Holding

The disability should be assessed at 65% and compensation for loss of future prospects at 40% of income, leading to a total award of Rs 19,65,600.

Summary

The appellant, a 20‑year‑old data‑entry operator, lost his right hand in a motor‑vehicle accident and claimed compensation under the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal assessed his disability at 89% but reduced it to 45% and used a monthly income of Rs 8,000, omitting a 50% addition for future prospects. The Delhi High Court further reduced the loss‑of‑earning award to Rs 7,77,600 but left other heads unchanged. On appeal, the Supreme Court held that the disability must be assessed in relation to the victim’s profession, fixing it at 65%, and that compensation for loss of future prospects (40% of income) is permissible. It also accepted the appellant’s higher income estimate of Rs 12,000 (adjusted to Rs 10,000 for contemporary wages) and applied a multiplier of 18, resulting in a revised total compensation of Rs 19,65,600. The Court partially allowed the appeal, modifying the High Court’s order.

Issues considered

The appropriate percentage of permanent disability for a data‑entry operator who has lost one arm
Whether compensation for loss of future prospects can be awarded in cases of permanent disablement
What monthly income figure should be used for calculating loss of earning capacity
Whether the High Court erred in applying the multiplier and other compensation heads

Legislation cited

Subjects

Motor accident compensationPermanent disability assessmentLoss of earning capacityFuture prospectsMultiplier methodMotor Vehicles Act

Judgment

968 [2020]REPORTS
SUPREME COURT 7 S.C.R. 968 [2020] 7 S.C.R.

A PAPPU DEO YADAV
v.
NARESH KUMAR AND ORS.
(Civil Appeal No. 2567 of 2020)
B SEPTEMBER 17, 2020
[L. NAGESWARA RAO, KRISHNA MURARI AND
S. RAVINDRA BHAT, JJ.]
Motor Vehicles Act, 1988
C Motor accident – Of 20 year old man who was working as a
data entry operator/ typist – Disability (amputation of right upper
limb) of the victim was ascertained as 89% – Claim for compensation
– Claims Tribunal assessing physical disability of the victim to be
45% and taking his income to be Rs. 8000/- PM added 50% towards
future prospects and awarded compensation of Rs. 14,25,400/- –
D
High Court, in appeal doing away with addition to 50% towards
future prospects reassessed the compensation for loss of earning
capacity at Rs. 7,77,600/- – However, compensation amount was
enhanced to Rs. 14,36,600 by enhancing the compensation under
other heads – Appeal to Supreme Court – Held: The disability was
E wrongly assessed as 45% – The severity of loss of a limb should be
judged in relation to profession, vocation or business of the victim
– There cannot be blind arithmetic formula for ready application –
The claimant being a data entry operator/ typist, loss of an arm
resulted in severe income earning impairment – However, since he
still had another arm and since is young, the extent of his disability
F
is assessed at 65% – High Court also erred in holding that
compensation for future prospects in cases involving serious injuries
resulting in permanent disablement could not be awarded – The
claimant is entitled to compensation for loss of future prospects @
40% – Claimants assertion about earning Rs. 12,000/- PM should
G not have been discarded by Courts below – His income per month
is taken as Rs. 10,000/- – Considering the enhancement towards
loss of earning capacity and future prospects, compensation is
modified to Rs. 19,65,600/- in place of Rs. 7,77,600/- awarded by
High Court – Assessment of amounts payable under other heads is
upheld.
H
968
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 969

Partly allowing the appeal, the Court A
Held: 1.1 Courts should be mindful that a serious injury not
only permanently imposes physical limitations and disabilities but
too often inflicts deep mental and emotional scars upon the victim.
The attendant trauma of the victim’s having to live in a world
entirely different from the one she or he is born into, as an invalid, B
and with degrees of dependence on others, robbed of complete
personal choice or autonomy, should forever be in the judge’s
mind, whenever tasked to adjudge compensation claims. Severe
limitations inflicted due to such injuries undermine the dignity
(which is now recognized as an intrinsic component of the right
C
to life under Article 21) of the individual, thus depriving the person
of the essence of the right to a wholesome life which she or he
had lived, hitherto. From the world of the able bodied, the victim
is thrust into the world of the disabled, itself most discomfiting
and unsettling. If courts nit-pick and award niggardly amounts
oblivious of these circumstances, there is resultant affront to the D
injured victim. [Para 22][996-B-D]
1.2 This court has emphasized time and again that “just
compensation” should include all elements that would go to place
the victim in as near a position as she or he was in, before the
occurrence of the accident. Whilst no amount of money or other E
material compensation can erase the trauma, pain and suffering
that a victim undergoes after a serious accident, (or replace the
loss of a loved one), monetary compensation is the manner known
to law, whereby society assures some measure of restitution to
those who survive, and the victims who have to face their
lives.[Para 8][977-C-D] F

Santosh Devi v. National Insurance Company Limited
(2012) 6 SCC 421 : [2012] 3 SCR 1178 – relied on.
2.1 The factual narrative discloses that the appellant, a 20-
year-old data entry operator (who had studied up to 12th standard) G
incurred permanent disability, i.e. loss of his right hand (which
was amputated). The disability was assessed to be 89%. However,
the Tribunal and the High Court re-assessed the disability to be
only 45%, on the assumption that the assessment for
compensation was to be on a different basis, as the injury entailed
H
970 SUPREME COURT REPORTS [2020] 7 S.C.R.

A loss of only one arm. This approach is completely mechanical and
entirely ignores realities. Whilst it is true that assessment of injury
of one limb or to one part may not entail permanent injury to the
whole body, the inquiry which the court has to conduct is the
resultant loss which the injury entails to the earning or income
generating capacity of the claimant. Thus, loss of one leg to
B
someone carrying on a vocation such as driving or something
that entails walking or constant mobility, results in severe income
generating impairment or its extinguishment altogether. Likewise,
for one involved in a job like a carpenter or hairdresser, or
machinist, and an experienced one at that, loss of an arm, (more
C so a functional arm) leads to near extinction of income generation.
If the age of the victim is beyond 40, the scope of rehabilitation
too diminishes. These individual factors are of crucial importance
which are to be borne in mind while determining the extent of
permanent disablement, for the purpose of assessment of loss of
earning capacity. [Para 13][985-C-F]
D
2.2 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 the present case, the
loss of an arm, resulted in severe income earning impairment
E 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
F in law. What is to be seen, 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.
The income generating capacity of the appellant was undoubtedly
G severely affected. Maybe, it is not to the extent of 89%, given
that he still has the use of one arm, is young and as yet, hopefully
training (and rehabilitating) himself adequately for some other
calling. Nevertheless, the assessment of disability cannot be 45%;
it is assessed at 65% in the circumstances of this case.
H [Para 20][995-A-D]
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 971

