Supreme Court increases motor accident compensation to over Rs.20.5 lakh, adopts minimum wage as basis and raises functional disability to 80%

A two-judge Bench of Justices Sanjay Karol and Prashant Kumar Mishra heard an appeal against a High Court order that had enhanced a Motor Accident Claims Tribunal award. The appeal concerned the quantum of compensation to a labourer who suffered amputation of his right hand after his hand was caught in a thresher attached to a tractor; the primary issues were the claimant’s monthly income, percentage of permanent and functional disability, and heads of compensation.

The Court allowed the civil appeal and substantially increased the compensation, holding that the minimum wage notification could be relied upon where direct evidence of income was lacking and that functional disability must reflect the claimant’s inability to perform his occupation. The Court noted that "the notifications under the Minimum Wages Act can be a guiding factor in cases where there is no evidence available to evaluate monthly income." The Court, in its reasoning, observed: "Adverting to the facts at hand, the minimum wage prevalent in the area for unskilled workers was Rs.6850/-, annexed as Annexure P1. In view of the above exposition of this Court, we are inclined to accept this submission of the Appellant. On the aspect of his functional disability, this Court recognises that due to the amputation of his right hand, his ability to work as a labourer would be significantly hampered. Therefore, in the interest of justice, we deem it appropriate to increase the percentage of functional disability to 80%." The Court therefore modified the award and directed payment of interest as awarded by the Tribunal.

Background The claimant-appellant, then aged 25, was operating a thresher mounted on a tractor on 25 September 2016 when the tractor driver allegedly reversed in a rash and negligent manner, drawing the claimant’s hand into the machine. He sustained severe injuries and underwent amputation below the elbow. An FIR named the driver and charged offences under Sections 279, 337, 338 and 287 IPC. The claimant filed a claim petition before the MACT seeking Rs.20 lakh, alleging he was the sole earning member and earned Rs.9,000 per month as a labourer. The Tribunal awarded Rs.3,76,090 based on a notional annual income of Rs.60,000 and assessed permanent disability at 20%.

The claimant appealed to the Madhya Pradesh High Court, which enhanced the award to Rs.6,61,690, finding 40% permanent disability and applying a multiplier and other heads. The claimant further appealed to the Supreme Court contesting the disability percentage (citing a PW2 certificate indicating 60% permanent disability and "100% functional disability" for his trade) and contending that his income should not be fixed at Rs.5,000 per month when minimum wages in the area were higher.

Relying on this Court’s precedents including Gurpreet Kaur v. United India Insurance Co. (guidance on using minimum wage notifications) and established principles on assessment of future prospects, multiplier and heads such as attendant charges and pain and suffering, the Bench accepted Rs.6,850 as monthly income, increased functional disability to 80% and applied a multiplier of 17. The Court applied established authorities for quantification of various heads and awarded specific sums for medical expenses, attendant charges, artificial limb and pain and suffering. The final compensation awarded to the claimant was Rs.20,55,452. The Civil Appeal was allowed in these terms and the impugned awards were modified accordingly; interest was directed to be paid as fixed by the Tribunal and pending applications were disposed of.

Case Details: Case No.: 2025 INSC 166; Civil Appeal No. 2209 of 2025 (Arising out of SLP(C) No. 575 of 2025) Case Title: Jitendra v. Sadiya & Ors. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment