Holding

Functional disability must be assessed on the basis of the claimant’s actual loss of earning capacity, and the evidence in this case warrants a 100% functional disability, leading to enhanced compensation.

Summary

The appellant R. Halle, a 30‑year‑old manager, suffered grievous injuries including head injury, facial injuries and a left femur fracture in a head‑on collision with a motorcycle driven by R. Chinnadurhi. The Motor Accidents Claims Tribunal (MACT) certified a permanent physical disability of 63% and awarded Rs 65,53,811 as compensation, calculating loss of future earnings using the multiplier method. The High Court reduced the functional disability to 30% and cut the award to Rs 35,61,000, holding that physical disability could not be equated with loss of earning capacity. The appellant appealed to the Supreme Court, contending that the medical board’s disability certificate and neuro‑psychological report showed severe cognitive impairment warranting a functional disability of 100%. The Supreme Court held that the uncontroverted medical evidence demonstrated total loss of the claimant’s ability to perform his managerial duties, and therefore functional disability must be deemed 100% for compensation. Accordingly, the Court enhanced the award to Rs 97,73,011 and modified both the High Court and MACT orders.

Issues considered

Whether the functional disability of the claimant should be assessed at 30% as held by the High Court or at the higher percentage indicated by the Medical Board and neuro‑psychological report for the purpose of computing loss of earning capacity under the Motor Vehicles Act, 1988.
Whether the compensation awarded by the MACT can be enhanced beyond its original award in view of the claimant’s permanent and functional disabilities.

Legislation cited

Motor Vehicles Act, 1988

Headnote

Issue for Consideration The principal issue which falls for consideration is with regard to the assessment of extent of disability for the purpose of computing loss of earning capacity, and more particularly, the soundness of the High Court’s determination of functional disability at 30% as by the Medical Board and affirmed by the MACT. Whether the appellant-claimant is entitled to any further enhancement of compensation over and above the amount awarded by the MACT. Headnotes† Motor Vehicle Accident claim – Enhancement of compensation – Motorcycle of appellant

Subjects

Motor Vehicle Accident claimCompensationEnhancement of compensationEarning capacityGrievous injuriesPermanent disabilityCognitive impairmentOrthopedic limitationsNeurological impairmentReappreciation of evidenceGrave medical and neurological impairmentsAssessment of disabilityLoss of earning capacitySocial justiceFinancial security

Judgment

[2026] 4 S.C.R. 202 : 2026 INSC 260

R. Halle
v.
Reliance General Insurance Company Limited
(Civil Appeal No. 3543 of 2026)
18 March 2026
[Prashant Kumar Mishra and Sandeep Mehta,* JJ.]

Issue for Consideration
The principal issue which falls for consideration is with regard to
the assessment of extent of disability for the purpose of computing
loss of earning capacity, and more particularly, the soundness of
the High Court’s determination of functional disability at 30% as
against 63% assessed by the Medical Board and affirmed by the
MACT. Whether the appellant-claimant is entitled to any further
enhancement of compensation over and above the amount awarded
by the MACT.

Headnotes†
Motor Vehicle Accident claim – Enhancement of compensation –
Motorcycle of appellant collided head-on with another
motorcycle – Appellant sustained grievous injuries which
led to 63% permanent disability – Claim petition filed – MACT
quantified the total compensation at Rs.65,53,811 along
with interest at the rate of 7.5% per annum from the date of
petition till its realization to the appellant-claimant – Appeal
before the High Court – The High Court, vide the impugned
judgment dismissed the appeal filed by appellant-claimant
seeking enhancement and partly allowed the appeal filed
by the respondent-insurer thereby reducing the amount of
compensation of Rs.65,53,811/- as awarded by MACT to
Rs.35,61,000/- – Correctness:
Held: In order to determine the functional disability suffered by the
appellant-claimant, it is necessary to advert to the findings recorded
by the Medical Board with respect to the permanent physical
disability, as well as the neuropsychological assessment report
placed on record – Both these documents remained uncontroverted
and hence, they provide credible expert evidence so as to assess
* Author
[2026] 4 S.C.R. 203

R. Halle v. Reliance General Insurance Company Limited

the extent and nature of disability – The injuries suffered by the
appellant-claimant were not merely orthopedic in nature, but had
significant neurological sequelae directly impacting his functional
and cognitive abilities – When these physical and neurological
impairments are cumulatively evaluated, it becomes manifest that
the appellant-claimant’s ability to effectively discharge his pre-
accident duties stands substantially and irreversibly impaired – The
evidence does not indicate a mere diminution in efficiency, rather, it
demonstrates a profound erosion of the faculties essential for gainful
employment in his chosen field – In such circumstances, and bearing
in mind the settled principle that functional disability must reflect
the actual loss of earning capacity – The disability in the present
case, for the purpose of computation of compensation, deserves
to be reckoned at 100% – The appellant-claimant would neither be
considered suitable for the managerial post nor would he be capable
of effectively discharging the onerous responsibilities attached to
the said post – The compensation payable to the appellant-claimant
warrants re-determination – The total compensation payable to the
appellant-claimant works out to Rs.97,73,011/- after calculating
amounts under various heads – The impugned judgment passed
by the High Court and the award passed by the MACT are modified
in terms of this judgment. [Paras 25, 26, 30, 31, 34]

