2026 INSC 260 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). OF 2026

(Arising out of SLP (Civil) No(s). of 2026)

(Diary No(s).37186 of 2023)

R. HALLE ….APPELLANT(S)

VERSUS

RELIANCE GENERAL

INSURANCE COMPANY

LIMITED ….RESPONDENT(S)

J U D G M E N T

Mehta, J.

1. Heard. Delay condoned.

2. Leave granted.

3. The instant appeal arises out of judgment and

order dated 11

th January, 2022 passed by High Court

of Judicature at Madras

1 in Civil Miscellaneous

Appeal No. 3595 of 2021. The said appeal was

preferred by appellant herein

2 seeking enhancement

1

Hereinafter, being referred to as the “High Court”.

2

Hereinafter, being referred to as the “appellant-claimant”.

2

of maintenance as awarded by Motor Accidents

Claims Tribunal, Special Subordinate Judge,

Coimbatore.

3 By its award dated 22

nd January, 2020,

the MACT granted compensation in the sum of

Rs.65,53,811/- (Rupees Sixty-Five Lakh Fifty-Three

Thousand Eight Hundred Eleven Only ) along with

interest at the rate of 7.5% per annum from the date

of petition till its realization to the appellant-claimant

and directed the Reliance General Insurance

Company Limited,

4 to satisfy the award. The MACT,

however, granted liberty to the respondent-insurer to

recover the said amount from the driver-cum-owner

of the offending vehicle, namely, R. Chinnadurai

5, in

accordance with law.

4. The High Court, vide the impugned judgment

dismissed the appeal filed by appellant-claimant

seeking enhancement and partly allowed the appeal

6

filed by the respondent-insurer thereby reducing the

amount of compensation of Rs.65,53,811/ - as

3

Hereinafter, being referred to as the “MACT”.

4

Hereinafter, being referred to as the “respondent-insurer”.

5

R. Chinnadurai was impleaded as party-Respondent No. 2 in the present

SLP. However, his name came to be deleted from the array of parties vide

order dated 13

th

December, 2024.

6

Civil Miscellaneous Appeal No. 464 of 2021.

3

awarded by MACT to Rs.35,61,000/- (Rupees Thirty-

Five Lakh Sixty-One Thousand Only).

5. For the sake of convenience, the chart

indicating the various heads under which

compensation was awarded to appellant-claimant by

the MACT as well as the High Court, along with the

amounts granted thereunder, is reproduced

hereinbelow: -

Head Awarded by

MACT

Awarded by HC Enhanced/

Reduced/

Granted/

Confirmed

Future loss of

earning power

Rs.40,000/- x

12 x 63%

(Disability) x 17

=

Rs.51,40,800/-

Rs.40,000/- x

12 x 30%

(Disability) x 17

=

Rs.24,48,000/-

Reduced

Medical

expenses

Rs.5,88,011/- Rs.5,88,011/- Confirmed

Loss of

amenities

Rs.3,00,000/- Rs.1,00,000/- Reduced

Pain and

Sufferings

Rs.5,00,000/- Rs.2,00,000/- Reduced

Transportation

to Hospital

Rs.10,000/- Rs.10,000/- Confirmed

Extra

Nourishment

Rs.10,000/- Rs.10,000/- Confirmed

4

Damage to

Clothing and

Articles

Rs.5,000/- Rs.5,000/- Confirmed

Loss of marital

prospectus

- Rs.2,00,000/- Granted

Total Rs.65,53,811/- Rs.35,61,011/-

[Rounded off

to Rs.

35,61,000/-]

Brief Facts: -

6. The facts in a nutshell relevant and essential for

disposal of the appeal are as follows.

7. On the night of 5

th May, 2016, at about 10:00

p.m., the appellant-claimant was proceeding on his

motorcycle bearing Registration No. TN-38-BY-9380

along Mettupalayam Road at Periyanaickenpalayam,

travelling from south to north. At that juncture,

another motorcycle bearing Registration No. TN-38-

CD-5823, driven by R. Chinnadurai, approached

from the opposite direction. It is the case of appellant-

claimant that the said vehicle was being driven in a

rash and negligent manner and collided head-on with

his motorcycle.

