Functional disability in non-functional limbs warrants compensation for loss of earning capacity using the multiplier method.

On August 12, 2019, the appellant was riding his two-wheeler when a Van belonging to the first respondent and insured by the second respondent struck him in a rash and negligent manner, causing grievous injuries.

Medical records (Ex.P6, P9, P10) confirmed a Diffuse Axonal injury and Left Brachial Plexus injury (nerve root injury), rendering his left hand non-functional.

The Motor Accident Claims Tribunal (MACT) awarded a total compensation of Rs. 5,52,190/-, calculating disability at Rs. 3,000 per percentage (percentage method) rather than assessing loss of earning capacity.

The appellant approached the High Court seeking enhancement, contending that the injuries resulted in total functional loss of the limb.

1. Whether the Tribunal erred in applying the percentage method for compensation instead of the multiplier method based on loss of earning capacity for a non-functional limb.

2. Whether the compensation awarded under various heads, including loss of marital prospects and amenities, required enhancement based on the severity of the injury.

Principles regarding the assessment of functional disability and its impact on earning capacity as laid down in Rajkumar v. Ajaykumar Anr. (2010 (2) TNMAC 581 SC).

The mandate regarding the addition of 40% for "future prospects" to the notional income for claimants aged below 40 years as per National Insurance Co. Ltd. v. Pranay Sethi.

Section 166 and 173 of the Motor Vehicles Act governing the claim and the appellate jurisdiction for enhancement.

The Court observed that the claimant suffered a nerve root injury resulting in a 50% disability as assessed by the Medical Board and upon personal inspection, the Court noted the left hand was "almost like amputated," requiring the support of the right hand even to lift.

The Court determined that the Tribunal failed to appreciate that such an injury to a dominant limb directly reduces earning capacity; consequently, the Court discarded the "per percentage" calculation and applied the multiplier method.

The Court fixed a notional monthly income of Rs. 18,000, added 40% for future prospects (totaling Rs. 25,200), and applied a multiplier of 18 based on the claimant’s age, resulting in a calculated loss of earning capacity of Rs. 27,21,600.

The Court also found the initial awards for attender charges, amenities, and marital prospects to be insufficient given the 57-day hospitalization and permanent physical limitations.

The High Court allowed the appeal in part, enhancing the compensation from Rs. 5,52,190/- to Rs. 32,34,690/- and directed the second respondent to deposit the enhanced amount with 7.5% interest per annum within six weeks.

The Court specifically awarded Rs. 1,00,000/- for loss of marital prospects and Rs. 72,000/- for attender charges.