No discount for insurer when employer accommodates disability

Ordinarily, a pay rise would suggest that a person’s earning capacity has grown. On Thursday however, the Supreme Court read Priyanka Das’s pay rise differently. Her annual Cost-to-Company rose from ₹16 lakh to ₹19 lakh after a road accident left her completely blind, with pelvic injuries and a permanent colostomy. 

The Motor Accident Claims Tribunal accepted her 100 per cent visual impairment, but fixed functional disability at 60 per cent because she remained employed. This was increased to 80 per cent by the High Court of Punjab and Haryana. When the matter reached the Supreme Court, a Division Bench of Justices S.V.N. Bhatti and N.V. Anjaria assessed Das’s functional disability at 100 per cent and increased her compensation from ₹2.95 crore to ₹3.78 crore, with 7.5 per cent interest. When Reliance General Insurance Company argued that Das had lost neither her job nor her income, the Court held that earning capacity must be assessed in the “open, competitive market” rather than by retention in one highly accommodated role.

Although the decision is significant for its refusal to turn employer-specific accommodation into a discount for the insurer, its vocabulary and method of valuation give rise to concern. 

Sustained by reasonable accommodation, not charity

When the accident occurred in April 2011, Das was 35 and a Deputy Group Manager at IBM Daksh, now Concentrix. She underwent pelvic reconstruction and suffered incurable cortical blindness. An attempt to restore her large intestine failed, leaving her with a permanent stoma.

Das was on unpaid leave for 19 months. A company letter said the accident had stalled her career progression, including possible advancement to General Manager, Director or Vice President. When Das returned to the company, she required specialised software, flexible hours and extensive support to be able to work. 

While the judgement describes this support as an act of “corporate compassion”, the phrase sits uneasily with the Court’s disability-rights jurisprudence.

The Rights of Persons with Disabilities Act, 2016 defines reasonable accommodation as appropriate modifications that enable equal enjoyment of rights without imposing a disproportionate burden. In Ch. Joseph v Telangana State Road Transport Corporation (2025), the Court called accommodation by a public employer an element of substantive equality, rooted in constitutional and statutory requirements rather than compassion.

Das’s case involved a private employer’s arrangements, not a claim to workplace accommodation. Even so, the Court’s words present inclusion as charity.

What is functional disability and how is it measured?

The term “physical disability” refers to bodily impairment while the term “functional disability” refers to the impact of this impairment on a person’s ability to earn. 

In Raj Kumar v Ajay Kumar (2010), the Supreme Court recognised that a person is to be compensated not only for their physical injury but also for the loss suffered as a result of it, including their ability to lead a full life, enjoy ordinary amenities and earn as much as they used to or could have earned. It laid down three steps for tribunals to follow when measuring earning capacity: 1) it must examine the impact of permanent disability, 2) it must consider the person’s age and occupation prior to the accident, and 3) determine whether the person is able to work in the same capacity, work at a reduced capacity or is unable to work at all. 

Notably, in Pappu Deo Yadav v Naresh Kumar (2020), a three-judge Bench emphasised that no fixed arithmetic formula could answer the question.

Recent cases provide useful illustration of how this method has been applied to distinguish between physical and functional disability. In Shankar Dutt v United India Insurance Company (2026), a carpenter with an above-knee amputation had 70 per cent medical disability but 100 per cent functional disability because he could no longer practise his trade.

In Oriental Insurance Company v Kumar Satrughana (2025), a claimant with 50 per cent lower-limb disability obtained another office job. The Court rejected the 40 per cent functional-disability basis for the ₹19.83 lakh future-income award and substituted ₹10 lakh for continuing discomfort, future difficulties and loss of amenities. 

In Anoop Maheshwari v Oriental Insurance Company (2025), a businessperson continued his business with a prosthetic limb after a hemipelvectomy. The Court retained 50 per cent functional disability but the compensation awarded for loss of expected income growth. It reasoned that the prosthesis enabled him to continue his business and that the functional-disability calculation already accounted for diminished earning capacity.

Das’s case adds a missing variable: accommodation. Employment is not a simple yes-or-no proxy for earning capacity. The decision suggests that a tribunal should ask whether the claimant could obtain comparable work with another employer, whether the present job is secure despite its dependence on employer-specific support, and whether the disability has blocked promotion to more senior or better-paid roles.

A principle without a valuation method

A multidisciplinary medical board assessed Das’s whole-body physical impairment at 100 per cent. The Court’s decision to peg Das’s functional disability at the same level is not adequately explained. Such a finding would ordinarily suggest that no earning capacity remains, yet Das remained employed as Deputy Group Manager and her annual CTC increased after the accident.

The Court shifted the measure of earning capacity of a claimant from their present payslip to their value in an open labour market without providing a method for tribunals to assess future earning capacity. It does not explain how tribunals should assess whether the claimant can retain the present accommodated job or obtain comparable support from another employer. Medical boards can certify bodily impairment, not vacancies or career mobility.

In an unusual move, the non-reportable judgement features a no-precedent warning in a section related to compensation for loss of marriage prospects and not in its open-market analysis.   

What remains unclear is whether future claimants will be expected to produce evidence about their precise accommodations, comparable jobs, promotion history and ability to obtain similar support elsewhere. The judgement considers these factors but does not prescribe an evidentiary test. The decision is thus best read as a fact-specific development, not a rule that every accommodated employee has lost all earning capacity.

Its immediate contribution is narrower but important: continued employment does not by itself settle the compensation inquiry and courts must independently determine earning capacity beyond the claimant’s present job.