LOSS OF EARNING CAPACITY 100% – INCREASED COMPENSATION FOR A GUNMAN’S PERMANENT DISABILITY – SC
On 4 July, 2023, In a landmark judgment, the Supreme Court of India has restored full compensation for a gunman’s permanent disability caused by a road accident. The appellant, Sarnam Singh, had filed an appeal challenging the order of the Delhi High Court, which had reduced the compensation awarded to him. The judgment, delivered by Justice Rajesh Bindal, highlights the importance of assessing loss of earning capacity based on the nature of work performed by the injured individual.
The accident occurred on November 24, 2013, when Singh’s vehicle collided with a tempo. As a result, he suffered severe injuries, leading to the amputation of his right lower limb. The appellant underwent hospitalization for over a month and continued follow-up treatment for a year. Due to the disability, he was unable to perform his duties as a gunman and subsequently lost his job. The Motor Accident Claims Tribunal awarded Singh compensation amounting to ₹34,29,800/-.
However, the insurance company, Shriram General Insurance Co. Ltd. & others, filed an appeal before the Delhi High Court challenging the compensation awarded. The High Court upheld most of the Tribunal’s findings but reduced the loss of earning capacity from 100% to 80%, resulting in a reduced compensation amount of ₹28,43,000/-. Dissatisfied with the reduction, Singh appealed to the Supreme Court.
During the proceedings, Singh’s counsel argued that the functional disability resulting from the amputation warranted a loss of earning capacity assessment of 100%. They emphasized that Singh’s termination from employment as a result of his disability confirmed his inability to continue working as a gunman. The insurance company’s counsel contended that the Tribunal’s compensation calculation was flawed and supported the High Court’s decision.
After considering the arguments, the Supreme Court examined the appellant’s disability certificate, which indicated a permanent physical disability of 85%. The certificate, issued by a board of doctors at Madan Mohan Malviya Hospital, confirmed that Singh’s condition was unlikely to improve further. The Court referred to previous judgments, including the case of Mohan Soni vs. Ram Avtar Tomar And Others, which established that the impact of a disability on earning capacity should be assessed based on the nature of the work performed by the individual.
Justice Bindal, delivering the judgment on behalf of the Bench, emphasized that the loss of earning capacity should be evaluated at 100% due to Singh’s functional disability. As a gunman, the amputation of his right lower limb rendered him unable to fulfill his job requirements. The Court noted that Singh was 50 years and 5 months old at the time of the accident, making it challenging for him to find alternative employment. Therefore, the High Court’s decision to reduce the loss of earning capacity to 80% was deemed erroneous.
Furthermore, the Supreme Court identified an error in the High Court’s calculation of the compensation amount. The correct compensation awarded by the Tribunal was ₹34,29,800/-, not ₹33,34,800/- as mentioned in the High Court’s order. Consequently, the Supreme Court allowed Singh’s appeal, set aside the High Court’s decision, and restored the Tribunal’s award. No costs were imposed in the case.
The judgment sets an important precedent for assessing compensation in cases of permanent disability, particularly considering the impact on the injured individual’s earning capacity based on their specific job requirements. This ruling reinforces the need to take into account the nature of work performed when determining compensation amounts in such instances.
Date of Decision: July 4, 2023
SARNAM SINGH vs SHRIRAM GENERAL INSURANCE CO. LTD. & ORS.
