Case Note & Summary
The original appellant, a Sub-Inspector in CRPF, met with a motor accident on 10.05.2010, sustaining grievous injuries leading to 61.94% disability as per Medical Board and 77.72% as per Tribunal-appointed Commissioner. He was discharged from service on 22.03.2012 and received a monthly pension of Rs.15,247. The Motor Accident Claims Tribunal initially awarded Rs.3,28,422, which was remanded by the High Court for reconsideration. On remand, the Tribunal awarded Rs.31,64,896 with 9% interest, taking disability at 50% and monthly income after tax deduction at Rs.33,761. Both parties appealed; the High Court partly allowed the appeals, reducing compensation to Rs.27,47,700 with 6% interest, by deducting pension from salary and using 61.94% disability. The appellant challenged this before the Supreme Court. The Supreme Court held that pension cannot be deducted from salary for computing loss of earning capacity, as it is a statutory right. It also held that future prospects at 30% must be added for a person aged 40-50 years with a permanent job, as per Pranay Sethi. The interest rate of 9% awarded by the Tribunal was restored. Regarding disability, the Court noted that the Commissioner's evidence was unchallenged and directed the Tribunal to reconsider the disability percentage. The appeal was partly allowed, setting aside the High Court's order and remanding the matter to the Tribunal for fresh computation of compensation in light of these principles.
Headnote
A) Motor Accident Claims - Computation of Compensation - Loss of Earning Capacity - Pension Deduction - Pension and retirement benefits cannot be deducted from salary for computing loss of earning capacity as they are statutory rights receivable irrespective of accident - Held that the High Court erred in deducting pension amount from salary (Paras 19-20). B) Motor Accident Claims - Future Prospects - Addition for Salaried Employees - For a person aged 40-50 years with permanent job, 30% of actual salary must be added towards future prospects as per Pranay Sethi - Held that neither Tribunal nor High Court awarded future prospects, and appellant is entitled to 30% addition (Paras 18, 21). C) Motor Accident Claims - Interest Rate - Reduction from 9% to 6% - Tribunal awarded 9% per annum which is just and proper; High Court's reduction to 6% is not justified - Held that interest rate of 9% per annum is restored (Para 22). D) Motor Accident Claims - Disability Assessment - Medical Board vs. Commissioner - Tribunal-appointed Commissioner assessed disability at 77.72% but Tribunal took 50% and High Court used 61.94% - Held that in absence of challenge to Commissioner's evidence, his assessment should be accepted; matter remanded for fresh determination of disability percentage (Paras 7, 23).
Issue of Consideration
Whether the High Court erred in deducting pension from salary for computing loss of earning, in not awarding future prospects, in reducing interest rate from 9% to 6%, and in not accepting the higher disability assessment of 77.72%
Final Decision
Appeal partly allowed. The impugned order of the High Court is set aside. The matter is remanded to the Motor Accident Claims Tribunal for fresh computation of compensation in accordance with law, considering: (i) no deduction of pension from salary; (ii) addition of 30% towards future prospects; (iii) interest at 9% per annum; (iv) reconsideration of disability percentage in light of Commissioner's evidence. The Tribunal shall pass fresh award within six months.
Law Points
- Compensation for loss of earning capacity must be based on last drawn salary without deducting pension
- Future prospects must be added for salaried employees aged 40-50 years at 30% addition
- Interest rate of 9% per annum is just and proper
- Disability assessment by Tribunal-appointed Commissioner should be considered
