Supreme Court of India
SHANKAR DUTTversusUNITED INDIA INSURANCE CO. LTD. AND OTHERS
- Citation
- 2026 INSC 656
- Decided
- 24 June 2026
- Disposal
- Appeal(s) allowed
Holding
The claimant, being a skilled carpenter with total functional disability, is entitled to compensation calculated on a notional monthly income of Rs.9,000, multiplier 15, functional disability 100%, resulting in a total award of Rs.35,95,923 with 6% interest.
Summary
The appellant, a 38‑year‑old skilled carpenter, lost his right leg above the knee in a motor vehicle accident caused by a rash Jeep driver. The Motor Accident Claims Tribunal awarded Rs.4,77,823, which the High Court enhanced to Rs.11,51,423, but the appellant sought further enhancement. The Supreme Court examined the appropriate notional income for a skilled carpenter, the correct multiplier for loss of future earnings, and the distinction between medical and functional disability, concluding that the functional disability was 100% given the nature of his occupation. Applying a monthly income of Rs.9,000, a multiplier of 15, and accounting for all heads of compensation including prosthetic limb costs, the Court fixed total compensation at Rs.35,95,923 with 6% interest. The appeal was allowed, directing the insurer to pay the balance amount.
Issues considered
- The appropriate notional monthly income for a skilled carpenter in compensation under the Motor Vehicle Act
- The correct multiplier to be applied for loss of future earnings based on the claimant's age
- Whether functional disability should be assessed at 100% despite a medical certificate of 70% disability
- The permissible heads of compensation and their quantum in a permanent disability case
- Whether the High Court's enhancement of compensation was adequate or required further increase
Legislation cited
Headnote
Issue for Consideration Issue arose as regards the just and fair compensation to be awarded to the claimant-skilled carpenter in the facts of the case, the parameters and the permissible heads of compensation. Headnotes† Motor Vehicle Act, 1988 – Compensation – Enhancement while travelling on his motorcycle, was hit by Jeep driven rashly and negligently, coming from the wrong side of the road – Claimant suffered serious injuries resulting in amputation of his right leg, from above the knee and became completely disabled – Tribunal awarded
Subjects
Just and fair compensationPermissible heads of compensationEnhancement of compensationSkilled carpenterAmputation of right leg, from above the kneeDisabilityMultiplier of 15Permanent disabilityLoss of earning capacity of the injuredSocio-economic conditionsMedical standardsFunctional disability70% disabilityFunctional disability at 100%Medical expensesExpenses for prosthetic legExpenses towards pain, shock and sufferingAttendant chargesLoss of amenitiesLoss of income during laid up periodTransportation charges
Judgment
[2026] 7 S.C.R. 379 : 2026 INSC 656
Shankar Dutt
v.
United India Insurance Co. Ltd. and Others
(Civil Appeal No. 8714 of 2026)
24 June 2026
[Ujjal Bhuyan and N.V. Anjaria,* JJ.]
Issue for Consideration
Issue arose as regards the just and fair compensation to be
awarded to the claimant-skilled carpenter in the facts of the case,
the parameters and the permissible heads of compensation.
Headnotes†
Motor Vehicle Act, 1988 – Compensation – Enhancement –
Claimant, 38 years old skilled carpenter, while travelling on
his motorcycle, was hit by Jeep driven rashly and negligently,
coming from the wrong side of the road – Claimant suffered
serious injuries resulting in amputation of his right leg, from
above the knee and became completely disabled – Tribunal
awarded compensation of Rs.4,77,823/- with 4% pa interest,
however, High Court enhanced the amount to Rs.11,51,423/-
with 6% pa interest – Correctness:
Held: When the income of the injured claimant carpenter is to
be notionally assessed for the purpose of compensation, the fact
that he was a skilled worker, cannot be overlooked, and has to
be accounted for – In assessing the compensation for permanent
disability, quantum of compensation must correspond to the loss
of earning capacity which is an important yardstick and an acid
test which would guide the courts – Socio-economic conditions
of the claimant and the concerning circumstances on that count
also to be taken into account – Extent of the functional disability
largely remain dependent upon the nature of work and the kind
of earning activity in which the injured is engaged, and not what
the doctor may have judged in terms of medical standards –
Claimant was engaged in the carpentry work and while working
as a carpenter, he has to necessarily sit – Because of amputation
of the lower half part of the right leg, the claimant is not able to
* Author
380 [2026] 7 S.C.R.
