Functional disability is assessed by occupational impact, not medical percentage, avoiding duplicate recovery.

The appellant-claimant, serving as a Deputy Sales Manager, suffered injuries in a motor accident involving two vehicles. The Medical Board certified permanent physical disability of 50%. He remained hospitalised for a considerable period, was bed-ridden for approximately three months, and thereafter required a walker for about three months. He continued in employment until 2008, during which his salary increased from approximately Rs. 38,724 per month to Rs. 50,000 per month, but subsequently resigned, attributing the resignation to physical difficulties arising from the injuries. Approximately seven years of service remained at the time of resignation.

The Motor Accident Claims Tribunal, Ranchi, awarded total compensation of Rs. 5,43,000 with interest at 9% per annum from 29.03.2011, the date of closure of evidence. It rejected compensation for loss of future earnings, awarded Rs. 4,00,000 towards permanent disability/loss of amenities, and granted amounts under other heads including pain and suffering, attendant charges and special diet. The claimant challenged the adequacy of the award in appeal.

1. Whether the Tribunal erred in declining compensation towards loss of future earnings and in its assessment of the claimant’s functional disability?

2. Whether the compensation awarded was just and reasonable and required enhancement under the heads of pain and suffering, attendant/driver charges, special diet, conveyance and incidental expenses, future medical expenses, and permanent disability/loss of amenities?

The Court applied Section 171 of the Motor Vehicles Act, 1988, under which interest on compensation is intended to compensate the claimant for deprivation of the amount due and ordinarily runs from the date of institution of the claim petition in the absence of claimant-attributable delay.

Relying principally on Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, and also on M. Paramesh v. VRL Logistics Ltd., 2026 INSC 655; Shankar Dutt v. United India Insurance Co. Ltd., 2026 INSC 656; and R. Halle v. Reliance General Insurance Co. Ltd., 2026 INSC 260, the Court held that medical disability cannot be mechanically equated with functional disability; the relevant inquiry is the actual effect of the disability on the claimant’s capacity to perform activities incidental to his occupation.

The Court further applied the principle that loss of future earning capacity and loss of amenities may overlap and should not result in double compensation; where appropriate, they may be assessed under a consolidated head.

The Court rejected both the Tribunal’s finding of nil loss of future earning capacity and the appellant’s implicit claim that the entire 50% medical disability should determine compensation. The claimant’s continued employment, increased salary, and absence of evidence of denied promotion, reduced salary or altered service conditions indicated that his earning capacity had not been wholly extinguished.

However, his resignation letter contemporaneously attributed his resignation to accident-related physical difficulties, and the permanent impairment reasonably affected the mobility, travel and field-visit requirements of his post as Deputy Sales Manager. The Court therefore assessed functional disability at 25%, representing partial but real impairment rather than complete incapacity or the full medical disability percentage.

Since the loss was not capable of precise computation through a demonstrated fall in income or a conventional multiplier calculation, and overlapped with loss of amenities, the Court awarded a consolidated Rs. 7,00,000 under loss of future earnings/permanent disability/loss of amenities.

Considering the prolonged hospitalisation, surgical treatment, bed-rest, use of a walker and continuing mobility restrictions, pain and suffering was enhanced from Rs. 1,00,000 to Rs. 2,00,000. Attendant charges of Rs. 18,000 were maintained, while Rs. 36,000 was added for driver services for twelve months, as the injuries made self-driving impossible during recovery.

The Court additionally awarded Rs. 20,000 for conveyance and incidental expenses and Rs. 50,000 for reasonably foreseeable future medical needs. The Tribunal’s rejection of reimbursed medical expenses, unrelated Delhi journeys and the amount allegedly lost on resignation was affirmed.

Interest was fixed at 6% per annum from the date of filing of the claim petition until realisation, replacing the Tribunal’s direction for interest from the date of closure of evidence. The finding of equal responsibility of both vehicles and equal liability of the two insurers was affirmed.

The enhanced amount was directed to be shared equally by Oriental Insurance Co. Ltd. and National Insurance Co. Ltd., deposited within six weeks, subject to adjustment of amounts already paid, and transferred to the appellant’s bank account through regular banking channels. No order as to costs was made.