Chhattisgarh HC rules interest applies on future prospects in motor accident compensation, dismisses insurer appeals

News Citation : 2026 LN (HC) 263 | 2026:CGHC:17586

April 17, 2026 : The Chhattisgarh High Court has dismissed two appeals filed by Royal Sundaram General Insurance Company Ltd., reaffirming that interest is payable on compensation amounts that include future prospects in motor accident claims.

In a common judgment dated April 17, 2026, Justice Sanjay K. Agrawal dealt with MAC No. 1181 of 2020 and MAC No. 1185 of 2020, both arising out of the same accident but involving separate claim cases. The insurer had challenged awards passed by the Motor Accident Claims Tribunal, Mahasamund, which had granted compensation with 9% interest to the claimants and fixed liability on the insurance company.

The core issue before the High Court was narrow but significant: whether interest can be awarded on the component of “future prospects” in compensation. The insurer argued that future prospects represent anticipated income and therefore should not carry interest, as the benefit accrues in the future rather than immediately.

Rejecting this contention, the Court relied on a recent ruling of the Supreme Court of India in Oriental Insurance Co. Ltd. v. Niru and others. The apex court had clarified that such arguments are untenable, noting that in reality, compensation often reaches claimants years after the accident due to litigation delays. As a result, even amounts calculated towards future prospects effectively compensate for past deprivation.

The High Court observed that delays in disbursement deprive claimants of timely financial support, and interest serves as a minimal remedy for that loss. It further noted that insurers have the option to make provisional payments early, which could reduce interest liability.

Applying this reasoning, the Court held that the Tribunal was correct in awarding interest on the entire compensation, including future prospects. Finding no merit in the insurer’s appeals under Section 173 of the Motor Vehicles Act, 1988, the Court dismissed both appeals.

Case Reference : MAC No. 1181 of 2020 (Royal Sundaram General Insurance Company Ltd. vs. Sarita Sidar & Ors.) and MAC No. 1185 of 2020 (Royal Sundaram General Insurance Company Ltd. vs. Fagnuram Yadav & Ors.); Counsels: For Appellant – Mr. Anupam Dubey, Advocate; For Respondents – None.