Motor Vehicles Act, 1988 – Assessment of disability –
Reappreciation of evidence by the Appellate Court – The Court
to assign cogent, clear and convincing reasons:
Held: When an appellate court interferes with findings of fact duly
recorded by the Motor Accidents Claims Tribunal, particularly on
issues such as assessment of disability and loss of earning capacity,
it is incumbent upon it to undertake a thorough reappreciation of
the evidence and to assign cogent, clear and convincing reasons
for departing from the conclusions arrived at by the MACT – Such
an obligation is heightened in proceedings under the Motor Vehicles
Act, 1988, which is a beneficial and welfare oriented legislation
enacted with the object of ensuring expeditious relief and just
compensation to victims of motor accidents and their families –
The statutory framework is designed to advance social justice
and to provide solace and financial security to those who suffer
on account of road accidents – Any interference with a reasoned
204 [2026] 4 S.C.R.

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award of the Motor Accidents Claims Tribunal must, therefore, be
consistent with the spirit and object of the enactment and supported
by sound judicial reasoning. [Para 35]

Case Law Cited
Raj Kumar v. Ajay Kumar [2010] 13 SCR 179 : (2011) 1 SCC
343 – referred to.

List of Acts
Motor Vehicles Act, 1988.

List of Keywords
Motor Vehicle Accident claim; Compensation; Enhancement of
compensation; Earning capacity; Grievous injuries; Permanent
disability; Cognitive impairment; Orthopedic limitations; Neurological
impairment; Reappreciation of evidence; Grave medical and
neurological impairments; Assessment of disability; Loss of earning
capacity; Social justice; Financial security.

Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3543 of 2026
From the Judgment and Order dated 11.01.2022 of the High Court
of Judicature at Madras in CMA No. 3595 of 2021.

Appearances for Parties
Advs. for the Appellant(s):
Ms. Haripriya Padmanaban, Sr. Adv., S. Prabu Ramasubramanian,
Raghunatha Sethupathy B, Manoj Kumar A., Ms. Trisha Chandran.
Adv. for the Respondent(s):
Ms. Prerna Mehta.

Judgment / Order of the Supreme Court

Judgment

Mehta, J.

1. Heard. Delay condoned.
2. Leave granted.
[2026] 4 S.C.R. 205

R. Halle v. Reliance General Insurance Company Limited

3. The instant appeal arises out of judgment and order dated 11th
January, 2022 passed by High Court of Judicature at Madras1 in
Civil Miscellaneous Appeal No. 3595 of 2021. The said appeal was
preferred by appellant herein2 seeking enhancement of maintenance
as awarded by Motor Accidents Claims Tribunal, Special Subordinate
Judge, Coimbatore.3 By its award dated 22nd January, 2020, the
MACT granted compensation in the sum of Rs.65,53,811/- (Rupees
Sixty-Five Lakh Fifty-Three Thousand Eight Hundred Eleven Only)
along with interest at the rate of 7.5% per annum from the date of
petition till its realization to the appellant-claimant and directed the
Reliance General Insurance Company Limited,4 to satisfy the award.
The MACT, however, granted liberty to the respondent-insurer to
recover the said amount from the driver-cum-owner of the offending
vehicle, namely, R. Chinnadurai5, in accordance with law.
4. The High Court, vide the impugned judgment dismissed the appeal
filed by appellant-claimant seeking enhancement and partly allowed
the appeal6 filed by the respondent-insurer thereby reducing the
amount of compensation of Rs.65,53,811/- as awarded by MACT to
Rs.35,61,000/- (Rupees Thirty-Five Lakh Sixty-One Thousand Only).
5. For the sake of convenience, the chart indicating the various heads
under which compensation was awarded to appellant-claimant by
the MACT as well as the High Court, along with the amounts granted
thereunder, is reproduced hereinbelow: -

Head Awarded by Awarded by HC Enhanced/
MACT Reduced/ Granted/
Confirmed

Future loss of Rs.40,000/- x Rs.40,000/- x Reduced
earning power 12 x 63% 12 x 30%
(Disability) x 17 (Disability) x 17 =
= Rs.51,40,800/- Rs.24,48,000/-

1 Hereinafter, being referred to as the “High Court”.
2 Hereinafter, being referred to as the “appellant-claimant”.
3 Hereinafter, being referred to as the “MACT”.
4 Hereinafter, being referred to as the “respondent-insurer”.
5 R. Chinnadurai was impleaded as party-Respondent No. 2 in the present SLP. However, his name came
to be deleted from the array of parties vide order dated 13th December, 2024.
6 Civil Miscellaneous Appeal No. 464 of 2021.
206 [2026] 4 S.C.R.

