Motor Accident Claim | Physical Disability Must Be Assessed With Reference To Victim's Nature Of Work : Supreme Court

The Supreme Court on Tuesday observed that in cases of motor accident claims, the physical disability caused due to an accident must be judged with reference to the nature of the work being done by the injured for assessing award of compensation.

Relying on the Apex Court judgement in Mohan Soni vs. Ram Avtar Tomar And Others. (2012) 2 SCC 267 a division bench of Justice Abhay S. Oka and Justice Rajesh Bindal observed that

“..any physical disability resulting from an accident has to be judged with reference to the nature of the work being performed by the person who suffered disability. The same injury suffered by two different persons may affect them in different ways. Loss of leg by a farmer or a rickshaw puller may be end of the road as far as his earning capacity is concerned. Whereas, in case of the persons engaged in some kind of desk work in office, loss of leg may have lesser effect.”

The Appellant in this case had suffered injury and his right lower limb had to be amputated on account of an accident. He was working as gunman with Bharat Hotels before he met with the accident. However, as a result of the accident and amputation of his right lower limb, he was terminated from service. The Motor Accident Claims Tribunal awarded him a compensation of ₹ 34,29,800/-. Out of the total compensation awarded, ₹ 30,84,800/- was awarded taking into account his functional disability at 100% with reference to his job as a gunman.

Subsequently, the insurance company appealed against the order of the Tribunal before the High Court of Delhi. The High Court reduced the compensation by ₹ 4,92,205/- taking his loss of earning capacity at 80%, even though the appellant had suffered amputation of his right lower limb.

The Petitioner argued that the functional disability should be taken as 100%, not 80%. It was contended that reducing the loss of earning capacity to 80% despite the appellant suffering amputation was erroneous, since due to accident he was terminated from service.

The Respondent Insurance company submitted that there was error in calculation of the compensation by the Tribunal in terms of the disability certificate produced by the appellant which was rectified by the High Court. The certificate issued by the hospital showed permanent physical disability at 85% noting that his condition was not likely to improve.

Setting aside the order of the High Court, the Apex Court held that the Tribunal was right in assessing his functional disability at 100%, given that he was working as a gunman and that he lost his job on account of the injuries sustained in the accident:

“..we find that the appellant herein was working as a gunman with Bharat Hotel Limited. On account of amputation of his right leg above the knee, he was terminated from service w.e.f. 31.05.2015. It is not a matter of dispute that a person with his right leg amputated cannot perform the duty of a gunman. This is his functional disability. He was 50 years & 5 months old at the time of accident. Considering the aforesaid facts, in our view, the Tribunal was right in assessing the loss of earning capacity of the appellant at 100% and assessing the compensation accordingly. The High Court was in error in reducing the loss of earning capacity to 80%, relying upon the judgment of High Court, despite there being a judgment of this Court available on the issue.”

Case Title: Sarnam Singh V. Shriram General Insurance

Citation : 2023 LiveLaw (SC) 498

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