Functional disability depends on the injury's impact on the claimant's specific professional avocation and earning capacity.

On May 5, 2016, the appellant, a 30-year-old Manager at a logistics firm, sustained grievous injuries including a severe head injury, facial fractures, and a left femur fracture when his motorcycle was hit by another motorcycle driven negligently

The Medical Board assessed his permanent physical disability at 63%, noting cognitive impairment, partial blindness, and restricted knee stability

The Motor Accident Claims Tribunal (MACT) accepted the 63% disability and awarded Rs. 65,53,811

On appeal, the High Court reduced the functional disability to 30% and the total compensation to Rs. 35,61,000, holding that physical disability cannot be mechanically equated with loss of earning capacity

The appellant approached the Supreme Court seeking enhancement, contending that his neurological deficits resulted in a 100% loss of earning capacity

1. Whether the High Court was justified in reducing the functional disability from 63% to 30% without an independent analysis of medical evidence

2. Whether the appellant’s cognitive and physical impairments, in light of his professional avocation, warrant a determination of 100% functional disability

The Court primarily applied the principles governing the assessment of "just compensation" under the Motor Vehicles Act, 1988

It relied heavily on the precedent established in Raj Kumar v. Ajay Kumar (2011) 1 SCC 343, which mandates a three-step structured analysis to determine functional disability: (i) ascertaining activities the claimant can no longer perform, (ii) assessing the claimant's avocation and age, and (iii) determining if the claimant is totally or partially disabled from earning a livelihood

The court emphasized that while physical disability is a medical fact, functional disability is an assessment of the "economic loss" or "loss of earning capacity" relative to the victim's specific profession

The Supreme Court criticized the High Court for "abruptly" reducing the disability percentage based on presumptions rather than a thorough reappreciation of evidence

Upon its own scrutiny of the Neuropsychological Assessment Report, the Court noted that the appellant suffered from severe memory impairment, frontal lobe dysfunction, and an IQ of 65, categorizing him as having a "Mild Intellectual Disability"

Applying the Raj Kumar test, the Court observed that the appellant’s role as a Manager required high cognitive functions, executive decision-making, and coordination

The Court reasoned that these specific neurological and physical impairments (including partial blindness) strike at the "core competencies" required for his job, rendering him unsuitable for managerial roles or any other gainful employment

Consequently, the Court found that the functional disability should be reckoned at 100% rather than the 63% assessed by the Board or the 30% by the High Court

The Court held that the appellant suffered a 100% functional disability

The total compensation was recalculated to Rs. 97,73,011 (Rupees Ninety-Seven Lakh Seventy-Three Thousand and Eleven) with 7.5% interest per annum from the date of the petition

The respondent-insurer was directed to satisfy the award with "pay and recover" liberty against the vehicle owner

Finally, the Court reiterated that appellate courts must provide cogent reasons when departing from a Tribunal’s findings in beneficial legislation cases