In an amputee's claim under the Motor Vehicles Act, the Supreme Court held that compensation for loss of earning capacity turns on functional disability — the real reduction in earning power in the claimant's vocation — not the percentage of physical disability certified by a medical board. It also reaffirmed that income-tax returns are cogent proof of pre-accident income and cannot be brushed aside on surmises.
The Supreme Court held that there is no bar on a Motor Accident Claims Tribunal or appellate court awarding compensation greater than the sum claimed. The statutory duty under Section 168 of the Motor Vehicles Act is to award just compensation, subject only to the claimant paying court fee on the enhanced amount.
The Supreme Court held that the addition for future prospects cannot be refused merely because the victim's income was notional rather than proved. Applying the Pranay Sethi percentages to a homemaker's notional income, the Court underscored the economic value of domestic work.
On 17 March 2026, a two-judge bench of Justices Pankaj Mithal and Prasanna B. Varale held that amounts received by the dependants of the deceased under employer-provided group insurance — or under other contractual or social-security benefits — cannot be treated as 'pecuniary advantages' liable to be deducted from compensation awarded under the Motor Vehicles Act, 1988. The judgment affirms the prior doctrinal line that advantages accruing from contracts performed during the deceased's lifetime are not outcomes of the death itself, and produces a working frame for the just-compensation architecture in motor-accident claims.