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Medical Rs.5,88,011/- Rs.5,88,011/- Confirmed
expenses
Loss of Rs.3,00,000/- Rs.1,00,000/- Reduced
amenities
Pain and Rs.5,00,000/- Rs.2,00,000/- Reduced
Sufferings
Transportation Rs.10,000/- Rs.10,000/- Confirmed
to Hospital
Extra Rs.10,000/- Rs.10,000/- Confirmed
Nourishment
Damage to Rs.5,000/- Rs.5,000/- Confirmed
Clothing and
Articles
Loss of marital - Rs.2,00,000/- Granted
prospectus
Total Rs.65,53,811/- Rs.35,61,011/-
[Rounded off to
Rs. 35,61,000/-]

Brief Facts: -
6. The facts in a nutshell relevant and essential for disposal of the
appeal are as follows.
7. On the night of 5th May, 2016, at about 10:00 p.m., the appellant-
claimant was proceeding on his motorcycle bearing Registration No.
TN-38-BY-9380 along Mettupalayam Road at Periyanaickenpalayam,
travelling from south to north. At that juncture, another motorcycle
bearing Registration No. TN-38-CD-5823, driven by R. Chinnadurai,
approached from the opposite direction. It is the case of appellant-
claimant that the said vehicle was being driven in a rash and negligent
manner and collided head-on with his motorcycle.
8. As a result of the impact, the appellant-claimant was thrown onto
the road and sustained grievous injuries, including a fracture of the
left leg, facial injuries, and a severe head injury. He was immediately
taken to Ganga Hospital, Coimbatore, where he was admitted as
an inpatient and underwent treatment. In connection with the said
occurrence, an FIR bearing Crime No.236 of 2016 was registered
on 7th May, 2016 against R. Chinnadurai for the offences punishable
under Sections 279 and 338 of the Indian Penal Code, 1860, at Police
Station Periyanaickenpalayam, Coimbatore District, Tamil Nadu.
[2026] 4 S.C.R. 207

R. Halle v. Reliance General Insurance Company Limited

9. After undergoing treatment for nearly a month, the appellant-claimant
was discharged from the hospital on 29th May, 2016. It is the case
of the appellant-claimant that notwithstanding prolonged treatment,
he was left with a permanent disability assessed at 65%, which,
according to him, has substantially impaired his functional capacity
and earning potential.
10. The appellant-claimant thereafter approached the MACT seeking
compensation, contending that at the time of the accident he was
about 30 years of age, hale and healthy, and employed as a Manager
at Flyjac Logistics Pvt. Ltd., Chennai, earning a monthly income of
Rs.25,000/-. Alleging that the accident occurred solely due to the rash
and negligent driving of R. Chinnadurai, he filed a claim petition,7
claiming a sum of Rs.30,00,000/- (Rupees Thirty Lakh Only) from R.
Chinnadurai and respondent-insurer towards loss of income, medical
expenses, pain and suffering, and other consequential damages.
11. Upon a comprehensive and meticulous evaluation of the oral and
documentary evidence adduced on record, including the testimony
of the appellant-claimant (PW-1) and PW-2, the medical records,
the disability certificate issued by the competent Medical Board, and
the salary documents exhibited on behalf of the appellant-claimant,
coupled with the fact that the driver-cum-owner remained ex parte
and there was no contra evidence from the respondent-insurer, the
MACT arrived at a categorical finding that the accident had occurred
solely due to the rash and negligent driving of R. Chinnadurai and
that the appellant-claimant had satisfactorily established the nature
and extent of the injuries sustained by him. The MACT, placing due
reliance on the disability certificate, assessed the permanent disability
at 63% as certified therein, holding the same to have a direct bearing
on the appellant-claimant’s functional and earning capacity.
12. The MACT, having accepted the disability certificate issued by the
Medical Board, proceeded to determine the impact of such disability on
appellant-claimant’s earning capacity. Applying the multiplier method8
in view of the settled legal position and taking into consideration
appellant-claimant’s age, monthly income inclusive of future prospects
[Rs.29,108/- + (40% of Rs.29,108/-) = Rs.40,751 (Rounded off

7 Motor Accidents Claim Original Petition No. 1372 of 2016.
8 Multiplier was taken to be “17” since the age of appellant-claimant was fixed as 30 years.
208 [2026] 4 S.C.R.