Neerupam Mohan Mathur v. New India Assurance A
Company (2013) 14 SCC 15 : [2013] 8 SCR 15; Jakir
Hussein v. Sabir (2015) 7 SCC 252 : [2015] 2 SCR
460; Anthony Alias Anthony Swamy v. Managing
Director, K.S.R.T.C (2020) SCC OnLine SC 493; Raj
Kumar v. Ajay Kumar (2011) 1 SCC 343 : [2010] 13
B
SCR 179; Nagarajappa v. Divisional Manager,
Oriental Insurance Company Limited (2011) 13 SCC
323 : [2011] 6 SCR 70; Syed Sadiq & Ors. v. Divisional
Manager, United Insurance Company Limited (2014) 2
SCC 735; Arvind Kumar Mishra v. New India Assurance
Co. Ltd. (2010) 10 SCC 254 : [2010] 11 SCR 857; C
Mohan Soni v. Ram Avtar Tomar (2012) 2 SCC 267 :
[2012] 2 SCR 921; Sandeep Khanduja v. Atul Dande
(2017) 3 SCC 351 – relied on.
3. The High Court clearly erred in holding that
compensation for loss of future prospects could not be awarded. D
In addition to loss of future earnings (based on a determination
of the income at the time of accident), the appellant is also entitled
to compensation for loss of future prospects, @ 40% . There
was no justification for the High Court to have read the previous
rulings of this court, to exclude the possibility of compensation E
for future prospects in accident cases involving serious injuries
resulting in permanent disablement. Such a narrow reading of
Pranay Sethi (2017) 16 SCC 860 is illogical, because it denies
altogether the possibility of the living victim progressing further
in life in accident cases - and admits such possibility of future
prospects, in case of the victim’s death. [Paras 12 and 7] F

Jagdish v. Mohan & Ors. (2018) 4 SCC 571 : [2018] 3
SCR 20; Parminder Singh v. New India Assurance Co.
Ltd. (2019) 7 SCC 217 : [2019] 8 SCR 986; K. Suresh v.
New IndiaAssurance Co. Ltd. (2012) 12 SCC 274 : [2012]
11 SCR 414; Kajal v. Jagdish Chand (2020) 4 SCC G
413 – relied on.
*National Insurance Company Ltd. v. Pranay Sethi &
Ors. (2017) 16 SCC 860; Anant s/o of Sidheshwar Dukre

H
972 SUPREME COURT REPORTS [2020] 7 S.C.R.

A v. Pratap s/o Zhamnnappa Lamzane & Anr. (2018) 9
SCC 450 : [2018] 10 SCR 11 – referred to.
4. The courts below needlessly discounted the evidence
presented by the appellant in respect of the income earned by
him. Working in the informal sector as he did, i.e. as a typist/
B data entry operator in court premises in Delhi, his assertion about
earning ` 12,000/- could not be discarded substantially, to the extent
of bringing it down to ` 8,000/- per month. Such self employed
professionals, it is noticeable, were not obliged to file income tax
returns for AY 2011-2012, when no levy existed for anyone earning
less than ` 1,60,000/- per annum. If one takes into account
C
contemporary minimum wages for skilled workers (which was
in the range of ` 8,500/-) the realistic figure would be
` 10,000/- per month. Adding future prospects at 40%, the income
should be taken as ` 14,000 for the purpose of calculation of
compensation. Accordingly, this court finds that the compensation
D payable for the disability of loss of an arm (assessed at 65%) would
be ` 19,65,600/- (i.e., ` 14,000/- × 12 × 65% × 18) or Rupees
Nineteen lakhs sixty five thousand six hundred only. [Para 21]
[996-A]
5. The High Court’s assessment of amounts payable under
E other heads (such as compensation for medical expenses,
compensation for pain and suffering, compensation for special
diet and attendant, conveyance charges, loss of amenities and
enjoyment of life, disfigurement and loss of income during
treatment), do not call for interference. In view of the above
conclusions, the impugned judgment is hereby modified; the sum
F
of ` 19,65,600/- shall be substituted in place of the amount of
` 7,77,600/-, considering the enhancement towards loss of
earning capacity and future prospects. [Para 23][996-D-F]
Case Law Reference
G (2017) 16 SCC 860 referred to Para 3
[2018] 10 SCR 11 referred to Para 4
[2012] 3 SCR 1178 relied on Para 8
[2018] 3 SCR 20 relied on Para 9
H
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 973

[2019] 8 SCR 986 relied on Para 10 A
[2012] 11 SCR 414 relied on Para 10
(2020) 4 SCC 413 relied on Para 11
[2013] 8 SCR 15 relied on Para 14
[2015] 2 SCR 460 relied on Para 15 B
[2010] 13 SCR 179 relied on Para 16
[2011] 6 SCR 70 relied on Para 16
(2014) 2 SCC 735 relied on Para 17
C
[2010] 11 SCR 857 relied on Para 18
[2012] 2 SCR 921 relied on Para 18
2017 (3) SCC 351 relied on Para 19
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2567
of 2020. D
From the Judgment and Order dated 13.09.2018 of the High Court
of Delhi at New Delhi in MAC. APP. 117/2018.
Mrs. Mona K. Rajvanshi, Ms. G. Indira, Jatinder Kamra, A. K.
De, Pramit Saxena, Zahid Ali and Ms. Ananya De, Advs. for the appearing
E
parties.
The Judgment of the Court was delivered by
S. RAVINDRA BHAT, J.
1. The appellant questions a decision of the High Court of Delhi1.
On 18.05.2012, the appellant was injured in a motor accident while F
travelling to Hapur as a passenger in a bus, having paid the requisite
fare. At about 1.30 pm when the bus reached village Sadikpur, PS-
Hafizpur, Hapur, Uttar Pradesh, the driver of the offending bus (the first
respondent) sought to overtake the bus in which the appellant was
travelling, from the wrong side, and zipped the appellant’s bus, scratching G
it. This rash and negligent act caused a dent in the bus where the appellant
was seated, as a result of which he suffered injuries. The appellant was
removed to Dr. Khan’s Rehan hospital and thereafter, AIIMS Trauma
Center. The appellant claimed compensation, impleading the owner, the
1
dated 13.09.2018, in M.A.C. APP. 520/ 2016 H
974 SUPREME COURT REPORTS [2020] 7 S.C.R.