Supreme Court Reports
sit in a squatted or crossed legged manner, as such it is evident
that he will not be able to perform the carpentry work – Carpenter
cannot perform such work while in a standing position – For
standing also, he would need support – Thus, the actual effect of
amputation resulting out of the accidental injury for the claimant
is total in terms of the work in which he is engaged and he is to
perform, which really does not match and does not augur well with
the extent of 70% disability as medically indicated – Disability of
the claimant has to be appreciated and assessed in the context of
the occupation of the claimant, activity of work he used to do as
carpenter – Functional disability of the claimant has to be taken
properly and reasonably at 100% – Claimant is 38 years of age,
and taking his average life expectancy to be 75 years, he would
require a replacement of artificial limb at least six times for the
remaining 37 years – Prosthetic limb would again require a half
yearly repair and maintenance – Claimant must be compensated
in a manner and to the extent that he is able to live life in the
future years almost in the same way as he was leading his life
prior to the accident – In the yearly income to be assessed on the
basis of monthly income at Rs.9,000/- and 40% will have to be
added towards ‘future prospects – Calculation, thus, leading to the
amount to be awarded towards loss of future earnings with 100%
disability and multiplier of 15% would be 22,68,000/- – In the said
total amount, the compensation towards other heads, expenses
for prosthetic leg, towards pain, shock and suffering, for attendant
charges, medical expenses, loss of amenities, loss of income
during laid up period, attendant charges, transportation charges
to be added – Compensation of Rs.35,95,923/- to be just and fair
compensation to be paid to the claimant, with 6% p.a interest from
the date of filing of the claim petition till actual payment. [Paras
5.2, 5.2.4, 5.3.2, 5.4.1, 5.5.1, 5.5.2, 5.6.3, 5.7.4-5.7.65.9, 5.9.2-8]
Case Law Cited
Mohd. Sabeer alias Shabir Hussain v. Regional Manager, U.P. State
Road Transport Corporation [2022] 18 SCR 427 : (2023) 20 SCC
774; Jitendra v. Sadiya and Others, 2025 SCC OnLine SC 261;
Hitesh Nagjibhai Patel v. Bababhai Nagjibhai Rabari and Another
[2025] 8 SCR 2428 : Civil Appeal No. 10278 of 2025 decided
on 08.08.2025; Jagdish v. Mohan and Others [2018] 3 SCR 20 :
(2018) 4 SCC 571; Laxman alias Laxman Mourya v. Divisional
[2026] 7 S.C.R. 381
Shankar Dutt v. United India Insurance Co. Ltd. and Others
Manager, Oriental Insurance Company Limited and Another
(2011) 10 SCC 756; State of Orissa and Others v. Adwait Charan
Mohanty and Others (1995) Supp. 1 SCC 470; Neeta and Others v.
Divisional Manager, Maharashtra SRTC, Kolhapur (2015) 3 SCC
590; Karamjit Singh v. Amandeep Singh and Another, 2024 SCC
OnLine SC 4275; Sarla Verma v. Delhi Transport Corporation and
Anr. [2009] 5 SCR 1098 : (2009) 6 SCC 121; Raj Kumar v. Ajay
Kumar and Another [2010] 13 SCR 179 : (2011) 1 SCC 343; R.
Halle v. Reliance General Insurance Company Limited, 2026 SCC
OnLine SC 433; Anant v. Pratap and Another [2018] 10 SCR 11 :
(2018) 9 SCC 450; R.D. Hattangadi v. Pest Control (India) Pvt.
Ltd. and Others [1995] 1 SCR 75 : (1995) 1 SCC 551; National
Insurance Co. Ltd. v. Pranay Sethi [2017] 13 SCR 100 : (2017)
16 SCC 680 – referred to.
Chameli Devi v. Jivrail Mian and Others, 2019 ACJ 3011;
S. Ettiappan v. D. Kumar (2026) 1 TAC 84 (SC) – referred to.
Books and Periodicals Cited
Shorter Oxford English Dictionary (3rd Edn.) Vol. 1, p. 103; Black’s
Law Dictionary – referred to.
List of Acts
Motor Vehicle Act, 1988.
List of Keywords
Just and fair compensation; Permissible heads of compensation;
Enhancement of compensation; Skilled carpenter; Amputation
of right leg, from above the knee; Disability; Multiplier of 15;
Permanent disability; Loss of earning capacity of the injured; Socio-
economic conditions; Medical standards; Functional disability;
70% disability; Functional disability at 100%; Medical expenses;
Expenses for prosthetic leg; Expenses towards pain, shock and
suffering; Attendant charges; Loss of amenities; Loss of income
during laid up period; Transportation charges.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8714 of 2026
From the Judgment and Order dated 19.12.2019 of the High Court
of Uttarakhand at Nainital in AFO No. 151 of 2012
382 [2026] 7 S.C.R.
Supreme Court Reports
Appearances for Parties
Advs. for the Appellant(s):
Ashwani Garg, Brijpal Singh Tomar, Vijay Kumar.
Advs. for the Respondent(s):
Abhishek Gola, Viresh B. Saharya, Anshul Mehral, Akshat Agarwal,
Rishabh Mathur, Ranjan Kumar Pandey, K.K. Bhat.
Judgment / Order of the Supreme Court
Judgment
N.V. Anjaria, J.
Leave granted.
2. The present appeal, which is preferred by the original claimant, is
directed against the judgment and order dated 19.12.2019 passed
by the High Court of Uttarakhand at Nainital1 in Appeal from Order
No. 151 of 2012. Thereby, the High Court enhanced the amount of
compensation to Rs.11,51,423/- to be paid with interest at the rate
of 6% per annum from the date of filing of the claim petition till the
date of realisation.
2.1 The Motor Accident Claims Tribunal-cum-Additional District
Judge, Kotdwar, Pauri Garhwal2 in Motor Accident Claim Case
No.50 of 2005 awarded Rs.4,77,823/- with 4% p.a. interest from
the date of filing of claim petition till the date of realisation. In the
appeal, the High Court enhanced the amount of compensation
to Rs.11,51,423/- with interest at 6% per annum. The appellant
seeks further enhancement in the compensation amount,
therefore, he has moved this Court by way of the present appeal.
