Pay Protection After Demotion Does Not Extinguish Loss of Future Income, Karnataka HC Rules for NEKRTC Drivers

The Karnataka High Court, Kalaburagi Bench, held that NEKRTC drivers reassigned as Attenders after accident-related disqualification retain a claim for loss of future income despite unaltered pay, remanding the matter for fresh assessment of income at the MACT level.

The High Court of Karnataka, Kalaburagi Bench, on 5 August 2026 partly allowed two Motor Vehicles Act appeals filed by injured NEKRTC bus crew members, ruling that the continuation of the same salary after reassignment to a lower-category post does not bar a claim for loss of future income. Justice K V Aravind, sitting singly, found that the Motor Accidents Claims Tribunal at Shahapur had erred by focusing exclusively on pay protection while ignoring the skilled prospects, perquisites, and post-retirement employment opportunities that the claimants had permanently lost. The court fixed functional disability at 15 per cent in both cases, modestly enhanced compensation under ancillary heads, and remitted the question of income assessment back to the Tribunal for a fresh exercise on evidence.

The Accident and the Tribunal's Award

The two claimants, Chandrakanth and Mahantesh, were employed with the North-Eastern Karnataka Road Transport Corporation (NEKRTC) — one as a driver-cum-conductor and the other as a driver at the Shahapur Depot. On 16 April 2016, they suffered injuries in a road accident involving their NEKRTC bus (KA-33/F-0112) and a lorry (AP-20-Y-0459). Separate claim petitions were filed before the Senior Civil Judge and JMFC & Addl. MACT-4, Shahapur, registered as MVC No. 01/2017 and MVC No. 02/2017.

The Tribunal awarded Rs. 1,61,000 with 6 per cent interest in MVC No. 01/2017 and Rs. 2,06,000 with 6 per cent interest in MVC No. 02/2017. On the question of loss of future income, the Tribunal declined to award anything, reasoning that both claimants had continued in NEKRTC service and drawn the same salary after the accident. The claimants filed appeals under Section 173(1) of the Motor Vehicles Act, seeking compensation of Rs. 14,39,000 and Rs. 14,00,000 respectively.

The Legal Issue: Does Wage Continuity Defeat a Future Income Claim?

Before Justice Aravind, the claimants' counsel argued that the accident injuries had disqualified both men from driving, and NEKRTC had, as a sympathetic measure, transferred them to the post of Attender — a categorically lower role. The submission was that the Tribunal wrongly equated the Attender post with the driver or driver-cum-conductor post simply because the pay figure remained the same. Benefits specific to skilled driving employment — increments available to drivers, perquisites attached to the driver cadre, and the option to work as skilled drivers after superannuation — were all permanently foreclosed.

Counsel for the insurers — Bharti AXA General Insurance Co. Ltd. (insurer of the lorry AP-20-Y-0459) and Sri Ram General Insurance Co. Ltd. (insurer of lorry KL-11-L-4316) — countered that a loss-of-future-income head requires an actual reduction in earnings. Since neither claimant suffered a salary cut, the Tribunal's refusal was correct. They also submitted that speculative future prospects or contingencies could not form the basis for an award.

How the Court Reasoned

Justice Aravind framed the precise question as whether the Tribunal was justified in denying the head of loss of future income solely because pay was protected, even though the claimants had been assigned different and lower duties. He answered in the negative.

The court accepted as an undisputed fact that the claimants had possessed skilled driver qualifications and, but for the accident, would have been entitled to increments and other benefits available in the driver cadre. The transfer to Attender was characterised as a sympathetic organisational decision by NEKRTC, not an equivalent redeployment. The post of Attender, the court held, cannot be treated as equal to that of a driver or driver-cum-conductor, even where pay protection is given, because the move represents a reduction in category.

The court identified a further dimension: had the claimants continued as drivers, they would have retained the option to resign, retire voluntarily or on superannuation and then work independently as skilled drivers. That post-employment livelihood avenue was permanently closed by the disqualification arising from their injuries. The Tribunal, Justice Aravind held, had placed excessive reliance on pay protection and had not examined the opportunities of which the claimants had been deprived.

On disability, the medical evidence before the Tribunal placed the figure at 25 per cent (MVC No. 02/2017) and 20 per cent (MVC No. 01/2017). The court noted the general practice of taking one-third of assessed permanent disability for compensation purposes, but observed that functional disability can be assessed in exceptional cases. Here, the undisputed shift from driver to Attender was itself evidence of functional disability. Justice Aravind fixed functional disability at 15 per cent for the purpose of the loss-of-future-income calculation in both cases.

The court acknowledged, however, that the Tribunal had not assessed monthly income in either case and that the record contained no evidence from which income could be determined. Accordingly, a full determination of the loss-of-future-income head was not possible at the appellate stage. The matter was remitted to the Tribunal for the limited exercise of assessing income and computing the award under that head alone.

Enhancements Under Ancillary Heads

While the question of loss of future income went back to the Tribunal, the court intervened on several other heads. Both claimants had undergone surgery with implants — one was hospitalised for 15 days and the other for 9 days. Justice Aravind found the amounts awarded for attendant charges and food and nourishment inadequate given the duration of hospitalisation and the nature of the procedures.

In MVC No. 02/2017, attendant charges were enhanced from Rs. 4,000 to Rs. 15,000 and food and nourishment from Rs. 4,000 to Rs. 10,000, bringing total compensation from Rs. 2,06,000 to Rs. 2,23,000 (an enhancement of Rs. 17,000). All other heads — medical expenses of Rs. 1,13,000, future medical expenses of Rs. 20,000, pain and suffering of Rs. 30,000, loss of amenities of Rs. 20,000, and conveyance of Rs. 15,000 — were maintained.

In MVC No. 01/2017, attendant charges were similarly enhanced from Rs. 4,000 to Rs. 15,000 and food and nourishment from Rs. 4,000 to Rs. 10,000, taking total compensation from Rs. 1,61,000 to Rs. 1,78,000 (also an enhancement of Rs. 17,000). Medical expenses of Rs. 48,000, future medical expenses of Rs. 15,000, pain and suffering of Rs. 60,000, loss of amenities of Rs. 20,000, and conveyance of Rs. 10,000 remained unchanged.

Order

Both appeals were allowed in part. The judgment and award dated 25 June 2020 in MVC Nos. 01/2017 and 02/2017 passed by the Senior Civil Judge and JMFC & Addl. MACT-4, Shahapur, stand modified. The claimant in MVC No. 01/2017 is entitled to total compensation of Rs. 1,78,000 and the claimant in MVC No. 02/2017 to Rs. 2,23,000, subject to any further amount the Tribunal may award on remand for loss of future income.

The matter was remitted to the Tribunal for the limited exercise of determining income and computing compensation under the head of loss of future income, with functional disability fixed at 15 per cent. Since both parties were represented before the High Court, the court directed them to appear before the Tribunal on 29 September 2026 without awaiting fresh notice. Given that the accident occurred in 2016, the Tribunal was directed to complete the remand proceedings within three months of the date of appearance. All other conditions imposed by the Tribunal were maintained. No order as to costs was made.