Observing that compensation in motor accident cases must be based on the actual impact of an injury on a victim's earning capacity and not merely the percentage of medical disability, the Supreme Court on Monday (August 3) enhanced the compensation awarded to a minor who suffered 100% functional disability due to spinal cord injuries from ₹45.40 lakh to ₹83.38 lakh.

“…where the claimant suffers a permanent disability as a result of injuries, the assessment of compensation under the head 'loss of future earnings' would depend upon the effect and impact of such permanent disability on his earning capacity. Therefore, what is required to be assessed is the effect of the permanent disability on the earning capacity of the injured… a minor who suffers permanent disability cannot be equated with a non-earning individual merely because he was not gainfully employed on the date of the accident. While dealing with child victims, the law must take into account the future which has been lost and not merely the status which existed at the time when the accident occurred.”, observed a bench of Justice Ujjal Bhuyan and Justice N.V. Anjaria.

The bench modified the Orissa High Court's judgment which had awarded ₹45.40 lakh compensation to the kid, treating her permanent disability based on the medical reports to be 90%, without considering her functional disability.

“…though the permanent physical disability has been assessed and certified at 90%, applying the functional disability test, it is evident that it would be impossible for her to engage in any avocation to earn a livelihood. Her future earning capacity has been completely destroyed; rather extinguished. Therefore, though the permanent physical disability has been assessed and certified at 90%, her functional disability is total i.e. 100%. Hence, her disability would be taken as 100%.”, the Court observed.

The case arose out of a road accident in 2015, where the six-month-old infant suffered severe spinal cord injuries and was later diagnosed with post-trauma myelopathy with paraplegia. Medical evidence before the Court established that there is a 90% permanent disability and irreversible and that she would require lifelong treatment, medication and assistance.

While the MACT had awarded compensation, and the High Court had partially modified the award, the child's mother approached the Supreme Court seeking enhancement on the ground that the compensation did not adequately account for the lifelong consequences of the injury.

Allowing the appeal, the judgment authored by Justice Bhuyan said :

“…compensation in cases involving children suffering catastrophic injuries cannot be confined to conventional heads alone. This Court took into consideration the lifelong deprivation suffered by the victim and awarded compensation keeping in view her permanent dependence, future requirements and complete destruction of normal life…Injured children seeking compensation, therefore, stand on a distinctly different footing. While determining compensation in such cases, the courts must remain conscious that what has been taken away is not merely physical capacity but the child's entire future life.”, the Court added, referencing Kajal Vs. Jagdish Chand where it was recognized that “in cases involving child victims suffering catastrophic disabilities, applying ordinary principles may not adequately compensate the victim.”

Thus, the Court restored the multiplier of 18 (instead of 15 applied by the High Court), following the recent trend in cases involving child victims, including Kajal (supra), Baby Sakshi Greola. Also, the Court held that for child claimants, the minimum wages payable to a skilled workman in the concerned State must be adopted as the notional income, not that of an unskilled labourer.

“The MACT had fallen in error in taking the income of the injured child as an unskilled labourer. Interestingly, the High Court also found the approach of the MACT to be just and appropriate.”, the Court said.

Resultantly, the appeal was allowed.

“Accordingly, the compensation payable to the appellant by the insurance company stands enhanced from Rs. 45,40,800.00 to Rs. 83,38,360.00. Appellant shall also be entitled to interest at the rate of 9% per annum from the date of filing of the claim petition till realization.”, the Court held.

Headnote

Motor Vehicles Act, 1988 — Section 168 — Child Victim Suffering Permanent Disability — Method of Determination of Just Compensation — Assessment Parameters - Child Victims vs. Adults - Child victims suffering permanent or near total disability constitute a distinct and special category - Compensation cannot be evaluated through the same lens applied to adults. Loss suffered by a child is lifelong, continuing, and irreversible, depriving them not merely of physical capacity, but of their entire future life and human dignity - Functional Disability vs. Physical Disability - A conceptual distinction exists between medically certified physical impairment and functional disability felt in daily life - Where a 6-month-old infant suffered 90% permanent locomotor disability (post-traumatic myelopathy with paraplegia) rendering her completely dependent on others for life, her functional disability must be treated as 100% because her future earning capacity stands completely extinguished - For a minor child (up to 15 years) suffering catastrophic permanent disability, the multiplier to be applied is 18 - The High Court erred in applying a multiplier of 15 - Minor children who suffer death or permanent disability cannot be placed in the category of non-earning individuals or unskilled labourers - The loss of income must necessarily be calculated based on the matrix of minimum wages payable to a skilled worker in the respective State at the relevant time plus 40% towards future prospects - Compensation towards attendant charges for a severely disabled child requiring lifelong 24-hour assistance must be determined using the multiplier method (taking full-time skilled assistance rates and applying a multiplier of 18) rather than awarding a lump-sum nominal amount - Compensation enhanced from ₹45,40,800/- to ₹83,38,360/- along with 9% per annum interest. [Relied on Kajal v. Jagdish Chand, (2020) 4 SCC 413; Master Ayush v. Reliance General Insurance Company Limited, (2022) 7 SCC 738; Baby Sakshi Greola v. Manzoor Ahmed Simon, 2024 SCC OnLine SC 3692; Hitesh Nagjibhai Patel v. Bababhai Nagjibhai Rabari, 2025 SCC OnLine SC 3446; Shankar Dutt v. United India Insurance Co. Ltd., 2026 SCC OnLine SC 1193; Paras 31-76]

Cause Title: GAYATREE PATTNAIK FOR SHREEJITA PATTNAIK VERSUS ARUNDHATI SAHOO AND ANR.

Citation : 2026 LiveLaw (SC) 756

Click here to download judgment

Appearance:

For Petitioner(s) Mr. Chitta Ranjan Mishra, Adv. Mr. Shakti Kanta Pattanaik, AOR Mr. Priyanshu Maheshwari, Adv. Mr. Om Prakash Yadav, Adv. Mr./Ms. Lokesh Raghav, Adv.

For Respondent(s) Ms. Awantika Manohar, AOR Ms. Parul Dhurvey, Adv.