Functional Disability Must Be Assessed Realistically - No Justification to Deny Future Prospects in Disability Cases: Allahabad High Court

“Denial of Future Prospects Is Illogical in Cases of Permanent Disablement,” In a judgment reinforcing the rights of permanently disabled motor accident victims, the Allahabad High Court dismissed an insurer’s appeal challenging the award of future prospects and functional disability compensation to a factory labourer who lost his right leg above the knee.

The appeal under Section 173 of the Motor Vehicles Act, 1988, filed by the insurance company, sought to reduce the compensation of ₹21,37,772 awarded by the Motor Accident Claims Tribunal (MACT), Etah. The appellant did not dispute the accident, liability, or negligence, but challenged the assessment of functional disability and the addition of 40% future prospects to the compensation, arguing both were excessive and unsupported.

“A Man Who Lost His Leg Above the Knee Cannot Lift or Transport Goods—Functional Disability of 60% Is Based on Sound Evidence”

The Court rejected the insurer’s challenge to the 60% functional disability assessed by the Tribunal, holding it to be well-reasoned and supported by evidence. The injured claimant had suffered above-knee amputation of his right leg, resulting in 70% permanent physical disability, and was no longer capable of performing manual labour.

The Tribunal had correctly noted that the claimant was employed in a biscuit factory as a labourer and could no longer lift or transport goods, making a realistic assessment of functional disability at 60% based on the nature of the job and the injury. The Court observed:

"The Tribunal has duly considered that... due to amputation of his right leg above the knee, he was not in a position to lift weight and was also not capable of transporting goods from one place to another because he was dependent on others."

“Future Prospects Not Just for the Dead—Living Victims Also Have Aspirations and Careers”

A key contention raised by the insurer was that future prospects should not be awarded in disability cases. The Court emphatically rejected this, relying on the Supreme Court’s decisions in Sidram v. United India Insurance Co. Ltd. (2023) 3 SCC 439 and Pranay Sethi (2017) 16 SCC 680.

Justice Jain held that there is no bar in law against awarding future prospects in disability claims, especially where the victim is young and has suffered life-altering injuries:

"There is no justification to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement... Such a narrow reading is illogical because it denies altogether the possibility of the living victim progressing further in life."

The Court further relied on Rule 220-A(5) of the U.P. Motor Vehicle Rules, 1998, which expressly permits the award of future prospects in permanent disability cases, leaving it to the discretion of the Tribunal based on the extent and impact of the disability.

“Claimant Aged Below 40—Tribunal Was Right to Apply 40% Future Prospects as Per Pranay Sethi”

The Court affirmed the Tribunal’s application of 40% addition towards future prospects, consistent with the ratio in Pranay Sethi, which permits such enhancement for victims aged below 40 years and engaged in unskilled work. The claimant, aged around 40 at the time of the accident in 2021, was awarded compensation based on the minimum wages for unskilled labour, assessed at ₹1,10,220 per annum.

After adjusting for 60% functional disability and future prospects, the Tribunal arrived at a loss of earning capacity of ₹66,132 annually, which was multiplied appropriately and added to other heads such as treatment, prosthetics, disfigurement, and pain and suffering.

“A Delay in Awarding Interest on Future Prospects Not Ground for Reversal—No Cross-Appeal Filed by Claimant”

The Court noted that the Tribunal had not awarded interest on the future prospects component, amounting to ₹3,96,792, but declined to interfere as no cross-appeal or challenge was made by the claimant. While acknowledging the omission as an error, the Court limited itself to the scope of the appeal, which was confined to reduction of compensation.

“Appeal Confined to Quantum and Not Meritorious—No Perversity Found in Tribunal’s Reasoning”

Since the appellant did not dispute negligence or occurrence of the accident, the only issue before the High Court was the justification of the awarded compensation. The Court concluded that the Tribunal’s approach was legally and factually sound, based on:

• Documentary medical evidence confirming amputation and disability

• Realistic estimation of the claimant’s pre-injury employment as an unskilled labourer

• Application of legal principles under Rule 220-A(5) and binding Supreme Court precedents

The insurer’s argument that the tribunal relied on minimum wages without proof of job designation was also rejected, with the Court noting that minimum wage is the statutory floor, and the Tribunal had rightly avoided speculative income figures.

Upholding Dignity and Future of Disabled Claimants

In affirming the Tribunal’s award and dismissing the appeal at the admission stage, the Allahabad High Court reiterated that permanently disabled victims are not to be denied the right to future financial progression. The judgment reinforces the principle that motor accident compensation must account for real-life consequences of disability, not just abstract medical percentages.

The Court directed that the statutory deposit made by the appellant be remitted back to the Tribunal forthwith, closing the matter with finality.

Date of Decision: 30 October 2025