Permanent disability affecting earning capacity warrants compensation under the multiplier method.

The claimant was injured when a lorry struck him on 16 March 2018.

He alleged that he earned ₹16,000 per month from tender-coconut and chicken-stall businesses.

He was treated as an inpatient for 12 days and underwent surgery, including shortening of three toes on his left foot.

The Medical Board assessed his permanent disability at 45% and recorded pain and disfigurement.

The Tribunal awarded ₹7,06,459, including ₹2,25,000 for permanent disability using the percentage method, and directed the insurer to pay and recover from the vehicle owner because the driver lacked a valid licence at the time of the accident.

The claimant appealed, seeking enhancement, principally on the basis that the disability affected his activities and earning capacity.

1. Whether the claimant’s 45% permanent disability and its effect on his earning capacity warranted applying the multiplier method instead of the percentage method.

2. Whether the Tribunal’s assessment of the claimant’s notional monthly income should be revised in calculating compensation for loss of earning capacity.

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against a Claims Tribunal’s award.

In assessing compensation for disability, the court must consider the disability’s effect on the claimant’s earning capacity; where the evidence supports a loss of earning capacity, compensation may be assessed by applying a multiplier to the income and the relevant percentage of disability. The Court relied on Rajkumar v. Ajay Kumar, (2011) 1 SCC 343, in adopting the multiplier method, and on Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, for the applicable multiplier based on age.

The Court considered the Medical Board’s assessment of 45% permanent disability alongside the documented loss and shortening of three toes and the recorded pain and disfigurement of the claimant’s left foot. It concluded that the disability affected his day-to-day activities and earning capacity, making the percentage-only award inadequate and the multiplier method appropriate.

Because the claimant had not proved his income, the Court fixed notional monthly income at ₹12,000, having regard to the accident year, his age of 31, and his occupation. Applying a multiplier of 16 and 45% disability, it calculated loss of earning capacity at ₹10,36,800.

The enhanced amount is payable with interest at 7.5% per annum from the date of the claim petition until deposit, subject to the stated exclusion of interest for any delay period. The insurer was directed to deposit the amount, less sums already deposited, within eight weeks and was granted recovery against the vehicle owner; the claimant may withdraw the deposit upon application.