8. As a result of the impact, the appellant-claimant

was thrown onto the road and sustained grievous

injuries, including a fracture of the left leg, facial

5

injuries, and a severe head injury. He was

immediately taken to Ganga Hospital, Coimbatore,

where he was admitted as an inpatient and

underwent treatment. In connection with the said

occurrence, an FIR bearing Crime No.236 of 2016

was registered on 7

th May, 2016 against R.

Chinnadurai for the offences punishable under

Sections 279 and 338 of the Indian Penal Code, 1860,

at Police Station Periyanaickenpalayam, Coimbatore

District, Tamil Nadu.

9. After undergoing treatment for nearly a month,

the appellant-claimant was discharged from the

hospital on 29

th May, 2016. It is the case of the

appellant-claimant that notwithstanding prolonged

treatment, he was left with a permanent disability

assessed at 65%, which, according to him, has

substantially impaired his functional capacity and

earning potential.

10. The appellant-claimant thereafter approached

the MACT seeking compensation, contending that at

the time of the accident he was about 30 years of age,

hale and healthy, and employed as a Manager at

Flyjac Logistics Pvt. Ltd., Chennai, earning a monthly

income of Rs.25,000/-. Alleging that the accident

6

occurred solely due to the rash and negligent driving

of R. Chinnadurai, he filed a claim petition,

7 claiming

a sum of Rs.30,00,000/- (Rupees Thirty Lakh Only)

from R. Chinnadurai and respondent-insurer

towards loss of income, medical expenses, pain and

suffering, and other consequential damages.

11. Upon a comprehensive and meticulous

evaluation of the oral and documentary evidence

adduced on record, including the testimony of the

appellant-claimant (PW-1) and PW-2, the medical

records, the disability certificate issued by the

competent Medical Board, and the salary documents

exhibited on behalf of the appellant-claimant,

coupled with the fact that the driver-cum-owner

remained ex parte and there was no contra evidence

from the respondent-insurer, the MACT arrived at a

categorical finding that the accident had occurred

solely due to the rash and negligent driving of R.

Chinnadurai and that the appellant-claimant had

satisfactorily established the nature and extent of the

injuries sustained by him. The MACT, placing due

reliance on the disability certificate, assessed the

7

Motor Accidents Claim Original Petition No. 1372 of 2016.

7

permanent disability at 63% as certified therein,

holding the same to have a direct bearing on the

appellant-claimant’s functional and earning

capacity.

12. The MACT, having accepted the disability

certificate issued by the Medical Board, proceeded to

determine the impact of such disability on appellant-

claimant’s earning capacity. Applying the multiplier

method

8 in view of the settled legal position and

taking into consideration appellant-claimant’s age,

monthly income inclusive of future prospects

[Rs.29,108/- + (40% of Rs.29,108/-) = Rs.40,751

(Rounded off to Rs.40,000/-)], and the functional

consequences of the injuries sustained, the MACT

computed the loss of future earning capacity at

Rs.51,40,800/- (Rs.40,000/- x 12 x 63% (Disability)

x 17). In addition, thereto, it awarded amounts under

the heads of medical expenses, loss of amenities, pain

and suffering, transportation, extra nourishment,

and other incidental expenses. On such computation

under the various permissible heads, the MACT

quantified the total compensation at Rs.65,53,811/-

8

Multiplier was taken to be “17” since the age of appellant-claimant was

fixed as 30 years.

8

(Rupees Sixty-Five Lakh Fifty-Three Thousand Eight

Hundred Eleven Only) along with interest at the rate

of 7.5% per annum from the date of petition till its

realization and awarded the said sum to the

appellant-claimant, as detailed supra. The MACT

directed the respondent-insurer to satisfy the award,

while granting it liberty to recover the said amount

from the driver-cum-owner of the offending vehicle,

namely, R. Chinnadurai, in accordance with law.