A driver of the vehicle, and the insurer. During the course of proceedings
before the Motor Accident Claims Tribunal, he applied for ascertainment
of his disability. The disability report (Ex. PW-l/9 dated 01.04.2014 issued
by Pandit Madan Mohan Malviya Hospital, during the motor vehicles
compensation claim proceedings) showed that he suffered 89% disability
in relation to his right upper limb, which had to be amputated. The report
B
also went on to say that the condition was “non progressive, not likely
to improve. Reassessment is not recommended”. A first information
report (FIR) regarding the accident was registered (FIR No. 57/12), as
case Crime No. 255/12, Hazifpur Police Station, Hapur, Uttar Pradesh,
under Sections 279 and 338 of the Indian Penal Code, 1860.
C 2. The appellant, at that time unmarried, was working as a data
entry operator/typist at Tis Hazari Courts. Prior to the injury, he earned
an amount of 12,000 per month. He had applied for grant of compensation
under Sections 166 and 140 of the Motor Vehicles Act, 1988, (hereafter
“the Act”) claiming a sum of 50 lakhs with interest at the rate of 12%
D per annum against the first respondent, (the driver of the bus at the time
of the accident), the second respondent (owner of the vehicle), and third
respondent (the insurer). The Motor Accident Claims Tribunal (hereafter
the “Tribunal”) rejected the insurer’s objection regarding its jurisdiction
and further held that the appellant had suffered serious injuries due to
rash and negligent driving of the respondent. It awarded compensation
E in the following terms:
1. Compensat ion for medical expenses 11,000
2. Compensat ion for pain and suffering 30,000
3. Compensat ion for special diet, attendant and 30,000
conveyance charges
4. Loss of future earning capacity/ income 11,66,400
F
5. Loss of amenities and enjoyment of life 15,000
6. Compensat ion for disfigurement 25,000
7. Loss of income during treatment 48,000
8. Future medical expenses 1,00,000
9. TOTAL 14,25,400

G 3. While assessing loss of earning capacity, the Tribunal took the
appellant’s income to be 8000 per month, and added 50% towards future
prospects. At the time of the accident, the appellant was only 20 years
of age. Therefore, a multiplier of 18 was applied. The physical disability
was assessed to be 45%, by the Tribunal. The High Court, to which the
H claimant appealed (and the insurer cross appealed), revised this head of
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 975
[S. RAVINDRA BHAT, J.]

compensation by doing away with the addition of 50% towards future A
prospects, and reassessed the compensation for loss of earning capacity
as 7,77,600 (8000 x 12 x 45% x 18). The total compensation was
reassessed by the High Court to be 14,36,600, after enhancing the
compensation for disfigurement, diet, attendant and conveyance, loss of
amenities and enjoyment of life, and pain and suffering. Further, an interest
B
of 9% per annum was imposed. In reducing the amount awarded for
loss of future prospects, the High Court noticed this court’s judgments in
National Insurance Company Ltd. v. Pranay Sethi & Ors. 2 and
Jagdish v. Mohan & Ors3 both by three-judge benches of this court.
4. The appellant argues that the impugned judgment is in material
error, in misreading this court’s judgments in Pranay Sethi & Ors4 which C
was later followed in Jagdish5 by a three judge Bench, which had ruled
that the benefit of future prospects should not be confined only to those
who have a permanent job and would extend to self-employed individuals,
and in case of self- employed persons an addition of 40% of established
income should be made where the age of the victim at the time of the D
accident was below 40 years. It was urged that the decision in Anant s/
o of Sidheshwar Dukre v. Pratap s/o Zhamnnappa- Lamzane & Anr.6
relied on by the High Court, did not assess future prospects. However,
that per se did not preclude claims by persons incurring permanent
disablement as a consequence of motor accidents, from seeking such
heads of compensation. It is urged that the High Court misread and E
created a distinct category of cases where addition in income towards
“future prospects” can only be given in case of death, and not for injury,
which cannot be the intention of this court as no such observation is
made. It was argued that the High Court should have reassessed and
not reduced ‘the loss of future earning capacity’ of the appellant from F
11,66,400/- (determined by the tribunal) to 7,77,600/- on the wrongly
depressed income of 8000/-. Learned counsel submitted that the
assessment of monthly income should have been Rs.12,000/- and not
Rs.8,000/. It was submitted that the courts below ignored the fact that in
2012, persons earning Rs.12, 000/- per month did not have to file income
G

2
(2017) 16 SCC 860.
3
(2018) 4 SCC 571
4
Supra n.2
5
Supra n.3
6
2018 (9) SCC 450 H
976 SUPREME COURT REPORTS [2020] 7 S.C.R.

A tax returns or pay tax. The High Court further erred in assessment of
physical permanent disability of injured as 45%, even though it was 100%.
5. Counsel for the insurer, who contested the appeal, urged this
court not to interfere with the impugned judgment, and stated that the
assessment of compensation was made by the High Court in conformity
B with this Court’s decisions. It was highlighted that permanent disability
of loss of one arm, cannot lead to loss of earning capacity of up to 90%
and consequently, the assessment of compensation on the head of loss
of earning capacity was correctly fixed at 45%. He also argued that as
far as income is concerned, although the appellant relied on the
independent testimony of a lawyer (who stated that he used to pay him
C about 300/- per day), there was no proof of payment of income tax to
support the claim that the appellant earned 12,000/- per month. The
production of the PAN card ipso facto did not establish income at the
level claimed. Further, the counsel urged that the impugned judgment
correctly appreciated the law, and loss of alleged future earning capacity
D was turned down.
6. The principle consistently followed by this court in assessing
motor vehicle compensation claims, is to place the victim in as near a
position as she or he was in before the accident, with other compensatory
directions for loss of amenities and other payments. These general
E principles have been stated and reiterated in several decisions.7
7. Two questions arise for consideration: one, whether in cases of
permanent disablement incurred as a result of a motor accident, the
claimant can seek, apart from compensation for future loss of income,
7
Govind Yadav v. New India Insurance Co. Ltd. [Govind Yadav v. New India Insurance
F Co. Ltd., (2011) 10 SCC 683. This court referred to the pronouncements in R.D.
Hattangadi v. Pest Control (India) (P) Ltd., (1995) 1 SCC 551; Nizam’s Institute of
Medical Sciences v. Prasanth S. Dhananka (2009) 6 SCC 1; Reshma Kumari v. Madan
Mohan (2009) 13 SCC 422; Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343. Govind
Yadav spelt out these principles by stating that the courts should,
“in determining the quantum of compensation payable to the victims of accident,
G who are disabled either permanently or temporarily. If the victim of the accident suffers
permanent disability, then efforts should always be made to award adequate
compensation not only for the physical injury and treatment, but also for the loss of
earning and his inability to lead a normal life and enjoy amenities, which he would have
enjoyed but for the disability caused due to the accident.”

