M Paramesh vs Vrl Logistics Ltd
- Court
- Supreme Court
REPORTABLE
2026 INSC 655
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8708 OF 2026
[ARISING OUT OF S.L.P. (CIVIL) NO. 35337 OF 2025]
M. PARAMESH … APPELLANT(S)
VERSUS
VRL LOGISTICS LTD. AND ANOTHER ... RESPONDENT(S)
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present Appeal arises out of the judgment and order dated
1
29.11.2023 passed by the High Court of Judicature at Madras in C.M.A.
No.1388 of 2021 whereby the High Court partly allowed the appeal preferred
by the appellant-claimant and enhanced the compensation awarded by the
2
Motor Accident Claims Tribunal/Sub Court, Rasipuram in M.C.O.P. No. 157
of 2017 from Rs. 10,84,330/- to Rs. 23,86,320/- together with interest at the
rate of 7.5% per annum.
3. The facts, in brief, necessary for the adjudication of the present Appeal
are that on 18.04.2017 at about 6:50 p.m., the appellant was proceeding on
his bicycle on the left side of the Namakkal–Salem NH-7 Road near
Signature Not Verified
Digitally signed by
Deepak Guglani
Date: 2026.06.23
15:13:05 IST
Reason:
1
For short ‘High Court’
2
For short ‘Tribunal’
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 1 of 13
Anaipalayam PACE Bank when a lorry bearing Registration No. KA-25-B-
5035, coming from behind, hit the bicycle in a rash and negligent manner. As
a result of the accident, the appellant sustained grievous injuries including
injuries to his head, jaw, eye and right leg. Owing to the severity of the injuries
suffered, his right leg subsequently came to be amputated above the knee.
4. Pursuant to the accident, FIR bearing Crime No. 279 of 2017 came to
be registered at Rasipuram Police Station under Sections 279 and 338 of the
3
Indian Penal Code, 1860 against the driver of the offending vehicle. Since
there is no challenge before us to the concurrent findings recorded by the
Courts below on the aspect of negligence, it is unnecessary to advert to the
said issue in any greater detail except to note that the Tribunal held the driver
of the offending lorry negligent and consequently fastened liability upon the
owner and insurer of the vehicle.
5. The appellant instituted claim proceedings under Section 166 of the
4
Motor Vehicles Act, 1988 before the MACT claiming compensation of
Rs. 25,00,000/- for the injuries and permanent disability suffered by him in
the aforesaid accident. It was the case of the appellant that at the time of the
accident he was aged about 30 years and was working as a mason earning
approximately Rs. 20,000/- per month. The appellant further asserted that
on account of the amputation of his right leg and the permanent disability
suffered by him, he had lost his earning capacity and was no longer in a
3
For short ‘IPC’
4
For short ‘MV Act’
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 2 of 13
position to continue his avocation as a mason. The disability certificate issued
by the competent authority assessed his permanent disability at 70%.
6. The respondents contested the claim by filing their written statements
disputing both the manner of accident and the quantum of compensation
claimed by the appellant. Before the Tribunal, the appellant examined himself
as P.W.-1 and produced documentary evidence including the FIR, medical
records, disability certificate and medical bills. The respondents, however, did
not adduce either oral or documentary evidence.
7. The Tribunal, by its award dated 29.11.2019, held that the accident
had occurred due to the rash and negligent driving of the driver of the
offending lorry and awarded compensation of Rs. 10,84,330/- together with
interest at the rate of 7.5% per annum from the date of filing of the claim
petition till realization. While computing compensation, the Tribunal assessed
the monthly income of the appellant at Rs. 6,000/- and awarded
compensation under various heads including loss of earning capacity, pain
and suffering and medical expenses.
8. Aggrieved by the quantum of compensation so awarded, the appellant
preferred C.M.A. No.1388 of 2021 before the High Court seeking enhancement
of compensation. The principal grievance raised before the High Court
pertained to the assessment of income, non-grant of future prospects and
inadequacy of compensation awarded under various heads considering the
nature of injuries and permanent disability suffered by the appellant.