13. Being aggrieved by the award passed by the

MACT, the respondent -insurer preferred Civil

Miscellaneous Appeal No. 464 of 2021 before the

High Court, contending that the compensation

awarded was excessive and disproportionate to the

injuries sustained and the disability suffered by the

appellant-claimant. Simultaneously, the appellant-

claimant also preferred Civil Miscellaneous Appeal

No. 3595 of 2021 seeking enhancement of the

compensation awarded, asserting that the amount

granted by the MACT was inadequate having regard

to the nature of injuries, extent of permanent

disability, and the consequential loss suffered by

him.

9

14. The High Court, upon reappreciation of the

evidence on record, observed that though the Medical

Board had assessed the physical disability of the

appellant-claimant at 63%, the same could not be

mechanically adopted for the purpose of determining

loss of earning capacity. Upon an independent

evaluation of the nature of injuries and the impact of

such injuries on the appellant-claimant’s avocation

as a Manager in a private concern, the High Court

adjudged the functional disability suffered by the

appellant-claimant at 30%. In view of the said

finding, the High Court, vide its common judgment

and order dated 11

th January, 2022, dismissed the

appeal preferred by the appellant-claimant seeking

enhancement of compensation and partly allowed the

appeal filed by the respondent-insurer, thereby

reducing the total compensation awarded by the

MACT from Rs.65,53,811/ - to Rs.35,61,000/-

(Rupees Thirty-Five Lakh Sixty-One Thousand Only),

as detailed supra, modifying the award of the MACT

to that extent.

15. Being dissatisfied with the dismissal of his

appeal seeking enhancement of compensation as

awarded by the MACT, the appellant-claimant has

10

preferred the instant appeal by special leave before

this Court.

Submissions on behalf of appellant-claimant: -

16. Ms. Haripriya Padmanaban, learned senior

counsel appearing on behalf of appellant-claimant,

assailed the impugned judgment of the High Court on

the following counts: -

A. That the High Court failed to appreciate that the

Medical Board had categorically assessed the

physical disability of the appellant-claimant at

63%, which finding was based on a duly

constituted medical examination and stood

substantiated by the disability certificate placed

on record. The Medical Board had recorded that

the case involved a head injury treated

conservatively, facial injury, and left femur

fracture treated by surgical intervention, and that

the said injuries had resulted in partial

blindness, cognitive impairment, and partial

loss of range of motion and stability of the left

knee. It was submitted that the MACT had

correctly placed reliance on the said expert

medical opinion and there was no justifiable

reason for the High Court to dilute the effect of the

11

certified disability while computing the loss of

earning capacity.

B. That the appellant-claimant had suffered severe

head injury in the accident, resulting in serious

cognitive impairments, as reflected in the

neuropsychological assessment report. The said

report demonstrated that the Memory Scale of the

patient, i.e., appellant-claimant indicated severe

impairment of both verbal and visual memory;

tests relating to frontal lobe functioning revealed

impairment; while parietal lobe functioning was

found to be intact. It was further submitted that

the appellant-claimant’s IQ score of 65 placed him

within the category of Mild Intellectual Disability,

thereby evidencing substantial neurological

degradation having direct bearing on his

functional abilities and employability.

C. That both the High Court and the MACT failed to

properly appreciate that although the physical

disability had been assessed at 63% by the

Medical Board, the functional disability suffered

by the appellant-claimant, having regard to the

nature of brain injury and its consequences, was

in effect 100%, as the cognitive deficits and

12

neurological damage had rendered the appellant-

claimant totally incapable of resuming his

previous avocation or engaging in any gainful

employment, resulting in a complete loss of

earning capacity.

