The future prospects cannot be deprived to both fixed-salary and self-employed individuals in motor vehicle accident compensation as they possess income growth potential due to inflation and career advancement, The Supreme Court (SC) says in Kavita Nagar & Others v The Oriental Insurance Co Ltd.
Even though there was no proof of periodic income increase in the salary of the deceased, the compensation awarded to the claimant shall include future prospects, the SC says.
The court discarded the reasoning that since the income of a fixed-salary employee or a self-employed deceased person remains stagnant, and their claimants cannot claim future prospects.
Instead, the factors like age, career growth, and economic conditions, ensuring fair compensation that reflects the individual’s true earning potential over time should be considered.
The SC relied on the view expressed in National Insurance Company Ltd v Pranay Sethi, which rightly emphasizes that failing to account for these dynamics creates a distorted view, where individuals in self-employment or fixed-income roles are presumed to have a stagnant earning potential. Such an outlook is fundamentally flawed because it negates the drive for income growth, which is inherent to human ambition and sustenance, the SC says.