Basic Facts
3. A vehicular accident took place on 09.11.2004. The appellant, 38
years old, engaged in the occupation of a carpenter, suffered serious
injuries when, at around 8:00 pm on the said date, he was travelling
on his motorcycle bearing registration No. UA-12-5725 from Kotdwar
1 Hereinafter, “High Court”
2 Hereinafter, “Claims Tribunal”
[2026] 7 S.C.R. 383
Shankar Dutt v. United India Insurance Co. Ltd. and Others
to Motadhak, a Jeep car bearing No. UP-06-0915, stated to have
been driven by its owner-driver rashly and negligently, came from
Motadhak, entered the wrong side of the road by proceeding to its
right side, and hit the motorcycle. The appellant sustained grievous
injuries, especially on his right leg which was badly injured.
3.1 The appellant came to be admitted to the Government Hospital,
Kotdwar. On the next day that is 10.11.2004, he was shifted for
further treatment to Himalayan Hospital, Jolly Grant, Dehradun,
upon medical advice. In order to save the life of the appellant, it
was considered necessary to amputate his right leg, which was
amputated from above the knee. The appellant was treated at
the said Dehradun Hospital since the date of his admission on
10.11.2004 till 22.12.2004, for about 43 days. As per the case
of the appellant, on account of the amputation of his right leg,
he became completely disabled from doing work as a carpenter
and his movement was seriously restricted.
3.1.1 The appellant filed the claim petition before the
Claims Tribunal seeking compensation to the tune
of Rs.18,50,000/-. Respondent Nos. 1 and 2 are the
Insurance Companies, which had insured the offending
Jeep and the motorcycle respectively, and respondent
No.3 is the driver-cum-owner of the offending Jeep.
The respondents filed written statements and contested
the petition. The Claims Tribunal passed the award
on 02.03.2012, determining total compensation under
various heads totalling Rs.4,77,823/- granting interest
at 4% interest per annum thereon.
Compensation by the High Court
3.2 The judgment and award of the Claims Tribunal was appealed
against. The High Court, while allowing the claimant’s appeal,
enhanced the amount of compensation to Rs. 11,51,423/-
awarding interest at 6% p.a. on the said amount from the
date of filing of the claim petition till realisation. In arriving at
the enhanced compensation, the High Court took the monthly
income at Rs. 5,000/- increasing the same from Rs. 3,000/-
per month as adopted by the Claims Tribunal. However, the
High Court reduced the multiplier from 17 to 15. The extent of
384 [2026] 7 S.C.R.
Supreme Court Reports
permanent disability which was considered to be 70% by the
Claims Tribunal was maintained. The High Court enhanced
the amount towards pain, suffering and loss of amenities
and further granted additional amounts of Rs. 25,000/- and
Rs.1,00,000/- towards future nourishment and future medical
expenses respectively.
3.2.1 The following tabular chart contains the comparative
details of the compensation awarded under different
heads by the Claims Tribunal and enhanced by the
High Court,
Compensation Heads Amount awarded by Amount awarded
the Claims Tribunal by the High Court
Monthly Income Rs. 3,000/- Rs. 5,000/-
Yearly Income (x 12) Rs. 36,000/- Rs. 60,000/-
Future Prospects - 60,000 + 24,000
(40%) = Rs. 84,000
Multiplier 36,000 x 17 = 84,000 x 15 =
Rs. 6,12,000/- Rs. 12,60,000
Permanent Disability 70% of 70% of
(70%) Rs. 6,12,000 = Rs. 12,60,000 =
Rs. 4,28,400/- Rs. 8,82,000/-
Loss of future Income Rs. 4,28,400/- Rs. 8,82,000
Pain and suffering and Rs. 5,000/- Rs. 1,00,000/-
Loss of Amenities
Future Nourishment - Rs. 25,000/-
Medical Expenses Rs. 44,423/- Rs. 44,423/-
Future medical expenses - Rs. 1,00,000/-
Interest 4 % p.a. 6 % p.a.
TOTAL Rs.4,77,823/- Rs.11,51,423/-
Rival Submissions
4. On behalf of the appellant, learned counsel Mr. Ashwani Garg
submitted that in respect of the following heads, the High Court
has either failed to award any amount or that the amount awarded
is on lower side.
(i) Notional income was assessed by the High Court at Rs.5,000/-
per month which is a low figure having regard to decisions of
[2026] 7 S.C.R. 385
Shankar Dutt v. United India Insurance Co. Ltd. and Others
this Court in Mohd. Sabeer alias Shabir Hussain vs. Regional
Manager, in U.P. State Road Transport Corporation3, in
Jitendra vs. Sadiya and Others4 and in Hitesh Nagjibhai
Patel vs. Bababhai Nagjibhai Rabari and Another5. The facts
in those cases were similar, therefore, income of the appellant
should be notionally taken at least at Rs.8,000/- per month.
(ii) The High Court failed to award any amount towards expenses
for purchase of artificial limb and its maintenance.
(iii) Also, under the head ‘transportation charges’, no amount is
awarded.
(iv) Attendant charges have also not been awarded by the High
Court which should have been awarded at Rs.2,00,000/- in
lump sum.
