Disability refers to any restriction or lack of ability to perform an activity in the manner considered normal for a human being.

Permanent disability refers to the residuary incapacity or loss of use of some part of the body, found existing at the end of the period of treatment and recuperation, after achieving the maximum bodily improvement or recovery which is likely to remain for the remainder life of the injured.

Temporary disability refers to the incapacity or loss of use of some part of the body on account of the injury, which will cease to exist at the end of the period of treatment and recuperation.

Jakir Hussein v. Sabir and Others, (2015) 7 SCC 252

In Jakir Hussein v. Sabir and Others, (2015) 7 SCC 252, Supreme Court had to consider the correctness of a compensation assessment based on the High Court’s analysis of the injury to the victim (a driver who suffered permanent injury to his arm, impairing movement as well as the wrist, which rendered him incapable of driving any vehicle). The High Court had assessed permanent disablement at 30%, even though the doctor had certified it to be 55%. Supreme Court, reversing the High Court order, observed inter alia that:

“15. …..Due to this injury, the doctor has stated that the appellant had great difficulty to move his shoulder, wrist and elbow and pus was coming out of the injury even two years after the accident and the treatment was taken by him. The doctor further stated in his evidence that the appellant got delayed joined fracture in the humerus bone of his right hand with wiring and nailing and that he had suffered 55% disability and cannot drive any motor vehicle in future due to the same.

He was once again operated upon during the pendency of the appeal before the High Court and he was hospitalised for 10 days. The appellant was present in person in the High Court and it was observed and noticed by the High Court that the right hand of the appellant was completely crushed and deformed. In view of the doctor’s evidence in this case, the Tribunal and the High Court have erroneously taken the extent of permanent disability at 30% and 55%, respectively for the calculation of amount towards the loss of future earning capacity.

No doubt, the doctor has assessed the permanent disability of the appellant at 55%. However, it is important to consider the relevant fact, namely, that the appellant is a driver and driving the motor vehicle is the only means of livelihood for himself as well as the members of his family. Further, it is very crucial to note that the High Court has clearly observed that his right hand was completely crushed and deformed.

16. In Raj Kumar v. Ajay Kumar [(2011) 1 SCC 343], Supreme Court specifically gave the illustration of a driver who has permanent disablement of hand and stated that the loss of future earnings capacity would be virtually 100%. Therefore, clearly when it comes to loss of earning due to permanent disability, the same may be treated as 100% loss caused to the appellant since he will never be able to work as a driver again.

The contention of the respondent Insurance Company that the appellant could take up any other alternative employment is no justification to avoid their vicarious liability. Hence, the loss of earning is determined by us at Rs 54,000 per annum. Thus, by applying the appropriate multiplier as per the principles laid down by Supreme Court in Sarla Verma v. DTC [(2009) 6 SCC 121, the total loss of future earnings of the appellant will be at Rs 54,000 × 16 = Rs 8,64,000.”

Anthony alias Anthony Swamy v. Managing Director, Karnataka State Road Transport Corporation, (2020) 7 SCC 161

In Anthony alias Anthony Swamy v. Managing Director, Karnataka State Road Transport Corporation, (2020) 7 SCC 161, where the victim was a painter by profession, a three-Judge Bench had followed Raj Kumar (supra) and Nagarajappa  v. Divisional Manager, Oriental Insurance Company Limited, (2011) 13 SCC 323. The High Court had assessed the injury to be 25% permanent disability, although the treating doctor had said that the injury incurred by the bus passenger (who was earning Rs. 9000/- per month) was 75% of the left leg and 37.5% for the whole body.

In Raj Kumar (supra), the physical disability of the upper limb was determined as 68% in proportion to 22- 23% of the whole-body. The High Court had assessed the injury as 25% and granted compensation. However, Supreme Court assessed the injury on the basis that the disability was 75%, stating as follows:

“8. PW 3 had assessed the physical functional disability of the left leg of the appellant at 75% and total body disability at 37.5%. The High Court has considered it proper to assess the physical disability at 25% of the whole body only. There is no discussion for this reduction in percentage, much less any consideration of the nature of permanent functional disability suffered by the appellant. The extent of physical functional disability, in the facts of the case has to be considered in a manner so as to grant just and proper compensation to the appellant towards loss of future earnings.

The earning capacity of the appellant as on the date of the accident stands completely negated and not reduced. He has been rendered permanently incapable of working as a painter or do any manual work. Compensation for loss of future earning, therefore has to be proper and just to enable him to live a life of dignity and not compensation which is elusive. If the 75% physical disability has rendered the appellant permanently disabled from pursuing his normal vocation or any similar work, it is difficult to comprehend the grant of compensation to him in ratio to the disability to the whole body.

The appellant is therefore held entitled to compensation for loss of future earning based on his 75% permanent physical functional disability recalculated with the salary of Rs 5,500 with multiplier of 14 at Rs 6,93,000.”

Syed Sadiq and Others v. Divisional Manager, United India Insurance Company Limited, (2014) 2 SCC 735

The question of amount of compensation payable to one suffering injury as a result of motor vehicle accident was considered in Syed Sadiq and Others v. Divisional Manager, United India Insurance Company Limited, (2014) 2 SCC 735, when Supreme Court had to apply the correct standard for awarding compensation for loss of future prospects for a vegetable vendor, whose right leg had to be amputated, as a result of a motor accident. The High Court had considered the disability to be 65%. Supreme Court held as follows:

 “7. Further, the appellant claims that he was working as a vegetable vendor. It is true that a vegetable vendor might not require mobility to the extent that he sells vegetables at one place. However, the occupation of vegetable vending is not confined to selling vegetables from a particular location. It rather involves procuring vegetables from the wholesale market or the farmers and then selling it off in the retail market. This often involves selling vegetables in the cart which requires 100% mobility.

