Supreme Court of India· 18 March 2026

Under the Motor Vehicles Act, 1988, can functional disability be reckoned at 100% when the Medical Board has certified the physical disability at a lower percentage?

R. HALLE v. RELIANCE GENERAL INSURANCE COMPANY LIMITED

2026 INSC 260
Coram: Sandeep Mehta; Prashant Kumar Mishra

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Answer

Yes. Where the physical and neurological impairments, cumulatively evaluated, show that the claimant's ability to discharge his pre-accident duties stands substantially and irreversibly impaired, the disability for the purpose of computing compensation may be reckoned at 100% notwithstanding a lower certified figure. Severe impairment of verbal and visual memory, frontal lobe dysfunction, an IQ of 65 falling in the category of Mild Intellectual Disability, partial blindness and restricted knee mobility strike at the core competencies indispensable to a managerial post.

Headnote

Motor Vehicles Act, 1988 — Just compensation — Permanent physical disability and functional disability — Loss of earning capacity — Appellate reappreciation of a Tribunal's award — Motor Vehicles Act, 1988 — Permanent disability — Not to be mechanically equated with loss of earning capacity — Held: The percentage of permanent disability certified by a medical expert cannot be mechanically adopted as the percentage of loss of earning capacity. What must be determined is the actual impact of that disability on the injured's capacity to earn in his avocation. (¶27) Motor Vehicles Act, 1988 — Appellate interference — Reappreciation and cogent reasons required — Held further: An appellate court reducing the functional disability found by the Tribunal must reappreciate the medical evidence and assign cogent reasons. A reduction made without adverting to the disability certificate or the neuropsychological report, and without contra material, rests on presumptions and assumptions. (¶21, 22) Motor Vehicles Act, 1988 — Head injury — Cognitive impairment in a managerial avocation — Held further: Where a head injury leaves severe impairment of memory, frontal lobe dysfunction and an IQ placing the claimant in Mild Intellectual Disability, the faculties essential to a managerial post stand irreversibly impaired. Functional disability is then reckoned at 100% though physical disability was certified at 63%. (¶29, 30) Motor Vehicles Act, 1988 — Beneficial and welfare-oriented legislation — Just compensation redetermined — Held further: The Act being beneficial and welfare-oriented, interference with a reasoned award must accord with its object of expeditious relief and just compensation. Compensation was redetermined at Rs.97,73,011/- with interest at 7.5% per annum; appeal allowed. (¶32, 35)

In the Court's own words

Paragraph 30Further, the Medical Board has recorded that the injuries resulted not only in cognitive impairment but also in partial blindness and orthopedic limitations affecting mobility and stability. When these physical and neurological impairments are cumulatively evaluated, it becomes manifest that the appellant-claimant’s ability to effectively discharge his pre-accident duties stands substantially and irreversibly impaired. The evidence does not indicate a mere diminution in efficiency, rather, it demonstrates a profound erosion of the faculties essential for gainful employment in his chosen field. These impairments strike at the core competencies indispensable for the effective discharge of managerial responsibilities and substantially undermine the appellant-claimant’s ability to perform the essential functions inherent in such a position. In such circumstances, and bearing in mind the settled principle that functional disability must reflect the actual loss of earning capacity, we are persuaded to hold that the disability in the present case, for the purpose of computation of compensation, deserves to be reckoned at 100%. It is beyond the pale of doubt that, having suffered such grave medical and neurological impairments, the appellant-claimant would neither be considered suitable for the managerial post nor would he be capable of effectively discharging the onerous responsibilities attached to the said post, particularly in light of his present condition, which is likely to deteriorate progressively over time.

Acts & Sections

Motor Vehicles Act, 1988s.279 Indian Penal Code, 1860s.338 Indian Penal Code, 1860

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Also decided in this judgment

Under the Motor Vehicles Act, 1988, can the percentage of permanent physical disability certified by a Medical Board be adopted as the percentage of loss of earning capacity?What structured inquiry must a Motor Accidents Claims Tribunal undertake to ascertain the effect of a permanent disability on actual earning capacity?Under the Motor Vehicles Act, 1988, what must an appellate court do before reducing the disability assessed by the Motor Accidents Claims Tribunal?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections