Supreme Court Raises Motor Accident Award to Rs 40.29 Lakh, Fixes Functional Disability at 100% for Amputee Mason

A division bench corrected two calculation errors by the Madras High Court and held that a mason who lost his leg above the knee suffers 100% functional disability, not 70%.

The Supreme Court on 23 June 2026 substantially enhanced the motor accident compensation payable to M. Paramesh, a mason who had his right leg amputated above the knee after a lorry struck his bicycle on NH-7 near Namakkal in April 2017. A division bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria raised the total award from Rs 23,86,320 to Rs 40,29,730, finding that both the Motor Accident Claims Tribunal and the Madras High Court had wrongly equated physical disability with functional disability. The Court also corrected two arithmetic errors in the High Court's computation that had understated the award even on the High Court's own reasoning. The insurance company has been directed to deposit the enhanced amount within six weeks.

How the Dispute Reached the Supreme Court

On 18 April 2017, at around 6:50 p.m., Paramesh was riding his bicycle on the left side of the Namakkal–Salem NH-7 road when a lorry bearing registration KA-25-B-5035, owned by VRL Logistics Ltd., came from behind and struck him. He suffered grievous injuries to his head, jaw, eye and right leg. The severity of the injuries led to the amputation of his right leg above the knee. An FIR was registered at Rasipuram Police Station under Sections 279 and 338 of the Indian Penal Code, 1860.

Paramesh filed a claim under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, Sub Court, Rasipuram, seeking Rs 25,00,000. He was approximately 30 years old at the time and stated he was earning around Rs 20,000 per month as a mason. A disability certificate issued by the competent authority assessed his permanent disability at 70%.

The Tribunal, by its award dated 29 November 2019, accepted the negligence of the lorry driver and fastened liability on the owner and insurer. However, it assessed Paramesh's monthly income at only Rs 6,000 and awarded total compensation of Rs 10,84,330 with interest at 7.5% per annum. The respondents led no oral or documentary evidence before the Tribunal.

Paramesh appealed to the Madras High Court in C.M.A. No. 1388 of 2021. The High Court partly allowed the appeal, raising his assessed monthly income to Rs 12,000 and adding 40% towards future prospects. It also granted amounts under attendant charges, loss of amenities and future medical expenses including artificial limb. The total was enhanced to Rs 23,86,320. Still dissatisfied, Paramesh approached the Supreme Court by way of Special Leave Petition, which was converted into Civil Appeal No. 8708 of 2026.

Two Arithmetic Errors in the High Court's Computation

Before addressing the substantive question of disability, the Court identified two errors in the High Court's own calculations.

First, the High Court had enhanced the monthly income to Rs 12,000 and recalculated the loss of earning capacity at Rs 17,13,600 (Rs 12,000 × 12 × 17 × 70%). Yet when computing the 40% addition for future prospects, it applied that percentage to Rs 8,56,800 — the figure the Tribunal had arrived at using the lower income of Rs 6,000 — rather than to the recalculated Rs 17,13,600. The correct future prospects amount should have been Rs 6,85,440, not Rs 3,42,720.

Second, the High Court had not disturbed the Tribunal's awards under the heads of nutrition (Rs 10,000), clothing and ornaments (Rs 5,000) and medical expenses (Rs 1,57,530). Yet these amounts were inadvertently left out of the High Court's final total. The Court held that amounts not disturbed on appeal must form part of the final computation.

Physical Disability Versus Functional Disability: The Core Issue

The central question was whether the loss of earning capacity should be assessed at 70% — matching the disability certificate — or at a higher figure reflecting the actual impact on Paramesh's ability to work as a mason.

The Court relied on Raj Kumar v. Ajay Kumar and Another, (2011) 1 SCC 343, which it described as having “elaborately explained the distinction between physical disability and functional disability.” That judgment holds that a tribunal must not mechanically apply the percentage of permanent disability as the percentage of economic loss. The relevant inquiry is the effect of the disability on the claimant's actual earning capacity, having regard to the nature of the avocation, age, and other factors.

Raj Kumar sets out a three-step process: first, identify what activities the claimant can and cannot perform despite the disability; second, ascertain the avocation, profession and age before the accident; third, determine whether the claimant is totally disabled from earning any livelihood, can still carry on the same activities, or can carry on some lesser scale of activity. The same physical disability may produce different percentages of functional disability depending on the occupation.

Applying this framework, the Court found that the work of a mason is essentially a physical and manual avocation requiring continuous use and support of both legs. Paramesh had undergone amputation of his right leg above the knee. The respondents had not even contended that he could continue working as a mason or that his earning capacity was unaffected. The Court held that restricting the loss of earning capacity to 70% merely on the basis of the physical disability certificate was not justified in these facts.

The Court assessed the functional disability at 100%. It said: “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.”

Recalculation of Compensation

With functional disability fixed at 100%, monthly income at Rs 12,000, a 40% addition for future prospects, and the multiplier of 17 (corresponding to the claimant's age of 30 years), the loss of earning capacity was recalculated as follows:

Base loss of income: Rs 12,000 × 12 × 17 × 100% = Rs 24,48,000. Future prospects at 40% of Rs 24,48,000 = Rs 9,79,200. Combined: Rs 34,27,200.

The Court also enhanced the amount for future medical expenses including artificial limb and prosthesis from Rs 1,00,000 to Rs 2,00,000, noting that Paramesh would require periodic replacement and maintenance of the artificial limb throughout his lifetime, along with continued medical assistance and rehabilitation.

The remaining heads were affirmed as awarded by the High Court: pain and suffering Rs 1,00,000; transportation Rs 25,000; nutrition Rs 10,000; clothing and ornaments Rs 5,000; medical expenses Rs 1,57,530; attendant charges Rs 30,000; loss of amenities Rs 75,000.

The revised total compensation is Rs 40,29,730, compared to Rs 23,86,320 awarded by the High Court and Rs 10,84,330 by the Tribunal.

Order

The Supreme Court partly allowed Civil Appeal No. 8708 of 2026 and modified the impugned judgment of the Madras High Court. The total compensation payable to M. Paramesh stands at Rs 40,29,730. The enhanced compensation carries interest at the same rate of 7.5% per annum as awarded by the High Court. Respondent No. 2, the insurance company, has been directed to deposit the enhanced amount before the Tribunal within six weeks. On such deposit, Paramesh is entitled to withdraw the amount in accordance with law.