‘Not one-time expense’: Supreme Court hikes accident payout by 463%, sets formula for prosthetic limb costs

Case that exposed gaps

The case dates back to May 2, 2007, when a Haryana Roadways bus rammed into the claimant’s motorcycle in Jaipur, leaving his right leg severely crushed. It was later amputated below the knee.

While the Motor Accident Claims Tribunal (MACT) initially awarded Rs 8.73 lakh, the Rajasthan High Court increased it to Rs 13.02 lakh in 2023. But neither accounted for the cost of prosthetic limbs, something the claimant argued was central to rebuilding his life.

Bigger question

At the heart of the case was a simple but often overlooked question: how do you fairly calculate compensation for something that needs to be replaced again and again over a lifetime?

The Supreme Court referred to many past rulings which asserted that prosthetic limbs are deeply personal and indispensable. They are not just medical devices but tools that allow a person to regain mobility, independence, and dignity.

The court factored in the lifetime cost of prosthetic limbs, their periodic replacement and maintenance, along with loss of future income.

The Supreme Court laid down a clear, practical framework for awarding damages to amputees, recognising that artificial limbs are not a one-time expense but a lifelong necessity.

The core issue before the top court was how to determine “just compensation”, particularly whether and how the cost of prosthetic limbs including their purchase, periodic replacement, and lifelong maintenance should be calculated and awarded.

“It has to be borne in mind that compensation for loss of limbs or life can hardly be weighed in golden scales. But at the same time it has to be borne in mind that the compensation is not expected to be a windfall for the victim. Statutory provisions clearly indicate that the compensation must be ‘just’ and it cannot be a bonanza; not a source of profit; but the same should not be a pittance,” the Supreme Court said, citing an earlier judgment by itself.

The apex court underlined the principle that damages must restore, as far as possible, what has been lost.

Structured formula

To bring consistency, the court worked out a practical model:

• It assumed a life expectancy of 70 years.
• It fixed the usable life of a prosthetic limb at five years.
• Since the claimant was 32 at the time of the accident, he would need seven limbs over his lifetime.
• This was not guesswork but it was an attempt to introduce predictability into an area where awards have varied wildly.
• The Supreme Court awarded Rs 3 lakh per prosthetic limb for seven limbs which stood at a total of Rs 21 lakh.
• Rs 5 lakh towards long-term maintenance.
• That brings the total for prosthetics alone to Rs 26 lakh.
• Importantly, the court chose to award this as a consolidated amount instead of breaking it into future payments.

Strong message on ‘cheap’ alternatives

One of the most striking parts of the judgment is the Supreme Court’s refusal to accept government-notified rates for artificial limbs, which were cited by the insurer.

Calling those figures unrealistically low, the bench made it clear that compensation cannot be dictated by bare minimum pricing. The underlying message was that a person who has lost a limb is entitled to a prosthetic that genuinely meets their needs, not just the cheapest available option.

Setting rules for future cases

The Supreme Court also tried to fix a recurring problem, lack of reliable cost data.

It said that going forward, anyone claiming compensation for prosthetic limbs must submit quotes from at least two or three providers, so tribunals can make informed decisions instead of rough estimates.

Income recalculated, disability recognised

The Supreme Court did not stop at prosthetics, but also revisited the claimant’s income:

• His monthly income was revised to Rs 6,000, instead of Rs 4,500.
• Since he was a driver and could no longer drive, the Supreme Court treated his disability as 100 per cent.
• This pushed the compensation for loss of future income significantly higher, adding over Rs 8 lakh more to the total.

Final outcome

In the end, the Supreme Court directed the insurance company to pay an additional Rs 36.2 lakh, over and above what the high court had already awarded. The amount must be paid within four weeks, failing which it will attract 9 per cent annual interest.