Without proof of lost earning capacity, permanent disability compensation may be assessed using the percentage method.

The claimant sustained multiple injuries in a road accident on 11 September 2016 involving a lorry owned by the first respondent and insured by the second respondent.

The Tribunal found the lorry driver negligent and awarded compensation of ₹11,39,274, including ₹2,25,000 for 45% permanent disability calculated at ₹5,000 per percentage point.

The claimant appealed under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement, including adoption of the multiplier method for alleged loss of earning capacity.

On appeal, a Medical Board assessed his disability at 51%; its certificate was marked as Ex.C1.

1. Whether the Tribunal erred in using the percentage method, rather than the multiplier method, to compensate the claimant for permanent disability and alleged loss of earning capacity

2. Whether the compensation under permanent disability, loss of income, and the other non-medical heads required enhancement

The claim arose under Section 166 of the Motor Vehicles Act, 1988, and the appeal was brought under Section 173.

As explained in Rajkumar v. Ajaykumar, 2010 (2) TNMAC 581 (SC), medical disability and loss of earning capacity are distinct: loss of earning capacity must be assessed by the Tribunal from the evidence as a whole, having regard to the claimant’s occupation, age, education, and other relevant factors; the medical percentage does not automatically establish an equivalent economic loss.

Where loss of earning capacity is not proved, compensation may be assessed by the percentage method.

The Court found no sufficient proof that the claimant’s disability prevented him from performing employment-related activities or established a corresponding loss of earning capacity. It therefore upheld the Tribunal’s use of the percentage method rather than the multiplier method.

However, because the Medical Board assessed disability at 51%, the Court used that figure instead of the Tribunal’s 45% and awarded ₹2,55,000 for permanent disability.

It also found the income and recovery-period assessment inadequate in light of the claimant’s age, occupation, multiple hospital admissions, and surgeries, and increased monthly income to ₹15,000 and the compensable period to seven months.

Considering the injuries and treatment, it enhanced the awards for pain and suffering, transportation, extra nourishment, attendant charges, and loss of amenities.

The insurer was directed to deposit the amount, less any sum already deposited, within four weeks; the claimant was permitted to withdraw it in accordance with the Tribunal’s directions.