Court’s Decision
The Karnataka High Court, presided over by Justice Umesh M. Adiga, allowed a Miscellaneous First Appeal filed under Section 173(1) of the Motor Vehicles Act, 1988, seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal (MACT), Bengaluru.
The Court enhanced the compensation by ₹1,68,175/- and directed that the amount carry interest at 6% per annum from the date of the claim petition till realization. It further clarified that the rest of the Tribunal’s award would remain unaltered.
Justice Adiga observed that the Tribunal had failed to consider the proper notional income and had omitted compensation for loss of income during the laid-up period, which warranted judicial interference.
“When the claimant’s income is not proved, the Court must adopt the notional income prescribed by the Karnataka State Legal Services Authority. Just compensation cannot be denied merely on technical grounds.”
Facts
The claimant, aged 28, was involved in a road traffic accident on 25 May 2018 near IBA College, Lakshmipura, NH-209 (Kanakapura–Bengaluru Main Road). The accident occurred when a Tipper Lorry (KA-41-A-0803), driven rashly and negligently, collided with his vehicle.
As a result, the claimant sustained grievous injuries leading to permanent partial disability. He filed a petition before the MACT seeking ₹40,00,000 as compensation under various heads.
The owner of the offending vehicle remained ex parte, while the insurer (United India Insurance Co. Ltd.) contested liability, denying both negligence and quantum of damages.
After recording evidence and hearing both sides, the Tribunal awarded ₹10,37,775 under the following heads:
| Particulars | Amount (₹) |
| Pain and Suffering | 75,000 |
| Loss of Future Earnings (due to disability) | 3,92,700 |
| Medical Expenses | 4,45,075 |
| Conveyance, Nourishment, and Food | 75,000 |
| Loss of Amenities and Unhappiness | 30,000 |
| Future Medical Expenses | 20,000 |
| Total | ₹10,37,775 |
Dissatisfied, the claimant filed an appeal seeking enhancement on the grounds that the Tribunal had undervalued his income, wrongly assessed the percentage of disability, and failed to award compensation for the period he was unable to work.
Issues
- Whether the Tribunal erred in fixing the claimant’s income at ₹10,000 per month despite prevailing notional income standards?
- Whether the assessment of disability and corresponding loss of earning capacity was correctly computed?
- Whether the claimant was entitled to additional compensation under omitted heads such as “loss of income during laid-up period” and “loss of amenities”?
Petitioner’s Arguments
The petitioner’s counsel argued that the Tribunal arbitrarily fixed the notional income at ₹10,000 per month, ignoring the Karnataka State Legal Services Authority (KSLSA) chart, which prescribed ₹12,500 for accidents occurring in 2018.
It was submitted that the claimant was working as a driver, earning ₹40,000 per month, and though documentary proof was unavailable, the Court should have adopted the standardized income approach recognized by various precedents.
Further, the counsel contended that the Tribunal failed to award any amount towards loss of income during treatment and recovery (the “laid-up period”), despite the claimant being incapacitated for at least four to five months.
The compensation granted under “loss of amenities and happiness” was also described as meager, failing to account for the permanent impact of disability on the claimant’s quality of life.
Hence, enhancement was sought under all relevant heads to ensure just and fair compensation, as mandated under Section 168 of the Motor Vehicles Act.
Respondent’s Arguments
The insurer’s counsel defended the Tribunal’s findings, submitting that the income claimed by the petitioner lacked documentary evidence and that the Tribunal’s assessment was reasonable and consistent with established norms.
He argued that the Tribunal had already awarded substantial medical expenses and loss of earning capacity, and further enhancement would amount to double compensation.
The insurer contended that there was no concrete medical proof of higher disability percentage or inability to work beyond the period already compensated. Therefore, the appeal deserved to be dismissed.
Analysis of the Law
Justice Adiga analyzed the principles governing determination of compensation in motor accident cases under the Motor Vehicles Act. The Court emphasized that compensation must be just, fair, and realistic, taking into account both pecuniary and non-pecuniary losses.