D. That the appellant-claimant placed reliance upon

several precedents of this Court to contend that

in appropriate cases this Court has enhanced

compensation by taking into consideration the

educational background, and socio -economic

status of the victim, so as to ensure that just

compensation is awarded to the victim. It was

further urged that this Court has consistently

restricted untenable legal defences raised by

insurance companies and has emphasized that

the burden lies upon them to establish any

limited statutory defence. It was specifically

contended that the respondent-insurer had failed

to place any material on record to demonstrate

that the functional disability suffered by the

appellant-claimant was lesser than the

percentage determined by the MACT, and in the

absence of any contra evidence, the reduction of

compensation effected by the High Court was

13

wholly unjustified. In the light of the settled

principles governing award of just compensation

under the Motor Vehicles Act , 1988, it was

submitted that the appellant-claimant is entitled

to enhancement of compensation over and above

what was awarded by the MACT.

On the aforesaid grounds, learned senior counsel

urged that the impugned judgment of the High Court

does not withstand judicial scrutiny, being founded

on an erroneous appreciation of the evidence and a

misapplication of the settled principles governing

assessment of disability and loss of earning capacity.

It was submitted that the judgment, having

disregarded material and unimpeachable

documentary evidence available on record, deserves

to be set aside. It was further prayed that this Court

may be pleased to enhance the compensation

appropriately by holding that the functional disability

suffered by the appellant-claimant is 100%, and by

recalculating the loss of future earning capacity and

other consequential heads in accordance with law.

14

Submissions on behalf respondent-insurer: -

17. Ms. Prerna Mehta, learned counsel appearing

on behalf of respondent-insurer, supported the

impugned judgment to the hilt and urged that the

same calls for no interference by this Court, inter alia,

on the following grounds: -

A. That the High Court has rightly and justly

exercised its appellate jurisdiction upon a proper

reappreciation of the evidence on record, and the

impugned judgment is well-reasoned, balanced

and in consonance with the settled principles

governing assessment of compensation under the

Motor Vehicles Act, 1988. It was submitted that no

perversity or patent illegality has been

demonstrated in the High Court’s reasoning

warranting interference by this Court.

B. That the High Court correctly held that physical

disability assessed by the Medical Board cannot

ipso facto be equated with functional disability for

the purpose of determining loss of earning

capacity. It was contended that the High Court,

upon considering the nature of employment of the

appellant-claimant and the material placed on

record, justifiably concluded that though the

15

physical disability was assessed at 63%, the

functional disability suffered by the appellant-

claimant ought to be taken at 30% for the purpose

of computation of compensation.

C. That the evidence on record does not establish

that the disability suffered by the appellant-

claimant has resulted in a complete loss of income

or total incapacity to earn. It was urged that the

injuries sustained by the appellant-claimant were

treated, and the disability certificate itself

indicates disability to the extent of 63%. In the

absence of cogent evidence demonstrating total

incapacitation or inability to undertake any form

of gainful employment, it cannot be contended

that the appellant-claimant has suffered 100%

functional disability or has lost his entire earning

capacity.

On these grounds, learned counsel submitted that

the impugned judgment of the High Court is legally

sound and does not warrant interference, and

accordingly prayed that the present appeal be

dismissed.

16

Analysis and Discussion: -

18. We have heard and considered the submissions

advanced by learned counsel for the parties and have

carefully gone through the impugned judgment as

well as the material placed on record.

19. At the outset, it must be noted that insofar as

the determination of monthly income and the

addition towards future prospects are concerned,

there is no serious dispute before us. The controversy

in the present appeal lies within a narrow compass.

The principal issue which falls for our consideration

is with regard to the assessment of extent of disability

for the purpose of computing loss of earning capacity,

and more particularly, the soundness of the High

Court’s determination of functional disability at 30%

as against 63% assessed by the Medical Board and

affirmed by the MACT. The consequential effect of the

above exercise would be to determine whether the

appellant-claimant is entitled to any further

enhancement of compensation over and above the

amount awarded by the MACT.

20. At the first instance, the MACT, upon

appreciation of the oral and documentary evidence

including the disability certificate (Exh.C-1), the

17

neuropsychological assessment report, and the

nature of avocation of the appellant-claimant as a

Manager in a private concern, accepted the

permanent physical disability assessed by the

Medical Board at 63% and proceeded to compute the

loss of future earning capacity by applying the

multiplier method established by a long line of

binding precedents. The MACT took note of the fact

that the injuries included a head injury resulting in

cognitive impairment, partial blindness, and

restriction of movement and stability of the left knee,

and recorded a finding that such disability had a

direct bearing on the appellant-claimant’s earning

capacity.

