Just Compensation Cannot Be Minimalistic: Punjab & Haryana HC Enhances MACT Award Applying Functional Disability and Future Prospects
Case Name: Alam v. Rajasthan State Road Transport Corporation and Another
Date of Judgment: 27.03.2026
Citation: FAO No. 4610 of 2008
Bench: Justice Harkesh Manuja
Held: The Punjab & Haryana High Court held that compensation awarded by the Motor Accident Claims Tribunal must be “just, fair, and reasonable” and cannot be denied or reduced merely due to absence of strict documentary proof. The Court emphasized that functional disability, future prospects, and realistic assessment of income must be considered while computing compensation in injury cases.
Summary: The present appeal was filed by the claimant seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal, Gurgaon, which had granted ₹95,000/- along with interest for injuries sustained in a motor accident dated 22.11.2005. The Tribunal had already held that the accident occurred due to rash and negligent driving, and that finding was not in dispute before the High Court.
The grievance of the appellant was that the compensation awarded was grossly inadequate considering the nature of injuries suffered. The record revealed that the claimant sustained multiple serious injuries, including a fracture of the left clavicle, chest injury, and severe head injury with haemorrhagic contusion causing midline shift. He remained hospitalized for several days and was rendered bedridden for about six months.
Medical evidence further established that the claimant suffered 25% permanent disability due to restricted movement of the left shoulder. However, the Court assessed functional disability at 20% considering the nature of his work as a labourer and its impact on earning capacity.
On the issue of income, the Court held that strict proof is not required in motor accident claims and some amount of reasonable estimation or “guesswork” is permissible. While the claimant had asserted a monthly income of ₹3,000/-, the Court reassessed it at ₹4,000/- considering minimum wages and prevailing economic conditions.
Applying settled principles laid down in Raj Kumar v. Ajay Kumar, the Court recalculated compensation under various heads. It granted compensation for loss of income during treatment, future loss of earnings by applying multiplier and functional disability, and added 30% towards future prospects in line with Pranay Sethi.
The Court also found that the Tribunal had erred in restricting medical expenses despite substantial evidence on record and enhanced the amount to ₹60,000/-. Further, significant enhancement was made under the heads of pain and suffering and other incidental expenses such as special diet, attendant charges, and conveyance, recognizing the long-term impact of injuries.
Decision: The High Court allowed the appeal and substantially enhanced the compensation from ₹95,000/- to ₹7,72,135/-. It also increased the rate of interest from 7.5% to 9% per annum from the date of filing of the claim petition till realization, with a further stipulation of 12% interest in case of delay beyond three months.
The Court reiterated that compensation in motor accident cases must reflect a realistic and humane assessment of the claimant’s loss and suffering, and cannot be reduced to a token amount.