(v) The future prospects, that is, loss of future earning is not taken
into account.
(vi) In respect of loss of income during treatment also, no amount
is awarded.
(vii) The High Court has adopted multiplier of 15 which ought to
have been 16.
(viii) The permanent disability is taken at 70%. Looking to the fact
that the appellant was a carpenter and his right leg below the
knee was amputated, the functional disability needed to be
taken at 100%. The loss of income for future earnings due to
disability will have to be accounted for accordingly.
(ix) Relying on the various decisions and suggesting in the factual
context of the present case, the amount towards pains, sufferings
as well as loss of amenities needed to be given to the tune of
Rs.5,00,000/-.
(x) While awarding medical expenses, the High Court has
overlooked that over and above the actual medical expenses,
there were out of pocket expenses. Therefore, the amount on
this count has to be increased.
3 (2023) 20 SCC 774
4 2025 SCC OnLine SC 261
5 Civil Appeal No.10278 of 2025 decided on 08.08.2025
386 [2026] 7 S.C.R.
Supreme Court Reports
4.1 On the other hand, learned counsel Mr. Abhishek Gola and
learned counsel Mr. K.K. Bhat for respondent Nos.1 and 2
respectively highlighted the stand of the Insurance Companies.
None appeared for respondent No.3, though served.
4.1.1 On behalf of respondent No.1-United India Insurance Co.
Ltd. with which the offending Jeep car was insured, it was
submitted through the counter affidavit filed before this
Court that the High Court rightly considered the figure of
Rs.5,000/- as income of the appellant inasmuch as the
said figure was arrived at on the basis of minimum wages
in the State of Uttarakhand as prevalent in December
2005. In support of this submission, the decision in
Chameli Devi vs. Jivrail Mian and Others6 was pressed
into service.
4.1.2 It was also sought to be submitted that the functional
disability at 70% was quite justified since it would be
possible for the appellant to perform his carpentry work
and that he would not be said to have become completely
handicap from working.
4.1.3 Respondent No.2-National Insurance Company Limited
filed its counter affidavit raising various pleas and
contested the appeal, emphasizing that the accident had
been caused due to negligence of the Jeep car driver
and that the said findings was not challenged any further.
5. Proceeding to examine the plea of the appellant for enhancement in
compensation and what could be the just and fair compensation to
be awarded to the appellant in the facts of the case, the parameters
and the permissible heads of compensation, may be looked at, at
the outset.
5.1 The principles governing the assessment of compensation
payable to road accident victim who suffers permanent or
temporary disability may be recalled. In Jagdish vs. Mohan and
Others7 this Court highlighted the aspects which must weigh
6 2019 ACJ 3011
7 (2018) 4 SCC 571
[2026] 7 S.C.R. 387
Shankar Dutt v. United India Insurance Co. Ltd. and Others
with the court in awarding the compensation. It was observed
in paragraph 8 of the judgment that a victim who suffers a
permanent or temporary disability occasioned by an accident
is entitled to the award of proper compensation.
5.1.1 The award of compensation must cover among others,
the following aspects, stated the court, (i) Pain, suffering
and trauma resulting from the accident (ii) Loss of income
including future income (iii) The inability of the victim to
lead a normal life together with its amenities (iv) Medical
expenses including those that the victim may be required
to undertake in future and (v) Loss of expectation of life.
5.1.2 In Laxman alias Laxman Mourya vs. Divisional
Manager, Oriental Insurance Company Limited and
Another8, after considering several other pronouncements,
this Court observed that if the victim of an accident suffers
permanent or temporary disability, then endeavour should
be to award the adequate compensation, not only for
the physical injury and treatment but also for the pain,
suffering and trauma caused due to accident, loss of
earnings and victim’s inability to lead a normal life and
enjoy amenities which he would have enjoyed but for
the disability caused due to the accident.
Carpentry A skilled work
5.2 The appellant who got injured in the accident and had to suffer
amputation of his right leg below the knee was a carpenter. A
carpenter is an artisan. An artisan is one who is engaged in
production of article of commercial value, or they are kind of
industrial arts.
5.2.1 Though in a different context, this Court in State of Orissa
and Others vs. Adwait Charan Mohanty and Others9
explained the concept of the word “artisan” from Shorter
Oxford English Dictionary, (3rd Edn.) Vol. 1, p. 103, to
define “artisan” as one who practices and cultivates art,
8 (2011) 10 SCC 756
9 (1995) Supp. 1 SCC 470
388 [2026] 7 S.C.R.
Supreme Court Reports
an artist, who occupies in any industrial art, a mechanic
handicraftsman. It was observed that the Black’s Law
Dictionary defines “artisan” as “one skilled in some kind
of trade, craft, or art requiring manual dexterity, e.g., a
carpenter, plumber, tailor, mechanic”.
5.2.2 The Court stated thus,
“The word ‘artisan’, therefore, has to be
understood in common parlance in a wider
sense as an art or an artist or one employed in
any of the industrial arts or produces an article of
commercial value or utility with manual dexterity,
either by manual labour or with the help of tools
or machine and brings into existence a product for
sale or service. An element of not only creativity
would be applied to bring into existence an article
or commercial goods with dexterity employing
manual or technical labour or with the aid of tools
etc. However, it is not exhaustive. Each case must
be considered on its own facts and attendant
circumstances to find whether the workman is an
artisan. However, if he is a Class IV government
servant, he too is entitled to superannuation on
attaining 60 years of age.”
