Anoop Maheshwari v. Oriental Insurance (2025): functional disability, not the medical certificate, governs loss of earning capacity

A businessman lost a leg — and part of his pelvis — when a rashly driven truck struck his motorbike in 2007. The fora below treated his case as a contest over numbers on a medical certificate, halving a 90% schedule entry to 45% and then settling on 50%, while waving away his income-tax returns as a contrivance to save tax. The Supreme Court, in a judgment authored by K. Vinod Chandran, J. for a Bench he shared with N. V. Anjaria, J., reframed the exercise: the question in an injury claim is not how much of the body is impaired but how much of the claimant's earning capacity is lost, and his tax returns were honest evidence of what that earning was. The Court enhanced the award accordingly.

The facts in brief

The accident occurred on 9 April 2007. The claimant, riding a motorbike with a pillion rider, was hit by a truck driven rashly and negligently; both findings — the truck driver's negligence and the validity of the insurance cover — attained finality once the insurer accepted dismissal of its appeal before the High Court. The injury was severe: a hemipelvectomy, the amputation of one leg together with a portion of the pelvic bone on the same side. The claimant had subsequently been fitted with a prosthetic limb.

On quantum, the Motor Accident Claims Tribunal assessed disability at 45%, against the claimant's case of 90% built on a Medical Board certificate. The Tribunal reasoned from the Employees' Compensation Act, 1923 schedule, which assigns 90% loss of earning capacity to amputation at the hip — which it read as covering both legs — and so adopted 45% for the loss of one leg. On income, the Tribunal declined to accept the claimant's income-tax returns for 2005-06, 2006-07 and 2007-08, suspecting that the declared income was a ruse to save tax. The High Court rejected a plea of composite negligence, nominally raised the disability to 50%, but largely carried forward the Tribunal's parsimonious approach to income.

The question

Two questions ran through the appeal. First, what disability is to be measured when computing loss of earning capacity in an injury claim — the medical or physical disability certified by a board, or the functional disability reflecting the real impact on the claimant's ability to earn in his actual vocation? Second, can a claimant's pre-accident income-tax returns be rejected as proof of income on the strength of surmise and conjecture, particularly where the claimant ran a business and had filed returns well before the accident?

What the Court held

On the first question, the Court drew a clean line between the medical and the functional. The disability that drives compensation is not the figure entered on a certificate but the reduction it works in the claimant's capacity to earn a living.

Applying that test to a businessman who had been fitted with a prosthetic limb and remained able to run his enterprise, the Court found the High Court's figure of 50% to be the correct functional disability — reasonable, and within the parameters for assessing loss of income flowing from the accident. The exercise was not a mechanical translation of a schedule meant for a different statute, but a judgment about earning power.

On the second question, the Court agreed with the High Court that the Tribunal had "entered into mere surmises and conjectures" in declining the income shown in the returns. The claimant ran a firm and had filed income-tax returns two years before the accident; he had also produced sales-tax returns, which the Tribunal wrongly discounted. The Court accepted the returns as the basis for income, computed loss of income on a 50% functional disability with the appropriate multiplier, and enhanced the total compensation to Rs 48,44,790.

Analysis

The functional-versus-medical distinction is not new doctrine, but the judgment is a crisp restatement of it for injury claims, where it is easily lost. Tribunals routinely reach for disability certificates and the Employees' Compensation Act schedule as if they were tariffs, when those instruments measure physical impairment, not vocational loss. The Supreme Court's settled approach — visible across the modern motor-accident jurisprudence consolidated by the Constitution Bench in National Insurance v. Pranay Sethi — is that "just compensation" under sections 166 and 168 of the Motor Vehicles Act, 1988 is an individualised assessment of what the claimant has actually lost. A certified percentage is a starting input; the operative figure is how the injury bites into the particular livelihood. A sedentary professional and a manual labourer with the same amputation will lose earning capacity to very different degrees, and the law must follow that difference rather than the certificate. This is the same functional lens the courts apply when calibrating disability in employment and benefit settings, as in the assessment debated in Anil Kumar v. KPTCL.

The second holding does quiet but important work on proof. Self-employed claimants are perennially disbelieved on income, and tribunals too often treat tax returns as self-serving or, paradoxically, as understatements engineered to dodge tax. The Court's insistence that returns filed years before any accident — corroborated here by sales-tax records — are cogent evidence, not to be displaced by conjecture, raises the evidentiary floor in the claimant's favour. It places the burden where it belongs: an insurer wishing to go behind the returns must show something, not merely speculate.

Why it matters

For claimants, the practical lesson is to build the income case on documents that pre-date the accident and to plead loss of earning capacity in functional terms — what the injury does to this person's trade or profession — rather than resting on a certificate alone. Filed income-tax and sales-tax returns are now firmly endorsed as the spine of an income claim for the self-employed, and a tribunal that wishes to reject them must give reasons beyond suspicion.

For insurers and tribunals, the judgment narrows the room to discount declared income on instinct and warns against importing the Employees' Compensation schedule wholesale into Motor Vehicles Act computations. The schedule answers a different question; the Act asks about real earning loss. The decision also signals that prosthetic rehabilitation and continued capacity to work are relevant to fixing functional disability, but they reduce rather than eliminate the loss — a person who can still run a business with one leg has nonetheless suffered a measurable diminution. For practitioners across the motor-accident docket, Anoop Maheshwari is a compact authority to cite whenever a tribunal has conflated the body's impairment with the wallet's.

Related on Valkya

• National Insurance Co. v. Pranay Sethi: the framework for just compensation
• Anil Kumar v. KPTCL: functional assessment of disability
• KSRTC v. Chandramouli: motor accident and group insurance
• Oriental Insurance v. Sony Cheriyan: strict construction in motor policies

Sources

• Verdictum, "Disability To Be Assessed For Awarding Motor Accident Compensation Is Functional Disability Which Reduces Earning Capacity & Not Medical Disability: Supreme Court"
• Verdictum, "Weekly Overview | Supreme Court Judgments: September 1 – September 5, 2025"