Functional Disability for Motor Accident Claims Must Reflect Actual Impact on Earning Capacity, Not Just Medical Impairment.

The Appellant (Insurance Company) challenged the award dated 28th February 2014 passed by MACT, Saket Courts, which granted ₹21,52,901/- to Respondent No. 1 (the injured claimant)

On 20th March 2011, the claimant, a TSR driver, was hit by an offending vehicle while riding his motorcycle

The claimant suffered a 90% permanent disability in his left lower limb due to a femur fracture treated with external fixtures

The Tribunal originally assessed his functional disability at 100%, equating it to a total loss of earning capacity

1. Whether the assessment of 100% functional disability was legally sustainable given the nature of the injuries and vocation of the claimant

2. Whether the claimant was entitled to future prospects and a revised multiplier in light of established precedents

The Court applied the principles laid down in *Raj Kumar v. Ajay Kumar (2011) 1 SCC 343*, which distinguishes between medical disability and functional disability (loss of earning capacity), holding that 100% loss should only be imputed if the person is completely disabled from earning any livelihood

It followed *National Insurance Company Ltd. v. Pranay Sethi (2017) 16 SCC 680* regarding the mandatory grant of future prospects even in injury cases

Additionally, the multiplier was determined as per the table in *Sarla Verma v. Delhi Transport Corporation (2009) 5 SCC 121*

The High Court found the Tribunal’s assessment of 100% functional disability erroneous.

Applying *Raj Kumar*, the Court reasoned that since the claimant's injury involved the left lower limb treated with plating (not amputation or paralysis), he could still theoretically engage in some lesser scale of activities or alternative vocations

Consequently, the Court reduced the functional disability from 100% to 75%

However, the Court observed that the Tribunal failed to award 30% future prospects required for a 45-year-old skilled worker under *Pranay Sethi*

and failed to apply the correct multiplier of 14 for the claimant’s age bracket

By integrating these adjustments—lower disability percentage but higher multiplier and future prospects—the Court recalculated the compensation

It held that functional disability is 75%, the multiplier is 14, and future prospects of 30% must be added

The total compensation was enhanced from ₹21,52,901/- to ₹22,10,699/-, carrying interest at 9% per annum

The Insurance Company was directed to deposit the enhanced amount of ₹57,798/- within four weeks for release to the claimant