(Para 10)
5.2.3 In Neeta and Others vs. Divisional Manager,
Maharashtra SRTC, Kolhapur 10, this Court viewed
that carpentry is a skilled job. In Karamjit Singh vs.
Amandeep Singh and Another11, for the purpose of
calculating the notional income of a carpenter, this Court
in terms stated that carpentry is a field work and that the
carpenter is a skilled worker,
“A carpenter is somebody who uses wood and
constructs objects for daily use or beauty or in
10 (2015) 3 SCC 590
11 2024 SCC OnLine SC 4275
[2026] 7 S.C.R. 389
Shankar Dutt v. United India Insurance Co. Ltd. and Others
certain countries even housing. A normal person
who is not trained in the craft certainly cannot
undertake these activities with the level of
precision that is required. It would be unfair then,
to classify a carpenter as an unskilled worker…”
(Para 7)
5.2.4 The carpenter is thus a skilled worker, who works to bring
into existence various items of wood by his expertise
and dexterity. When the income of the injured appellant
carpenter is to be notionally assessed for the purpose of
compensation, the fact and the aspect that the appellant
was a skilled worker, cannot be overlooked, and has to
be accounted for.
Fair Notional Income
5.3 The High Court, while increasing the figure of monthly income
of the injured appellant from Rs.3,000/- to Rs.5,000/-, heavily
relied on the decision of this Court Chameli Devi (supra) in
which also the injured was a carpenter whose income was
assessed to Rs.5,000/- per month. The accident in that case
had taken place in the year 2001.
5.3.1 Jagdish (supra) also was the case of a carpenter, where
the accident had taken place on 24.11.2011. The Claims
Tribunal had considered the income of the appellant
Jagdish at Rs.4050/- per month which was confirmed by
the High Court. In that case, the injury had resulted into
the hands of the injured becoming non-functional and the
injured needed assistance even in eating the food. This
Court took the figure of income at Rs.6,000/- per month.
5.3.2 The present is a case where the accident took place in
November 2004. The appellant claimed in this evidence
that he was earning Rs.8,000/- to 10,000/- per month.
This evidence has almost remained unrefuted. This Court
is of the view that the High Court erred in restricting the
figure of income at Rs.5,000/- per month. A skilled job
would always have potentiality to fetch and earn higher
income. Keeping in view Chameli Devi (supra) and
390 [2026] 7 S.C.R.
Supreme Court Reports
Jagdish (supra), taking guidance from said cases and
further by striking a balance in the context of the facts
of the present case, this Court considers it appropriate
to assess the income of the appellant at Rs.9,000/- per
month, when the appellant was a skilled worker for the
purpose of computing the compensation.
Adoption of Multiplier
5.4 The Tribunal applied the multiplier of 17. However, the High
Court applied the multiplier of 15 in view of the law laid down
in Sarla Verma vs. Delhi Transport Corporation and Anr.12.
Para 42 of Sarla Verma (supra) provides that:
“We therefore hold that the multiplier to be used
should be as mentioned in Column (4) of the table
above (prepared by applying Susamma Thomas?,
Trilok Chandra and Charlie), which starts with ag
operative multiplier of 18 (for the age groups of 15
to 20 and 21 to 25 years), reduced by one unit for
every five years, that is M-17 for 26 to 30 years,
M-16 for 31 to 35 years, M-15 for 36 to 40 years,
M-14 for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years, that
is, M-11 for 51 to 55 years. M-9 for 56 to 60 years,
M-7 for 61 to 65 years and M-5 for 66 to 70 years.”
(Para 42)
5.4.1 As the age of the appellant-claimant at the time of accident
was 38, multiplier of 15 was rightly applied by the High
Court. It has to be maintained.
Loss of Earning Capacity
5.5 For the claimant who is rendered partial or completely disabled
and who has suffered permanent or partial disability, the factor
of loss of earning capacity becomes pivotal in determining the
compensation amount. An injured in the vehicular accident
stands incapacitated or physically impaired to work for earning
12 (2009) 6 SCC 121.
[2026] 7 S.C.R. 391
Shankar Dutt v. United India Insurance Co. Ltd. and Others
the livelihood. The earning capacity gets adversely affected in
presenti as well as for the future. When the disability resulted
out of the injury is of a permanent nature, it would have an in
futuro effect. The injured would be left disabled to undertake
any effective activity for earning for the rest of the years of his
life, both for himself and his family.
5.5.1 In assessing the compensation for permanent disability,
the extent of loss of earning capacity of the injured is a
decisive consideration. It goes with the extent of disability
suffered. The quantum of compensation must correspond
to the loss of earning capacity. In other words, the loss of
earning capacity is an important yardstick and it is an acid
test which would guide the assessment of compensation
by the Claims Tribunal or the court undertaking such
exercise.
5.5.2 Furthermore, the socio-economic conditions of the
claimant and the concerning circumstances on that count
can also be taken into account for adjudging the loss
of earning capacity, in turn, for the purpose of arriving
at the total compensation. Thus, the loss of earning
capacity guided by the compelling socio-economic factors
becomes prime considerations.
