New Delhi: The Supreme Court has enhanced compensation payable to a Tamil Nadu mason who lost his right leg in a road accident, holding that courts must assess “functional disability” and not merely the percentage of physical disability while determining loss of earning capacity in motor accident claims.
A bench of Justices Prashant Kumar Mishra and N.V. Anjaria increased the compensation awarded to claimant M. Paramesh from Rs 29.01 lakh, as fixed by the Madras High Court, to Rs 40.29 lakh, observing that the amputation of his right leg above the knee had effectively rendered him incapable of continuing his profession as a mason.
Allowing the appeal in part, the apex court held that although the claimant’s permanent physical disability had been assessed at 70 per cent, his functional disability for the purpose of earning a livelihood was 100 per cent.
“The amputation of the right leg above the knee has not merely caused physical disability to the appellant but has rendered him incapable of effectively carrying on the manual and physical work which constituted his only source of livelihood,” the Justice Mishra-led Bench said.
“In such circumstances, restricting the loss of earning capacity to 70 per cent merely on the basis of physical disability would not be justified,” it added.
The case arose from an accident that occurred on April 18, 2017, on the Namakkal–Salem National Highway in Tamil Nadu when a lorry hit the claimant’s bicycle from behind. The accident caused grievous injuries to his head, jaw, eye and right leg, eventually leading to amputation of the right leg above the knee.
The claimant, who was around 30 years old at the time and worked as a mason, had approached the Motor Accident Claims Tribunal (MACT) seeking compensation of Rs 25 lakh, contending that he had lost his ability to continue his occupation due to the permanent disability suffered in the accident.
The MACT awarded compensation of Rs 10.84 lakh in 2019 by assessing his monthly income at Rs 6,000 and calculating loss of earning capacity on the basis of 70 per cent disability. On appeal, the Madras High Court enhanced the compensation to Rs 23.86 lakh by increasing the monthly income to Rs 12,000 and granting a 40 per cent addition towards future prospects.
However, the Supreme Court found errors in the High Court’s computation and recorded that future prospects had been calculated on the basis of the MCAT’s assessment rather than on the enhanced income determined by the High Court itself.
The apex court also observed that certain amounts awarded by the MCAT under the heads of nutrition, clothing and ornaments, and medical expenses were inadvertently omitted from the Madras High Court’s final computation despite not being disturbed.
Referring to an earlier decision, the Justice Mishra-led Bench reiterated that compensation cannot be determined by mechanically equating physical disability with loss of earning capacity.
“The assessment of compensation in cases of permanent disability cannot be undertaken by mechanically applying the percentage of physical disability as the percentage of economic loss,” the judgment said.
Observing that masonry is a physically demanding profession requiring continuous use and support of both legs, the apex court held that the claimant had effectively lost his capacity to continue his avocation.
“Having regard to the nature of avocation carried on by the appellant, the extent of injuries suffered by him and the principles laid down by this Court…, we are of the considered opinion that the functional disability suffered by the appellant is required to be assessed at 100 per cent,” the bench ruled. It further enhanced compensation towards future medical expenses, including artificial limb replacement and rehabilitation, from Rs 1 lakh to Rs 2 lakh, observing that the claimant would require periodic replacement and maintenance of prosthetic limbs throughout his lifetime.
Recalculating compensation by treating the claimant’s functional disability as 100 per cent, retaining the monthly income at Rs 12,000, adding 40 per cent towards future prospects and applying a multiplier of 17, the Supreme Court enhanced the total compensation to Rs 40.29 lakh. It directed the insurance company to deposit the enhanced compensation amount before the MCAT within six weeks. The enhanced amount will carry interest at the same rate fixed by the Madras High Court.
(IANS)