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 3 of 13
9. The High Court, by the impugned judgment, partly allowed the appeal
and enhanced the monthly income of the appellant from Rs. 6,000/- to
Rs. 12,000/- and further granted addition of 40% towards future prospects.
The High Court also enhanced the compensation awarded under certain
conventional heads and granted compensation towards attendant charges,
loss of amenities and future medical expenses including artificial
limb/prosthesis. Consequently, the compensation awarded by the Tribunal
came to be enhanced from Rs. 10,84,330/- to Rs. 23,86,320/- together with
interest at the rate of 7.5% per annum.
10. Still dissatisfied with the quantum of compensation so determined by
the High Court, the appellant-claimant is before this Court seeking further
enhancement of compensation.
11. Before adverting to the rival submissions advanced on behalf of the
parties, it would be apposite to notice the compensation awarded by the
Tribunal under various heads and the modifications carried out by the High
Court in the impugned judgment while enhancing the award amount. The
comparative position of compensation as awarded by the Tribunal and as
modified by the High Court via the impugned judgment is reproduced
hereunder for ready reference:
HEADS TRIBUNAL HIGH COURT
Loss of Income
(Disability @ 70%)
Rs 6000 x 12 x 17 x
70% = Rs 8,56,800/-
Rs 12,000 x 12 x 17
x 70% = Rs
17,13,600/-
Future Prospects Not considered 40% of Rs 8,56,800 =
Rs 3,42,720/-
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 4 of 13
Pain and Suffering Rs 50,000/- Rs 1,00,000/-
Transportation Rs 5,000/- Rs 25,000/-
Nutrition Rs 10,000/- -
Clothing and
Rs 5,000/- -
Ornaments
Medical expenses Rs 1,57,530/- -
Attendant Charges Not Considered Rs 30,000/-
Loss of Amenities Not Considered Rs 75,000/-
Future Medical
Not Considered Rs 1,00,000/-
Expenses for
Artificial Limb
TOTAL
COMPENSATION
5
Rs. 10,84,330/- Rs 23,86,320/-
12. We have heard learned counsel appearing for the parties and have
carefully perused the material available on record including the award passed
by the Tribunal as well as the impugned judgment of the High Court.
13. At the outset, before adverting to the plea of the appellant seeking
further enhancement of compensation, certain infirmities in the calculations
undertaken by the High Court while determining the compensation deserve
to be noticed.
14. A perusal of the impugned judgment would reveal that while the High
Court enhanced the monthly income of the appellant from Rs. 6,000/- to Rs.
12,000/-, it awarded a sum of Rs. 3,42,720/- towards future prospects by
applying addition of 40%. However, on a closer scrutiny of the calculation
undertaken by the High Court, it becomes evident that the said amount of Rs.
5
This amount has been wrongly calculated by High Court. Our analysis from Para 14
onwards addresses this.
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 5 of 13
3,42,720/- has been arrived at by applying 40% future prospects on the
amount of loss of income as calculated by the Tribunal, namely
Rs. 8,56,800/-.
15. Once the High Court itself enhanced the monthly income of the
appellant to Rs. 12,000/- and consequently recalculated the loss of earning
capacity at Rs. 17,13,600/- (12,000 × 12 × 17 × 70/100), the addition towards
future prospects ought to have been computed on the said recalculated
amount. In such circumstances, the correct amount towards future prospects
would work out to Rs. 6,85,440/- being 40% of Rs. 17,13,600/-. The High
Court appears to have inadvertently computed the addition towards future
prospects on the basis of the income assessed by the Tribunal instead of the
recalculated income determined by the High Court itself.
16. That apart, a further careful perusal of the table hereinabove and the
comparative calculation undertaken by the High Court would also reveal that
though the High Court did not interfere with the amounts awarded by the
Tribunal under the heads of nutrition, clothing and ornaments and medical
expenses, the said amounts were inadvertently omitted from the final
computation of compensation undertaken by the High Court. The aforesaid
amounts, having not been disturbed by the High Court, ought to have formed
part of the final computation of compensation.
17. Having noticed the aforesaid infirmities in the computation undertaken
by the High Court, we may now advert to the claim of the appellant seeking
further enhancement of compensation.
