In a quiet but significant ruling delivered in open court, the Supreme Court of India revisited how compensation should be calculated for accident victims who suffer lasting disability. The case involved a young claimant who said the lower courts had undervalued both his income and the extent of his disability, resulting in an unfairly low award.
Background of the Case
The appeal was filed by S. Shakul Hameed, who suffered injuries and disability in a motor accident involving a bus operated by the Tamil Nadu State Transport Corporation Limited.
Initially, the Motor Accident Claims Tribunal awarded him ₹2,12,800. The Madras High Court slightly enhanced this to ₹2,23,000 with interest at 7.5% per annum. Still dissatisfied, the claimant approached the Supreme Court seeking proper reassessment of his income and disability.
The appellant argued that he was working as a salesman earning ₹8,000 per month, but the Tribunal had fixed his income at only ₹3,300 by mechanically applying the schedule under Section 163A of the Motor Vehicles Act.
Arguments Before the Court
Counsel for the claimant submitted that even if documentary proof of income was unavailable, the courts should have adopted at least the minimum or notional wages applicable at the time of the accident.
It was also argued that the medical expert had assessed permanent disability at 60%, which the Tribunal reduced to 50%. The High Court further reduced it to 40% without any appeal by the transport corporation, which, according to the claimant, was unjustified.
On the other hand, the transport corporation maintained that the claim was filed under Section 163A, where strict proof of income is not required, and that the disability assessed was functional, not total.
Court’s Observations
After examining the record, the bench noted an important inconsistency. Although the claim petition mentioned Section 163A, the pleadings clearly alleged rash and negligent driving by the bus driver.
“The nature of the pleadings shows that the claim was essentially one under Section 166 of the Act,” the bench observed, holding that the case could not be restricted by a mere technical reference to Section 163A.
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On income, the Court referred to its earlier decision where a daily wage worker’s income in 2004 was taken as ₹4,500 per month. Applying a reasonable increase, the bench held that even a conservative estimate would place the claimant’s monthly income at ₹5,000 in 2005, the year of the accident.
Regarding disability, the Court found fault with the High Court’s approach.
“The High Court reduced the disability to 40% without any appeal by the insurer. This was improper,” the judges noted, restoring the Tribunal’s assessment of 50% disability.
Final Decision
The Supreme Court recalculated the compensation for loss of income using the corrected figures-monthly income of ₹5,000, multiplier of 17 based on age, 40% future prospects, and 50% disability. This alone worked out to ₹7,14,000.
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The amounts awarded under other conventional heads were left untouched. The transport corporation was directed to pay the enhanced compensation within three months, along with interest at 7.5% per annum, as already ordered by the High Court.
With these directions, the appeal was allowed.
Case Title: S. Shakul Hameed vs Tamil Nadu State Transport Corporation Ltd.
Case No.: CA @ SLP (C) No. 7347 of 2024
Case Type: Motor Accident Compensation Appeal
Decision Date: 6 January 2026