5.5.3 In Raj Kumar vs. Ajay Kumar and Another13, this Court
observed thus,
“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
13 (2011) 1 SCC 343
392 [2026] 7 S.C.R.
Supreme Court Reports
from a permanent disability will be different from
the percentage of permanent disability…”
(Para 10)
5.5.4 It was further observed in paragraph 11 that what is
required to be assessed 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 income, it has to be quantified in terms of
money, by arriving at future loss of earnings by applying
the standard multiplier method used to determine loss
of dependency.
Medical versus Functional Disability
5.6 The Medical Certificate issued by the doctor stated that the injury
of the appellant which finally ended up with the amputation of
the lower half part of his right leg was about 70%. The appellant-
claimant asserted that because of the amputation of the leg,
his disability would result 100%.
5.6.1 A conceptual distinction has to be drawn between the
medically certified disability resulting out of physical
injury or impairment on one hand, and the long-term
repercussions on the injured, on his or her life and
activities on the other hand. The functional disability is
one which is suffered and felt by the injured in his day-
to-day life or in his avocation, occupation, business or
profession.
5.6.2 The medical opinion may have suggested that physical
impairment on account of the injury is to a particular
extent, however its functional effect may be greater. In
fact, it could be reasonable to state that the functional
incapacity resulting out of a particular bodily injury, which
may be impairment or amputation, would be higher and
greater than what may be medically perceived.
5.6.3 When it comes to assessing the compensation in the
context of the injury suffered, what matters is the extent
by which the functions of an injured person suffers, and
not what the doctor may have judged in terms of medical
[2026] 7 S.C.R. 393
Shankar Dutt v. United India Insurance Co. Ltd. and Others
standards. The functional aspect of the disability arising
out of injury has correlation with the age of the injured,
his occupation, engagement in work or avocation, the
adversarial effect on the earning capacity of the injured,
which would again depend upon the nature of work or
earning activity with which and in which the injured is
engaged and such other relevant considerations.
5.6.4 For instance, where an injured is a driver, his partial
amputation of the hand would render him cent percent
incapable of driving the vehicle as he would not be able
to effectively and safely handle the steering. The extent
of the functional disability would largely remain dependent
upon the nature of work and the kind of earning activity
in which the injured is engaged.
Cent Percent in Present Case
5.7 In the recent decision in R. Halle vs. Reliance General
Insurance Company Limited 14 which was decided on
18.03.2026, this Court observed inter alia that the principles
governing the assessment of disability should be properly
analyzed on the basis of the attended facts and no abrupt
conclusion about the functional disability should be arrived at.
It was observed that the assessment of functional disability has
a direct bearing on the determination of just compensation and
necessarily requires a careful scrutiny of medical evidence and
its impact on the avocation of the injured. A failure to undertake
such an exercise could amount to the commission of an error
in law on the part of the tribunal or the court.
5.7.1 In S. Ettiappan vs. D. Kumar15, the appellant was working
as a loader, who used to load and unload vegetables into
the vehicles. In such an activity as a loader, it required
the appellant to use both his legs. Due to the injury
caused in the accident, his right leg below the knee was
amputated, and he became immobile and was not in a
position to work as a loader. The High Court had assessed
the disability of the said appellant to the extent of 70%.
14 (2026) SCC OnLine SC 433
15 (2026) 1 TAC 84 (SC)
394 [2026] 7 S.C.R.
Supreme Court Reports
5.7.2 The following observations in S. Ettiappan (supra) stand
in good stead,
“…. However, the High Court while re-
appreciating the evidence has restricted the
whole-body disability at 70% on the basis of
Medical Board Certificate (Ex. C-1) without
noticing the fact that on account of said disability
suffered by the claimant, his functional disability
would be 100%. It is not in dispute that appellant
was working as a loader who used to discharge
his duties of loading and unloading vegetables
into the vehicles. This physical or manual activity
would require support of both legs or in other
words claimant is required to use both the legs
for discharging his duties as a loader. By virtue
of amputation of his right leg below the knee,
he has become immobile or in other words, he
is not in a position to discharge his daily routine
work as a loader…..”
(Para 7.1)
5.7.3 It was added that to earn his bread, he had to work by
loading or unloading vegetable into the vehicle which
was the only avocation he was carrying on. Now by
virtue of amputation of his leg below the knee appellant
is not only unable to work as a loader but even unable
to stand without support. As such the functional disability
requires to be considered at 100% and not 70% as held
by High Court.
5.7.4 The appellant-claimant in the present case was engaged
in the carpentry work. While working as a carpenter, he
has to necessarily sit. Because of amputation of the
lower half part of the right leg, the appellant is not able
to sit in a squatted or crossed legged manner. He cannot
stand without support. He cannot work without the help
of an attendant. It is stated that the appellant has not
been able to pass stool in an Indian style outlet and he
has been severely handicapped in doing routine work.
[2026] 7 S.C.R. 395
Shankar Dutt v. United India Insurance Co. Ltd. and Others
5.7.5 As a skilled carpenter, the appellant used to run the shop
of carpentry and used to accept the contracts for making
furniture, almirahs, doors, and windows of newly built
houses. Appellant had the only source of income from
such work to upbring and to maintain his family which
consisted of his wife and two minor children.