21. However, the High Court, while observing that

physical disability cannot be mechanically equated

with functional disability, reduced the functional

disability suffered by the appellant-claimant from

63% to 30% without adverting in detail to the medical

evidence on record, particularly the findings of the

Medical Board and the neuropsychological report

evidencing cognitive deficits suffered by the

appellant-claimant as a consequence of the injuries

suffered in the accident. No independent contra

18

material was placed on record by the respondent-

insurer to displace the evidentiary value of the

disability certificate. In our considered view, such

reduction of the functional disability, in the absence

of convincing evidence impeaching the credibility of

the medical certificates placed on record by the

appellant-claimant and without assigning cogent

reasons, was not at all justified. For ready reference,

the relevant extract from the impugned judgment is

reproduced hereinbelow: -

“10. According to the claimant he was earning a sum

of Rs.29,108/- per month by working as a Manager

in a private concern, which has been proved through

Exs.21 to 25. Thus, the Tribunal has arrived the

amount under the head of loss of earning power, by

multiplying the disability as 63%. It appears to be on

the higher side. Though the Medical Board has

assessed the physical disability of the claimant

as 63%, after going through the records, we have

come to the conclusion that the functional

disability suffered by the claimant would be 30%.

After adding 40% towards future prospectus, the

total income of the claimant is arrived at

Rs.40,751/-, rounded off to Rs.40,000/-. Thereby,

the claimant is entitled for an amount of

Rs.24,48,000/- (Rs.40,000/- x 12 x 30% x 17);

Rs.1,00,000/- for Loss of amenities; Rs.2,00,000/-

under Pain and sufferings; since the claimant was

unmarried at the time of accident and sustained

grievous injuries in the accident, an amount of

Rs.2,00,000/- is granted towards loss of marital

prospectus; The amounts awarded under the heads

of Medical expenses, Transportation to hospital,

19

Extra nourishment and Damage to clothing and

articles are confirmed.”

[Emphasis supplied]

22. A careful reading of the aforesaid extract

indicates that the High Court merely adverted to the

general principles governing assessment of disability

and, without undertaking any independent analysis

of the evidence on record, abruptly concluded that

the functional disability suffered by the appellant-

claimant would be 30%. There is no discussion as to

why the medical findings, the disability certificate

issued by the competent Medical Board , or the

neuropsychological report were doubtful or

insufficient to sustain the conclusion reached by the

MACT. Equally, while reducing the quantum of

compensation, no specific or cogent reasons have

been assigned for curtailing the amounts awarded

under the heads of “Loss of Amenities” and “Pain and

Suffering,” which were based on the nature and

gravity of the injuries sustained by the appellant-

claimant. In our considered opinion, such

conclusions, abruptly arrived at without proper

reappreciation of the evidence and without recording

adequate reasons, are in the nature of presumptions

20

and assumptions and cannot be sustained in the

eyes of law.

23. Ordinarily, where a Court exercising appellate

jurisdiction reverses or modifies a finding of fact

recorded by the Court of first instance without a

proper reappreciation of the evidence or without

assigning cogent reasons, this Court would be

justified in setting aside the impugned judgment and

remitting the matter for fresh consideration on merits

and in accordance with law. In the present case, the

assessment of functional disability, which had a

direct bearing on the determination of just

compensation, necessarily required a careful

scrutiny of the medical evidence and its impact on

the avocation of the injured. The failure to undertake

such an exercise would, in the normal course,

warrant a remand.

24. However, we cannot be oblivious of the fact that

the accident occurred in the year 2016 and that the

appellant-claimant has been engaged in litigation for

nearly a decade, first before the MACT, thereafter

before the High Court and now before this Court. A

remand at this stage would only prolong the

proceedings and compound the agony already

21

suffered by the appellant -claimant. In these

circumstances, in order to do complete justice

between the parties, we deem it appropriate to

examine the issue on merits and determine the issue

of functional disability on the basis of the material

available on record.

