The Supreme Court has held that compensation for permanent disability in a motor accident claim cannot be denied merely because the claimant continued in government service without an immediate reduction in salary, emphasizing that ‘just compensation’ must account for non-pecuniary losses such as pain, suffering, and loss of amenities.
A Bench of Justices Sanjay Karol and Augustine George Masih was hearing an appeal filed by a government school teacher against a Rajasthan High Court judgment that had drastically reduced her compensation from ₹5.57 lakh awarded by the Motor Accident Claims Tribunal (MACT) to ₹2.11 lakh.
The claimant had suffered grievous injuries in a road accident in Jaipur in February 1997 when a truck allegedly being driven rashly collided head-on with her scooter. Medical records showed 39.07% permanent disability caused by multiple fractures, shortening of a limb, and restricted movement.
The MACT had assessed her monthly income at ₹6,230 and awarded compensation including ₹4.96 lakh towards permanent disability and future loss of income. However, the High Court set aside compensation under that head, reasoning that since she remained a government employee and had suffered no salary reduction or removal from service, there was no actual loss of income.
Disagreeing with this approach, the Supreme Court observed that while direct pecuniary loss may not always be immediately apparent where employment continues, the impact of permanent disability extends beyond salary figures.
The Court noted that a 39.07% permanent disability affecting the claimant’s ability to stand for long hours, sit cross-legged, or move freely would inevitably affect her quality of life, physical well-being, and professional efficiency. It further observed that even if salary protections under government service insulated her from immediate income loss, her earning capacity in the broader sense and life-long suffering warranted meaningful compensation.
Holding that the High Court failed to adequately account for these consequences, the Bench substantially enhanced compensation under non-pecuniary heads, awarding ₹5 lakh towards pain and suffering and ₹3.5 lakh towards loss of happiness and amenities, taking the total compensation to ₹9,12,886.
The Court also retained the Tribunal’s direction on interest and directed Oriental Insurance to satisfy the award within eight weeks.
