Government employees cannot claim loss of earning capacity multiplier if employment and salary continue despite disability.

On 13.01.2015 at about 11.00 p.m., the 1st respondent/claimant Vadivel was riding his motorcycle (TN 54Z 4232) with his daughter Anbukkarasi as pillion rider from Aattur towards Naduvalur Gengavalli Branch Road, when an unknown vehicle hit the motorcycle, causing multiple injuries to both.

Vadivel was treated at Government Hospital, Salem, Kurinji Hospital, Salem, and Ganga Hospital, Coimbatore, remaining an inpatient for 15 days, and claimed Rs. 20,00,000/- as compensation.

The appellant Insurance Company contested the claim, alleging that a fraudulent case had been created with police assistance and that the driver of the offending TATA 407 vehicle (TN 45Y 8445) lacked a valid licence to drive a transport vehicle, constituting a policy violation absolving the insurer.

The Tribunal, by a common order dated 07.03.2024 in MCOP Nos. 531/2015 and 1991/2017, awarded the 1st claimant Rs. 17,60,847/-, including Rs. 9,43,800/- towards loss of income on account of permanent disability.

The claimant, aged 53 years at the time of the accident, was a Government School Teacher who suffered below-knee amputation of the right leg, with the Medical Board assessing permanent disability at 65%; he continued in his government employment.

1. Whether the Tribunal was justified in awarding Rs. 9,43,800/- towards loss of income on account of permanent disability when the claimant continued in his profession as a Government School Teacher.

2. Whether the percentage of permanent disability assessed by the Medical Board (65%) can be equated with the percentage of loss of earning capacity for computing compensation.

The Court applied the principles laid down by the Hon'ble Supreme Court in Raj Kumar v. Ajay Kumar and another [2011 ACJ 1], which established that: (i) all injuries or permanent disabilities do not result in loss of earning capacity; (ii) the percentage of permanent disability with reference to the whole body cannot be assumed to be the percentage of loss of earning capacity.

A doctor can testify only as to the extent of permanent disability, while loss of earning capacity must be assessed by the Tribunal on the entirety of the evidence; and (iv) the same permanent disability may result in differing percentages of loss of earning capacity in different persons depending upon the nature of profession, occupation or job, age, education, and other factors.

Applying the Raj Kumar principles, the Court noted that although the claimant sustained a 65% permanent disability (below-knee amputation), he was a Government School Teacher who continued in service, and therefore the disability percentage could not be mechanically equated with loss of earning capacity.

Since the claimant remained employed, the Court adopted the multiplier method but substantially reduced the loss of income head from Rs. 9,43,800/- to Rs. 3,25,000/-.

Simultaneously, having regard to the grievous nature of the injuries (amputation), the Court enhanced conventional heads: pain and suffering was raised from Rs. 65,000/- to Rs. 1,50,000/-, attender expenses from Rs. 20,000/- to Rs. 50,000/-, and loss of amenities from Rs. 30,000/- to Rs. 1,00,000/-, while additionally awarding Rs. 75,000/- towards future medical expenses.

The final order provided for interest at 7.5% per annum from the date of the claim petition till the date of disbursement, with the manner of disbursement and apportionment following the Tribunal's directions.