25. In order to determine the functional disability

suffered by the appellant-claimant, it is necessary to

advert to the findings recorded by the Medical Board

with respect to the permanent physical disability, as

well as the neuropsychological assessment report

placed on record. Both these documents remained

uncontroverted and hence, they provide credible

expert evidence so as to assess the extent and nature

of disability. The true nature and extent of the

injuries, and their impact on the cognitive and

functional abilities of the appellant-claimant, can be

properly appreciated only upon a careful

consideration of these materials. For ready reference,

the relevant extracts from the said documents are

reproduced hereinbelow: -

“Neuropsychological Assessment Report:

Interpretation & Conclusion

• Memory Scale shows that his verbal and Visual

memory is impaired severely.

22

• On tests for frontal lobe functioning -

impairment.

• On the test for parietal lobe functioning,

normal performance shows that the lobe

function is intact.

• The IQ range of 65, fall into the category of

Mild Intellectual Disability.

Report of the Medical Board

Case of Head injury treated conservatively, facial

injury x left femur fracture treated by surgical

intervention. Above injury has resulted in partial

blindness, cognitive impairment and partial lom

of Rom and stability of left knee.

His disability due to above injuries sixty three

percent (63%).”

[Emphasis supplied]

26. Having bestowed our anxious consideration to

the material placed on record, we find that the

disability certificate issued by the Medical Board

clearly records that the appellant-claimant had

suffered a head injury treated conservatively, facial

injury, and left femur fracture treated by surgical

intervention. These injuries progressively resulted in

partial blindness, cognitive impairment and partial

loss of range of motion and stability of the left knee.

The neuropsychological assessment further

evidences severe impairment in verbal and visual

memory, impairment of frontal lobe functions and an

IQ score of 65, placing the appellant-claimant in the

23

category of Mild Intellectual Disability. These

findings, read conjointly, demonstrate that the

injuries suffered by the appellant-claimant were not

merely orthopedic in nature, but had significant

neurological sequelae directly impacting his

functional and cognitive abilities.

27. This Court, in Raj Kumar v. Ajay Kumar

9, has

authoritatively laid down the principles governing

assessment of permanent and functional disability

for the purpose of awarding compensation. It has

been held that the percentage of permanent disability

assessed by a medical expert cannot be mechanically

equated with the percentage of loss of earning

capacity. What is required to be determined is the

actual impact of such disability on the earning

capacity of the injured, having regard to his

avocation, age and the nature of work performed. The

Tribunal is required to undertake a structured

analysis to ascertain the activities the claimant can

or cannot perform post-injury, the nature of his

profession prior to the accident, and whether the

disability has resulted in total incapacity or merely

9

(2011) 1 SCC 343

24

restricted or reduced earning capacity. For ready

reference, the relevant extracts from the said

judgment are reproduced hereinbelow: -

“9. The percentage of permanent disability is

expressed by the doctors with reference to the whole

body, or more often than not, with reference to a

particular limb. When a disability certificate states

that the injured has suffered permanent disability to

an extent of 45% of the left lower limb, it is not the

same as 45% permanent disability with reference to

the whole body. The extent of disability of a limb (or

part of the body) expressed in terms of a percentage

of the total functions of that limb, obviously cannot

be assumed to be the extent of disability of the whole

body. If there is 60% permanent disability of the

right hand and 80% permanent disability of left leg,

it does not mean that the extent of permanent

disability with reference to the whole body is 140%

(that is 80% plus 60%). If different parts of the body

have suffered different percentages of disabilities,

the sum total thereof expressed in terms of the

permanent disability with reference to the whole

body cannot obviously exceed 100%.

