Introduction

This Supreme Court of India decision clarifies several recurring controversies in motor accident compensation adjudication under the Motor Vehicles Act, 1988. The Court affirms that:

• Compensation must be based on functional disability (impact on earning capacity), not merely medical disability.
• Pre‑accident income tax returns and sales tax records are cogent evidence for determining income and cannot be rejected on conjectures.
• Future prospects are not an automatic add-on in injury cases; awarding them risks double counting when functional disability has already been applied and the claimant continues gainful activity.
• Documented medical expenditure supported by invoices should ordinarily be reimbursed in full absent specific, reasoned disallowance.
• Separate compensation for future prosthetic maintenance and replacements is permissible, even if exact periodicity and quantum are not proved with mathematical precision.

The case arises from a 2007 motorbike-truck collision in which the claimant, a young businessman who had recently graduated, underwent a hemipelvectomy (amputation of one leg with part of the pelvic bone). While fault and insurance coverage stood concluded, the Supreme Court addressed only the quantum of compensation.

Summary of the Judgment

The Tribunal had assessed disability at 45%, fixed monthly income at Rs. 4,500, and awarded Rs. 13,23,831. The High Court raised monthly income to Rs. 8,000, adopted 50% disability with a multiplier of 18, added 40% for future prospects, enhanced medical expenses to Rs. 8,00,000, and awarded Rs. 23,09,600.

On appeal by the claimant seeking further enhancement, the Supreme Court held:

• Disability: Medical Board’s certificate is acceptable without examining the doctor; however, compensation is based on functional disability. Given the claimant’s business activity and prosthesis-assisted mobility, 50% functional disability is reasonable.
• Income: Pre‑accident income tax returns and sales tax returns should be accepted. Net annual income fixed at Rs. 1,91,000 (after tax of Rs. 4,641 on gross Rs. 1,96,000).
• Future Prospects: 40% addition disallowed to avoid double counting; functional disability already captures the loss of earning capacity where the claimant continues business.
• Medical Expenses: Entire invoiced amount of Rs. 12,54,985 allowed; High Court’s unreasoned reduction to Rs. 8,00,000 set aside.
• Other Heads: Pain and suffering (Rs. 1,00,000) and loss of amenities (Rs. 2,00,000) sustained; attendant charges (Rs. 1,00,000) and initial prosthetic purchase cost (Rs. 4,70,805) restored.
• Future Prosthetic Needs: Rs. 10,00,000 awarded for future medical expenses and prosthetic servicing/accessories despite limited evidence, recognizing recurring needs.
• Total Compensation: Rs. 48,44,790 with 6% interest per annum from the date of the claim application, payable within three months (after adjusting amounts already paid).

Key Issues Before the Court

1. Whether the Medical Board’s disability certificate must be strictly proved by examining the doctor and whether medical disability equals compensable disability.
2. How to correctly determine income for a young, self‑employed claimant using pre‑accident tax records.
3. Whether “future prospects” can be added in injury cases when functional disability already accounts for loss of earning capacity.
4. What evidentiary standard applies to reimbursement of medical expenses and periodic prosthetic costs.
5. Appropriate multiplier and heads of compensation, including restoration of attendant and prosthesis costs omitted by the High Court.

Analysis

A. Precedents and Authorities

The judgment text does not list prior cases by name. Nonetheless, its reasoning aligns with well-settled Supreme Court jurisprudence on motor accident compensation:

• Functional versus medical disability: The Court’s emphasis that compensation must reflect functional disability (impact on earning capacity), not raw medical percentage, reflects the approach long adopted by the Supreme Court. The disability percentage must be tailored to the specific occupation, skill set, and evidence of continued or impaired earning ability.
• Multiplier method and net income: Using a multiplier based on age and applying it to net annual income (after tax) is consistent with established practice for computing loss of earnings.
• Future prospects in injury cases: While future prospects are recognized in death cases and sometimes in injury cases, the Court here stresses the need to avoid double counting when functional disability already captures projected earning impairment and the claimant remains gainfully occupied.
• Medical expenses: The Court’s insistence on reimbursing documented treatment costs and prosthetic-related expenditure unless cogent reasons exist to disallow them underscores the benevolent nature of the Motor Vehicles Act and the principle of “just compensation.”

Practitioners should read this judgment alongside the body of Supreme Court law on injury compensation that emphasizes individualized, evidence-based assessment of functional disability and careful calibration of heads of damages to avoid overlap.

