Personal-expense deductions are impermissible in compensation claims for injuries causing permanent disability.

On 1 March 2011, Hussain Ahmed was travelling as a passenger in Night Super Bus No. AS-14-C-1731 from Karimganj to Guwahati when the bus collided with a truck near Aurangabad, Badarpur.

As he was seated beside the window, broken glass severed his right arm at shoulder level, besides causing other injuries.

He filed a claim under Section 166 of the Motor Vehicles Act, 1988, in MAC Case No. 54/2011 before the Motor Accident Claims Tribunal, Karimganj.

The insurer’s written statement was filed, but it subsequently failed to contest the proceedings, which proceeded ex parte against it.

The Tribunal awarded Rs.8,75,000 with interest at 6% per annum.

The claimant appealed under Section 173 of the Motor Vehicles Act, principally challenging the computation of compensation, including income, deduction of personal expenses, prosthetic-arm expenses, pain and suffering, and interest.

Whether the Tribunal correctly assessed the claimant’s monthly income at Rs.5,000 despite his assertion that he earned Rs.12,000 per month as a driver.

Whether deduction of 50% towards personal and living expenses was legally permissible in a claim arising from permanent disability and injury, rather than death.

Whether the amount awarded for future medical treatment and implantation of a prosthetic arm required enhancement and whether such amount was liable to carry interest.

Whether the compensation awarded for pain, suffering and agony, and the overall compensation and rate of interest, required enhancement.

The Court applied Sections 166 and 173 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor-vehicle injuries and appeals against awards.

It relied on Rahul Ganpatrao Sable v. Laxman Maruti Jadhav, (2023) 13 SCC 334, read with Lalan D. v. Oriental Insurance Co. Ltd., (2020) 9 SCC 805, for the rule that no deduction towards personal expenses is permissible where the claimant is a surviving injured person seeking compensation for permanent disability rather than the dependants of a deceased victim.

The Court also applied the principle that compensation must reasonably cover the immediate medical consequences of a serious injury, including the need for a prosthetic limb, and that such compensation carries interest where it forms part of the award.

The assessment of non-pecuniary compensation was guided by the principles concerning pain, suffering, disability and loss of amenities discussed in Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, and R.D. Hattangadi v. Pest Control (India) Pvt. Ltd., (1995) 1 SCC 551.

The Court upheld the Tribunal’s assessment of monthly income at Rs.5,000 because the claimant’s oral assertion of earning Rs.12,000 per month was not supported by documentary or corroborative evidence.

The Court noted that the applicable notional income for an unskilled worker was Rs.3,900 per month and therefore found the Tribunal’s assessment, if anything, to be slightly higher.

However, it held that the Tribunal had wrongly deducted 50% of the assessed income towards personal expenses.

Since the claimant had survived the accident and suffered permanent disability, the deduction applicable in death claims had no legal justification.

Given the complete amputation of the right arm at shoulder level, the Court enhanced the amount for a prosthetic arm and related future medical treatment from Rs.3,00,000 to Rs.5,00,000, holding that the requirement was an immediate medical necessity rather than a remote future contingency; the amount therefore carried interest.

It found the Rs.50,000 awarded for pain, suffering and agony reasonable and did not enhance it.

The compensation was consequently recalculated at Rs.5,000 × 12 × 16 for loss of earning, Rs.45,000 for medical expenses, Rs.5,00,000 for prosthetic-arm and future medical expenses, and Rs.50,000 for pain and suffering.

The Court enhanced the compensation from Rs.8,75,000 to Rs.15,55,000 and enhanced the interest rate from 6% to 7.5% per annum.

The Insurance Company was directed to deposit the outstanding amount with interest before the Registry within four weeks, after which the amount was to be disbursed to the claimant upon proper verification.