The Supreme Court held that the application of a “split multiplier” in motor accident compensation cases is impermissible. Relying on the structured formula from Sarla Verma and Pranay Sethi, the Court ruled that compensation must be calculated using a single multiplier based solely on the victim’s age, as superannuation does not constitute an exceptional circumstance justifying a deviation from this settled method.
Facts Of The Case:
On 3rd August 2012, T.I. Krishnan, aged 51, died in a road accident on the Pala-Thodupuzha Road when his car was hit by a rashly driven bus. His surviving family—his wife and children—filed a claim petition before the Motor Accidents Claims Tribunal (MACT), Pala, seeking compensation. The Tribunal, in April 2014, awarded approximately ₹44 lakhs, determining his monthly income and applying standard deductions, a multiplier, and conventional heads. Dissatisfied, both the insurance company and the claimants appealed to the Kerala High Court. In June 2024, the High Court reduced the compensation by over ₹7 lakhs under the loss of dependency head. It applied a “split multiplier,” reasoning that the deceased’s income would have significantly dropped after his imminent retirement. The claimants’ review petition was rejected. They then appealed to the Supreme Court, challenging the High Court’s adoption of the split multiplier, arguing it failed to consider the deceased’s potential to earn post-retirement and deviated from established legal principles.
Procedural History:
The claim originated before the Motor Accidents Claims Tribunal (MACT), Pala, which awarded compensation to the appellants in April 2014. Dissatisfied, both the insurance company and the claimants filed separate appeals (MACA Nos. 210 and 1219 of 2015) before the High Court of Kerala. The High Court, in its impugned judgment dated June 2024, modified the award by applying a split multiplier, thereby reducing the compensation. The claimants’ subsequent Review Petitions (R.P. Nos. 1165 and 1187 of 2024) were rejected by the High Court. This led to the filing of Special Leave Petitions before the Supreme Court, which granted leave and culminated in the present civil appeals, ultimately allowing them and restoring the compensation calculation based on a single multiplier.
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Court Observation:
The Supreme Court made several critical observations in its judgment. Primarily, it strongly disapproved of the High Court’s application of a “split multiplier,” stating that superannuation is a normal life event and does not constitute an exceptional circumstance required to deviate from the standard multiplier method established in Sarla Verma and Pranay Sethi. The Court emphasized that the age of the deceased is the sole criterion for selecting the multiplier, ensuring certainty and uniformity in compensation calculations. It noted with concern the divergent and conflicting practices among various High Courts on this issue, which undermined judicial discipline. Furthermore, the Court found that the High Court had failed to properly apply the periodic enhancement for conventional heads of compensation as mandated by Pranay Sethi. Ultimately, it held that the concept of a split multiplier is alien to the Motor Vehicles Act and should not be employed by tribunals or courts.
Final Decision & Judgement:
The Supreme Court allowed the appeals, setting aside the High Court’s judgment. It restored the compensation calculation methodology of the Tribunal, which used a single multiplier based on the deceased’s age, and further enhanced the amounts under conventional heads in accordance with Pranay Sethi. Consequently, the total compensation payable to the appellants was increased to ₹47,76,794/-, with interest as awarded by the Tribunal. The Court directed the insurance company to remit this amount directly to the appellants’ bank accounts by 30th November 2025. It clarified that this ruling applies prospectively and ordered a copy of the judgment to be circulated to all High Courts for uniformity in future cases.