These decisions were also followed in ICICI Lombard General Insurance Co. Ltd. v.
H Ajay Kumar Mohanty, (2018) 3 SCC 686.
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 977
[S. RAVINDRA BHAT, J.]

amounts for future prospects too; and two, the extent of disability. On A
the first question, the High Court no doubt, is technically correct in holding
that Pranay Sethi8 involved assessment of compensation in a case where
the victim died. However, it went wrong in saying that later, the three-
judge bench decision in Jagdish9 was not binding, but rather that the
subsequent decision in Anant10 to the extent that it did not award
B
compensation for future prospects, was binding. This court is of the
opinion that there was no justification for the High Court to have read
the previous rulings of this court, to exclude the possibility of compensation
for future prospects in accident cases involving serious injuries resulting
in permanent disablement. Such a narrow reading of Pranay Sethi11 is
illogical, because it denies altogether the possibility of the living victim C
progressing further in life in accident cases - and admits such possibility
of future prospects, in case of the victim’s death.
8. This court has emphasized time and again that “just
compensation” should include all elements that would go to place the
victim in as near a position as she or he was in, before the occurrence of D
the accident. Whilst no amount of money or other material compensation
can erase the trauma, pain and suffering that a victim undergoes after a
serious accident, (or replace the loss of a loved one), monetary
compensation is the manner known to law, whereby society assures
some measure of restitution to those who survive, and the victims who
have to face their lives. In Santosh Devi v. National Insurance E
Company Limited12, this Court held that:
“14. We find it extremely difficult to fathom any rationale for
the observation made in paragraph 24 of the judgment in
Sarla Verma’s case that where the deceased was self-employed
or was on a fixed salary without provision for annual F
increment, etc., the Courts will usually take only the actual
income at the time of death and a departure from this rule
should be made only in rare and exceptional cases involving
special circumstances. In our view, it will be nave to say that
the wages or total emoluments/income of a person who is self- G
employed or who is employed on a fixed salary without
8
Supra n.2
9
Supra n.3
10
Supra n.6
11
Supra n.2
12
(2012) 6 SCC 421 H
978 SUPREME COURT REPORTS [2020] 7 S.C.R.

A provision for annual increment, etc., would remain the same
throughout his life.
15. The rise in the cost of living affects everyone across the
board. It does not make any distinction between rich and poor.
As a matter of fact, the effect of rise in prices which directly
B impacts the cost of living is minimal on the rich and maximum
on those who are self-employed or who get fixed income/
emoluments. They are the worst affected people. Therefore,
they put extra efforts to generate additional income necessary
for sustaining their families.
C 16. The salaries of those employed under the Central and
State Governments and their agencies/instrumentalities have
been revised from time to time to provide a cushion against
the rising prices and provisions have been made for providing
security to the families of the deceased employees. The salaries
of those employed in private sectors have also increased
D manifold. Till about two decades ago, nobody could have
imagined that salary of Class IV employee of the Government
would be in five figures and total emoluments of those in higher
echelons of service will cross the figure of rupees one lac.
17. Although, the wages/income of those employed in
E unorganized sectors has not registered a corresponding
increase and has not kept pace with the increase in the salaries
of the Government employees and those employed in private
sectors but it cannot be denied that there has been incremental
enhancement in the income of those who are self-employed
F and even those engaged on daily basis, monthly basis or even
seasonal basis. We can take judicial notice of the fact that
with a view to meet the challenges posed by high cost of living,
the persons falling in the latter category periodically increase
the cost of their labour. In this context, it may be useful to
give an example of a tailor who earns his livelihood by
G stitching cloths. If the cost of living increases and the prices
of essentials go up, it is but natural for him to increase the
cost of his labour. So will be the cases of ordinary skilled and
unskilled labour, like, barber, blacksmith, cobbler, mason etc.
18. Therefore, we do not think that while making the
H observations in the last three lines of paragraph 24 of Sarla
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 979
[S. RAVINDRA BHAT, J.]

Verma’s judgment, the Court had intended to lay down an A
absolute rule that there will be no addition in the income of a
person who is self-employed or who is paid fixed wages.
Rather, it would be reasonable to say that a person who is
self-employed or is engaged on fixed wages will also get 30
per cent increase in his total income over a period of time
B
and if he / she becomes victim of accident then the same
formula deserves to be applied for calculating the amount of
compensation.”
9. In Jagdish13 the victim, a carpenter, suffered permanent
disablement, and his claim for compensation including for loss of future
prospects was considered by a three-judge bench (which included, C
incidentally, the judges who had decided Pranay Sethi14). This court
held that:
“13. In the judgment of the Constitution Bench in Pranay
Sethi [National Insurance Co. Ltd. v. Pranay Sethi, (2017)
16 SCC 680], this Court has held that the benefit of future D
prospects should not be confined only to those who have a
permanent job and would extend to self-employed individuals.
In the case of a self-employed person, an addition of 40% of
the established income should be made where the age of the
victim at the time of the accident was below 40 years. Hence, E
in the present case, the appellant would be entitled to an
enhancement of Rs 2400 towards loss of future prospects.
14. In making the computation in the present case, the court
must be mindful of the fact that the appellant has suffered a
serious disability in which he has suffered a loss of the use of F
both his hands. For a person engaged in manual activities, it
requires no stretch of imagination to understand that a loss
of hands is a complete deprivation of the ability to earn.
Nothing—at least in the facts of this case—can restore lost
hands. But the measure of compensation must reflect a genuine
attempt of the law to restore the dignity of the being. Our G
yardsticks of compensation should not be so abysmal as to
lead one to question whether our law values human life. If it
does, as it must, it must provide a realistic recompense for the
13
Supra.n.3
14
Supra n.2 H
980 SUPREME COURT REPORTS [2020] 7 S.C.R.

