The assessment of permanent disability in the context of a personal injury claim involves understanding that not all injuries resulting in physical or bodily impairment necessarily lead to a loss of earning capacity (!) (!) . Permanent disability refers to the residual incapacity or loss of use of some part of the body after the period of treatment and recovery, which is likely to persist for the remainder of the injured person’s life (!) (!) (!) (!) .

It is important to distinguish between physical or bodily disabilities and functional disability, which pertains to the actual impact of the injury on the person’s ability to perform activities or work. A disability certificate may specify a percentage of permanent disability with reference to a specific limb or part of the body, but this percentage does not automatically equate to a corresponding percentage of loss of earning capacity (!) (!) (!) (!) (!) (!) (!) (!) .

The extent of functional disability and its effect on earning capacity must be assessed by considering the nature of the injury, the specific limb or bodily part affected, and the individual’s profession, occupation, age, education, and other relevant factors (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .

The medical evidence, including disability certificates and assessments by treating doctors or medical boards, should be carefully examined to determine whether the recorded percentage of permanent disability reflects a proportional loss of earning capacity. The assessment should not be based solely on the percentage of bodily impairment but should involve a holistic consideration of how the disability affects the claimant’s ability to perform their previous work or engage in gainful employment (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .

In cases where the disability certificate indicates a certain percentage of permanent disability to a limb or part of the body, the tribunal should evaluate whether this impairment translates into a corresponding loss of earning capacity, considering the individual’s occupation and the extent to which the disability impairs their ability to perform their work effectively (!) (!) (!) (!) (!) .

Furthermore, the assessment of functional disability involves a detailed analysis of how the injury restricts or impairs the claimant’s activities, and whether the disability affects their ability to carry on their previous occupation or any other gainful activity. This evaluation is crucial for accurately determining the loss of future earning capacity and ensuring that compensation reflects the true impact of the injury (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .

In summary, the concept of functional disability encompasses the practical limitations imposed by the injury on the claimant’s life and work, rather than just the percentage of bodily impairment. The assessment should be based on a comprehensive understanding of the claimant’s medical condition, occupation, and the actual effect on their earning capacity, rather than relying solely on disability percentages indicated in certificates.

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8981 OF 2010

(Arising out of SLP (C) No. 10383 of 2007)

Raj Kumar

….Appellant

Vs.

Ajay Kumar & Anr.

.… Respondents

O R D E R

R.V.RAVEENDRAN, J.

Leave granted. Heard.

2.

The appellant was injured in a motor accident on 1.10.1991 and

sustained fracture of both bones of left leg and fracture of left radius. He was

under treatment from 1.10.1991 to 16.6.1992. The Motor Accident Claims

Tribunal, by award dated 20.7.2002, awarded compensation of Rs.94,700/-,

with interest at 9% per annum from the date of petition till date of

realization. The amount awarded was made up of Rs.11,000/- towards

medical expenses, conveyance and special diet; Rs.3600/- towards loss of

1

earning during period of treatment; Rs.25,000/- for pain and suffering; and

Rs.55,080 towards loss of future earnings. For calculating the loss of future

earnings, the Tribunal took the minimum wage as the monthly income of the

appellant, that is Rs.891/- rounded off to Rs.900/- and deducted one-third

therefrom towards the personal and living expenses; and by assuming the

percentage of disability (45%) shown in disability certificate to be the

economic disability, the Tribunal arrived at loss of future earnings as 45% of

Rs.600/-, that is Rs.270/- per month or Rs.3,240/- per annum. By applying a

multiplier of 17, it arrived at Rs.55,080/- as the loss of future earnings. The

appellant filed an appeal seeking increase in compensation. The High Court

rejected the said appeal by the impugned judgment dated 31.1.2007 on the

ground that the disability certificate produced by the appellant was not

reliable. The said judgment of the High Court is challenged in this appeal by

special leave.

3.

The appellant puts forth two grievances: (i) the assessment of monthly

income at Rs.900/- was very low; and (ii) deduction of one third of the

income (towards personal and living expenses) while assessing the future

loss of earning was not warranted. The questions that therefore arise for our

consideration are whether the principles adopted for assessing the

2

compensation were erroneous and whether compensation awarded requires

to be increased.

General principles relating to compensation in injury cases

4.

The provision of the Motor Vehicles Act, 1988 (‘Act’ for short)

makes it clear that the award must be just, which means that compensation

should, to the extent possible, fully and adequately restore the claimant to

the position prior to the accident. The object of awarding damages is to

make good the loss suffered as a result of wrong done as far as money can

do so, in a fair, reasonable and equitable manner. The court or tribunal shall

have to assess the damages objectively and exclude from consideration any

speculation or fancy, though some conjecture with reference to the nature of

disability and its consequences, is inevitable. A person is not only to be

compensated for the physical injury, but also for the loss which he suffered

as a result of such injury. This means that he is to be compensated for his

inability to lead a full life, his inability to enjoy those normal amenities

which he would have enjoyed but for the injuries, and his inability to earn as

much as he used to earn or could have earned. (See C. K. Subramonia Iyer

vs. T. Kunhikuttan Nair – AIR 1970 SC 376, R. D. Hattangadi vs. Pest

3

Control (India) Ltd. - 1995 (1) SCC 551 and Baker vs. Willoughby – 1970

AC 467).

5.

The heads under which compensation is awarded in personal injury

cases are the following :

Pecuniary damages (Special Damages)

(i)

Expenses relating to treatment, hospitalization, medicines, transportation,

nourishing food, and miscellaneous expenditure.

(ii)

Loss of earnings (and other gains) which the injured would have made had

he not been injured, comprising :

(a) Loss of earning during the period of treatment;

(b) Loss of f