5.7.6 When the appellant is not able to sit either in a squatted
way or with a crossed leg, it is evident that he will not
be able to perform the carpentry work. It is essential and
indispensable for a carpenter to sit to do the carpentry
works. A carpenter cannot perform such work while in a
standing position. For standing also, the appellant would
need support. Therefore, the actual effect of amputation
resulting out of the accidental injury for the appellant
is total in terms of the work in which he is engaged
and he is to perform, which really does not match and
does not augur well with the extent of 70% disability as
medically indicated. The disability of the appellant has
to be appreciated and assessed in the context of the
occupation of the appellant, activity of work he used to
do as carpenter. The functional disability of the appellant-
claimant has to be taken properly and reasonably at 100%.
Restoring Injured to same position
5.8 The compensation for the injured for his or her injuries and
disability suffered, are classifiable into two heads, pecuniary
and non-pecuniary. In Mohd. Sabeer alias Shabir Hussain
(supra), this Court elaborately delineated the principles which
may govern the determination of compensation towards both
pecuniary and non-pecuniary losses, in cases of permanent
disablement of the claimant. Both pecuniary damages and
non-pecuniary compensation deserve to be granted to the
claimant, stated this Court. The pecuniary damages are those
which the victim has actually incurred, which are possible to be
calculated in terms of money, whereas non-pecuniary damages
are incapable of being assessed by arithmetical calculations.
5.8.1 The Court emphasized that in case of permanent disability,
the claimant would be entitled to not just future loss of
income but also future prospects. Mohd. Sabeer (supra)
396 [2026] 7 S.C.R.
Supreme Court Reports
relied on the earlier judgment of this Court in Anant vs.
Pratap and Another16 to reiterate that the purpose of fair
compensation is to restore the injured to the position he
was in prior to the accident as best as possible.
5.8.2 The following observations from Anant (supra) came to
be highlighted by Mohd. Sabeer (supra),
“ In cases of motor accidents leading to injuries
and disablements, it is a well settled principle
that a person must not only be compensated for
his physical injury, but also for the non-pecuniary
losses which he has suffered due to the injury.
The claimant is entitled to be compensated for
his inability to lead a full life and enjoy those
things and amenities which he would have
enjoyed, but for the injuries.”
(Para 22)
5.8.3 Mohd. Sabeer (supra) followed the decision in R.D.
Hattangadi vs. Pest Control (India) Pvt. Ltd. and
Others17, to reproduce the heads of pecuniary damages
as well as the heads under the non-pecuniary damages
to be considered as part of compensation to the injured
who has suffered from disability. The pecuniary damages,
it was highlighted, comprised of expenses incurred by
the claimant such as: (i) medical attendance; (ii) loss of
earning of profit up to the date of trial; (iii) other material
loss. Similarly, as far as the non-pecuniary damages are
concerned, they would be under the heads of (i) damages
for mental and physical shock, pain and suffering, already
suffered or likely to be suffered in the future; (ii) damages
to compensate for the loss of amenities of life which may
include a variety of matters that is on account of injury the
claimant may not be able to walk, run or sit; (iii) damages
for the loss of expectation of life, that is, on account of
injury the normal longevity of the person concerned is
16 (2018) 9 SCC 450
17 (1995) 1 SCC 551
[2026] 7 S.C.R. 397
Shankar Dutt v. United India Insurance Co. Ltd. and Others
shortened; (iv) inconvenience, hardship, discomfort,
disappointment, frustration and mental stress in life.
Expenses Towards Prosthetic Leg
5.9 Amputation of a limb from the human body has its own effect
on the working ability, earning capacity and quality of life in
general. In the present case, half part of the right leg of the
appellant is amputated and he has been using artificial leg. The
prosthetic leg is not an all time same attachment. By its very
nature that it is artificial, it would require replacement periodically.
It would further need maintenance to keep it properly functional.
The injured-appellant whose leg was amputated needs to be
compensated on this score also.
5.9.1 In Mohd. Sabeer (supra), it was the submission that the
cost of the prosthetic limb itself is more than Rs.2,60,000/-
and the life of the prosthetic limb is only 5 to 6 years.
The prosthetic limb also requires repair and maintenance
after every six months, and each repair costs between
Rs.15,000/- to Rs.20,000/-. In Anant (supra), as noted
above, the claimant was held entitled to be compensated
for his inability to lead a full life and enjoy those things and
amenities which he would have enjoyed, but for the injuries.
5.9.2 Applying the above principles in the present case,
the appellant-claimant is 38 years of age. Taking his
average life expectancy to be 75 years, he would
require a replacement of artificial limb at least six times
for the remaining 37 years. The prosthetic limb would
again require a half yearly repair and maintenance. The
appellant must be compensated in a manner and to
the extent that he is able to live life in the future years
almost in the same way as he was leading his life prior
to the accident.
5.9.3 While the loss of leg cannot be compensated, the
appellant could be paid pecuniary compensation towards
the purchase of the prosthetic leg and its repairs. It
would tend to do justice. This consideration is indeed
a part of determining the just and fair compensation.
Therefore, this Court is of the view that Rs.10,00,000/-
398 [2026] 7 S.C.R.