A pain of loss and the trauma of suffering. Awards of
compensation are not law’s doles. In a discourse of rights,
they constitute entitlements under law. Our conversations
about law must shift from a paternalistic subordination of the
individual to an assertion of enforceable rights as intrinsic
to human dignity.
B
15. The Tribunal has noted that the appellant is unable to
even eat or to attend to a visit to the toilet without the assistance
of an attendant. In this background, it would be a denial of
justice to compute the disability at 90%. The disability is
indeed total. Having regard to the age of the appellant, the
C Tribunal applied a multiplier of 18. In the circumstances, the
compensation payable to the appellant on account of the loss
of income, including future prospects, would be Rs 18,14,400.
In addition to this amount, the appellant should be granted
an amount of Rs 2 lakhs on account of pain, suffering and
D loss of amenities. The amount awarded by the Tribunal towards
medical expenses (Rs 98,908); for extra nourishment (Rs
25,000) and for attendant’s expenses (Rs 1 lakh) is
maintained. The Tribunal has declined to award any amount
towards future treatment. The appellant should be allowed
an amount of Rs 3 lakhs towards future medical expenses.
E The appellant is thus awarded a total sum of Rs 25,38,308 by
way of compensation. The appellant would be entitled to
interest at the rate of 9% p.a. on the compensation from the
date of the filing of the claim petition. The liability to pay
compensation has been fastened by the Tribunal and by the
F High Court on the insurer, owner and driver jointly and
severally which is affirmed. The amount shall be deposited
before the Tribunal within a period of 6 weeks from today
and shall be paid over to the appellant upon proper
identification.”
G 10. The recent decision in Parminder Singh v. New India
Assurance Co. Ltd15, involved an accident victim who underwent surgery
for hemiplegia16. According to the treating medic, he could not work as
a labourer or perform any agricultural work, or work as a driver (as he
15
(2019) 7 SCC 217
16
H Weakness of one half of the body on the left side; in this case, caused by an accident.
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 981
[S. RAVINDRA BHAT, J.]

was wont to); the assessment of his disability was at 75%, and of a A
permanent nature. The court held that:
“5.2. On the basis of the affidavit filed by the employer of the
appellant, we accept that the income of the appellant was Rs
10,000 p.m. at the time of the accident, for the purpose of
computing the compensation payable to him. B
5.1. The appellant has however, produced an affidavit by his
employer in this Court. As per the said affidavit, the appellant
was earning Rs 10,000 p.m. at the time of the accident.
5.3. Taking the income of the appellant as Rs 10,000 p.m.,
with future prospects @ 50% as awarded by the High Court, C
the total income of the appellant would come to Rs 15,000
p.m.
5.4. The appellant was 23 years old at the time when the
accident occurred. Applying the multiplier of 18, the loss of
future earnings suffered by the appellant would work out to D
Rs 15,000 × 12 × 18 = Rs 32,40,000.
********* ********* **********
5.7. In K. Suresh v. New India Assurance Co. Ltd (2012) 12
SCC 274, this Court held that17:
E
“10. It is noteworthy to state that an adjudicating authority,
while determining the quantum of compensation, has to
keep in view the sufferings of the injured person which
would include his inability to lead a full life, his incapacity
to enjoy the normal amenities which he would have enjoyed
F
but for the injuries and his ability to earn as much as he
used to earn or could have earned. Hence, while
computing compensation the approach of the Tribunal or
a court has to be broad-based. Needless to say, it would
involve some guesswork as there cannot be any
mathematical exactitude or a precise formula to determine G
the quantum of compensation. In determination of

17
at page 279, para 10 H
982 SUPREME COURT REPORTS [2020] 7 S.C.R.

A compensation the fundamental criterion of “just
compensation” should be inhered.”
******** ********* ********
5.9. In the present case, it is an admitted position that it is not
possible for the appellant to get employed as a driver, or do
B any kind of manual labour, or engage in any agricultural
operations whatsoever, for his sustenance. In such
circumstances, the High Court has rightly assessed the
appellant’s functional disability at 100% insofar as his loss
of earning capacity is concerned. The appellant is, therefore,
C awarded Rs 32,40,000 towards loss of earning capacity.”
11. Yet later and more recently in an accident case, which tragically
left in its wake a young girl in a life-long state of paraplegia, this court, in
Kajal v. Jagdish Chand,18 reiterated that in addition to loss of earnings,
compensation for future prospects too could be factored in, and observed
D that:
“14. In Concord of India Insurance Co. Ltd. v. Nirmala Devi
[Concord of India Insurance Co. Ltd. v. Nirmala Devi, (1979)
4 SCC 365 : 1979 SCC (Cri) 996 : 1980 ACJ 55] , this Court
held : (SCC p. 366, para 2)
E “2. … the determination of the quantum must be liberal,
not niggardly since the law values life and limb in a free
country in generous scales.”
15. In R.D. Hattangadi v. Pest Control (India) (P) Ltd. [R.D.
Hattangadi v. Pest Control (India) (P) Ltd., (1995) 1 SCC
F 551 : 1995 SCC (Cri) 250], dealing with the different heads
of compensation in injury cases this Court held thus : (SCC
p. 556, para 9)
“9. Broadly speaking while fixing the amount of compensation
payable to a victim of an accident, the damages have to be
G assessed separately as pecuniary damages and special
damages. Pecuniary damages are those which the victim has
actually incurred and which are capable of being calculated
in terms of money; whereas non-pecuniary damages are those
which are incapable of being assessed by arithmetical
18
H (2020) 4 SCC 413.
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 983
[S. RAVINDRA BHAT, J.]

calculations. In order to appreciate two concepts pecuniary A
damages may include expenses incurred by the claimant: (i)
medical attendance; (ii) loss of earning of profit up to the
date of trial; (iii) other material loss. So far as non-pecuniary
damages are concerned, they may include : (i) damages for
mental and physical shock, pain and suffering, already
B
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 i.e. on account of injury the claimant
may not be able to walk, run or sit; (iii) damages for loss of
expectation of life i.e. on account of injury the normal
longevity of the person concerned is shortened; (iv) C
inconvenience, hardship, discomfort, disappointment,
frustration and mental stress in life.”
16. In Raj Kumar v. Ajay Kumar [Raj Kumar v. Ajay Kumar,
(2011) 1 SCC 343 : (2011) 1 SCC (Civ) 164 : (2011) 1 SCC
(Cri) 1161] , this Court laid down the heads under which D
compensation is to be awarded for personal injuries : (SCC
p. 348, para 6)
“6. The heads under which compensation is awarded in
personal injury cases are the following:
Pecuniary damages (Special damages) E

