 days in MVC No. 1/2017—and the surgeries involving implants.

It therefore enhanced attendant charges from ₹4,000 to ₹15,000 and food and nourishment expenses from ₹4,000 to ₹10,000 in each case, while maintaining or confirming the other specified heads of compensation.

The award in MVC No. 2/2017 was enhanced from ₹2,06,000 to ₹2,23,000, and the award in MVC No. 1/2017 was enhanced from ₹1,61,000 to ₹1,78,000, in each case excluding the yet-to-be-determined component of loss of future income.

The matter was remitted to the Tribunal for the limited purpose of assessing the claimants’ income and computing loss of future income by applying 15% functional disability.

The parties were directed to appear before the Tribunal on 29 September 2026, and the remand proceedings were ordered to be completed within three months from the date of appearance.

The remaining terms of the Tribunal’s award were maintained, with no order as to costs.