Motor Accident Compensation: Multiplier Method Has To Be Applied For Future Prospects And Advancement In Life And Career: Supreme Court

The Supreme Court observed that, while computing motor accident compensation, multiplier method has to be applied for future prospects and advancement in life and career. 

In this case, Motor Accident Claims Tribunal assessed the amount of compensation at Rs.21,92,000/-.  The High Court, allowing the appeal filed by insurance company reduced the compensation to Rs.3,40,000/-.

Before the Apex Court in appeal, the claimant-appellant referred to judgments in Erudhaya Priya v. State Express Transport Corporation Ltd.  in which it was observed that multiplier method was logically sound and legally well established to quantify the loss of income as a result of death or permanent disability suffered in an accident. The present case being one of permanent disability of 40 per cent, it has been urged that the same principle should be applied in the present case while in fact nothing has been granted on account of future prospects, the claimant contended.

"In our view, this issue is no more res integra in view of Sandeep Khanduja's case (supra) and Erudhaya Priya's case (supra) opining that multiplier method has to be applied for future prospects and advancement in life and career. Thus, the same principle would have to apply and learned counsel for insurance Company cannot seriously contend to the contrary.", the bench observed.

The court noted that, in this case, the multiplier would be 16 taking into consideration that the age of the claimant is 34 years. The court held that Rs.21,60,000/- will be payable to the claimant under the heads 'Loss of earning power' and  'future prospects', an addition to the amount award by the High Court of Rs.3,40,000.

Insofar as the interest is concerned, the interest payable throughout would be at 9 per cent per annum, the court added while allowing the appeal.

Case: Karthik Subramanian Vs B. Sarath Babu [CA 799-800 OF 2021]
Coram: Justices Sanjay Kishan Kaul and Hemant Gupta
Counsel: Adv Garima Jain, AOR Amrreeta Swaarup
Citation: LL 2021 SC 141

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