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M Parameshv.VRL Logistics Ltd and Another

Citation:
2026 INSC 655
Date:
25 June 2026
Reading time:
15 min read

Functional Disability Over Physical Disability in Motor Accident Claims – A Legal Analysis


Case Snapshot

Case Name: M. Paramesh v. VRL Logistics Ltd. and Another

Citation: 2026 INSC 655

Bench: Justice Prashant Kumar Mishra and Justice N.V. Anjaria

Date of Judgment: June 23, 2026

Area of Law: Motor Accident Claims, Compensation, Personal Injury


Judgment in Brief

The Supreme Court enhanced the compensation awarded to a 30-year-old mason who suffered amputation of his right leg above the knee in a road accident. The Court clarified the distinction between physical disability and functional disability, holding that while the medical certificate assessed the physical disability at 70%, the functional disability affecting the earning capacity of a manual labourer like a mason must be assessed at 100%. The Court also corrected a calculation error committed by the High Court regarding future prospects. Consequently, the compensation was enhanced from ₹23,86,320 to ₹47,27,700. The judgment reaffirms the principles laid down in Raj Kumar v. Ajay Kumar and emphasizes that compensation must be based on the actual loss of earning capacity, not merely the percentage of physical disability.

Relevant Facts

  • The appellant, aged 30 years, was a mason by profession earning approximately ₹20,000 per month.

  • On April 18, 2017, while cycling on the left side of NH-7, a lorry belonging to the respondent hit him from behind, causing grievous injuries.

  • The appellant suffered amputation of his right leg above the knee. The disability certificate assessed permanent physical disability at 70%.

  • The appellant filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking ₹25,00,000 compensation.

  • The Motor Accidents Claims Tribunal (MACT) awarded ₹10,84,330, assessing monthly income at ₹6,000 and disability at 70%.

  • The High Court enhanced the compensation to ₹23,86,320, increasing monthly income to ₹12,000, adding 40% future prospects, and maintaining 70% disability.


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