Daijiworld Media Network - New Delhi

New Delhi, Jun 24: The Supreme Court has enhanced the compensation awarded to a Tamil Nadu mason who lost his right leg in a road accident, ruling that courts must consider a victim’s “functional disability” rather than relying solely on the percentage of physical disability while assessing loss of earning capacity in motor accident cases.

A Bench comprising Justices Prashant Kumar Mishra and N.V. Anjaria increased the compensation payable to M. Paramesh from Rs 29.01 lakh, as determined by the Madras High Court, to Rs 40.29 lakh.

The court observed that the amputation of his right leg above the knee had effectively ended his ability to continue working as a mason, his sole source of livelihood.

Allowing the appeal in part, the apex court held that although Paramesh’s permanent physical disability had been assessed at 70 per cent, his functional disability for the purpose of earning a livelihood should be treated as 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 Bench observed.

It added that limiting the loss of earning capacity to 70 per cent solely on the basis of physical disability would be unjustified in such circumstances.

The case stems from an accident that occurred on April 18, 2017, on the Namakkal–Salem National Highway in Tamil Nadu, when a lorry hit Paramesh’s bicycle from behind.

The collision caused serious injuries to his head, jaw, eye and right leg, eventually necessitating the amputation of his leg above the knee.

Paramesh, who was around 30 years old at the time and worked as a mason, had approached the Motor Accident Claims Tribunal (MACT) seeking Rs 25 lakh in compensation, arguing that the permanent disability had deprived him of his ability to continue his profession.

In 2019, the tribunal awarded Rs 10.84 lakh, calculating the amount on the basis of a monthly income of Rs 6,000 and considering a 70 per cent loss of earning capacity.

The Madras High Court later enhanced the compensation to Rs 23.86 lakh by increasing his monthly income to Rs 12,000 and adding 40 per cent towards future prospects.

However, the Supreme Court found flaws in the High Court’s calculations.

It noted that future prospects had been computed using the tribunal’s original income assessment instead of the revised income determined by the High Court.

The apex court also pointed out that compensation awarded under categories such as nutrition, clothing and ornaments, and medical expenses had been omitted from the High Court’s final calculation despite not being altered.

Reiterating an earlier legal principle, the court said compensation cannot be determined by mechanically equating physical disability with economic loss.

“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 stated.

The Bench observed that masonry is a physically demanding occupation requiring the continuous use of both legs and held that Paramesh had effectively lost his ability to continue his profession.

“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.

The court also enhanced compensation for future medical requirements, including the replacement and maintenance of artificial limbs and rehabilitation, from Rs 1 lakh to Rs 2 lakh, noting that he would require lifelong support and periodic replacement of prosthetic limbs.

After recalculating the compensation by treating the 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 fixed the total compensation at Rs 40.29 lakh.

The insurance company has been directed to deposit the enhanced amount before the Motor Accident Claims Tribunal within six weeks. The compensation will carry interest at the rate previously fixed by the Madras High Court.