10. Where the claimant suffers a permanent

disability as a result of injuries, the assessment

of compensation under the head of loss of future

earnings would depend upon the effect and

impact of such permanent disability on his

earning capacity. The Tribunal s hould not

mechanically apply the percentage of permanent

disability as the percentage of economic loss or

loss of earning capacity. In most of the cases, the

percentage of economic loss, that is, the

percentage of loss of earning capacity, arising

from a permanent disability will be different from

the percentage of permanent disability. Some

Tribunals wrongly assume that in all cases, a

particular extent (percentage) of permanent

disability would result in a corresponding loss of

25

earning capacity, and consequently, if the

evidence produced show 45% as the permanent

disability, will hold that there is 45% loss of

future earning capacity. In most of the cases,

equating the extent (percentage) of loss of

earning capacity to the extent (percentage) of

permanent disability will result in award of either

too low or too high a compensation.

11. What requires to be assessed by the Tribunal

is the effect of the permanent disability on the

earning capacity of the injured; and after

assessing the loss of earning capacity in terms of

a percentage of the income, it has to be

quantified in terms of money, to arrive at the

future loss of earnings (by applying the standard

multiplier method used to determine loss of

dependency). We may however note that in some

cases, on appreciation of evidence and assessment,

the Tribunal may find that the percentage of loss of

earning capacity as a result of the permanent

disability, is approximately the same as the

percentage of permanent disability in which case, of

course, the Tribunal will adopt the said percentage

for determination of compensation. (See for example,

the decisions of this Court in Arvind Kumar Mishra

v. New India Assurance Co. Ltd. [(2010) 10 SCC 254

: (2010) 3 SCC (Cri) 1258: (2010) 10 Scale 298] and

Yadava Kumar v. National Insurance Co. Ltd. [(2010)

10 SCC 341 : (2010) 3 SCC (Cri) 1285 : (2010) 8

Scale 567])

[……]

13. Ascertainment of the effect of the permanent

disability on the actual earning capacity involves

three steps. The Tribunal has to first ascertain

what activities the claimant could carry on in

spite of the permanent disability and what he

could not do as a result of the permanent

disability (this is also relevant for awarding

compensation under the head of loss of

amenities of life). The second step is to ascertain

26

his avocation, profession and nature of work

before the accident, as also his age. The third

step is to find out whether (i) the claimant is

totally disabled from earning any kind of

livelihood, or (ii) whether in spite of the

permanent disability, the claimant could still

effectively carry on the activities and functions,

which he was earlier carrying on, or (iii) whether

he was prevented or restricted from discharging

his previous activities and functions, but could

carry on some other or lesser scale of activities

and functions so that he continues to earn or can

continue to earn his livelihood.”

[Emphasis supplied]

28. In view of the principles laid down by this Court

in Raj Kumar (supra), as consistently affirmed

thereafter, the assessment of functional disability

must be grounded in a realistic appraisal of the

impact of the injury on the claimant’s capacity to

earn. The inquiry is not confined to the numerical

percentage of physical impairment certified by the

Medical Board, but extends to evaluating whether the

claimant, in light of his educational background, skill

set and nature of employment, is capable of

meaningfully pursue his avocation.

29. Reverting to the facts of the present case, the

appellant-claimant was admittedly employed as a

Manager in a private concern, a role inherently

dependent upon sustained cognitive functioning,

27

including memory retention, analytical ability,

executive decision-making, coordination and effective

communication. The neuropsychological report on

record evidences severe impairment in verbal and

visual memory, frontal lobe dysfunction, and an IQ

score of 65 placing him within the category of Mild

Intellectual Disability.

30. Further, the Medical Board has recorded that

the injuries resulted not only in cognitive impairment

but also in partial blindness and orthopedic

limitations affecting mobility and stability. When

these physical and neurological impairments are

cumulatively evaluated, it becomes manifest that the

appellant-claimant’s ability to effectively discharge

his pre-accident duties stands substantially and

irreversibly impaired. The evidence does not indicate

a mere diminution in efficiency, rather, it

demonstrates a profound erosion of the faculties

essential for gainful employment in his chosen field.

