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Judgment
ANISH DAYAL, J (ORAL)
This appeal has been filed seeking enhancement of compensation awarded by the Motor Accident Claims Tribunal, Rohini Courts (‘MACT/Tribunal’), by the impugned award dated 06th April 2026 in MACP No. 710/2023, whereby a compensation of Rs.78,18,000/- along with interest at the rate of 7.5% per annum was awarded.
Mr. Manish Maini, counsel appearing for the appellant-injured, seeks enhancement on the following two counts:
Functional disability ought to have been assessed at 100% instead of 70% as considered, as assessed by the Tribunal.
Minimum wages of Rs. 20,903/- were adopted as the notional income despite the evidence of PW3, Girdhari, the employer, who deposed that the appellant was employed as a daily wager and was being paid Rs. 25,000/- to Rs. 30,000/- per month for working as a palledar (loading/unloading goods from trucks).
Ms. Suman Bagga, counsel for the insurance company, has countered these submissions, stating that there was no evidence placed on record to show that the injured-appellant was earning Rs.25,000/- per month and, therefore, the MACT had taken a generous view by adopting the minimum wages of a matriculate person in Delhi.
On the issue of functionality, she states that the amputation was below the left lower limb; therefore, reliance placed by Mr. Maini on the Supreme Court's judgment in M. Paramesh v. V.R.L. Logistics 2026:INSC:655 is misplaced and is distinguishable on facts.
The accident occurred on 15th June 2023, when the appellant was travelling on a motorcycle towards his godown along with another person. The motorcycle was hit by the offending vehicle, as a result of which the appellant sustained injuries. His disability was certified as 70% permanent disability in relation to the left lower limb, involving below-knee amputation.
The appellant was about 29 years of age at the time of the accident and was working as palledar.
The MACT considered the issue of notional income in paragraph 30 of the award. PW3, Giridhari, deposed that he was a contractor and residing in the godown at Bakoli, Delhi, and the injured was working as a palledar under him and the said godown. He stated that he was earning around Rs.25,000/- to Rs.30,000/- per month and was unable to resume work due to the accident. In his cross-examination by the insurance company, he stated that he maintained no records of the payments made to the appellant, as the wages were paid in cash. PW3 also named some of the labourers working under him and stated that he did not maintain any register of his permanent employees.
Although the testimony of PW3 was considered by the MACT, it was not found fully reliable.
Ms. Bagga further states that despite there being no documentary proof of the injured-appellant’s residence in Delhi, as there was neither Aadhaar card, Voter Identity Card or Ration Card and only his 12th class mark sheet annexed as Ex. PW1/5, MACT still adopted the minimum wages applicable to a matriculate in Delhi, i.e. Rs. 20,903/-, instead of the minimum wages applicable to an unskilled worker.
Mr. Maini has strenuously argued that there could have been no evidence which could have been placed by a daily wager.
However, surrounding facts and circumstances have also to be considered in order to fully adopt what is being stated by a witness, not supported by any documentary proof or any other corroborative evidence.
This Court does not find anything amiss in the view taken by the MACT regarding the determination of the appellant's notional income.
In any event, the minimum wages of a matriculate person in Delhi were taken and therefore the MACT’s view to determine just and reasonable compensation is upheld.
On the other issue of functional disability, Mr. Maini relied upon the decision of the Supreme Court in M. Paramesh (supra). In that case, the Supreme Court was dealing with a 30-year-old mason earning approximately Rs. 20,000/- per month whose right leg had been amputated above the knee. Taking into account that he had effectively lost his livelihood as a mason, the Court applied the principles laid down in Raj Kumar v. Ajay Kumar (2011) 1 SCC 343 and held that functional disability cannot be determined mechanically by applying the percentage of physical disability alone, but that the surrounding circumstances must also be considered.
Though each case is different in its facts and circumstances and the Court has to make an intelligent assessment using the principles and the three-step test laid down in in Raj Kumar (supra). Relevant paragraphs of which are being extracted as under:
“11.What requires to be assessed by the Tribunal is the effect of the permanent disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by applying the standard multiplier method used to determine loss of dependency). We may however note that in some cases, on appreciation of evidence and assessment, the Tribunal may find that the percentage of loss of earning capacity as a result of the permanent disability, is approximately the same as the percentage of permanent disability in which case, of course, the Tribunal will adopt the said percentage for
determination of compensation. (See for example, the decisions of this Court in Arvind Kumar Mishra v. New India Assurance Co. Ltd. [(2010) 10 SCC 254 : (2010) 3 SCC (Cri) 1258 : (2010) 10 Scale 298] and Yadava Kumar v. National Insurance Co. Ltd. [(2010) 10 SCC 341 : (2010) 3 SCC (Cri) 1285 : (2010) 8 Scale 567] )
12.Therefore, the Tribunal has to first decide whether there is any permanent disability and, if so, the extent of such permanent disability. This means that the Tribunal should consider and decide with reference to the evidence:
(i)whether the disablement is permanent or temporary;
(ii)if the disablement is permanent, whether it is permanent total disablement or permanent partial disablement;
(iii)if the disablement percentage is expressed with reference to any specific limb, then the effect of such disablement of the limb on the functioning of the entire body, that is, the permanent disability suffered by the person.