The Court noted that when documentary evidence regarding income is unavailable, the KSLSA notional income chart must be applied uniformly to ensure consistency across tribunals. For the year 2018, the notional income was fixed at ₹12,500 per month, not ₹10,000 as used by the Tribunal.
Further, the Court clarified that the loss of income during the recovery period is a distinct head of compensation that cannot be ignored. Even if the permanent disability affects earning capacity, the temporary incapacity to work immediately after the accident warrants independent compensation.
This approach aligns with the principle of “just compensation” under Section 168, which requires the court to adopt a liberal, not hyper-technical, interpretation when assessing victims’ economic losses.
Precedent Analysis
- Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343 — The Supreme Court laid down the formula for calculating loss of future earnings, emphasizing assessment based on notional income, age, and disability.
- K. Suresh v. New India Assurance Co. Ltd., (2012) 12 SCC 274 — Reiterated that compensation must include all foreseeable future losses and should not be reduced arbitrarily.
- Karnataka State Legal Services Authority Circular (2018) — Provided standard notional income guidelines for uniform application in MACT cases across the state.
By applying these precedents, the Court ensured adherence to a uniform compensation framework that reflects contemporary economic conditions.
Court’s Reasoning
Upon reappraisal of evidence, Justice Adiga found that the Tribunal erred in adopting an outdated income figure. The Court revised the notional income to ₹12,500 per month and recalculated the loss of future earning capacity based on the disability percentage established on record.
The Court also awarded ₹50,000 for loss of income during laid-up period (₹12,500 × 4 months) and enhanced loss of amenities and happiness by ₹20,000.
A total enhancement of ₹1,68,175 was thus computed under the following heads:
| Particulars | Amount (₹) |
| Loss of Future Earning Capacity | 98,175 |
| Loss of Income During Laid-Up Period | 50,000 |
| Loss of Amenities and Unhappiness | 20,000 |
| Total | ₹1,68,175 |
The enhanced amount was made payable with interest at 6% per annum from the date of the claim petition till realization. Both the owner and insurer were held jointly and severally liable to pay the same.
Conclusion
The Karnataka High Court partly allowed the appeal, modifying the Tribunal’s award to grant an enhanced compensation of ₹1,68,175 with 6% interest.
Justice Adiga reiterated that compensation should not be arbitrary but grounded in statutory and economic reasonableness. The judgment reinforces that tribunals must align their assessments with standardized notional income guidelines to avoid undervaluation of victims’ losses.
“When income is not proved, courts should rely on standardized notional income charts to arrive at a fair figure; denying such fair computation defeats the object of social justice embedded in the Motor Vehicles Act.”
Implications
This judgment carries significant implications for MACT cases in Karnataka:
- Ensures uniform application of KSLSA notional income charts.
- Affirms that temporary loss of income must be independently compensated.
- Reinforces that courts must adopt a liberal approach when assessing victims’ economic hardships.
It underscores the judiciary’s role in balancing equity and practicality while delivering justice to accident victims.
Judgments Referred
- Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343 — Clarified principles for assessing loss of future earnings.
- K. Suresh v. New India Assurance Co. Ltd., (2012) 12 SCC 274 — Mandated inclusion of all foreseeable losses.
- KSLSA Notional Income Chart (2018) — Provided standardized income parameters for MACT cases.
FAQs
Q1. What is notional income and how is it determined in motor accident cases?
When actual income proof is unavailable, courts apply KSLSA notional income charts that prescribe income levels based on year and occupation for uniformity.
Q2. Can courts award compensation for loss of income during recovery even if permanent disability is already compensated?
Yes. The recovery or laid-up period is distinct from long-term disability and must be compensated separately.
Q3. What interest rate applies to enhanced compensation?
In this case, the Court awarded 6% per annum from the date of petition until realization.