Holding

The appellant is entitled to compensation for loss of future earnings calculated on the basis of his reduced earning capacity, the applicable multiplier, and interest, in addition to the compensation already awarded.

Summary

Sunil Kumar, a mini‑truck driver, was injured in a collision on 10 July 2003, sustaining three fractures and a 45% permanent disability. He claimed compensation under Section 166 of the Motor Vehicles Act for loss of earnings, but the Motor Accident Claims Tribunal awarded only Rs 45,000 for disability, Rs 21,000 for treatment and Rs 6,000 for pain, totalling Rs 72,000, with no award for future loss of income. The High Court dismissed his appeal. The Supreme Court held that the tribunal and High Court erred by not compensating for loss of earning capacity, calculated the monthly loss as Rs 1,200 (after a one‑third deduction for expenses) and applied a multiplier of 18, arriving at a loss of Rs 2,59,200, which is to be added to the earlier award with interest at 6% per annum. The appeal was allowed and the order modified accordingly.

Issues considered

What compensation, if any, is payable for loss of future earnings under Section 166 of the Motor Vehicles Act when a claimant suffers a permanent disability affecting his earning capacity?

Legislation cited

Motor Vehicles Act, 1988s. 163-A, s. 166

Subjects

Motor Vehicles Actcompensationpermanent disabilityloss of earning capacityaccidentmultiplierinterestSupreme Court

Judgment

I
1

~ ,

A SUNILKUMAR
v.
RAM SINGH GAUD AND ORS.

NOVEMBER 2, 2007
B ~
[ASHOK BHAN AND D.K. JAIN, JJ.] -I._

Motor Vehicles Act, 1988:

c S.166 and Schedule II to s.163-A-Compensation for loss of
earning due to permanent disability-Collision between two vehicles-
Driver of mini truck sustaining grievious injuries resulting in 45%
permanent disability-MA CT allowing Rs.45,0001- as compensation
for 45% permanent disability, cost oftreatment and towards pain and
mental agony-High Court dismissing appeal of claimant-HELD:
D ..>(
Tribunal as well as High Court have not awarded any compensation ~
towards loss offuture income-After fracture oftibia, it is doubtful if
the appellant can even drive again-Disability suffered by appellant
would surely reduce earning capacity-Therefore, appellant is required
to be compensated for loss ofearning due to irifuries suffered by him
E in accident-Taking into consideration present income ofappellant as
Rs.4,0001- per month minus I/3rd deduction towards miscellaneous
expenses, the permanent disability of45% suffered by him, appellant
being 29 years old at the time ofaccident, and taking multiplier to be
18, total loss of income comes to Rs.2,59,2001- for which appellant
F would be entitled in addition to the sum already awarded by the
Tribunal-He would be entitled to interest at the same rate i.e. 6% per
annum on the enhanced amount as well from the date offiling claim
petition till realization.

G CIVIL APPELLATE nJRISDICTION : Civil Appeal No. 5108 of
2007. -'-:-+-'
From the final Judgment and Order dated 12.10.2004 of the High
Court of Madhya Pradesh at Jabalpur in M.A. No. 2728 of2004.

H 876
SUNIL KUMAR v. RAM SINGH GAUD 877

Tara Chandra Sharma (SCLSC), for the Appellant. A
Santosh Paul (for M.J. Paul) for the Respondent.
The following Order of the Court was delivered by
ORDER
B
1. Leave granted.
2. Factual background of the case is that on 10th July, 2003,
appellant was driving his mini truck No.MP 20 G-7705 towards Bargi '
along with one Ran1esh Prajapati. When the mini truck reached Chulha C
Gulhai, a tmck dumper bearing No. MP 18-6392 came from the opposite
side, which was being driven in rash and negligent manner and hit the mini
truck of the appellant with the result that the appellant sustained grievous
injuries on his leg. He suffered three fractures including one at tibia. He
was examined by the Medical Board. After exanlining the injuries, Board
came to the conclusion that the appellant had suffered 45% pennanent D
disability. Appellant was 29 years of age at the time of accident and was
working as a driver and earning Rs. 4,000/- per month.
3. FIR was lodged. A claim was also filed against the owner of truck
dumper as well as the insurance company before the Motor Accident , E
Claims Tribunal (for short 'the Tribunal') for compensation under Section
166 of the Motor Vehicles Act, 1998 (for short 'the Act'), inter alia, ,
stating that in the accident, appellant suffered fracture in his tibia and two
other places. Appellant claimed Rs. 8,20,000/- by way of compensation.
/ 4. Tribunal by its order dated 25th June, 2004 awarded a F
compensation ofRs.45,000/- for the 45% pennanent disability suffered ·
by the appellant; Rs.21,000/- towards the amount spent on the treatment
and Rs.6,000/- for physical pain and mental agony suffered by the
appellant. Tims, a total sun1 ofRs.72,000/-was awarded as compensation , G
along with interest@6% per annum from the date of the claim petition
-1.... till payment

5. Being aggrieved, appellant filed an appeal in the High Court of
Madhya Pradesh at Jabalpur which has been dismissed by the impugned '
order. H
....

878 SUPREME COURT REPORTS [2007] 11 S.C.R.
____, ,
--,
A 6. Learned counsel appearing for the appellant contends that as a
result of the impact of injuries suffered by the appellant, the appellant cannot
pursue his vocation of driving any longer and the Tribunal as well as the
High Court have grossly erred in not awarding any compensation towards
the loss of his earning capacity. That, keeping in view the injuries suffered
B by him, the compensation awarded is too low. Counsel appearing for the
Oriental Insurance Company Limited, Respondent No.3, has supported
r-
~
the judgment and order passed by the courts below.
7. Learned counsels for the parties have been heard at length.
8. We find substance in the submission put forth by the counsel for
c the appellant. The Tribunal as well as the High Court have not awarded
any compensation towards loss of future income. After the fracture of tibia,
it is doubtful if the appellant can even drive again. Even if he putsues some
other vocation, he would not be able to earn as much as he is earning
now. The disability suffered by the appellant would surely reduce his
D earning capacity. Therefore, the appellant is required to be compensated 1
for the loss of earning due to the injuries suffered by him in the accident. f
9. Taking into consideration the present income of the appellant as
Rs.4,000/- per month; and the pem1anent disability of 45% suffered by
him, we are of the view that the capacity of the appellant to earn in future
E would be reduced by Rs.1,800/- per month approximately. If l/3rd is
deducted towards miscellaneous expenses, the loss of income comes to
Rs.1,200/- per month which, in tum, comes to Rs.14,400/- per annum.
Appellant was 29 years of age at the time of accident. Taking the multiplier
to be 18 [as per the Second Schedule to Section 163A of the Act], the
F total loss of income comes to Rs.2,59,200/-. ~.
10. For the reasons stated above, the loss of income is assessed at
Rs.2,59,200/-. The appellant would be entitled to tl1e aforesaid amount
in addition to the sum already awarded by the Tribunal, which has been
upheld by the High Court. The appellant would be entitled to interest at
G the same rate, i.e., 6% per annum on the enhanced amount as well from
the date of filing of the claim petition till realization. ~~

11. Accordingly, the appeal is accepted and the order passed by
the Courts below stands modified to the extent indicated above.
H RP. Appeal allowed.