In Anoop Maheshwari v. Oriental Insurance Company Ltd [2025 INSC 1076], the Supreme Court held that the disability to be assessed for the purpose of awarding compensation in motor vehicle compensation is the functional disability.
In personal injury law, a crucial distinction is made between a person’s medical and functional disability to ensure fair compensation for loss of earning capacity.
Functional Disability Impacts the Earning Capacity
It is the functional disability, but not the medical disability, which reduces the earning capacity of the claimant. In medical disability, the medical board’s certificate can be accepted, even without examining a witness.
Medical vs. Functional Disability
Medical Disability is a clinical assessment by a medical professional describing the physical impairment resulting from an injury, often expressed as a percentage.
Functional Disability is a legal and practical assessment of the impairment’s impact on the individual’s ability to perform their job and earn income.
Legal Precedents from the Supreme Court
The Supreme Court of India has clarified this distinction through several landmark judgments:
The foundational precedent was set in Pratap Narain Singh v. Srinivasa Sabata [1976 AIR 222], which established that compensation for loss of earning capacity must be based on the percentage of functional disability, not merely based on the medical assessment of physical impairment.
Similarly, the above principle was further detailed in Raj Kumar v. Ajay Kumar, where the Supreme Court held that functional disability must be assessed specifically in relation to the claimant’s profession. The Court affirmed that a lower medical disability could result in a higher functional disability if it severely impacts the claimant’s specific job, and vice versa.
Illustrative Examples
The difference is best understood through practical examples: A surgeon might assess a professional driver with a leg injury as having a 20% medical disability. However, if that injury prevents the person from ever driving a heavy vehicle again, their functional disability for that job is 100%.
Likewise, a concert pianist who loses the tip of an index finger may have a medical disability assessed at only 5-10%, but their functional disability as a performing artist is effectively 100%, completely destroying their earning capacity in that field.
