Assessment Of Loss Of Future Earnings In MACT Claims Must Be Based On Impact On Earnings, Not Mere Percentage Of Disability: Karnataka High Court
The High Court has reiterated that while assessing compensation in motor accident cases involving permanent disability, courts must evaluate the impact of the disability on the claimant’s earning capacity rather than mechanically applying the percentage of physical disability.
The Karnataka High Court has held that the assessment of compensation for loss of future earnings due to permanent disability must depend on how the disability affects the injured person’s earning capacity, and not merely on the percentage of physical disability determined medically.
The Court was hearing an appeal filed under Section 173(1) of the Motor Vehicles Act challenging the award passed by the Motor Accident Claims Tribunal, Bengaluru, which had granted compensation of ₹2,47,771 to an injured claimant following a road accident.
The Bench of Justice Tara Vitasta Ganju observed: “…while assessing the future loss of earnings due to permanent disability, the Court has to examine various aspects before it reaches its conclusion on the extent of permanent physical disability. Where the claimant suffers permanent disability as a result of injuries, the assessment of compensation under the head of 'loss of future earnings' would depend on the effect and impact of the disability on his earning capacity. What needs to be assessed is how the disability would relate to his loss of earnings. The Court is required to first ascertain the nature of the activity that the appellant was carrying on prior to the accident and what he could do and not do thereafter. It would also ascertain his avocation, profession and the nature of his work performed by him before the accident and determine whether, on account of the injuries sustained, he is disabled from earning his livelihood.
Background
The accident occurred on 21 June 2015 when the claimant was riding his motorcycle. Another motorcycle, allegedly driven in a rash and negligent manner, collided with the claimant’s vehicle, causing him to fall and sustain injuries. He was hospitalised for treatment and subsequently filed a claim petition seeking compensation for the injuries suffered.
The Tribunal awarded compensation of ₹2,47,771 with interest at 7.5% per annum. However, it assessed the claimant’s monthly income at ₹7,000 and the permanent disability at 7%. It further deducted 50% of the compensation on account of contributory negligence.
Aggrieved by the quantum of compensation and the findings of the Tribunal, the claimant approached the High Court seeking enhancement.
Court’s Observation
The High Court examined the medical evidence and noted that the claimant had sustained a crush injury to the right foot with fractures to the metatarsal bones and had undergone surgery. A medico-legal consultant who was part of the medical team treating the claimant assessed the permanent physical impairment of the right lower limb at 15%.
Rejecting the argument that the doctor was not competent to assess disability because he was not an orthopaedic surgeon, the Court held that the law only requires assessment by a “qualified medical practitioner,” and not necessarily a specialist in orthopaedics.
The Court further referred to the Supreme Court decision in Raj Kumar v. Ajay Kumar, reiterating that the percentage of physical disability cannot automatically be equated with the percentage of loss of earning capacity. Instead, the Tribunal must evaluate the effect of the disability on the claimant’s actual ability to work and earn.
Applying these principles, the Court held that the Tribunal had erred in reducing the disability to 7%. The medical evidence established that the claimant suffered permanent impairment affecting his mobility, which would impact his work that required movement.
Accordingly, the High Court reassessed the claimant’s notional income at ₹9,000 per month and applied 15% functional disability with the appropriate multiplier, thereby recalculating the compensation for loss of future earnings.
However, the Court declined to interfere with the Tribunal’s finding of contributory negligence. Relying on the site map, spot panchanama and IMV report, it was observed that the collision occurred at a junction and both riders had contributed to the accident by failing to exercise due caution.
Conclusion
Allowing the appeal in part, the Court enhanced the total compensation payable to the claimant to ₹4,23,211 with interest at 7.5% per annum from the date of the petition until realisation. The Insurance Company was directed to deposit the enhanced compensation within eight weeks.
Cause Title: T. Harish v. Santhosh Kumar D.S. & Anr. (Neutral Citation: NC: 2026:KHC:10099)
Appearances
Appellant: Advocate Ravikumara B.R.
Respondent: Advocate B. Pradeep