Motor Accident Claim | Functional Disability Can't Be Reduced Just Because Victim Was Retained In A Specified Role : Supreme Court
Saima Anjum
4 Sept 2026 6:33 PM IST
The impact on the earning capacity in the open, competitive market must be seen.
The Supreme Court has held that assessment of functional disability in motor accident compensation cases must focus on a victim's ability to earn in the open, competitive labour market, rather than on the fact that the person continues to retain a job in a highly accommodated workplace.
"The calculation of functional disability depends on assessing the victim's earning capacity in the open, competitive market, rather than on retention in a specific, highly accommodated role," the Court said.
A Bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria made the observation while enhancing compensation to a woman who suffered complete blindness, serious pelvic injuries and a permanent colostomy following a 2011 road accident. The Court held that her continued employment could not, by itself, be treated as evidence that she had suffered little or no loss of earning capacity.
The woman, who was 35 at the time of the accident, had been working as a Deputy Group Manager with IBM Daksh in Gurugram. Although she continued in employment after the accident and her annual cost to company rose from Rs 16 lakh to Rs 19 lakh, the record showed that she could perform her duties only with specially created assistive software, flexible working hours and extensive accommodations provided by her employer.
The Court also relied on a career-growth letter issued by her employer, which showed that she had lost normal promotional progression following the accident. The record indicated that she had missed opportunities for advancement to positions such as General Manager, Director and Vice-President.
The MACT had assessed her functional disability at 60% and awarded Rs 1,35,53,298, which the High Court enhanced to Rs 2,94,48,617, after raising the functional disability to 80% and granting a 50% addition towards future prospects. This finding was arrived at by relying on Pappu Deo Yadav v Naresh Kumar & Ors.
Noting the gravity of the injuries, including a pelvic fracture, degloving injuries, cortical blindness, and a permanent colostomy, the Supreme Court had directed fresh medical examination of the claimant by a multi-disciplinary Medical Board at Vardhman Mahavir Medical College and Safdarjung Hospital, New Delhi. The Board concluded that the claimant suffered 100% permanent physical impairment of the whole body.
Rejecting the insurer's arguments that compensation ought to be based only on functional disability despite the claimant remaining employed, the Court held that having invited the Medical Board's opinion, the insurer could not resist the resultant finding merely because it went against its interest. The Court observed that the Medical Board's opinion would now be the guiding factor for determining compensation, and that the insurer could not argue for a lower percentage once the report was against it, having itself sought the reference.
The Court held that assessment of functional disability must be based on the claimant's earning capacity in the open, competitive market, and not merely on her continuance in a specially accommodated role created by her employer, noting that she could perform her duties only through specialised software, flexible hours among others.
Revising the compensation on the basis of 100% functional disability, applying 50% towards future prospects, and a multiplier of 16, the Court recalculated the total loss of future income at Rs 2,42,08,416. The Court also enhanced attendant charges, future medical expenses, pain and suffering, and a loss of marriage prospects, while clarifying that the sum awarded for loss of marriage prospects (Rs 20,00,000) was arrived at in the peculiar facts of the case and “shall not be treated as a precedent”.
The final compensation for the injury claim was enhanced to Rs 3,77,84,297, with an interest at 7.5% per annum from the date of filing of the claim petition.
Connected appeal by the parents of the deceased
In the death claim, the MACT (Gurugram) had awarded Rs 82,56,152 to the claimants (alleged wife, Priyanka Das, and parents of the deceased), applying a multiplier of 16 based on the deceased's age of 33 years. The MACT had declined to treat Priyanka Das as the legally wedded wife of the deceased for want of documentary proof of marriage. It, instead, treated her as his fiancee based on employment records, and awarded her a small share of the compensation. Subsequently, the Punjab and Haryana High Court made only a marginal enhancement to her share from Rs 5 lakh to Rs 7.5 lakh.
Before the Supreme Court, the insurer argued that since compensation was payable to the deceased's parents, the multiplier ought to be based on their age rather than the deceased's age. Rejecting this contention, the Court held that this issue was no longer res integra. The Court further noted that Munna Lal Jain v Vipin Kumar Sharma had held that the multiplier must be determined by the age of the deceased and not of the dependents, a position affirmed in Sube Singh v Shyam Singh. Since the deceased was 33 years old, falling in the 31-35 bracket, the Court held that the multiplier of 16 applied by the MACT and the High Court was correctly determined.
On the question of the marital status, the Court declined to reappreciate the concurrent findings of fact recorded by the MACT and the High Court, holding that the burden of proving her status as the legally wedded wife was on Priyanka Das, and that the MACT and the High Court had correctly appreciated the oral and documentary evidence in concluding she was not the legally wedded wife. The Court also rejected the argument for a higher apportionment in her favour, observing that the claimants are to be awarded just compensation, ensuring “what is due is not denied, what is undeserving is not awarded”.
Both appeals arising from the death claim were accordingly dismissed.
Case: Reliance General Insurance Company v Priyanka Das & Ors
Citation : 2026 LiveLaw (SC) 897
Appearance:
For claimant: Mr Prashanto Chandra Sen, Senior Adv and Ms Prerna Mehta, Adv
For respondent: Mr Syed Jafar Alam, Adv and Mr Shantanu Sagar, Adv
Click here to read the judgment