Supreme Court Reports
should be awarded to the appellant towards the cost and
maintenance for the artificial leg he will require during
his lifetime. This is the minimum amount which he is
qualified for as part of the compensation payable under
this head to the appellant-claimant.
6. In the yearly income to be assessed on the basis of monthly
income at Rs.9,000/- and 40% will have to be added towards ‘future
prospects’. This would be in accordance with the principles laid down
in National Insurance Co. Ltd. vs. Pranay Sethi18. The calculation,
therefore, leading to the amount to be awarded towards loss of future
earnings with 100% disability would be calculated thus (i) Monthly
income at Rs.9,000/- (ii) Yearly income 9000/- x 12 = 1,08,000/- (iii)
Future prospects at 40% 1,08,000/- + 40% (43,200) = 1,51,200/-,
(iv) Multiplier 15% 1,51,200/- x 15 = 22,68,000/- (v) 100% Disability
22,68,000/- x 100% = 22,68,000/-.
6.1 In the above total amount, the compensation towards other
heads, such as towards medical expenses including the
expenses for prosthetic leg, towards pain, shock and suffering,
for attendant charges, in respect of medical expenses, etc., will
be added as indicated in the succeeding paragraph 7 to arrive
at the total amount of compensation.
Compensation Under Other Heads
7. Having regard to the nature of injury and the extent of functional
disability suffered by the appellant and in the totality of facts and
circumstances obtained, following amounts are considered to be
just and reasonable under different heads to be added to the total
compensation payable to the appellant.
(i) For ‘Future Medical Expenses’ including the cost of prosthetic leg,
considering the age of the appellant and other relevant factors,
vis-à-vis periodicity for which the prosthetic leg will have to be
replaced, the amount is required to be awarded. On the above
total count, this court considers it fit to award total Rs. 10,00,000/-.
(ii) Under the head of ‘Pain, Shock and Suffering’, the High Court
awarded Rs.1,00,000/-. In S. Ettiappan (supra), the similar
18 (2017) 16 SCC 680
[2026] 7 S.C.R. 399
Shankar Dutt v. United India Insurance Co. Ltd. and Others
facts and circumstances, same amount was awarded by this
Court, therefore, the award of Rs. 1,00,000/- under this head
is maintained.
(iii) Towards ‘Loss of Amenities’, Rs. 50,000/- is awarded.
(iv) The appellant had to stay in the hospital for one and a half
months, about 43 days for treatment. Therefore, in respect
of ‘Loss of Income During Laid Up Period’, Rs. 13,500/-
(Rs. 9,000 x 1.5 = Rs. 13,500/-) will be awardable.
(v) Considering that the appellant’s right leg is amputated, he would
need an attendant for his day to day and other work. Under the
head of ‘Attendant Charges’, this Court considers it fit to award
Rs. 50,000/-. Under the head of ‘Nutrition and Other Incidental
Charges’, the amount which shall qualify towards compensation
will be Rs. 40,000/-.
(vi) ‘Medical Expenses’ as actually incurred and awarded is Rs.
44,423/-, which have to be awarded accordingly only to that
extent.
(vii) Under the head of ‘Transportation Charges’, while the appellant
seeks amount of Rs. 50,000/, it would be reasonable to award
Rs. 30,000/-.
7.1 In view of the above, the total compensation which would be
payable to the appellant is calculated as under in the tabular
form,
S. No. Heads Amounts in Rupees
Yearly Income 9,000 x 12 = 1,08,000/-
Future prospects (40%) 1,08,000/- + 40%
(43,200) = 1,51,200/-
Multiplier (15) 1,51,200/- x 15 =
22,68,000/-
1. Loss of future earnings 22,68,000/- x 100% =
towards disability 22,68,000/-
2. Pain, shock and suffering 1,00,000/-
3. Expenses towards 10,00,000/-
prosthetic leg
400 [2026] 7 S.C.R.
Supreme Court Reports
4. Loss of income during laid 9,000 x 1.5 = 13,500/-
up period
5. Attendant charges 50,000/-
6. Nutrition and other 40,000/-
incidental charges
7. Medical expenses 44,423/-
8. Transportation charges 30,000/-
9. Loss of amenities 50,000/-
10. TOTAL Rs. 35,95,923 /-
8. The above compensation of Rs. 35,95,923/-would be just and fair
compensation to be paid to the appellant-claimant. The appellant-
claimant shall be entitled to receive the said total amount with 6% p.a.
interest from the date of filing of the claim petition till actual payment.
9. The additional entitlement of compensation payable to the appellant
shall be disbursed by the Claims Tribunal after undergoing necessary
procedure, including identification, by directly transmitting the amount
to the bank account of the appellant.
10. The respondent No.1-United India Insurance Co. Ltd. shall deposit
the balance additional amount of Rs.24,44,500/- (Rs.35,95,923/- –
Rs.11,51,423/-) with interest at 6% p.a. as provided above, with the
Claims Tribunal within six weeks from today. The said additional
amount shall be disbursed in favour of the appellant by undertaking
the necessary process of verification etc. and transferring the same
to the bank account of the appellant.
11. The appeal stands allowed in the aforesaid terms.
Any Interlocutory Application, if pending, shall not survive in view of
the disposal of main appeal as above.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Nidhi Jain
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