Functional Disability, Not Medical, To Be Considered While Awarding Compensation Under MV Act: SC

Last Updated:September 05, 2025, 17:00 IST

The appellant, riding a bike with a pillion, was in 2007 hit by a truck, driven rashly and negligently. He suffered amputation of one leg and a portion of the pelvic bone

The bench finally enhanced the total compensation to Rs 48,44,790 to be paid by the insurance company within three months with interest at a rate of 6% per annum. (PTI/File)

The Supreme Court on Thursday said functional disability, which reduces the earning capacity of the claimant, and not strictly medical disability, is to be assessed for the purpose of awarding compensation arising from a motor accident.

A bench of Justices K. Vinod Chandran and N. V. Anjaria upheld the High Court’s order which held the disability in the case of appellant Anoop Maheshwari to be 50% for the purpose of computing loss of income as relatable to the loss of earning capacity, saying it was correct and within the parameters to be considered for assessing the loss of income arising from a motor accident which led to disability of the victim.

The disability assessed at 50% is the functional disability and it is quite reasonable, the court said.

“Insofar as the disability is concerned, we have no doubt that the medical board’s certificate can be accepted, even without a witness being examined," the bench said.

The appellant, riding a bike with a pillion, was in 2007 hit by a truck, driven rashly and negligently. He suffered amputation of one leg and a portion of the pelvic bone on the same side.

The court noted admittedly the claimant was running a business, and he has already been fitted with a prosthetic limb to ensure his mobility.

The Motor Accident Claims Tribunal awarded him Rs 13,23,831 as compensation. The High Court enhanced it to Rs 23,09,600.

Considering the appeal, the bench agreed with the High Court that the Tribunal had entered into mere surmises and conjectures to decline adoption of the income as per the income tax returns.

The court noted the registration of the firm of the claimant took place on March 06, 2006, and the income tax returns produced were also for the assessment years 2005-2006 and 2006-2007 relatable to the financial years 2004-2005 and 2005-2006 which are prior to the accident which occurred on April 09, 2007.

“It cannot be said that the claimant apprehended an accident and got registration of a firm and filed his income tax returns two years prior to the accident. Further, the claimant had also produced sales tax returns which were also rejected by the Tribunal," the bench said.

The court assessed the income at Rs 1,91,000. In assessing the loss of income, the multiplier of 18 is perfectly in order and the disability is 50% as determined by the High Court, it said.

“Since just compensation is granted, we do not find any reason to award compensation for loss of future prospects," the bench said.

The court said the claimant though has suffered a disability, which has been determined to be 50%, there is no difficulty in continuing with the business and the claimant has also been fitted with a prosthetic leg which ensures his mobility and continuance of the business.

The 40% enhancement in the annual income for taking into account the future prospects is found to be improper, especially in the context of 50% disability having been reckoned for the purpose of loss of earning capacity and the claimant enabled to continue his business, the bench said.

The court also directed the entire medical expenses claimed with invoices, totalling Rs 12,54,985 has to be paid. It also awarded Rs 10 lakh for the future expenses for continued use of the prosthetic limb and the medical expenses.

The bench finally enhanced the total compensation to Rs 48,44,790 to be paid by the insurance company within three months with interest at a rate of 6% per annum, commencing from the date of application.

Sanya Talwar

Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl...Read More

Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl...

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News india Functional Disability, Not Medical, To Be Considered While Awarding Compensation Under MV Act: SC

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