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to Rs.40,000/-)], and the functional consequences of the injuries
sustained, the MACT computed the loss of future earning capacity at
Rs.51,40,800/- (Rs.40,000/- x 12 x 63% (Disability) x 17). In addition,
thereto, it awarded amounts under the heads of medical expenses,
loss of amenities, pain and suffering, transportation, extra nourishment,
and other incidental expenses. On such computation under the various
permissible heads, the MACT quantified the total compensation at
Rs.65,53,811/- (Rupees Sixty-Five Lakh Fifty-Three Thousand Eight
Hundred Eleven Only) along with interest at the rate of 7.5% per
annum from the date of petition till its realization and awarded the
said sum to the appellant-claimant, as detailed supra. The MACT
directed the respondent-insurer to satisfy the award, while granting
it liberty to recover the said amount from the driver-cum-owner of the
offending vehicle, namely, R. Chinnadurai, in accordance with law.
13. Being aggrieved by the award passed by the MACT, the respondent-
insurer preferred Civil Miscellaneous Appeal No. 464 of 2021 before
the High Court, contending that the compensation awarded was
excessive and disproportionate to the injuries sustained and the
disability suffered by the appellant-claimant. Simultaneously, the
appellant-claimant also preferred Civil Miscellaneous Appeal No.
3595 of 2021 seeking enhancement of the compensation awarded,
asserting that the amount granted by the MACT was inadequate
having regard to the nature of injuries, extent of permanent disability,
and the consequential loss suffered by him.
14. The High Court, upon reappreciation of the evidence on record,
observed that though the Medical Board had assessed the physical
disability of the appellant-claimant at 63%, the same could not be
mechanically adopted for the purpose of determining loss of earning
capacity. Upon an independent evaluation of the nature of injuries
and the impact of such injuries on the appellant-claimant’s avocation
as a Manager in a private concern, the High Court adjudged the
functional disability suffered by the appellant-claimant at 30%. In view
of the said finding, the High Court, vide its common judgment and
order dated 11th January, 2022, dismissed the appeal preferred by the
appellant-claimant seeking enhancement of compensation and partly
allowed the appeal filed by the respondent-insurer, thereby reducing
the total compensation awarded by the MACT from Rs.65,53,811/- to
Rs.35,61,000/- (Rupees Thirty-Five Lakh Sixty-One Thousand Only),
as detailed supra, modifying the award of the MACT to that extent.
[2026] 4 S.C.R. 209

R. Halle v. Reliance General Insurance Company Limited

15. Being dissatisfied with the dismissal of his appeal seeking
enhancement of compensation as awarded by the MACT, the
appellant-claimant has preferred the instant appeal by special leave
before this Court.

Submissions on behalf of appellant-claimant: -
16. Ms. Haripriya Padmanaban, learned senior counsel appearing on
behalf of appellant-claimant, assailed the impugned judgment of the
High Court on the following counts: -
A. That the High Court failed to appreciate that the Medical
Board had categorically assessed the physical disability of the
appellant-claimant at 63%, which finding was based on a duly
constituted medical examination and stood substantiated by
the disability certificate placed on record. The Medical Board
had recorded that the case involved a head injury treated
conservatively, facial injury, and left femur fracture treated by
surgical intervention, and that the said injuries had resulted in
partial blindness, cognitive impairment, and partial loss
of range of motion and stability of the left knee. It was
submitted that the MACT had correctly placed reliance on the
said expert medical opinion and there was no justifiable reason
for the High Court to dilute the effect of the certified disability
while computing the loss of earning capacity.
B. That the appellant-claimant had suffered severe head injury
in the accident, resulting in serious cognitive impairments, as
reflected in the neuropsychological assessment report. The said
report demonstrated that the Memory Scale of the patient, i.e.,
appellant-claimant indicated severe impairment of both verbal and
visual memory; tests relating to frontal lobe functioning revealed
impairment; while parietal lobe functioning was found to be intact.
It was further submitted that the appellant-claimant’s IQ score of
65 placed him within the category of Mild Intellectual Disability,
thereby evidencing substantial neurological degradation having
direct bearing on his functional abilities and employability.
C. That both the High Court and the MACT failed to properly
appreciate that although the physical disability had been
assessed at 63% by the Medical Board, the functional disability
suffered by the appellant-claimant, having regard to the nature
210 [2026] 4 S.C.R.

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of brain injury and its consequences, was in effect 100%, as the
cognitive deficits and neurological damage had rendered the
appellant-claimant totally incapable of resuming his previous
avocation or engaging in any gainful employment, resulting in
a complete loss of earning capacity.
D. That the appellant-claimant placed reliance upon several
precedents of this Court to contend that in appropriate cases this
Court has enhanced compensation by taking into consideration the
educational background, and socio-economic status of the victim,
so as to ensure that just compensation is awarded to the victim.
It was further urged that this Court has consistently restricted
untenable legal defences raised by insurance companies and
has emphasized that the burden lies upon them to establish any
limited statutory defence. It was specifically contended that the
respondent-insurer had failed to place any material on record
to demonstrate that the functional disability suffered by the
appellant-claimant was lesser than the percentage determined
by the MACT, and in the absence of any contra evidence, the
reduction of compensation effected by the High Court was wholly
unjustified. In the light of the settled principles governing award
of just compensation under the Motor Vehicles Act, 1988, it was
submitted that the appellant-claimant is entitled to enhancement of
compensation over and above what was awarded by the MACT.
On the aforesaid grounds, learned senior counsel urged that the
impugned judgment of the High Court does not withstand judicial
scrutiny, being founded on an erroneous appreciation of the evidence
and a misapplication of the settled principles governing assessment
of disability and loss of earning capacity. It was submitted that
the judgment, having disregarded material and unimpeachable
documentary evidence available on record, deserves to be set aside.
It was further prayed that this Court may be pleased to enhance the
compensation appropriately by holding that the functional disability
suffered by the appellant-claimant is 100%, and by recalculating
the loss of future earning capacity and other consequential heads
in accordance with law.