B. Legal Reasoning and Principles Applied

1) Disability: medical certificate accepted; functional disability governs compensation

The Court explicitly holds that a Medical Board’s disability certificate “can be accepted, even without a witness being examined.” This clarifies evidentiary practice: in motor accident claims — which are summary and benevolent — formal proof by summoning the certifying doctor is not indispensable where the certificate is otherwise credible.

Crucially, the Court differentiates between “medical disability” and “functional disability.” The claimant’s hemipelvectomy is undeniably catastrophic from a medical standpoint. Yet, compensation is pegged to how this injury affects earning capacity. Because the claimant is a businessman and has regained mobility through a prosthesis, the Court finds that the High Court’s assessment of 50% functional disability (as opposed to the Medical Board’s 90% medical disability) is “quite reasonable.”

The Tribunal’s reliance on the Employees’ Compensation Act, 1923 schedule to infer a 90% loss for an amputation at hip was also corrected conceptually. The schedule is a statutory guide to loss of earning capacity for specific injuries under that Act; in Motor Vehicles Act claims, the Court must assess functional loss of earning capacity in the claimant’s actual vocation.

2) Income: pre‑accident tax returns and sales tax records must be approached with care

The Tribunal’s rejection of the claimant’s income tax returns as a tax-saving ruse was faulted as “mere surmises and conjectures.” The Supreme Court highlights two anchors:

• The firm registration (6 March 2006) and the returns (AY 2005–06 and 2006–07), all prior to the 9 April 2007 accident, negate any inference of fabrication to inflate compensation.
• The Tribunal misunderstood the sales tax position: sales tax/VAT is on turnover, not profits. Absence of sales tax liability does not imply absence of profits; income tax returns remain probative of income.

Accordingly, the Court accepts the 2007–08 gross income of Rs. 1,96,000, deducts tax of Rs. 4,641, and fixes net income at Rs. 1,91,000 for multiplier computation.

3) Future prospects: not an automatic addition in disability claims

The High Court’s 40% enhancement for future prospects is set aside. The Supreme Court reasons that where the claimant continues his business and functional disability has already been assessed at 50% (thereby capturing the impact on earning capacity), an additional future prospects load would amount to double counting. This is an important clarification that future prospects in injury cases are fact-sensitive, not automatic; tribunals must ask whether there is credible evidence of a likely enhancement in earnings that the functional disability percentage does not already factor in.

4) Medical expenses: full reimbursement on invoices, and provision for future prosthetic costs

The Court restores the entirety of invoiced medical expenditure (Rs. 12,54,985). It criticizes the High Court’s unreasoned reduction and the Tribunal’s reliance on an insurer “verification” that seemingly did not involve the claimant or a judicially guided process. The clear message: where bills are produced and not specifically rebutted with reasons, they should be reimbursed.

Recognizing the recurring and costly nature of prosthetic maintenance and replacements, the Court grants Rs. 10,00,000 under a separate head for future medical and prosthetic needs, despite limited proof of frequency or exact cost. This adopts a pragmatic approach to “just compensation,” taking judicial notice of ongoing needs in catastrophic limb loss cases.

5) Multiplier and heads of damages: calibrated, non-overlapping approach

The Court uses a multiplier of 18 and net annual income of Rs. 1,91,000, applying 50% functional disability to compute loss of earning capacity:

• Loss of income: Rs. 1,91,000 × 18 × 50% = Rs. 17,19,000

It sustains conventional heads (pain and suffering: Rs. 1,00,000; loss of amenities: Rs. 2,00,000) and restores two heads omitted by the High Court (attendant expenses: Rs. 1,00,000; initial prosthesis: Rs. 4,70,805). This disciplined structure avoids overlap and ensures each head serves a distinct compensatory function.

C. Impact and Prospective Significance

• Functional disability standard reinforced: Tribunals must explicitly assess functional disability, not simply adopt medical percentages or ECA schedules, and must relate the disability to the claimant’s occupation.
• Evidentiary value of tax records strengthened: Pre‑accident income tax and sales tax records should be treated as reliable indicators of income in the absence of concrete impeaching material.
• Future prospects in injury claims narrowed to evidence-based scenarios: This decision will likely curb routine addition of future prospects in disability cases, especially for self‑employed claimants who continue business with adapted means.
• Prosthetic care as a distinct head: Expect greater recognition of a separate, forward-looking award for prosthetic maintenance and replacements in amputation cases, even where detailed actuarial proof is not available.
• Reasoned assessment of medical bills: Unilateral or opaque “verifications” by insurers will not suffice. Disallowances must be explained with specific reasons, and the claimant should be heard.
• Net-of-tax computation re-affirmed: Deducting income tax before applying the multiplier will likely continue to guide tribunals in injury cases.

