In an appeal filed before the Supreme Court against a judgment and order dated 29-11-2023 by the Madras High Court, whereby the appellant’s appeal was partly allowed and the compensation awarded by the Motor Accident Claims Tribunal, Rasipuram (MACT) was enhanced from Rs. 10,84,330/- to Rs. 23,86,320/- with interest at 7.5% per annum, a Bench comprising Justice Prashant Kumar Mishra and Justice N.V. Anjaria modified the impugned judgment and partly allowed the appeal while enhancing the compensation to Rs. 40,29,730/-.
On 18-04-2017, at about 6:50 P.M., when the appellant was travelling on his bicycle, a lorry coming from behind in a rash and negligent manner, hit the bicycle. As a result, the appellant sustained grievous injuries including injuries to his head, jaw, eye, and right leg, which led to the amputation of his right leg above the knee. Thereafter, an FIR was registered against the driver of the offending vehicle and the appellant instituted claim proceedings under Section 166 of the Motor Vehicles Act, 1988, claiming compensation of Rs. 25,00,000/- for the injuries and permanent disability suffered. At the time, the appellant was aged about 30 years and was working as a mason earning approximately Rs. 20,000/- per month. The competent authority issued a disability certificate assessing his permanent physical disability at 70%.
The MACT held that the accident occurred due to the rash and negligent driving of the offending lorry and awarded a total compensation of Rs. 10,84,330/- with interest at 7.5% p.a. While computing the compensation, the Tribunal assessed the monthly income of the appellant at Rs. 6,000/- and evaluated the loss of earning capacity by applying the 70% physical disability. Aggrieved, the appellant preferred an appeal before the High Court seeking enhancement. The appeal was partly allowed, enhancing the monthly income of the appellant to Rs. 12,000/- and granting an addition of 40% towards future prospects. Consequently, the compensation was enhanced from Rs. 10,84,330/- to Rs. 23,86,320/-. Still dissatisfied, the appellant filed the present petition.
The Court stated that once the High Court had enhanced the monthly income of the appellant to Rs. 12,000/- and recalculated the loss of earning capacity, the addition towards future prospects ought to have been computed on the said recalculated amount. It was also noted that even though the High Court did not interfere with the amounts awarded by the MACT under the heads of nutrition, clothing, ornaments, and medical expenses, these amounts were omitted from the final computation of compensation.
The Court declined to interfere with the monthly income of Rs. 12,000/- established by the High Court due to a lack of cogent documentary evidence supporting the higher claim. However, the Court opined that both lower courts failed to examine the aspect of functional disability. Referring to Raj Kumar v. Ajay Kumar & Anr. (2011) 1 SCC 343, it was said that though the physical disability may be assessed at a particular percentage, the functional disability affecting earning capacity may, depending upon the nature of the injured person’s profession, be assessed at a higher percentage including 100%.
The Court noted that the appellant was a mason whose work essentially includes physical and manual avocation requiring the continuous use of both legs. Since the amputation rendered the appellant entirely incapable of effectively carrying on his sole avocation, the Court determined that his functional disability affecting earning capacity must be assessed at 100% rather than 70%. Hence, the Court recalculated the loss of earning capacity by treating the functional disability at 100%, using the monthly income of Rs. 12,000/-, adding 40% for future prospects, and applying the multiplier of 17. The amount for future medical expenses for the artificial limb was also enhanced from Rs. 1,00,000/- to Rs. 2,00,000/- to account for periodic replacement and maintenance.
The Court corrected the prior calculation errors and restored the omitted amounts for nutrition, clothing, ornaments, and medical expenses. Ultimately, the Court modified the High Court’s judgment, partly allowed the appeal, and enhanced the total compensation to Rs. 40,29,730/- with interest. The insurance company was directed to deposit the enhanced amount before MACT within six weeks.
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