If the Tribunal concludes that there is no permanent disability then there is no question of proceeding further and determining the loss of future earning capacity. But if the Tribunal concludes that there is permanent disability then it will proceed to ascertain its extent. After the Tribunal ascertains the actual extent of permanent disability of the claimant based on the medical evidence, it has to determine whether such permanent disability has affected or will affect his earning capacity.
13.Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent disability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of activities and functions so that he continues to earn or can continue to earn his livelihood.”
(emphasis added)
The facts of the present case must, therefore, be examined in light of the aforesaid principles. The appellant was 29 years of age on the date of the accident and was working as a palledar engaged in loading and unloading goods. According to the testimony of PW6, the doctor, the appellant had suffered 70% permanent physical impairment in relation to his left lower limb, which was not likely to improve in the future. During cross-examination, PW6 stated that “…..he could lift the weight if the range of motion in knee is adequate with the help of prosthetics. He can desk work while sitting even without prosthetics”.
Relying upon the aforesaid testimony, Ms. Suman Bagga, counsel for the insurance company, has argued that there should be no increase in the functional disability assessment since appellant/claimant has been granted an amount of Rs. 30,00,000/- on account of prosthetics as well.
No doubt, the use of prosthetics would increase his mobility to some extent; however, for a 29-year-old who was carrying out the work as a palledar/labour, the disability would place him at some disadvantage in carrying on a similar vocation. More importantly, as submitted by Mr. Maini, the appellant has not been offered any alternative employment by PW3, and therefore, it cannot be assumed that he would be able to continue the same vocation/job.
As per Raj Kumar (supra), it has to be taken into account that the appellant may be capable of carrying out other vocation/jobs. In this regard, the testimony of PW6 is of some material.
Accordingly, taking into account the testimony of PW6, the principles laid down by the Supreme Court in Raj Kumar (supra), and the overall impact of the disability on the appellant's earning capacity and future employment, this Court is of the view that the functional disability ought to be enhanced to 80%.
The revised compensation is as under:
| Sr. No. | Heads | Awarded by the Tribunal | Awarded by this Court |
|---|---|---|---|
| PECUNIARY LOSS | |||
| 1. | Expenditure on Medical Bills and medical treatment (A) | Rs. 21,501.02/- | Rs. 21,501.02/- |
| 2. | Expenditure on conveyance, special diet and Attendant Charges (B) | Rs. 1,00,000/- | Rs. 1,00,000/- |
| 3. | Income of injured per month(E) | Rs. 20,903 | Rs. 20,903 |
| 4. | Loss of Income (C) | Rs. 1,67,224 | Rs. 1,67,224 |
| 5. | Add: Future prospects (F) | 40% | 40% of Rs. 20,903 = Rs. 8,361.20/- |
| 6. | Multiplier (G) | 17 | 17 |
| 7. | Functional disability (H) | 70% | 80% |
| 8. | Loss of future income/future earnings [(E+F) x 12 x G x H] = (I) | Rs. 41,78,927.76/- | Rs. 47,75,917.44/- |
| NON- PECUNIARY LOSS | |||
| 9. | Pain and suffering (J) | Rs. 2,00,000/- | Rs. 2,00,000/- |
| 10. | Loss of amenities of life (K) | Rs. 1,50,000/- | Rs. 1,50,000/- |
| 11. | Total compensation (A + B + C + I+ J+ K) = L | Rs. 48,17,652.78/- (rounded to Rs. 48,18,000/-) | Rs. 54,14,642.46/- (rounded to Rs. 54,15,000/- |
| 12. | Interest awarded | 7.5 % p.a. | 7.5 % p.a. |
| 13. | Artificial limb and its maintenance expenses | Rs. 30,00,000/- | Rs. 30,00,000/- |
| 14. | Enhanced Compensation | Rs. 5,97,000/- | |
Accordingly, the compensation is enhanced by Rs. 5,97,000/-.
Enhanced amount along with interest at 7.5% per annum from the date of filing the petition shall be deposited before MACT within a period of four weeks. It is directed that a lump sum amount of Rs. 2,00,000/- shall be released to the claimant from the deposit of enhanced amount within a period of two weeks thereafter. Remaining enhanced amount, along with accrued interest, shall be kept in Fixed Deposit Receipts (FDRs) of Rs. 25,000/- each for periods of 1 month, 2 months, 3 months and so on, in succession as maybe calculated. Interest accruing on said FDRs shall be credited to the designated Savings Bank Account of claimant. The amount of FDRs on maturity would be released to the Savings Bank Account of claimant upon due verification.
The originally awarded compensation shall continue to be disbursed as per the scheme of disbursal in the MACT award.
The appeal is disposed of in the above terms.
Pending applications, if any, are rendered infructuous.
Judgment be uploaded on the website of this Court.