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 6 of 13
18. Insofar as the monthly income of the appellant is concerned, we are not
inclined to interfere with the determination made by the High Court assessing
the income of the appellant at Rs. 12,000/- per month. Though it was the
claim of the appellant that he was earning approximately Rs. 20,000/- per
month by working as a mason, no cogent documentary evidence has been
placed on record to substantiate the said claim. In the facts and
circumstances of the case, we find the determination of monthly income by
the High Court to be just and reasonable requiring no further interference.
19. The next aspect which falls for consideration is with regard to the
assessment of disability and loss of earning capacity suffered by the appellant.
20. The disability certificate issued by the competent authority assessed
the permanent disability suffered by the appellant at 70%. The Tribunal as
well as the High Court proceeded on the basis of the said physical disability
and accordingly assessed the loss of earning capacity at 70%. However, in our
considered view, both the Courts below failed to examine the aspect of
functional disability suffered by the appellant in the peculiar facts of the
present case.
6
21. In Raj Kumar vs. Ajay Kumar and Another , this Court has
elaborately explained the distinction between physical disability and
functional disability and has held that for the purposes of determining
compensation, the effect of the permanent disability on the earning capacity
6
(2011) 1 SCC 343
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 7 of 13
of the injured is the relevant consideration. The relevant observations are
reproduced hereinbelow:
“10. Where the claimant suffers a permanent disability
as a result of injuries, the assessment of compensation
under the head of loss of future earnings would depend
upon the effect and impact of such permanent
disability on his earning capacity. The Tribunal should
not mechanically apply the percentage of permanent
disability as the percentage of economic loss or loss of
earning capacity. In most of the cases, the percentage
of economic loss, that is, the percentage of loss of
earning capacity, arising from a permanent disability
will be different from the percentage of permanent
disability. Some Tribunals wrongly assume that in all
cases, a particular extent (percentage) of permanent
disability would result in a corresponding loss of earning
capacity, and consequently, if the evidence produced show
45% as the permanent disability, will hold that there is
45% loss of future earning capacity. In most of the cases,
equating the extent (percentage) of loss of earning capacity
to the extent (percentage) of permanent disability will
result in award of either too low or too high a
compensation.
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;
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 8 of 13
(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.
*
19. We may now summarise the principles discussed
above:
(i) All injuries (or permanent disabilities arising
from injuries), do not result in loss of earning capacity.
(ii) The percentage of permanent disability with
reference to the whole body of a person, cannot be
assumed to be the percentage of loss of earning
capacity. To put it differently, the percentage of loss
of earning capacity is not the same as the percentage
of permanent disability (except in a few cases, where
the Tribunal on the basis of evidence, concludes that
the percentage of loss of earning capacity is the same
as the percentage of permanent disability).
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 9 of 13
(iii) The doctor who treated an injured claimant or who
examined him subsequently to assess the extent of his
permanent disability can give evidence only in regard to
the extent of permanent disability. The loss of earning
capacity is something that will have to be assessed by the
Tribunal with reference to the evidence in entirety.
(iv) The same permanent disability may result in
different percentages of loss of earning capacity in
different persons, depending upon the nature of
profession, occupation or job, age, education and other
factors.”
(emphasis supplied)
22. From the above observations in Raj Kumar (supra) , it becomes crystal
clear that though the physical disability may be assessed at a particular
percentage, the functional disability affecting earning capacity may,
depending upon the nature of avocation carried on by the injured, be assessed
at a higher percentage including 100%. The assessment of compensation in
cases of permanent disability cannot be undertaken by mechanically applying
the percentage of physical disability as the percentage of economic loss.
23. There is no dispute with regard to the fact that the appellant was
working as a mason at the time of the accident. The work of a mason is
essentially a physical and manual avocation requiring continuous use and
support of both legs. The material on record further reveals that on account
of the injuries suffered in the accident, the appellant underwent amputation
of his right leg above the knee.