Final Computation as Settled by the Supreme Court

Interest: 6% per annum from the date of the claim application until payment, to be made within three months (less amounts already paid).

Complex Concepts Simplified

• Medical vs. functional disability: Medical disability is the clinical assessment (e.g., 90% for hemipelvectomy). Functional disability asks: how does the injury reduce the person’s ability to earn in their specific job? A shop owner with a prosthesis may suffer a lower functional loss than a manual laborer with the same medical injury.
• Multiplier method: A one-time calculation for future loss of earnings: yearly income (net of tax) × a multiplier (based on age) × functional disability percentage = total loss of earning capacity.
• Future prospects: An additional percentage added to income to reflect likely future increases. In injury cases, this is not automatic. If functional disability already encapsulates reduced earning capacity and the claimant continues working, adding future prospects may overcompensate.
• ECA Schedule vs MV Act claims: The Employees’ Compensation Act schedule lists standard percentages for loss of earning capacity by injury type. In motor accident claims, those figures are not binding; tribunals must tailor the functional disability to the claimant’s occupation and evidence.
• Medical bills and insurer verification: If the claimant files bills, they should be paid unless specifically disputed with reasons. Verification cannot be a black box—due process requires transparency and, ideally, the claimant’s participation.
• Prosthetic future costs: Prosthetic limbs have recurring costs (servicing, liners, sockets, periodic upgrades). Courts can award a lump sum under a separate head to ensure “just compensation,” even if exact schedules and sums are not precisely proved.

Practical Takeaways for Practitioners and Tribunals

• Prove income with pre‑accident records: File income tax returns, sales tax/GST returns, bank statements, invoices. Where pre‑accident records exist, tribunals should not discard them on suspicion alone.
• Establish functional disability clearly: Beyond medical certificates, submit evidence on job requirements, post-injury work patterns, and whether assistive devices restore some capacity.
• Argue future prospects with care: For salaried employees or those with demonstrable career trajectories, future prospects may be justified. For self‑employed claimants continuing business, avoid double counting if functional disability already captures loss.
• Medical bills: File originals/attested copies with a bill-wise summary. If insurers challenge items, they must articulate specific grounds; tribunals should record reasons for any disallowance.
• Prosthetic costs: Submit expert notes on expected life cycles, service schedules, and cost ranges for components (socket, liners, feet, microprocessor knees, etc.). Even without exact figures, this judgment supports substantial forward-looking awards.
• Net-of-tax income: Deduct statutory income tax from gross income before applying the multiplier.

Limits and Nuances of the Ruling

• Fact-specific future prospects ruling: The Court does not create a blanket bar on future prospects in injury claims. It insists on evidence and careful avoidance of overlap with functional disability. In different factual settings (e.g., a salaried employee with a demonstrably curtailed career trajectory), future prospects may still be awarded.
• “Non‑Reportable” tag: Although designated non‑reportable, the judgment is a reasoned Supreme Court decision. Its articulation of principles may be relied upon for guidance, in harmony with the broader jurisprudence.
• Functional disability percentage is contextual: A different occupation (e.g., heavy manual work) might yield a higher functional disability for the same medical injury.

Conclusion

The Supreme Court’s decision in Anoop Maheshwari reinforces core tenets of motor accident compensation: individualize the assessment, prioritize functional disability over medical labels, rely on credible pre‑accident financial records to compute income, and ensure that every rupee of genuine medical expenditure is reimbursed. By rejecting an automatic addition for future prospects where the claimant continues business and functional disability already captures earning loss, the Court promotes coherence and avoids double recovery. It also advances a humane, pragmatic approach to catastrophic injury by recognizing substantial future prosthetic costs as a distinct compensatory head.

As tribunals grapple with claims involving life-altering amputations and long-term rehabilitation needs, this judgment offers a structured roadmap: evidence-led income determination, careful calibration of disability, disciplined compartmentalization of damages, and an unambiguous commitment to “just compensation” under the Motor Vehicles Act.