Pay Protection Cannot Deny Loss Of Future Income Claims: Karnataka High Court

In a significant ruling that underscores the importance of career trajectory over mere salary preservation, the Karnataka High Court has held that a Motor Accident Claims Tribunal (MACT) cannot deny compensation for loss of future income solely because the claimant's pay was protected after a road accident. Justice K V Aravind, presiding over the Kalaburagi Bench, emphasized that a reduction in job category, even with pay parity, deprives a claimant of future opportunities and perquisites.

Background: From Drivers to Attendants

The case involved two employees of the North Eastern Karnataka Road Transport Corporation (NEKRTC): Chandrakant, a driver-cum-conductor, and Mahantesh, a driver. On April 16, 2016, they sustained injuries in a road accident involving a NEKRTC bus and a lorry. The injuries rendered them medically disqualified from working as drivers. The Corporation, in a sympathetic move, reassigned them as Attenders while protecting their existing salaries.

The MACT at Shahapur, while awarding compensation for medical expenses, pain, and other heads, refused to grant any amount for loss of future income. The Tribunal reasoned that since the claimants continued to draw the same salary, there was no actual loss of income.

Arguments: Lost Career Prospects vs. Pay Protection

The claimants' counsel, Sri. Sidramreddy Venkanna Paraddy, argued that the Tribunal had erred by focusing narrowly on salary. He submitted that the change from skilled driving positions to the lower post of Attender stripped the claimants of future increments, better prospects, and perquisites that would have naturally accrued over a career. He pointed out that both claimants had undergone surgery and spent significant time as inpatients—15 days for Chandrakant and 9 days for Mahantesh.

Opposing this, the insurers' counsel contended that since the claimants' salaries remained unchanged, there was no loss of income to compensate. They argued that hypothetical future prospects could not be considered.

High Court's Reasoning: More Than Just Salary

Justice K V Aravind rejected the narrow view. The Court observed that the post of Attender and driver cannot be considered equal posts. "Though pay protection is given, there is a reduction in category, which is lower than the post of driver," the judgment noted. The Court highlighted that the claimants, had they continued as drivers, would have enjoyed certain perquisites and the option to resign, retire voluntarily, or continue as skilled drivers—opportunities now lost.

The Court found that the very change in duties was evidence of functional disability. While the medical evidence assessed permanent disability at 25% and 20% respectively, the Court determined that 15% functional disability was appropriate for both cases, given the loss of skilled employment.

Key Observations

"The Tribunal, while considering this issue, committed an error in placing much reliance on the pay protection without examining the opportunities that are deprived to the claimants."

"Hypothetically, the claimants had an option to resign or retire voluntarily or on superannuation and continue to work as skilled drivers. These prospects are no longer available in view of the disqualification suffered due to the accidental injuries."

Decision: Enhanced Compensation and Remand

The High Court allowed both appeals in part. It enhanced the compensation by ₹17,000 in each case, increasing the amounts awarded for attendant charges (from ₹4,000 to ₹15,000) and food and nourishment (from ₹4,000 to ₹10,000). The total compensation now stands at ₹1,78,000 for Mahantesh (MVC No. 1/2017) and ₹2,23,000 for Chandrakant (MVC No. 2/2017).

Crucially, the Court remanded the cases to the MACT for a limited exercise: determining the loss of future income based on a 15% functional disability and the claimants' actual income. The Tribunal must complete this assessment within three months, with the parties directed to appear on September 29, 2026, without further notice.

Implications

This ruling clarifies that pay protection does not extinguish a claimant's right to compensation for loss of future income when the accident results in a downgrade of job role. It reinforces that MACTs must consider the full spectrum of career losses, including diminished prospects and lost perquisites, rather than focusing solely on current salary. The decision is likely to guide similar claims involving public sector employees who are reassigned to lower posts after accidents.