Submissions on behalf respondent-insurer: -
17. Ms. Prerna Mehta, learned counsel appearing on behalf of respondent-
insurer, supported the impugned judgment to the hilt and urged that
[2026] 4 S.C.R. 211

R. Halle v. Reliance General Insurance Company Limited

the same calls for no interference by this Court, inter alia, on the
following grounds: -
A. That the High Court has rightly and justly exercised its appellate
jurisdiction upon a proper reappreciation of the evidence on
record, and the impugned judgment is well-reasoned, balanced
and in consonance with the settled principles governing
assessment of compensation under the Motor Vehicles Act,
1988. It was submitted that no perversity or patent illegality has
been demonstrated in the High Court’s reasoning warranting
interference by this Court.
B. That the High Court correctly held that physical disability
assessed by the Medical Board cannot ipso facto be equated
with functional disability for the purpose of determining loss
of earning capacity. It was contended that the High Court,
upon considering the nature of employment of the appellant-
claimant and the material placed on record, justifiably concluded
that though the physical disability was assessed at 63%, the
functional disability suffered by the appellant-claimant ought to be
taken at 30% for the purpose of computation of compensation.
C. That the evidence on record does not establish that the disability
suffered by the appellant-claimant has resulted in a complete
loss of income or total incapacity to earn. It was urged that the
injuries sustained by the appellant-claimant were treated, and
the disability certificate itself indicates disability to the extent
of 63%. In the absence of cogent evidence demonstrating
total incapacitation or inability to undertake any form of gainful
employment, it cannot be contended that the appellant-claimant
has suffered 100% functional disability or has lost his entire
earning capacity.
On these grounds, learned counsel submitted that the impugned
judgment of the High Court is legally sound and does not warrant
interference, and accordingly prayed that the present appeal be
dismissed.
Analysis and Discussion: -
18. We have heard and considered the submissions advanced by learned
counsel for the parties and have carefully gone through the impugned
judgment as well as the material placed on record.
212 [2026] 4 S.C.R.

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19. At the outset, it must be noted that insofar as the determination
of monthly income and the addition towards future prospects are
concerned, there is no serious dispute before us. The controversy
in the present appeal lies within a narrow compass. The principal
issue which falls for our consideration is with regard to the
assessment of extent of disability for the purpose of computing
loss of earning capacity, and more particularly, the soundness
of the High Court’s determination of functional disability at 30%
as against 63% assessed by the Medical Board and affirmed by
the MACT. The consequential effect of the above exercise would
be to determine whether the appellant-claimant is entitled to any
further enhancement of compensation over and above the amount
awarded by the MACT.
20. At the first instance, the MACT, upon appreciation of the oral and
documentary evidence including the disability certificate (Exh.C-1), the
neuropsychological assessment report, and the nature of avocation of
the appellant-claimant as a Manager in a private concern, accepted
the permanent physical disability assessed by the Medical Board at
63% and proceeded to compute the loss of future earning capacity by
applying the multiplier method established by a long line of binding
precedents. The MACT took note of the fact that the injuries included
a head injury resulting in cognitive impairment, partial blindness, and
restriction of movement and stability of the left knee, and recorded
a finding that such disability had a direct bearing on the appellant-
claimant’s earning capacity.
21. However, the High Court, while observing that physical disability
cannot be mechanically equated with functional disability, reduced
the functional disability suffered by the appellant-claimant from
63% to 30% without adverting in detail to the medical evidence
on record, particularly the findings of the Medical Board and the
neuropsychological report evidencing cognitive deficits suffered by
the appellant-claimant as a consequence of the injuries suffered in
the accident. No independent contra material was placed on record
by the respondent-insurer to displace the evidentiary value of the
disability certificate. In our considered view, such reduction of the
functional disability, in the absence of convincing evidence impeaching
the credibility of the medical certificates placed on record by the
appellant-claimant and without assigning cogent reasons, was not
at all justified. For ready reference, the relevant extract from the
impugned judgment is reproduced hereinbelow: -
[2026] 4 S.C.R. 213

