The Supreme Court has substantially enhanced compensation awarded to a Tamil Nadu road accident victim, ruling that the loss of a leg above the knee rendered him completely incapable of continuing his profession as a mason. The Court increased the compensation from ₹23.86 lakh awarded by the Madras High Court to ₹40.29 lakh.
Background of the Case
The case arose from a road accident that occurred on April 18, 2017, when M. Paramesh was cycling along the Namakkal-Salem highway. According to the records, a lorry hit him from behind, causing severe injuries to his head, jaw, eye and right leg. The injuries ultimately led to the amputation of his right leg above the knee.
Paramesh filed a compensation claim under the Motor Vehicles Act, stating that he was working as a mason and earning his livelihood through manual labour. While the disability certificate assessed his permanent physical disability at 70%, he argued that the injury had effectively ended his ability to continue his occupation.
Court’s Observations
The Bench noted that both the Tribunal and the High Court had treated the claimant’s loss of earning capacity as equivalent to his 70% physical disability. However, the Court said such an approach ignored the concept of functional disability.
Referring to earlier precedent, the Bench observed,
“The assessment of compensation in cases of permanent disability cannot be undertaken by mechanically applying the percentage of physical disability as the percentage of economic loss.”
The Court emphasized that the work of a mason requires continuous physical activity and support of both legs. Since the claimant had undergone above-knee amputation, he had effectively lost the ability to pursue his profession.
The judgment stated that,
“The amputation of the right leg above the knee has not merely caused physical disability to the appellant but has rendered him incapable of effectively carrying on the manual and physical work which constituted his only source of livelihood.”
Compensation Recalculated
The Court found errors in the High Court’s computation of future prospects and also noted that certain heads of compensation had been omitted from the final calculation despite not being disturbed.
Taking the claimant’s monthly income at ₹12,000, applying a multiplier of 17, adding 40% towards future prospects, and treating the functional disability as 100%, the Court recalculated the loss of earning capacity. It also increased future medical expenses for artificial limbs and rehabilitation from ₹1 lakh to ₹2 lakh.
Decision
Partly allowing the appeal, the Supreme Court modified the High Court’s judgment and enhanced the total compensation payable to the claimant from ₹23.86 lakh to ₹40.29 lakh. The Court directed the insurance company to deposit the enhanced amount before the Tribunal within six weeks, with interest at the rate already awarded by the High Court.
Case Details:
Case Title: M. Paramesh v. VRL Logistics Ltd. and Another
Case Number: Civil Appeal No. 8708 of 2026 (arising out of SLP (Civil) No. 35337 of 2025)
Judge: Justice Prashant Kumar Mishra and Justice N.V. Anjaria
Decision Date: June 23, 2026
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