But even by conservative approach, if we presume that the vegetable vending by the appellant claimant involved selling vegetables from one place, the claimant would require assistance with his mobility in bringing vegetables to the market place which otherwise would be extremely difficult for him with an amputated leg. We are required to be sensitive while dealing with manual labour cases where loss of limb is often equivalent to loss of livelihood. Yet, considering that the appellant claimant is still capable to fend for his livelihood once he is brought in the market place, we determine the disability at 85% to determine the loss of income.

8. The appellant claimant in his appeal further claimed that he had been earning Rs 10,000 p.m. by doing vegetable vending work. The High Court however, considered the loss of income at Rs 3500 p.m. considering that the claimant did not produce any document to establish his loss of income. It is difficult for us to convince ourselves as to how a labour involved in an unorganised sector doing his own business is expected to produce documents to prove his monthly income…..”

Mohan Soni v. Ram Avtar Tomar and Others, (2012) 2 SCC 267

In Mohan Soni v. Ram Avtar Tomar and Others, (2012) 2 SCC 267 (page 272), in a case of injury entailing loss of a leg, Supreme Court held that medical evidence of the extent of disability should not be mechanically scaled down:

“8. On hearing the counsel for the parties and on going through the materials on record, we are of the view that both the Tribunal and the High Court were in error in pegging down the disability of the appellant to 50% with reference to Schedule I of the Workmen’s Compensation Act, 1923. In the context of loss of future earning, any physical disability resulting from an accident has to be judged with reference to the nature of work being performed by the person suffering the disability. This is the basic premise and once that is grasped, it clearly follows that the same injury or loss may affect two different persons in different ways.

Take the case of a marginal farmer who does his cultivation work himself and ploughs his land with his own two hands; or the puller of a cycle-rickshaw, one of the main means of transport in hundreds of small towns all over the country. The loss of one of the legs either to the marginal farmer or the cycle-rickshaw- puller would be the end of the road insofar as their earning capacity is concerned. But in case of a person engaged in some kind of desk work in an office, the loss of a leg may not have the same effect.

The loss of a leg (or for that matter the loss of any limb) to anyone is bound to have very traumatic effects on one’s personal, family or social life but the loss of one of the legs to a person working in the office would not interfere with his work/earning capacity in the same degree as in the case of a marginal farmer or a cycle-rickshaw-puller.

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10. Supreme Court in K. Janardhan case [(2008) 8 SCC 518 : (2008) 2 SCC (L&S) 733], set aside the High Court judgment and held that the tanker driver had suffered 100% disability and incapacity in earning his keep as a tanker driver as his right leg was amputated from the knee and, accordingly, restored the order passed by the Commissioner of Workmen’s Compensation.

In K. Janardhan [(2008) 8 SCC 518 : (2008) 2 SCC (L&S) 733] Supreme Court also referred to and relied upon an earlier decision of the Court in Pratap Narain Singh Deo v. Srinivas Sabata [(1976) 1 SCC 289 : 1976 SCC (L&S) 52] in which a carpenter who suffered an amputation of his left arm from the elbow was held to have suffered complete loss of his earning capacity.

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13. Any scaling down of the compensation should require something more tangible than a hypothetical conjecture that notwithstanding the disability, the victim could make up for the loss of income by changing his vocation or by adopting another means of livelihood. The party advocating for a lower amount of compensation for that reason must plead and show before the Tribunal that the victim enjoyed some legal protection (as in the case of persons covered by the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995) or in case of the vast multitude who earn their livelihood in the unorganised sector by leading cogent evidence that the victim had in fact changed his vocation or the means of his livelihood and by virtue of such change he was deriving a certain income.

14. The loss of earning capacity of the appellant, according to us, may be as high as 100% but in no case it would be less than 90%. We, accordingly, find and hold that the compensation for the loss of the appellant’s future earnings must be computed on that basis. On calculation on that basis, the amount of compensation would come to Rs 3,56,400 and after addition of a sum of Rs 30,000 and Rs 15,000 the total amount would be Rs 4,01,400.

The additional compensation amount would carry interest at the rate of 9% per annum from the date of filing of the claim petition till the date of payment. The additional amount of compensation along with interest should be paid to the appellant without delay and not later than three months from today.”

Pappu Deo Yadav v. Naresh Kumar and Others, AIR 2020 SCC 4424

In Pappu Deo Yadav v. Naresh Kumar and Others, AIR 2020 SCC 4424, it was held that courts should not adopt a stereotypical or myopic approach, but instead, view the matter taking into account the realities of life, both in the assessment of the extent of disabilities, and compensation under various heads. In this case, the loss of an arm, in the opinion of the court, resulted in severe income earning impairment upon the appellant.

As a typist/data entry operator, full functioning of his hands was essential to his livelihood. The extent of his permanent disablement was assessed at 89%; however, the High Court halved it to 45% on an entirely wrong application of some ‘proportionate’ principle, which was illogical and is unsupportable in law.

What is to be seen, as emphasized by decision after decision, is the impact of the injury upon the income generating capacity of the victim. The loss of a limb (a leg or arm) and its severity on that account is to be judged in relation to the profession, vocation or business of the victim; there cannot be a blind arithmetic formula for ready application. 48. With the aforesaid broad principles in mind, we proceed to examine the appellant’s claim for enhancement of the compensation awarded to him by the High Court.