Compensation for physical disability must be computed using the multiplier method rather than a percentage-based approach.

The appellant, a squash coach, sustained injuries in a motorcycle accident on August 16, 2019, due to the negligence of another rider.

The Motor Accident Claims Tribunal (Tribunal) assessed a 20% permanent disability based on a medical certificate and awarded ₹19,58,513, calculating loss of earning capacity using the multiplier method based on a monthly income of ₹30,000.

On appeal by the Insurance Company, the High Court drastically reduced the compensation for loss of earning capacity to ₹80,000 by applying a flat rate of ₹4,000 per percentage of disability, while slightly increasing conventional heads and adding ₹50,000 for loss of amenities.

The Court applied the principle of "just compensation" under the Motor Vehicles Act, 1988.

It emphasized the established "multiplier method" for calculating future loss of earnings as settled in Sarla Verma v. Delhi Transport Corporation and Reshma Kumari v. Madan Mohan.

Future prospects (40% for those under 40 years) must be included as per Pranay Sethi where disability significantly affects employment.

The principle that loss of earning capacity generally encompasses loss of amenities.

The Supreme Court found the High Court's "per percentage" calculation (₹4,000 per 1%) to be "unheard of" and legally erroneous.

The Court validated the Tribunal's reliance on the appellant’s bank statements (Ex. P14) and appointment letter from IIT Madras (Ex. P13), which proved a monthly income of approximately ₹30,000.

Since a squash coach relies on physical agility, a 20% permanent disability (confirmed by a freshly constituted Medical Board) directly impacts his earning capacity.

The Court held that the Tribunal correctly applied the multiplier of 18 and added 40% for future prospects.

Regarding the High Court's grant of ₹50,000 for "loss of amenities," the Court determined this was redundant as the comprehensive assessment of "loss of earning capacity" already accounted for the impact of the disability on the claimant's quality of life.

The total compensation was fixed at ₹19,81,513 with 7.5% interest per annum, with Respondents directed to disburse the remaining amount within three months.