Functional Disability Cannot Be Reduced Because a Victim Was Retained in a Specified Role: Supreme Court's Motor Accident Ruling

An insurer argues that a woman who suffered complete blindness, severe pelvic injuries, and a permanent colostomy should get a smaller compensation cheque because her employer kept her on the payroll. The Supreme Court's answer to this argument, delivered on 3 September 2026, reshapes how functional disability gets measured in every motor accident claim that follows.

What Happened on the Brijghat Bridge

On 10 April 2011, Sushant Prabhakaran was riding a motorcycle with Priyanka Das as the pillion rider when a heavy goods vehicle hit them on the Brijghat Bridge. The truck ran over Prabhakaran, causing his instant death, while Das sustained grievous injuries to vital parts of her body.

The Supreme Court, in the course of the appeals, had earlier directed a fresh medical examination of Das by a multi-disciplinary Medical Board at Vardhman Mahavir Medical College and Safdarjung Hospital, New Delhi. Specialists across neurology, neurosurgery, ophthalmology, general surgery, and physical medicine examined her and certified 100 percent permanent physical impairment of the whole body, covering cortical blindness, a pelvic fracture, degloving injuries, and a permanent colostomy.

The Insurer's Argument, and Why It Failed

The insurer argued that Das had continued working as Deputy Group Manager and had even received salary increments after the accident, so there was no real loss of earning capacity justifying a high functional disability percentage. The Motor Accident Claims Tribunal had already noted that despite 100 percent physical disability on paper, her continued employment complicated the compensation calculation.

The Supreme Court rejected this reasoning outright. It observed that Das could perform her current duties only through specially created software, flexible working hours, and what the Court called extreme accommodations provided by her employer as an act of corporate compassion. Retention in a job under those conditions, the Court held, says nothing about a person's actual capacity to compete and earn in the open labour market.

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The Governing Test: Open Market Earning Capacity, Not Job Retention

The Court laid down the operative principle plainly: the calculation of functional disability depends on assessing the victim's earning capacity in the open, competitive market, rather than on retention in a specific, highly accommodated role. A sympathetic employer's willingness to keep an employee on payroll, with software, schedules, and support built entirely around their disability, does not measure what that person could earn if they had to compete for a job on equal terms with everyone else.

The Court also addressed an internal inconsistency the insurer's own argument created. Having invited the Medical Board's opinion in the first place, the insurer could not turn around and reject the resulting 100 percent impairment finding simply because it went against its financial interest. If the Board's assessment had come out lower, the Court noted, the insurer would certainly have relied on it to argue for reduced compensation.

The Outcome

The Supreme Court dismissed the insurer's appeals concerning Das's injuries and partly allowed her own appeal, enhancing her compensation significantly based on the Medical Board's finding of complete permanent impairment. In the separate appeals arising from Sushant Prabhakaran's death, the Court maintained the High Court's existing apportionment and total compensation figure, dismissing both the insurer's and the claimant's appeals on that count.

Why This Matters Beyond This One Case

Insurers in motor accident litigation frequently argue that continued employment defeats or reduces a disability claim. This judgment gives claimants and their counsel a clear, citable answer: courts must look at whether that employment reflects genuine, competitive earning capacity or whether it survives only because of extraordinary accommodation. The distinction matters enormously for claimants with serious injuries who happen to have understanding employers, since without this principle, workplace kindness could end up costing them fair compensation.

For exam purposes, this case pairs naturally with general principles on assessing permanent disability under the Motor Vehicles Act, where courts already look beyond a bare medical percentage to the claimant's age, profession, and the practical impact of the injury on future earning capacity. This judgment adds a specific, modern gloss to that inquiry: retained employment is not proof against disability when the retention itself depends on exceptional accommodation.

Frequently Asked Questions

Q1. What is the citation of this judgment?

The case is Reliance General Insurance Company v. Priyanka Das and Others, reported as 2026 INSC 950, decided on 3 September 2026.

Q2. What was the Medical Board's finding on the claimant's disability?

A multi-disciplinary Medical Board at Vardhman Mahavir Medical College and Safdarjung Hospital certified 100 percent permanent physical impairment of the whole body.

Q3. Why did the insurer argue for a lower functional disability percentage?

The insurer pointed to the claimant's continued employment as Deputy Group Manager and her salary increments after the accident as evidence against significant loss of earning capacity.

Q4. What test did the Supreme Court lay down for functional disability?

The Court held that functional disability must be assessed by the victim's earning capacity in the open, competitive market, not by whether they were retained in a specific, highly accommodated role.

Q5. Why could the insurer not simply reject the Medical Board's report?

The insurer itself had invited the Medical Board's opinion, so it could not resist the resulting finding merely because the outcome was unfavourable to its position.

Q6. What happened to the compensation claims arising from the death in this accident?

The Supreme Court dismissed both the insurer's and the claimant's appeals concerning the death claim, maintaining the High Court's existing apportionment and total compensation.

Q7. Who were the judges on this Bench?

The Bench comprised Justice S.V.N. Bhatti and Justice N.V. Anjaria.

Closing Thought

This case gives you a precise, modern authority for a scenario examiners love to test: a claimant who still has a job but has lost real capacity to work. Learn the exact phrase the Court used, open, competitive market, since reproducing the Court's own language earns more marks than paraphrasing it loosely.

Nitesh Sir's civil law sessions at Aashayein Judiciary regularly update compensation and tort law notes with rulings exactly like this one. Explore our judiciary coaching and mock test series to keep your Motor Vehicles Act answers current.