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Loss of earning capacity, and not percentage of disability, must decide compensation, says HC

While computing compensation claims of accident victims, the victim's loss of earning capacity shall outweigh the percentage/extent of his disability, the Madras high court has felt.

Justice R Mahadevan, enhancing the compensation payable to an injured driver by Rs 2 lakh, said: "In cases for compensation, it is not the disability, which is partial or total, alone that matters, it is the loss in earning capacity as a result of accident that is to be considered."

R Murali, driver of a mixed concrete vehicle, met with an accident in January 2009 and suffered injuries in hip, right leg and ankle. He claimed loss of 100% earning capacity and sought appropriate compensation along with 12% interest rate.

However, as the disability certificate issued by a doctor pegged the percentage of his disability at 60%, the deputy commissioner of labour-II, awarded Rs 3.12 lakh as compensation, by fixing the monthly income at Rs 4,000. Aggrieved by the poor package, Murali filed the present appeal.

Opposing enhancement of compensation, counsel for the insurance company said Murali could walk and that his disability was only 60%. Even though he is incapable of driving, he can go for some other job, he said and sought dismissal of the appeal.

Justice Mahadevan, disagreein with the findings of the deputy commissioner of labour-II as well as the insurance counsel, said the officials had failed to discuss the applicability of 'total disablement'. Distinguishing 'disability' in medical parlance and 'disability' vis a vis earning capacity, the judge said, "considering the injury on the hip, right leg and ankle, Murali can no longer drive a vehicle as he cannot exercise absolute control over it."

Justice Mahadevan further said: "As the injury is to the right leg, he cannot effectively apply the break and accelerator. He would not even be able to sit and operate the vehicle comfortably. He is 27 years old today. The accident has already taken away 4 years of quality life in him. It has also deprived him the normal life expected of a man of his age. Leave alone the driving of the vehicle, he cannot move as swiftly as he was moving prior to the accident."

Holding that the disability was total for the purpose of loss of earning capacity, the judge then awarded Rs 5.3 lakh compensation to him, and directed the authorities to pay him the revised package within four weeks.

Article referred: http://articles.timesofindia.indiatimes.com/2013-12-25/chennai/45561114_1_disability-compensation-murali

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