The Supreme Court has held that the loss of a right leg above the knee must be treated as 100% functional disability in the case of a mason, observing that compensation in motor accident claims cannot be determined merely on the basis of the percentage of physical disability without considering its impact on the victim's livelihood.

A Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria enhanced the compensation payable to a Tamil Nadu mason from ₹29.01 lakh to ₹40.29 lakh after finding that the courts below had wrongly assessed his loss of earning capacity at 70%, corresponding to the percentage of physical disability certified by medical authorities.

"The functional disability suffered by the appellant is required to be assessed at 100% and not at 70% as assessed by the Tribunal and affirmed by the High Court," the Court held.

The appellant suffered grievous injuries in a road accident in April 2017 when a lorry hit his bicycle from behind on the Namakkal-Salem highway. The accident eventually led to the amputation of his right leg above the knee. At the time of the accident, he was working as a mason and claimed that he could no longer continue his occupation because of the disability.

The disability certificate assessed his permanent physical disability at 70%. Both the Motor Accident Claims Tribunal and the Madras High Court treated the loss of earning capacity as 70% while calculating compensation.

The Supreme Court, however, emphasised the distinction between physical disability and functional disability, relying on its earlier decision in Raj Kumar v. Ajay Kumar. The Court reiterated that compensation must be based on the effect of the disability on the victim's earning capacity rather than mechanically adopting the percentage of physical disability.

Observing that masonry is a physically demanding occupation requiring continuous use of both legs, the Bench noted that the amputation had effectively deprived the claimant of his ability to pursue his only source of livelihood.

"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 Court said.

The Court accordingly recalculated the compensation by treating the functional disability as 100%, taking the claimant's monthly income at ₹12,000, adding 40% towards future prospects and applying a multiplier of 17. It also enhanced compensation for future medical expenses, including artificial limb and prosthesis requirements, from ₹1 lakh to ₹2 lakh, noting that the claimant would require periodic replacement and maintenance of the prosthesis throughout his lifetime.

As a result, the total compensation was enhanced to ₹40,29,730 with interest at 7.5% per annum. The insurer was directed to deposit the enhanced amount within six weeks.

Case: M. Paramesh v. VRL Logistics Ltd. & Anr.

Citation : 2026 LiveLaw (SC) 641

Click here to read the judgment