(i) Expenses relating to treatment, hospitalisation,
medicines, transportation, nourishing food, and
miscellaneous expenditure.
(ii) Loss of earnings (and other gains) which the injured F
would have made had he not been injured, comprising:
(a) Loss of earning during the period of treatment;
(b) Loss of future earnings on account of permanent
disability.
(iii) Future medical expenses. G

Non-pecuniary damages (General damages)
(iv) Damages for pain, suffering and trauma as a
consequence of the injuries.
(v) Loss of amenities (and/or loss of prospects of marriage). H
984 SUPREME COURT REPORTS [2020] 7 S.C.R.

A (vi) Loss of expectation of life (shortening of normal
longevity).
In routine personal injury cases, compensation will be
awarded only under heads (i), (ii)(a) and (iv). It is only in
serious cases of injury, where there is specific medical
B evidence corroborating the evidence of the claimant, that
compensation will be granted under any of the heads (ii)(b),
(iii), (v) and (vi) relating to loss of future earnings on account
of permanent disability, future medical expenses, loss of
amenities (and/or loss of prospects of marriage) and loss of
expectation of life.”
C
17. In K. Suresh v. New India Assurance Co. Ltd. [K. Suresh
v. New India Assurance Co. Ltd., (2012) 12 SCC 274 : (2013)
2 SCC (Civ) 279 : (2013) 4 SCC (Cri) 638] , this Court held
as follows : (SCC p. 276, para 2)
D “2. … There cannot be actual compensation for anguish
of the heart or for mental tribulations. The quintessentiality
lies in the pragmatic computation of the loss sustained
which has to be in the realm of realistic approximation.
Therefore, Section 168 of the Motor Vehicles Act, 1988
(for brevity “the Act”) stipulates that there should be grant
E of “just compensation”. Thus, it becomes a challenge for
a court of law to determine “just compensation” which is
neither a bonanza nor a windfall, and simultaneously,
should not be a pittance.”
******* ******** *********
F
Loss of earnings
20. Both the courts below have held that since the girl was
a young child of 12 years only notional income of Rs
15,000 p.a. can be taken into consideration. We do not
think this is a proper way of assessing the future loss of
G
income. This young girl after studying could have worked
and would have earned much more than Rs 15,000 p.a.
Each case has to be decided on its own evidence but taking
notional income to be Rs 15,000 p.a. is not at all justified.
The appellant has placed before us material to show that
H
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 985
[S. RAVINDRA BHAT, J.]

the minimum wages payable to a skilled workman is A
Rs 4846 per month. In our opinion, this would be the
minimum amount which she would have earned on
becoming a major. Adding 40% for the future prospects, it
works to be Rs 6784.40 per month i.e. 81,412.80 p.a.
Applying the multiplier of 18, it works out to Rs
B
14,65,430.40, which is rounded off to Rs 14,66,000.”
12. In view of the above decisive rulings of this court, the High
Court clearly erred in holding that compensation for loss of future
prospects could not be awarded. In addition to loss of future earnings
(based on a determination of the income at the time of accident), the
appellant is also entitled to compensation for loss of future prospects, @ C
40% (following the Pranay Sethi principle).
13. The factual narrative discloses that the appellant, a 20-year-
old data entry operator (who had studied up to 12th standard) incurred
permanent disability, i.e. loss of his right hand (which was amputated).
The disability was assessed to be 89%. However, the tribunal and the D
High Court re-assessed the disability to be only 45%, on the assumption
that the assessment for compensation was to be on a different basis, as
the injury entailed loss of only one arm. This approach, in the opinion of
this court, is completely mechanical and entirely ignores realities. Whilst
it is true that assessment of injury of one limb or to one part may not E
entail permanent injury to the whole body, the inquiry which the court
has to conduct is the resultant loss which the injury entails to the earning
or income generating capacity of the claimant. Thus, loss of one leg to
someone carrying on a vocation such as driving or something that entails
walking or constant mobility, results in severe income generating
impairment or its extinguishment altogether. Likewise, for one involved F
in a job like a carpenter or hairdresser, or machinist, and an experienced
one at that, loss of an arm, (more so a functional arm) leads to near
extinction of income generation. If the age of the victim is beyond 40,
the scope of rehabilitation too diminishes. These individual factors are of
crucial importance which are to be borne in mind while determining the G
extent of permanent disablement, for the purpose of assessment of loss
of earning capacity.
14. In Neerupam Mohan Mathur v. New India Assurance
Company19, this court considered the case of a victim, whose injury
19
(2013) 14 SCC 15 H
986 SUPREME COURT REPORTS [2020] 7 S.C.R.

A was assessed to 70% as loss of earning capacity for amputation of the
arm; he was a postgraduate diploma holder in mechanical engineering,
32 years of age and earning about 3000/- per month. This court held,
approving the High Court’s order (which had adopted the formula from
the Workmen’s Compensation Act, to determine 70% for the purpose of
deciding loss of earning capacity) as follows:
B
“12. In the present case, the percentage of permanent disability
has not been expressed by the doctors with reference to the
full body or with reference to a particular limb. However, it is
not in dispute that the claimant suffered such a permanent
disability as a result of injuries that he is not in a position of
C doing the specialised job of designing, refrigeration and air
conditioning. For the said reason, the claimant’s services were
terminated by his employer but that does not mean that the
claimant is not capable to do any other job including the
desk job. Having qualification of BSc degree and
D postgraduate diploma in Mechanical Engineering, he can
perform any job where application of mind is required than
any physical work.
13. In view of the forgoing discussion we find no grounds
made out to interfere with the finding of the High Court which
E determined the percentage of loss of earning capacity to 70%
adopting the percentage of loss of earning capacity as per
the Workmen’s Compensation Act. The total loss of income
was thus rightly calculated by the High Court at Rs 6, 04,800.”
15. Later, in another judgment, i.e. Jakir Hussein v. Sabir20 this
F 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% though the
doctor had certified it to be 55%. This court, reversing the High Court
G order, observed inter alia that:
“… 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

20
H (2015) 7 SCC 252
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 987
[S. RAVINDRA BHAT, J.]

the accident and the treatment was taken by him. The doctor A
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
B
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 C
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
D
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.
********* ********* ********** E
16. In Raj Kumar v. Ajay Kumar [(2011) 1 SCC 343, this
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 F
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 G
per annum. Thus, by applying the appropriate multiplier as
per the principles laid down by this Court in Sarla Verma v.
DTC [(2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2

H
988 SUPREME COURT REPORTS [2020] 7 S.C.R.