R. Halle v. Reliance General Insurance Company Limited

“10. According to the claimant he was earning a sum of
Rs.29,108/- per month by working as a Manager in a
private concern, which has been proved through Exs.21
to 25. Thus, the Tribunal has arrived the amount under the
head of loss of earning power, by multiplying the disability
as 63%. It appears to be on the higher side. Though the
Medical Board has assessed the physical disability of
the claimant as 63%, after going through the records,
we have come to the conclusion that the functional
disability suffered by the claimant would be 30%.
After adding 40% towards future prospectus, the total
income of the claimant is arrived at Rs.40,751/-, rounded
off to Rs.40,000/-. Thereby, the claimant is entitled for an
amount of Rs.24,48,000/- (Rs.40,000/- x 12 x 30% x 17);
Rs.1,00,000/- for Loss of amenities; Rs.2,00,000/- under
Pain and sufferings; since the claimant was unmarried at
the time of accident and sustained grievous injuries in the
accident, an amount of Rs.2,00,000/- is granted towards
loss of marital prospectus; The amounts awarded under
the heads of Medical expenses, Transportation to hospital,
Extra nourishment and Damage to clothing and articles
are confirmed.”
[Emphasis supplied]

22. A careful reading of the aforesaid extract indicates that the High Court
merely adverted to the general principles governing assessment of
disability and, without undertaking any independent analysis of the
evidence on record, abruptly concluded that the functional disability
suffered by the appellant-claimant would be 30%. There is no
discussion as to why the medical findings, the disability certificate
issued by the competent Medical Board, or the neuropsychological
report were doubtful or insufficient to sustain the conclusion reached
by the MACT. Equally, while reducing the quantum of compensation,
no specific or cogent reasons have been assigned for curtailing the
amounts awarded under the heads of “Loss of Amenities” and “Pain
and Suffering,” which were based on the nature and gravity of the
injuries sustained by the appellant-claimant. In our considered opinion,
such conclusions, abruptly arrived at without proper reappreciation
of the evidence and without recording adequate reasons, are in the
nature of presumptions and assumptions and cannot be sustained
in the eyes of law.
214 [2026] 4 S.C.R.

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23. Ordinarily, where a Court exercising appellate jurisdiction reverses or
modifies a finding of fact recorded by the Court of first instance without
a proper reappreciation of the evidence or without assigning cogent
reasons, this Court would be justified in setting aside the impugned
judgment and remitting the matter for fresh consideration on merits
and in accordance with law. In the present case, the assessment of
functional disability, which had a direct bearing on the determination
of just compensation, necessarily required a careful scrutiny of the
medical evidence and its impact on the avocation of the injured. The
failure to undertake such an exercise would, in the normal course,
warrant a remand.
24. However, we cannot be oblivious of the fact that the accident occurred
in the year 2016 and that the appellant-claimant has been engaged
in litigation for nearly a decade, first before the MACT, thereafter
before the High Court and now before this Court. A remand at this
stage would only prolong the proceedings and compound the agony
already suffered by the appellant-claimant. In these circumstances,
in order to do complete justice between the parties, we deem it
appropriate to examine the issue on merits and determine the issue
of functional disability on the basis of the material available on record.
25. In order to determine the functional disability suffered by the appellant-
claimant, it is necessary to advert to the findings recorded by the
Medical Board with respect to the permanent physical disability, as well
as the neuropsychological assessment report placed on record. Both
these documents remained uncontroverted and hence, they provide
credible expert evidence so as to assess the extent and nature of
disability. The true nature and extent of the injuries, and their impact
on the cognitive and functional abilities of the appellant-claimant, can
be properly appreciated only upon a careful consideration of these
materials. For ready reference, the relevant extracts from the said
documents are reproduced hereinbelow: -
“Neuropsychological Assessment Report: Interpretation
& Conclusion
• Memory Scale shows that his verbal and Visual
memory is impaired severely.
• On tests for frontal lobe functioning-impairment.
• On the test for parietal lobe functioning, normal
performance shows that the lobe function is intact.
[2026] 4 S.C.R. 215

R. Halle v. Reliance General Insurance Company Limited

• The IQ range of 65, fall into the category of Mild
Intellectual Disability.
Report of the Medical Board
Case of Head injury treated conservatively, facial injury x
left femur fracture treated by surgical intervention. Above
injury has resulted in partial blindness, cognitive
impairment and partial lom of Rom and stability of
left knee.
His disability due to above injuries sixty three percent
(63%).”
[Emphasis supplied]

26. Having bestowed our anxious consideration to the material placed
on record, we find that the disability certificate issued by the Medical
Board clearly records that the appellant-claimant had suffered a head
injury treated conservatively, facial injury, and left femur fracture
treated by surgical intervention. These injuries progressively resulted
in partial blindness, cognitive impairment and partial loss of range
of motion and stability of the left knee. The neuropsychological
assessment further evidences severe impairment in verbal and visual
memory, impairment of frontal lobe functions and an IQ score of 65,
placing the appellant-claimant in the category of Mild Intellectual
Disability. These findings, read conjointly, demonstrate that the injuries
suffered by the appellant-claimant were not merely orthopedic in
nature, but had significant neurological sequelae directly impacting
his functional and cognitive abilities.
27. This Court, in Raj Kumar v. Ajay Kumar9, has authoritatively laid down
the principles governing assessment of permanent and functional
disability for the purpose of awarding compensation. It has been held
that the percentage of permanent disability assessed by a medical
expert cannot be mechanically equated with the percentage of loss
of earning capacity. What is required to be determined is the actual
impact of such disability on the earning capacity of the injured, having
regard to his avocation, age and the nature of work performed. The
Tribunal is required to undertake a structured analysis to ascertain the

9 (2011) 1 SCC 343
216 [2026] 4 S.C.R.

