Weigh future potential when awarding relief: SC

What is the news?

Reversing a High Court (HC) judgement, the Supreme Court (SC) observed that the possibility for a bright future of an accident victim should be considered while determining compensation.

The court was dealing with the death of a 21-year-old engineering student in an accident. The Madhya Pradesh High Court calculated his monthly income at Rs. 5,000.

As per SC, the High Court had committed a grave error.

What are the observations made by the SC?

As per the Supreme Court,

To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time

– The High Court has not considered the future rise in income while awarding the future loss of income. The future rise of income of the road accident victim should be taken into consideration, even if he or she was not earning at the time of death.

– The future rise in income should be calculated after considering factors like, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc.

– The legal heirs of the deceased shall also be entitled to future prospects by adding future rise in income, i.e., addition of 40% of the income determined on guesswork considering the educational qualification, family background etc., where the deceased was below the age of 40 years

Source: This post is based on the article “Weigh future potential when awarding relief: SC” published in The Hindu on 20th Nov 2021.