A SCC (Cri) 1002], the total loss of future earnings of the
appellant will be at Rs 54,000 × 16 = Rs 8,64,000.”
16. Recently, in Anthony Alias Anthony Swamy v. Managing
Director, K.S.R.T.C21 where the victim was a painter by profession, a
three-judge bench had followed Raj Kumar v. Ajay Kumar 22 and
B Nagarajappa v. Divisional Manager, Oriental Insurance Company
Limited23. 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 9000/- per month) was 75% of the
left leg and 37.5% for the whole body. In Raj Kumar24, the physical
disability of the upper limb was determined as 68% in proportion to 22-
C 23% of the whole-body. The High Court had assessed the injury as 25%
and granted compensation. However, this court assessed the injury on
the basis that the disability was 75%, stating as follows:
“9. PW.3 had assessed the physical functional disability of
the left leg of the appellant at 75% and total body disability
D 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
E considered in a manner so as to grant just and proper
compensation to the appellant towards loss of future earning.
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
F 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
G 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
21
(2020) SCC OnLine SC 493.
22
(2011) 1 SCC 343
23
(2011) 13 SCC 323.
24
H Supra n.22
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 989
[S. RAVINDRA BHAT, J.]

functional disability recalculated with the salary of A
Rs. 5,500/- with multiplier of 14 at Rs. 6,93,000/-.”
17. The question of amount of compensation payable to one
suffering injury as a result of motor vehicle accident was considered in
Syed Sadiq & Ors. v. Divisional Manager, United Insurance
Company Limited 25, when this Court had to apply the correct standard B
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%. This
court held as follows:
“7. Further, the appellant claims that he was working as a C
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 whole-sale
market or the farmers and then selling it off in the retail market. D
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 E
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 F
disability at 85% to determine the loss of income.
8. The appellant/claimant in his appeal further claimed that
he had been earning [pic]10,000/- p.m. by doing vegetable
vending work. The High Court however, considered the loss
of income at [pic]3500/- p.m. considering that the claimant G
did not produce any document to establish his loss of income.
It is difficult for us to convince ourselves as to how a labour

25
(2014) 2 SCC 735
H
990 SUPREME COURT REPORTS [2020] 7 S.C.R.

A involved in an unorganized sector doing his own business is
expected to produce documents to prove his monthly income.”
18. In Arvind Kumar Mishra v. New India Assurance Co. Ltd26,
the appellant at the time of accident was a final year engineering
(Mechanical) degree student in a reputed college. He was a brilliant
B student and had passed all his semester examinations with distinction.
He suffered grievous injuries and remained in a coma for about two
months; his studies were disrupted as he was moved to different hospitals
for surgeries. For many months, his condition remained serious; his right
hand was amputated and vision seriously affected. This court accepted
his claim and held that he was permanently disabled to the extent of
C 70%. In Mohan Soni v. Ram Avtar Tomar27 again a case of injury
entailing loss of a leg, the 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
D 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
E
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-
F 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
G
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
26
(2010) 10 SCC 254
27
H (2012) 2 SCC 267 at page 272
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 991
[S. RAVINDRA BHAT, J.]

with his work/earning capacity in the same degree as in the A
case of a marginal farmer or a cycle-rickshaw-puller.
********* ********* *********
10. This 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 B
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] this Court also referred to and relied upon C
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.
D
******** ********* ********
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
E
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 F
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 G
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 H
992 SUPREME COURT REPORTS [2020] 7 S.C.R.

A 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.”
B
19. One more decision, Sandeep Khanduja v. Atul Dande28 too
had dealt with the precise aspect of assessing the quantum of permanent
disablement. The victim was aged about 30 years, working as a chartered
accountant for various institutions for which he was paid professional
fees. The injuries suffered by him resulted in severe impairment of
C movement; he had problems in climbing stairs, back trouble while sleeping,
etc. A rod was implanted in his leg. He suffered 70% permanent disability,
and mental and physical agony. This court enhanced the compensation,
observing the proper manner to calculate the extent of disability:
“9. The percentage of permanent disability is expressed by
D the doctors with reference to the whole body, or more often
than not, with reference to a particular limb. When a disability
certificate states that the injured has suffered permanent
disability to an extent of 45% of the left lower limb, it is not
the same as 45% permanent disability with reference to the
E whole body. The extent of disability of a limb (or part of the
body) expressed in terms of a percentage of the total functions
of that limb, obviously cannot be assumed to be the extent of
disability of the whole body. If there is 60% permanent
disability of the right hand and 80% permanent disability of
left leg, it does not mean that the extent of permanent disability
F with reference to the whole body is 140% (that is 80% plus
60%). If different parts of the body have suffered different
percentages of disabilities, the sum total thereof expressed in
terms of the permanent disability with reference to the whole
body cannot obviously exceed 100%.
G 10. 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
H 28
2017 (3) SCC 351
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 993
[S. RAVINDRA BHAT, J.]

percentage of permanent disability as the percentage of A
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 from a permanent disability
will be different from the percentage of permanent disability.
Some Tribunals wrongly assume that in all cases, a particular
B
extent (percentage) of permanent disability would result in a
corresponding loss of earning capacity, and consequently, if
the evidence produced show 45% as the permanent disability,
will hold that there is 45% loss of future earning capacity. In
most of the cases, equating the extent (percentage) of loss of
earning capacity to the extent (percentage) of permanent C
disability will result in award of either too low or too high a
compensation.
11. What requires to be assessed by the Tribunal is the effect
of the permanent disability on the earning capacity of the
injured; and after assessing the loss of earning capacity in D
terms of a percentage of the income, it has to be quantified in
terms of money, to arrive at the future loss of earnings (by
applying the standard multiplier method used to determine
loss of dependency). We may however note that in some cases,
on appreciation of evidence and assessment, the Tribunal may
E
find that the percentage of loss of earning capacity as a result
of the permanent disability, is approximately the same as the
percentage of permanent disability in which case, of course,
the Tribunal will adopt the said percentage for determination
of compensation.” The crucial factor which has to be taken
into consideration, thus, is to assess as to whether the F
permanent disability has any adverse effect on the earning
capacity of the injured. In this sense, the MACT approached
the issue in right direction by taking into consideration the
aforesaid test. However, we feel that the conclusion of the
MACT, on the application of the aforesaid test, is erroneous.
G
A very myopic view is taken by the MACT in taking the view
that 70% permanent disability suffered by the appellant would
not impact the earning capacity of the appellant.… A person
who is engaged and cannot freely move to attend to his duties
may not be able to match the earning in comparison with the
one who is healthy and bodily abled. Movements of the H
994 SUPREME COURT REPORTS [2020] 7 S.C.R.