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activities the claimant can or cannot perform post-injury, the nature
of his profession prior to the accident, and whether the disability has
resulted in total incapacity or merely restricted or reduced earning
capacity. For ready reference, the relevant extracts from the said
judgment are reproduced hereinbelow: -
“9. The percentage of permanent disability is expressed
by the doctors with reference to the whole body, or more
often than not, with reference to a particular limb. When
a disability certificate states that the injured has suffered
permanent disability to an extent of 45% of the left lower
limb, it is not the same as 45% permanent disability with
reference to the whole body. The extent of disability of a limb
(or part of the body) expressed in terms of a percentage
of the total functions of that limb, obviously cannot be
assumed to be the extent of disability of the whole body.
If there is 60% permanent disability of the right hand and
80% permanent disability of left leg, it does not mean that
the extent of permanent disability with reference to the
whole body is 140% (that is 80% plus 60%). If different
parts of the body have suffered different percentages of
disabilities, the sum total thereof expressed in terms of
the permanent disability with reference to the whole body
cannot obviously exceed 100%.
10. Where the claimant suffers a permanent disability
as a result of injuries, the assessment of compensation
under the head of loss of future earnings would
depend upon the effect and impact of such permanent
disability on his earning capacity. The Tribunal should
not mechanically apply the percentage of permanent
disability as the percentage of economic loss or loss of
earning capacity. In most of the cases, the percentage
of economic loss, that is, the percentage of loss of
earning capacity, arising from a permanent disability
will be different from the percentage of permanent
disability. Some Tribunals wrongly assume that in all
cases, a particular extent (percentage) of permanent
disability would result in a corresponding loss of
earning capacity, and consequently, if the evidence
produced show 45% as the permanent disability, will
[2026] 4 S.C.R. 217

R. Halle v. Reliance General Insurance Company Limited

hold that there is 45% loss of future earning capacity.
In most of the cases, equating the extent (percentage)
of loss of earning capacity to the extent (percentage)
of permanent disability will result in award of either
too low or too high a compensation.
11. What requires to be assessed by the Tribunal is
the effect of the permanent disability on the earning
capacity of the injured; and after assessing the loss
of earning capacity in terms of a percentage of the
income, it has to be quantified in terms of money, to
arrive at the future loss of earnings (by applying the
standard multiplier method used to determine loss of
dependency). We may however note that in some cases,
on appreciation of evidence and assessment, the Tribunal
may find that the percentage of loss of earning capacity as
a result of the permanent disability, is approximately the
same as the percentage of permanent disability in which
case, of course, the Tribunal will adopt the said percentage
for determination of compensation. (See for example, the
decisions of this Court in Arvind Kumar Mishra v. New India
Assurance Co. Ltd. [(2010) 10 SCC 254 : (2010) 3 SCC
(Cri) 1258: (2010) 10 Scale 298] and Yadava Kumar v.
National Insurance Co. Ltd. [(2010) 10 SCC 341 : (2010)
3 SCC (Cri) 1285 : (2010) 8 Scale 567])
[……]
13. Ascertainment of the effect of the permanent
disability on the actual earning capacity involves
three steps. The Tribunal has to first ascertain what
activities the claimant could carry on in spite of the
permanent disability and what he could not do as a
result of the permanent disability (this is also relevant
for awarding compensation under the head of loss of
amenities of life). The second step is to ascertain his
avocation, profession and nature of work before the
accident, as also his age. The third step is to find out
whether (i) the claimant is totally disabled from earning
any kind of livelihood, or (ii) whether in spite of the
permanent disability, the claimant could still effectively
218 [2026] 4 S.C.R.