These impairments strike at the core competencies

indispensable for the effective discharge of

managerial responsibilities and substantially

undermine the appellant -claimant’s ability to

perform the essential functions inherent in such a

28

position. In such circumstances, and bearing in mind

the settled principle that functional disability must

reflect the actual loss of earning capacity, we are

persuaded to hold that the disability in the present

case, for the purpose of computation of

compensation, deserves to be reckoned at 100%. It is

beyond the pale of doubt that, having suffered such

grave medical and neurological impairments, the

appellant-claimant would neither be considered

suitable for the managerial post nor would he be

capable of effectively discharging the onerous

responsibilities attached to the said post, particularly

in light of his present condition, which is likely to

deteriorate progressively over time.

31. Consequently, in light of the foregoing

discussion and considering that the functional

disability suffered by the appellant-claimant is to be

assessed at 100% for the purpose of computing loss

of earning capacity, the compensation payable to the

appellant-claimant warrants re-determination so as

to ensure the award of just and fair compensation in

accordance with law. Accordingly, the compensation

payable to the appellant-claimant is recalculated as

per the computation set out hereunder: -

29

Head Amount Awarded

Future loss of

earning power

Rs.40,000/- x 12 x 100% (Disability)

x 17 = Rs.81,60,000/-

Medical expenses Rs.5,88,011/-

Loss of amenities Rs.3,00,000/-

Pain and Sufferings Rs.5,00,000/-

Transportation to

Hospital

Rs.10,000/-

Extra Nourishment Rs.10,000/-

Damage to Clothing

and Articles

Rs.5,000/-

Loss of marital

prospectus

Rs.2,00,000/-

Total Rs.97,73,011/-

32. Thus, the total compensation payable to the

appellant-claimant works out to Rs.97,73,011/ -

(Rupees Ninety-Seven Lakh Seventy-Three Thousand

and Eleven only). The appellant-claimant shall be

entitled to interest at the rate of 7.5% per annum

from the date of filing of the claim petition till the date

of realization, as awarded by the MACT. The amount,

if any, already paid shall be duly adjusted towards

the aforesaid sum. The award shall be satisfied by the

respondent-insurer. However, as directed by the

30

MACT, the respondent-insurer shall be at liberty to

recover the said amount from the driver-cum-owner

of the offending vehicle, namely, R. Chinnadurai, in

accordance with law.

33. The respondent-insurer is directed to deposit

the balance amount of compensation along with

accrued interest within a period of six weeks from the

date of receipt of this judgment before the Motor

Accidents Claims Tribunal, Special Subordinate

Judge, Coimbatore, which shall disburse the same to

the appellant-claimant in accordance with law.

34. The impugned judgment dated 11

th January,

2022 passed by the High Court and the award dated

22

nd January, 2020 passed by the MACT are modified

in terms of this judgment.

35. Before parting with the matter, we deem it

appropriate to reiterate that when an appellate court

interferes with findings of fact duly recorded by the

Motor Accidents Claims Tribunal, particularly on

issues such as assessment of disability and loss of

earning capacity, it is incumbent upon it to

undertake a thorough reappreciation of the evidence

and to assign cogent, clear and convincing reasons

for departing from the conclusions arrived at by the

31

Motor Accidents Claims Tribunal. Such an obligation

is heightened in proceedings under the Motor

Vehicles Act, 1988, which is a beneficial and welfare-

oriented legislation enacted with the object of

ensuring expeditious relief and just compensation to

victims of motor accidents and their families. The

statutory framework is designed to advance social

justice and to provide solace and financial security to

those who suffer on account of road accidents. Any

interference with a reasoned award of the Motor

Accidents Claims Tribunal must, therefore, be

consistent with the spirit and object of the enactment

and supported by sound judicial reasoning.

36. The appeal is allowed accordingly.

37. There shall be no order as to costs.

38. Pending application(s), if any, shall stand

disposed of.

……………. ….……………………J.

(PRASHANT KUMAR MISHRA )

……………. ...…………………….J.

(SANDEEP MEHTA)

NEW DELHI;

MARCH 18, 2026.