In the case of a mason, the Supreme Court ruled that the loss of a right leg above the knee must be considered a 100% functional disability, noting that compensation in motor accident claims cannot be decided solely on the basis of the percentage of physical disability without taking into account the impact on the victim's livelihood.
 

A Tamil Nadu mason's compensation was increased from ₹29.01 lakh to ₹40.29 lakh by a bench of Justices Prashant Kumar Mishra and N.V. Anjaria after they discovered that the lower courts had incorrectly determined his loss of earning capacity at 70%, which is the percentage of physical disability certified by medical authorities.
 

"The functional disability suffered by the appellant is required to be assessed at 100% and not at 70% as assessed by the Tribunal and affirmed by the High Court," the Court ruled. In April 2017, a truck struck the appellant's bicycle from behind on the Namakkal-Salem route, resulting in serious injuries. His right leg was subsequently amputated above the knee as a result of the accident. He was employed as a mason at the time of the accident and stated that his impairment prevented him from continuing in his line of employment.

His permanent physical disability was rated at 70% on the disability certificate. When determining compensation, the Madras High Court and the Motor Accident Claims Tribunal both considered the loss of earning capacity to be 70%. However, the Supreme Court emphasized the difference between functional and physical disabilities, citing its previous ruling in Raj Kumar v. Ajay Kumar. The Court reaffirmed that rather than automatically adopting the percentage of physical disability, compensation must be based on the impact of the condition on the victim's earning capability.
 

Given that masonry is a physically taxing profession that necessitates constant use of both legs, the Bench observed that the claimant's capacity to pursue his sole source of income had been effectively taken away by the amputation. "The amputation of the right leg above the knee has not merely caused physical disability to the appellant but has rendered him incapable of effectively carrying on the manual and physical work which constituted his only source of livelihood," the Court stated.
 

In light of this, the Court recalculated the compensation using a multiplier of 17, assuming the functional handicap as 100%, taking the claimant's monthly income at ₹12,000, and adding 40% for future prospects. Additionally, it increased compensation from ₹1 lakh to ₹2 lakh for future medical costs, including artificial limb and prosthetic requirements, taking into account the claimant's lifetime need for prosthesis replacement and upkeep. Consequently, the total compensation was increased to ₹40,29,730 at an annual interest rate of 7.5%. Within six weeks, the insurer was instructed to deposit the increased sum.
 

Case: M. Paramesh v. VRL Logistics Ltd. & Anr.

Citation : 2026 LiveLaw (SC) 641