Permanent physical disability must be assessed as functional disability for computing loss of future earnings.

The appellant-claimant, a 20-year-old MBBS student, suffered multiple injuries, including fractures of both thigh bones, in a motor vehicle accident on 03.02.2003 caused by the rash and negligent driving of respondent No.1.

The offending bus was owned by respondent No.2 and insured with respondent No.3.

The Motor Accident Claims Tribunal, Bathinda, awarded ₹2,21,000 with interest at 9% per annum under Section 166 of the Motor Vehicles Act, 1988.

The claimant appealed seeking enhancement.

During the appeal, the original court and Tribunal records were damaged in a fire, and the appeal was decided on the basis of the facts and evidence recorded in the award.

The claimant relied on additional disability evidence, pursuant to which a medical board assessed his permanent disability at 40%, involving abnormalities in both hands and the right foot, besides the injuries to his lower limbs.

The Court applied Section 166 of the Motor Vehicles Act, 1988, under which an injured claimant is entitled to “just compensation” for injuries caused by the negligence of the offending vehicle’s driver.

In personal-injury claims, compensation may be assessed under pecuniary heads—medical, hospitalisation, transportation, nourishment, loss of earnings during treatment, loss of future earning capacity, and future medical expenses—and non-pecuniary heads such as pain and suffering, loss of amenities, and loss of expectation of life, as stated in G. Ravindranath @ R. Chowdary v. E. Srinivas.

The Court relied on Yadava Kumar v. The Divisional Manager, National Insurance Company Ltd. for assessing loss of earning capacity by applying the percentage of functional disability and an appropriate multiplier.

It also relied on Sanjay Verma v. Haryana Roadways and National Insurance Co. Ltd. v. Pranay Sethi for adding future prospects and applying the multiplier method.

The governing principle was that compensation must be fair, reasonable, equitable, and neither a windfall nor a pittance.

The finding that the accident resulted from respondent No.1’s rash and negligent driving was not challenged by respondents No.1 and 2 and was therefore affirmed.

The Court accepted the additional medical evidence assessing the claimant’s permanent disability at 40%, finding no reason to disbelieve the disability certificate issued on the basis of a medical-board assessment.

Since the claimant was pursuing MBBS and was 20 years old, the Court assessed his probable future monthly income at ₹15,000 and added 40% towards future prospects, resulting in ₹21,000 per month.

Although the medical disability was 40%, the Court assessed functional disability at 25% for computing loss of earning capacity, producing a monthly loss of ₹5,250 and an annual loss of ₹63,000.

Applying the multiplier of 18 applicable to a 20-year-old claimant, the loss of future income was calculated at ₹11,34,000.

The Court further enhanced compensation for pain and suffering and shortening of the leg to ₹75,000; awarded ₹40,000 collectively for nourishment, attendant charges, and transportation; increased treatment expenses to ₹90,000 by allowing reasonable estimation beyond the bills produced; retained ₹50,000 for loss of studies; and awarded ₹35,000 for loss of amenities.

The total just compensation was consequently recalculated at ₹14,24,000.

The claimant was held entitled to total compensation of ₹14,24,000, resulting in an enhancement of ₹12,03,000 over the Tribunal’s award of ₹2,21,000.

The enhanced amount was made payable jointly and severally by respondents No.1 to 3, with interest at 9% per annum from the date of filing of the claim petition, i.e., 21.03.2003, until realization.

The enhanced compensation was directed to be deposited in the claimant’s bank account, and the Insurance Company was directed to comply with the Supreme Court’s directions in Bajaj Allianz General Insurance Co. v. Union of India.