24. By virtue of the aforesaid amputation, the appellant has effectively lost
his capacity to continue the work of a mason which was admittedly the sole
avocation being pursued by him for earning his livelihood. It is not even the
case of the respondents that the appellant was engaged in any other sedentary
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 10 of 13
occupation or that despite the amputation suffered by him, his earning
capacity remained unaffected.
25. 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. In such circumstances, restricting the loss of
earning capacity to 70% merely on the basis of physical disability would not
be justified.
26. Having regard to the nature of avocation carried on by the appellant,
the extent of injuries suffered by him and the principles laid down by this
Court in Raj Kumar (supra) , we are of the considered opinion that 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. Consequently, the loss of earning capacity suffered by the appellant
deserves to be computed by treating the functional disability at 100%. Taking
the monthly income of the appellant at Rs. 12,000/- with addition of 40%
towards future prospects and applying the multiplier of ‘17’ as adopted by the
Courts below, the compensation payable towards loss of earning capacity is
recalculated accordingly.
27. We are also of the considered view that the amount awarded by the High
Court towards future medical expenses including artificial limb/prosthesis
requires enhancement. The appellant has suffered amputation above the knee
and would require periodic replacement and maintenance of artificial
limb/prosthesis throughout his lifetime besides continued medical assistance
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 11 of 13
and rehabilitation. In the facts and circumstances of the case, the amount
awarded by the High Court under the said head deserves to be enhanced from
Rs. 1,00,000/- to Rs. 2,00,000/-.
28. Save and except the modifications indicated hereinabove, we do not find
any reason to interfere with the compensation awarded by the High Court
under the remaining heads and the same are accordingly affirmed.
29. In view of the discussion made hereinabove, the compensation awarded
to the appellant stands modified and enhanced accordingly. The revised
compensation payable to the appellant under the various heads, after
incorporating the modifications made by this Court, is reproduced hereunder
for ready reference:
HEADS TRIBUNAL HIGH COURT THIS COURT
Monthly Income Rs. 6000/- Rs 12,000/- Rs 12,000/-
Functional
70% 70% 100%
Disability
Assessed
Multiplier (age 30
17 17 17
years)
Loss of Income Rs 6000 x 12 x
Rs 12,000 x 12
x 17 x 70% = Rs
Rs 12,000 x 12 x
17 x 70% = Rs
17 x 100% = Rs
8,56,800/-
17,13,600/-
24,48,000/-
Future Prospects Not considered Rs 17,13,600 +
Rs 24,48,000/-
40% of Rs
17,13,600 = Rs
+ 40% of Rs
24,48,000 = Rs
23,99,040/-
34,27,200/-
Pain and
Suffering
Rs 50,000/- Rs 1,00,000/- Rs 1,00,000/-
Transportation Rs 5,000/- Rs 25,000/- Rs 25,000/-
Nutrition Rs 10,000/- Rs 10,000/- Rs 10,000/-
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 12 of 13
Clothing and
Rs 5,000/- Rs 5,000/- Rs 5,000/-
Ornaments
Medical expenses Rs 1,57,530/- Rs 1,57,530/- Rs 1,57,530/-
Attendant
Not Considered Rs 30,000/- Rs 30,000/-
Charges
Loss of Amenities Not Considered Rs 75,000/- Rs 75,000/-
Future Medical
Not Considered Rs 1,00,000/- Rs 2,00,000/-
Expenses for
Artificial Limb
TOTAL
COMPENSATION
Rs. 10,84,330/- Rs. 29,01,570/- Rs. 40,29,730/-
30. The impugned judgment passed by the High Court stands modified to
the aforesaid extent. Consequently, the Appeal is partly allowed.
31. The enhanced compensation shall carry interest at the same rate as
awarded by the High Court. The respondent no. 2-Insurance Company is
directed to deposit the enhanced amount before the Tribunal within a period
of six weeks from today. On such deposit being made, the appellant shall be
entitled to withdraw the same in accordance with law.
………………………………………J.
(PRASHANT KUMAR MISHRA)
………………………………………J.
(N.V. ANJARIA)
NEW DELHI;
JUNE 23, 2026.
Civil Appeal @ S.L.P. (Civil) No. 35337 of 2025 Page 13 of 13