A appellant have been restricted to a large extent and that too
at a young age. Though the High Court recognised this, it
did not go forward to apply the principle of multiplier. We are
of the opinion that in a case like this and having regard to
the injuries suffered by the appellant, there is a definite loss
B of earning capacity and it calls for grant of compensation
with the adoption of multiplier method, as held by this Court
in Yadava Kumar v Divisional Manager, National Insurance
Co. Ltd [2010 (10) SCC 341]:
“9. We do not intend to review in detail state of
C authorities in relation to assessment of all damages for
personal injury. Suffice it to say that the basis of assessment
of all damages for personal injury is compensation. The whole
idea is to put the claimant in the same position as he was
insofar as money can. Perfect compensation is hardly possible
but one has to keep in mind that the victim has done no wrong;
D he has suffered at the hands of the wrongdoer and the court
must take care to give him full and fair compensation for that
he had suffered.
10. In some cases for personal injury, the claim could be in
respect of lifetime’s earnings lost because, though he will live,
E he cannot earn his living. In others, the claim may be made
for partial loss of earnings. Each case has to be considered
in the light of its own facts and at the end, one must ask
whether the sum awarded is a fair and reasonable sum. The
conventional basis of assessing compensation in personal
injury cases—and that is now recognised mode as to the
F
proper measure of compensation—is taking an appropriate
multiplier of an appropriate multiplicand.” In that case, after
following the judgment in Kerala SRTC v. Susamma Thomas
(1994) 2 SCC 176, the Court chose to apply multiplier of 18
keeping in view the age of the victim, who as 25 years at the
G time of the accident.
In the instant case, the MACT had quantified the income of the
appellant at 10,000, i.e. 1,20,000 per annum. Going by the age
of the appellant at the time of the accident, multiplier of 17 would
be admissible. Keeping in view that the permanent disability is
H 70%, the compensation under this head would be worked out at
PAPPU DEO YADAV v. NARESH KUMAR AND ORS. 995
[S. RAVINDRA BHAT, J.]

14,28,000. The MACT had awarded compensation of 70,000 for A
permanent disability, which stands enhanced to 14,28,000. For
mental and physical agony and frustration and disappointment
towards life, the MACT has awarded a sum of 30,000, which we
enhance to 1,30,000.”
20. Courts should not adopt a stereotypical or myopic approach, B
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 the present 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 C
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 D
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. On an overview of the principles outlined
in the previous decisions, it is apparent that the income generating capacity
of the appellant was undoubtedly severely affected. Maybe, it is not to E
the extent of 89%, given that he still has the use of one arm, is young and
as yet, hopefully training (and rehabilitating) himself adequately for some
other calling. Nevertheless, the assessment of disability cannot be 45%;
it is assessed at 65% in the circumstances of this case.
21. This court is also of the opinion that the courts below needlessly
F
discounted the evidence presented by the appellant in respect of the
income earned by him. Working in the informal sector as he did, i.e. as a
typist/data entry operator in court premises in Delhi, his assertion about
earning 12,000/- could not be discarded substantially, to the extent of
bringing it down to 8,000/- per month. Such self employed professionals,
it is noticeable, were not obliged to file income tax returns for AY 2011- G
2012, when no levy existed for anyone earning less than 1,60,000/- per
annum.29 The advocate who deposed about the earnings of the appellant
was believed to the extent that the tribunal fixed the appellant’s monthly
29
First Schedule, Finance Act, 2011.
30
By applying the ratio in Pranay Sethi. H
996 SUPREME COURT REPORTS [2020] 7 S.C.R.

A earnings at 8,000/-. If one takes into account contemporary minimum
wages for skilled workers (which was in the range of 8,500/-) the realistic
figure would be 10,000/- per month. Adding future prospects at 40%30,
the income should be taken as 14,000 for the purpose of calculation of
compensation. Accordingly, this court finds that the compensation payable
for the disability of loss of an arm (assessed at 65%) would be
B
19,65,600/- (i.e., 14,000/- x 12 x 65% x 18) or Rupees Nineteen
lakhs sixty five thousand six hundred only.
22. In parting, it needs to be underlined that Courts should be
mindful that a serious injury not only permanently imposes physical
limitations and disabilities but too often inflicts deep mental and emotional
C scars upon the victim. The attendant trauma of the victim’s having to
live in a world entirely different from the one she or he is born into, as an
invalid, and with degrees of dependence on others, robbed of complete
personal choice or autonomy, should forever be in the judge’s mind,
whenever tasked to adjudge compensation claims. Severe limitations
D inflicted due to such injuries undermine the dignity (which is now
recognized as an intrinsic component of the right to life under Article 21)
of the individual, thus depriving the person of the essence of the right to
a wholesome life which she or he had lived, hitherto. From the world of
the able bodied, the victim is thrust into the world of the disabled, itself
most discomfiting and unsettling. If courts nit-pick and award niggardly
E amounts oblivious of these circumstances, there is resultant affront to
the injured victim.
23. The High Court’s assessment of amounts payable under other
heads (such as compensation for medical expenses, compensation for
pain and suffering, compensation for special diet and attendant,
F conveyance charges, loss of amenities and enjoyment of life,
disfigurement and loss of income during treatment), do not call for
interference. In view of the above conclusions, the impugned judgment
is hereby modified; the sum of 19,65,600/- shall be substituted in place
of the amount of 7,77,600/-, considering the enhancement towards loss
G of earning capacity and future prospects.
24. The appeal is partly allowed; the impugned judgment stands
modified in the above terms. There shall be no order on costs.

Kalpana K. Tripathy Appeal partly allowed.
H