Supreme Court Allows Appeal of Injured Claimant in Motor Accident Case — Restores 100% Functional Disability for Loss of Earning Capacity Due to Amputation. Amputation of right lower limb renders gunman permanently unfit for duty, warranting full compensation for loss of earning capacity under Motor Vehicles Act, 1988.

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2026-05-18 15:21:44

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Case Note & Summary

The appellant, Sarnam Singh, met with a motor accident on 24.11.2013 involving a tempo, resulting in severe injuries leading to amputation of his right lower limb. He was hospitalized from 24.11.2013 to 05.01.2014 and underwent follow-up treatment for about a year, suffering 85% disability in relation to his right lower limb. At the time of the accident, he was employed as a Senior Assistant (gunman) with M/s Bharat Hotels Ltd., drawing a monthly salary of ₹20,774, including a conveyance allowance of ₹800. He had been in permanent employment since 20.06.1992. Due to the amputation, his services were terminated w.e.f. 31.05.2015 as he was unable to discharge his duties. The Motor Accident Claims Tribunal, South District, Saket, New Delhi, vide award dated 18.04.2016, awarded total compensation of ₹34,29,800, assessing functional disability at 100% and loss of earning capacity at 100%, applying a multiplier of 14. The Tribunal awarded ₹1,50,000 for pain and suffering, ₹95,000 for diet, conveyance, and attendant charges, and ₹1,00,000 for loss of amenities. The insurance company appealed to the Delhi High Court, which vide order dated 25.08.2017 reduced the compensation by modifying the loss of earning capacity to 50%, reducing pain and suffering to ₹1,00,000, loss of amenities to ₹75,000, and diet/conveyance/attendant charges to ₹50,000. The appellant appealed to the Supreme Court. The Supreme Court held that the High Court erred in reducing the functional disability to 50% as the appellant, being a gunman, could not perform his duties with an amputated leg, and his termination confirmed total loss of earning capacity. The Court restored the Tribunal's assessment of 100% functional disability for loss of earning capacity, applying a multiplier of 14 and deducting 1/3rd for personal expenses, resulting in loss of earning capacity of ₹22,34,064. The Court also restored the Tribunal's awards for pain and suffering (₹1,50,000), loss of amenities (₹1,00,000), and diet/conveyance/attendant charges (₹95,000), and additionally granted ₹50,000 for future medical expenses for replacement of artificial limb. The total compensation was enhanced to ₹26,29,064 with interest at 9% per annum from the date of filing of the claim petition.

Headnote

A) Motor Accident Compensation - Functional Disability - Loss of Earning Capacity - Amputation of right lower limb resulting in 85% disability of the limb - Tribunal assessed functional disability at 100% and loss of earning capacity at 100% - High Court reduced it to 50% - Supreme Court restored 100% functional disability as the appellant could not continue his employment as a gunman - Held that when a person is rendered permanently unfit for his specific job, functional disability should be assessed at 100% for loss of earning capacity (Paras 1-10).

B) Motor Accident Compensation - Pain and Suffering - Loss of Amenities - Tribunal awarded ₹1,50,000 for pain and suffering and ₹1,00,000 for loss of amenities - High Court reduced pain and suffering to ₹1,00,000 and loss of amenities to ₹75,000 - Supreme Court restored the Tribunal's award as the amputation and prolonged treatment justified higher compensation (Paras 11-13).

C) Motor Accident Compensation - Attendant Charges - Future Medical Expenses - Tribunal awarded ₹95,000 for diet, conveyance, and attendant charges - High Court reduced it to ₹50,000 - Supreme Court restored the Tribunal's award and also granted ₹50,000 for future medical expenses considering the need for periodic replacement of artificial limb (Paras 14-15).

Issue of Consideration

Whether the High Court was justified in reducing the compensation awarded by the Motor Accident Claims Tribunal for loss of earning capacity from 100% to 50% in a case of amputation of the right lower limb, and whether the compensation for pain and suffering, loss of amenities, and other heads was adequate.

Final Decision

The Supreme Court allowed the appeal, set aside the High Court's order, and restored the Tribunal's award with modifications. The Court assessed loss of earning capacity at 100% functional disability, computed as ₹22,34,064 (monthly income ₹19,974 after deducting conveyance allowance, minus 1/3rd personal expenses, multiplied by 14). Pain and suffering restored to ₹1,50,000, loss of amenities to ₹1,00,000, diet/conveyance/attendant charges to ₹95,000, and an additional ₹50,000 for future medical expenses. Total compensation enhanced to ₹26,29,064 with interest at 9% per annum from the date of filing of the claim petition.

Law Points

Motor accident compensation
functional disability
loss of earning capacity
amputation
multiplier method
Motor Vehicles Act
1988

Case Details

2023 LawText (SC) (7) 18

Civil Appeal No.3900 of 2023

2023-08-25

Rajesh Bindal

Sarnam Singh

Shriram General Insurance Co. Ltd. & Ors.

Nature of Litigation

Civil appeal against the order of the Delhi High Court reducing compensation awarded by the Motor Accident Claims Tribunal in a motor accident claim.

Remedy Sought

The appellant sought enhancement of compensation for injuries sustained in a motor accident, including loss of earning capacity, pain and suffering, loss of amenities, and future medical expenses.

Filing Reason

The appellant was dissatisfied with the reduction of compensation by the High Court from the Tribunal's award.

Previous Decisions

The Motor Accident Claims Tribunal awarded ₹34,29,800 on 18.04.2016. The Delhi High Court reduced the compensation on 25.08.2017 in MAC.APP.461/2016.

Issues

Whether the High Court was correct in reducing the functional disability from 100% to 50% for loss of earning capacity? Whether the compensation for pain and suffering, loss of amenities, and diet/conveyance/attendant charges was rightly reduced? Whether the appellant is entitled to future medical expenses for replacement of artificial limb?

Submissions/Arguments

The appellant argued that due to amputation of his right lower limb, he is permanently disabled and cannot perform his duties as a gunman, hence functional disability should be 100%. The insurance company contended that the appellant could still do some other work, so disability should be assessed at 50%.

Ratio Decidendi

In motor accident compensation cases, when a claimant suffers amputation rendering him permanently unfit for his specific employment, the functional disability for loss of earning capacity should be assessed at 100%, as the claimant cannot perform the duties for which he was employed. The multiplier method under the Motor Vehicles Act, 1988 should be applied to the actual income, deducting personal expenses, to compute loss of earning capacity.

Judgment Excerpts

The appellant met with an accident on 24.11.2013 with Tempo bearing registration number UP 79T 1948. He suffered 85% disability in relation to his right lower limb as the same had to be amputated. The Tribunal had taken the net salary at ₹19,974/- per month after deducting the conveyance allowance. The High Court reduced the functional disability to 50%. We are of the considered opinion that the High Court erred in reducing the functional disability to 50%. The appellant was working as a gunman and with the amputation of his right leg, he cannot perform his duties. We restore the award of the Tribunal on this count. We award a sum of ₹50,000/- towards future medical expenses.

Procedural History

The appellant filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, South District, Saket, New Delhi, which awarded compensation of ₹34,29,800 on 18.04.2016. The insurance company appealed to the Delhi High Court in MAC.APP.461/2016, which reduced the compensation on 25.08.2017. The appellant then filed the present civil appeal before the Supreme Court.