Functional disability must reflect occupational impact, not merely the percentage of physical disability.

The appellant, aged about 16 and working as a labourer, was injured when a truck overturned on 3 March 2008.

He sustained fractures to his right femur, knee and hip, underwent surgery and remained under treatment for 35 days.

A disability certificate recorded 35% permanent physical disability.

The Claims Tribunal awarded Rs. 60,000, assessing monthly income at Rs. 2,000 and functional disability at 20%.

The claimant appealed only on the adequacy of compensation; negligence and liability were not disputed.

Whether the Tribunal’s assessment of the claimant’s functional disability at 20%, rather than the 35% physical disability recorded in the certificate, warranted interference

Whether the claimant’s income and compensation under the relevant heads should be reassessed and enhanced

Under Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, permanent physical disability cannot automatically be equated with loss of earning capacity; functional disability must be assessed in light of the injured person’s occupation and the effect of the injuries on their ability to earn.

Compensation must be assessed with reference to the circumstances of the accident and the evidence, including the claimant’s income, disability, treatment and resulting losses.

The Court applied a multiplier of 18 and added 40% for future prospects, having regard to the claimant’s age.

The Court maintained 20% functional disability because the claimant’s 35% physical disability did not, by itself, establish an equivalent loss of earning capacity; it considered his labouring work and injuries to his femur and hip.

It assessed monthly income at Rs. 2,651, the applicable minimum wage for an unskilled worker, and applied the multiplier of 18 and 40% future prospects to calculate Rs. 1,60,332 for loss of future earning capacity.

It further awarded Rs. 3,093 for 35 days’ loss of income, increased medical and treatment expenses to Rs. 25,000, pain and suffering to Rs. 10,000, and allowed Rs. 5,000 each for conveyance and attendant charges.

Total compensation was enhanced from Rs. 60,000 to Rs. 2,08,425, an increase of Rs. 1,48,425.

The enhanced amount was ordered to carry interest at the same rate and from the same date as in the Tribunal’s award, and the insurer was directed to deposit it with accrued interest within two months of receiving a certified copy of the order.

The Tribunal’s remaining findings were affirmed.