Functional disability must reflect actual earning-capacity loss, not merely certified physical impairment.

The appellant, aged approximately 29 years, was travelling on a motorcycle on 15 June 2023 when it was hit by the offending vehicle. He suffered injuries resulting in below-knee amputation of the left lower limb and was certified to have 70% permanent physical disability in relation to that limb.

At the time of the accident, he was working as a palledar, performing loading and unloading work.

The Motor Accident Claims Tribunal, Rohini Courts, awarded total compensation of ₹78,18,000 with interest at 7.5% per annum by award dated 6 April 2026.

The employer testified that the appellant earned approximately ₹25,000–₹30,000 per month as a daily-wage palledar, but admitted that payments were made in cash and that no payment or employment records were maintained.

The Tribunal nevertheless adopted ₹20,903 as the appellant’s notional monthly income.

The Tribunal assessed functional disability at 70% and awarded ₹30,00,000 towards an artificial limb and its maintenance.

1. Whether the appellant’s functional disability, arising from below-knee amputation and assessed as 70% physical disability in relation to the left lower limb, ought to be enhanced to 100% for determining loss of future earning capacity?

2. Whether the appellant’s monthly income ought to have been assessed at ₹25,000–₹30,000 on the basis of the employer’s testimony, instead of ₹20,903 based on the minimum wages applicable to a matriculate in Delhi?

The Court applied the principles governing assessment of loss of future earning capacity under Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, namely that physical disability cannot be mechanically equated with functional disability; the Tribunal must assess the nature and permanence of the disability, its effect on the whole body, the claimant’s avocation, and whether he can continue his previous work or undertake alternative employment.

The Court also relied on M. Paramesh v. V.R.L. Logistics, 2026 INSC 655, which recognises that the impact of amputation on the claimant’s actual livelihood and earning capacity must be evaluated in light of the surrounding circumstances.

The governing principle for determination of income is that compensation must be just and reasonable, and where claimed income is unsupported by reliable documentary or corroborative evidence, the Court may adopt an appropriate minimum-wage or notional-income basis.

The standard multiplier method, including future prospects, was applied to quantify loss of future earnings.

The Court upheld the Tribunal’s assessment of monthly income at ₹20,903 because the employer’s testimony regarding ₹25,000–₹30,000 per month was unsupported by wage registers, payment records, or other corroborative evidence; the cash-payment arrangement and absence of records reduced the reliability of the evidence.

The Court also noted that the Tribunal had already adopted the minimum wages applicable to a matriculate in Delhi, and therefore found no basis for enhancement of income.

As to functional disability, the Court distinguished between the certified 70% physical disability of the left lower limb and its effect on the appellant’s earning capacity.

Although prosthetics could improve mobility and permit some lifting or desk work, the appellant’s pre-accident occupation involved physically demanding loading and unloading work.

His amputation placed him at a significant disadvantage in continuing that vocation, and no alternative employment had been offered by his employer.

Applying Raj Kumar, the Court held that the appellant was not totally disabled from all forms of employment, and consequently rejected the claim for 100% functional disability; however, considering his age, occupation, amputation, and reduced future employment prospects, it enhanced functional disability from 70% to 80%.

The Court rejected the claim for assessment of income at ₹25,000–₹30,000 per month and affirmed the monthly income of ₹20,903.

It enhanced the functional disability from 70% to 80%, increasing the compensation for loss of future earnings from ₹41,78,927.76 to ₹47,75,917.44.

The total compensation was consequently enhanced from ₹78,18,000 to ₹84,15,000, resulting in enhanced compensation of ₹5,97,000.

The enhanced amount was directed to be deposited before the MACT within four weeks, with interest at 7.5% per annum from the date of filing of the claim petition.

A lump sum of ₹2,00,000 was to be released to the claimant, while the balance enhanced amount and accrued interest were to be placed in successive fixed deposits of ₹25,000 each.

The original award’s disbursal scheme was continued, and the appeal was disposed of accordingly.