Permanent disability compensation must reflect functional loss of earning capacity and applicable future prospects.

The appeals arose from the same motor-vehicle accident dated 2 November 2001 involving Tata-407 vehicle No. HR-47-0581, driven by respondent No. 2, owned by respondent No. 1, and insured with United India Insurance Company, respondent No. 3.

The Motor Accident Claims Tribunal, Gurgaon, held the respondents jointly and severally liable under Section 166 of the Motor Vehicles Act, 1988.

It awarded ₹2,38,500 to Ajit Singh for injuries and ₹3,14,000 to Phoolwati and the other claimants for the death of Ramesh, with interest at 9% per annum.

Ajit Singh had suffered multiple injuries, including a right subtrochanteric femur fracture, undergone surgeries and prolonged treatment, and sustained 30% permanent disability of the right lower limb, with shortening of the leg and restricted knee movement.

Ramesh, aged 35 years, was a camel-cart owner and operator who transported goods and earned his livelihood through that work.

He left behind his wife and two children.

The Court applied Section 166 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor accidents caused by rash and negligent driving.

In personal-injury cases, compensation must be “just,” fair, reasonable, and based on the evidence, including pecuniary losses and non-pecuniary damages such as pain, suffering, loss of amenities, and loss of future earning capacity, as explained in G. Ravindranath @ R. Chowdary v. E. Srinivas.

The Court relied on Chandra alias Chander alias Chanda Ram v. Mukesh Kumar Yadav for the principle that absence of documentary proof of income is not by itself fatal and that income may be assessed on a reasonable estimate based on probabilities and surrounding circumstances.

It applied Sanjay Verma v. Haryana Roadways and National Insurance Co. Ltd. v. Pranay Sethi to add future prospects, Sarla Verma v. Delhi Transport Corporation to determine deductions and multipliers, Yadava Kumar v. Divisional Manager, National Insurance Co. Ltd. to assess loss of earning capacity due to permanent disability, and Magma General Insurance Co. Ltd. v. Nanu Ram and United India Insurance Co. Ltd. v. Satinder Kaur to award spousal and parental consortium.

The Court also relied on Syed Basheer Ahamed v. Mohd. Jameel for the principle that compensation must neither be arbitrary nor a windfall, but must have a reasonable nexus with the loss suffered.

The finding that the accident resulted from the rash and negligent driving of respondent No. 2 was not challenged and was therefore affirmed.

In Ajit Singh’s case, the Court treated his asserted monthly income of ₹2,600 as reasonable for a daily-wage worker in 2001, added 40% towards future prospects, and calculated the loss of future earning capacity by applying 30% functional disability and a multiplier of 18, given his age of approximately 19 years.

Considering his prolonged treatment, two surgeries, pain, attendant requirements, transportation, special diet, and permanent impairment, the Court reassessed the compensation at ₹4,92,500.

In the death claim, the Court rejected the Tribunal’s treatment of Ramesh as a casual labourer and assessed his monthly income at ₹3,000 because he owned and operated a camel cart for transporting goods.

It added 40% future prospects, deducted one-third for personal expenses because he left three dependants, and applied a multiplier of 16 for his age of 35 years.

The Court further awarded consortium and conventional damages to the wife and parental consortium to both children.

Ajit Singh’s total compensation was enhanced from ₹2,38,500 to ₹4,92,500; consequently, he was awarded an additional ₹2,54,000 with interest at 9% per annum from 10 December 2001 until realization.

The compensation payable to Phoolwati and the other claimants was enhanced from ₹3,14,000 to ₹6,87,600; consequently, an additional ₹3,74,000 was awarded with interest at 9% per annum from 10 December 2001 until realization.

The respondents remained jointly and severally liable.

Of the enhanced amount in the death claim, ₹75,000 each, with proportionate interest, was directed to be paid to the two children, with the balance payable to the widow.

The Insurance Company was also directed to comply with the Supreme Court’s directions concerning electronic transmission and satisfaction of motor-accident awards.