Supreme Court restores 100% functional disability for amputated gunman in motor accident case: Sarnam Singh vs. Shriram General Insurance Co. Ltd. (2023) INSC 606 (4 July 2023)

Date of the Judgment: 4 July 2023

Citation: (2023) INSC 606

Judges: Abhay S. Oka, J., Rajesh Bindal, J.

Can a High Court reduce the functional disability of a person who has suffered amputation of a limb, especially when their job requires full physical capacity? The Supreme Court of India recently addressed this question in a motor accident compensation case. The court examined whether the High Court was correct in reducing the compensation awarded by the Motor Accident Claims Tribunal (MACT) by lowering the functional disability of the appellant, who had suffered an amputation of his right lower limb. The bench comprised of Justice Abhay S. Oka and Justice Rajesh Bindal, with the judgment authored by Justice Rajesh Bindal.

Case Background

On 24 November 2013, Sarnam Singh, the appellant, was involved in an accident with a Tempo bearing registration number UP 79T 1948. As a result of the accident, he sustained severe injuries and was hospitalized from 24 November 2013 to 5 January 2014, a period of about one month and ten days. He continued to receive follow-up treatment for approximately a year. The accident resulted in an 85% disability in his right lower limb, which had to be amputated. At the time of the accident, Sarnam Singh was 50 years and 5 months old and was employed as a gunman with M/s Bharat Hotels Ltd., holding the designation of Senior Assistant. His monthly salary was ₹20,774, which included a conveyance allowance of ₹800. He had been working with the company since 20 June 1992, starting with a salary of ₹1,572 per month. Due to the amputation, his services were terminated on 31 May 2015 as he was unable to perform his duties as a gunman.

Timeline

Course of Proceedings

The Motor Accident Claims Tribunal, South District, Saket, New Delhi, awarded a compensation of ₹34,29,800 to the appellant on 18 April 2016. The Tribunal assessed the compensation by awarding ₹1,50,000 for pain and suffering, ₹95,000 for diet, conveyance, and attendant charges, and ₹1,00,000 for loss of amenities. The Tribunal considered his net salary to be ₹19,947 per month after deducting the transport allowance. Applying a multiplier of 13, and taking his functional disability at 100% with reference to his job, the Tribunal awarded ₹30,84,800 for loss of earning capacity. The insurance company appealed to the High Court of Delhi, which, while not disputing the Tribunal’s findings on income, age, multiplier, or disability suffered, reduced the compensation by taking his loss of earning capacity at 80%. The High Court reduced the compensation by ₹4,92,205, fixing the final amount at ₹28,43,000. The appellant then filed an appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the assessment of functional disability in motor accident compensation claims. The principle is that compensation should reflect the actual loss of earning capacity due to the disability suffered. The Supreme Court has consistently held that the impact of a disability should be judged in the context of the specific job or work the injured person was performing. The court referred to its earlier judgment in Mohan Soni vs. Ram Avtar Tomar And Others [(2012) 2 SCC 267], which emphasized that the functional disability should be assessed in relation to the nature of work performed by the injured person. The court noted that the same injury can affect different individuals differently based on their occupation. The court also noted that the nature of work of the appellant was that of a gunman.

Arguments

Appellant’s Arguments:

• The appellant argued that the High Court erred in reducing the loss of earning capacity to 80%.
• It was contended that the appellant suffered amputation of his right lower limb, which rendered him completely unable to perform his duties as a gunman.
• The appellant’s services were terminated due to his inability to perform his duties as a gunman.
• The functional disability should be considered 100% in his case.

Respondent’s Arguments:

• The respondent insurance company submitted that there was an error in the Tribunal’s calculation of compensation, considering the disability certificate.
• The High Court had corrected the error.
• The appellant had not appealed seeking an enhancement of compensation, and therefore, the High Court’s order was correct.

The innovativeness of the argument lies in the appellant’s emphasis on the functional aspect of the disability, arguing that the loss of a limb directly impacts the ability to perform specific job duties, particularly a physically demanding one like that of a gunman.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

• What should be the functional disability of the appellant for the purpose of assessment of compensation considering the fact that he suffered amputation of his right lower limb?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Cases:

• Mohan Soni vs. Ram Avtar Tomar And Others [(2012) 2 SCC 267] – The Supreme Court of India. This case was referred to for the principle that functional disability should be assessed with reference to the nature of the work performed by the injured person.

Legal Provisions:

• There were no specific legal provisions mentioned in the judgment, but the principle of assessing functional disability in motor accident compensation claims was discussed.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court followed the principle laid down in Mohan Soni vs. Ram Avtar Tomar And Others [(2012) 2 SCC 267]* that functional disability should be assessed with reference to the nature of the work performed by the injured person.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the functional impact of the appellant’s disability on his ability to perform his job as a gunman. The court emphasized that the amputation of his right leg made it impossible for him to carry out his duties. The court also noted that the High Court had erred by not following the principle laid down in Mohan Soni vs. Ram Avtar Tomar And Others [(2012) 2 SCC 267]*.

The court’s reasoning was heavily based on the factual aspects of the case, specifically the nature of the appellant’s job and the impact of his disability on his earning capacity. The legal principle of assessing functional disability in relation to the nature of work was also a key factor.

The court stated, “The fact remains that he suffered injuries in a road accident on account of which his right lower limb was amputated. This resulted in permanent disability.”

The court further observed, “Applying the same principle to the case in hand, we find that the appellant herein was working as a gunman with Bharat Hotel Limited. On account of amputation of his right leg above the knee, he was terminated from service w.e.f. 31.05.2015. It is not a matter of dispute that a person with his right leg amputated cannot perform the duty of a gunman. This is his functional disability.”

The court also noted, “Considering the aforesaid facts, in our view, the Tribunal was right in assessing the loss of earning capacity of the appellant at 100% and assessing the compensation accordingly. The High Court was in error in reducing the loss of earning capacity to 80%, relying upon the judgment of High Court, despite there being a judgment of this Court available on the issue.”

The court rejected the High Court’s reasoning that the appellant’s functional disability should be reduced to 80%, emphasizing the direct link between the amputation and the inability to perform his specific job. There was no minority opinion.

Key Takeaways

• Functional disability should be assessed in relation to the specific job performed by the injured person.
• Amputation of a limb can lead to 100% functional disability if it prevents an individual from performing their job.
• High Courts should follow the precedents set by the Supreme Court on functional disability assessment.
• The actual loss of earning capacity due to a disability should be the basis for compensation.

Directions

The Supreme Court set aside the impugned order passed by the High Court and restored the award passed by the Tribunal. There was no order as to costs.

Specific Amendments Analysis

There was no specific amendment discussed in the judgment.

Development of Law

The ratio decidendi of this case is that in cases of motor accident compensation, the functional disability of an injured person should be assessed with specific reference to their occupation. If an injury, such as an amputation, renders a person completely incapable of performing their job, the functional disability should be assessed at 100%. This judgment reinforces the principle that compensation should be directly related to the loss of earning capacity due to the disability suffered. It also reiterates that High Courts should adhere to the precedents set by the Supreme Court on the issue of functional disability assessment.

Conclusion

In the case of Sarnam Singh vs. Shriram General Insurance Co. Ltd., the Supreme Court held that the High Court erred in reducing the functional disability of the appellant from 100% to 80%. The Supreme Court restored the Tribunal’s award, emphasizing that the amputation of the appellant’s right leg rendered him completely unable to perform his duties as a gunman. The judgment reinforces the principle that functional disability should be assessed in relation to the specific job performed by the injured person and that compensation should reflect the actual loss of earning capacity.