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carry on the activities and functions, which he was
earlier carrying on, or (iii) whether he was prevented
or restricted from discharging his previous activities
and functions, but could carry on some other or lesser
scale of activities and functions so that he continues
to earn or can continue to earn his livelihood.”
[Emphasis supplied]

28. In view of the principles laid down by this Court in Raj Kumar
(supra), as consistently affirmed thereafter, the assessment of
functional disability must be grounded in a realistic appraisal of the
impact of the injury on the claimant’s capacity to earn. The inquiry
is not confined to the numerical percentage of physical impairment
certified by the Medical Board, but extends to evaluating whether the
claimant, in light of his educational background, skill set and nature
of employment, is capable of meaningfully pursue his avocation.
29. Reverting to the facts of the present case, the appellant-claimant
was admittedly employed as a Manager in a private concern, a role
inherently dependent upon sustained cognitive functioning, including
memory retention, analytical ability, executive decision-making,
coordination and effective communication. The neuropsychological
report on record evidences severe impairment in verbal and visual
memory, frontal lobe dysfunction, and an IQ score of 65 placing him
within the category of Mild Intellectual Disability.
30. Further, the Medical Board has recorded that the injuries resulted
not only in cognitive impairment but also in partial blindness and
orthopedic limitations affecting mobility and stability. When these
physical and neurological impairments are cumulatively evaluated,
it becomes manifest that the appellant-claimant’s ability to effectively
discharge his pre-accident duties stands substantially and irreversibly
impaired. The evidence does not indicate a mere diminution in
efficiency, rather, it demonstrates a profound erosion of the faculties
essential for gainful employment in his chosen field. These
impairments strike at the core competencies indispensable for the
effective discharge of managerial responsibilities and substantially
undermine the appellant-claimant’s ability to perform the essential
functions inherent in such a position. In such circumstances, and
bearing in mind the settled principle that functional disability must
reflect the actual loss of earning capacity, we are persuaded to hold
[2026] 4 S.C.R. 219

R. Halle v. Reliance General Insurance Company Limited

that the disability in the present case, for the purpose of computation
of compensation, deserves to be reckoned at 100%. It is beyond
the pale of doubt that, having suffered such grave medical and
neurological impairments, the appellant-claimant would neither be
considered suitable for the managerial post nor would he be capable
of effectively discharging the onerous responsibilities attached to the
said post, particularly in light of his present condition, which is likely
to deteriorate progressively over time.
31. Consequently, in light of the foregoing discussion and considering
that the functional disability suffered by the appellant-claimant
is to be assessed at 100% for the purpose of computing loss
of earning capacity, the compensation payable to the appellant-
claimant warrants re-determination so as to ensure the award of
just and fair compensation in accordance with law. Accordingly, the
compensation payable to the appellant-claimant is recalculated as
per the computation set out hereunder: -

Head Amount Awarded
Future loss of earning Rs.40,000/- x 12 x 100% (Disability)
power x 17 = Rs.81,60,000/-
Medical expenses Rs.5,88,011/-
Loss of amenities Rs.3,00,000/-
Pain and Sufferings Rs.5,00,000/-
Transportation to Hospital Rs.10,000/-
Extra Nourishment Rs.10,000/-
Damage to Clothing and Rs.5,000/-
Articles
Loss of marital prospectus Rs.2,00,000/-
Total Rs.97,73,011/-

32. Thus, the total compensation payable to the appellant-claimant works
out to Rs.97,73,011/- (Rupees Ninety-Seven Lakh Seventy-Three
Thousand and Eleven only). The appellant-claimant shall be entitled
to interest at the rate of 7.5% per annum from the date of filing of the
claim petition till the date of realization, as awarded by the MACT.
The amount, if any, already paid shall be duly adjusted towards the
aforesaid sum. The award shall be satisfied by the respondent-insurer.
However, as directed by the MACT, the respondent-insurer shall be at
220 [2026] 4 S.C.R.

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liberty to recover the said amount from the driver-cum-owner of the
offending vehicle, namely, R. Chinnadurai, in accordance with law.
33. The respondent-insurer is directed to deposit the balance amount of
compensation along with accrued interest within a period of six weeks
from the date of receipt of this judgment before the Motor Accidents
Claims Tribunal, Special Subordinate Judge, Coimbatore, which shall
disburse the same to the appellant-claimant in accordance with law.
34. The impugned judgment dated 11th January, 2022 passed by the
High Court and the award dated 22nd January, 2020 passed by the
MACT are modified in terms of this judgment.
35. Before parting with the matter, we deem it appropriate to reiterate
that when an appellate court interferes with findings of fact duly
recorded by the Motor Accidents Claims Tribunal, particularly on
issues such as assessment of disability and loss of earning capacity,
it is incumbent upon it to undertake a thorough reappreciation of the
evidence and to assign cogent, clear and convincing reasons for
departing from the conclusions arrived at by the Motor Accidents
Claims Tribunal. Such an obligation is heightened in proceedings
under the Motor Vehicles Act, 1988, which is a beneficial and welfare-
oriented legislation enacted with the object of ensuring expeditious
relief and just compensation to victims of motor accidents and their
families. The statutory framework is designed to advance social justice
and to provide solace and financial security to those who suffer on
account of road accidents. Any interference with a reasoned award
of the Motor Accidents Claims Tribunal must, therefore, be consistent
with the spirit and object of the enactment and supported by sound
judicial reasoning.
36. The appeal is allowed accordingly.
37. There shall be no order as to costs.
38. Pending application(s), if any, shall stand disposed of.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan