[Motor Accident Compensation]Future Prospects On Advancement In Life And Career Also To Be Considered In Multiplier Method :SC

The Supreme Court has observed that while applying the multiplier method in computing Motor Accident Compensation, future prospects on advancement in life and career are also to be taken into consideration.

In 2011, the bus, in which E.Priya was travelling collided with a lorry and she suffered a disability of 31.1% of the whole body. She filed ed a claim petition before the Motor Accident Claims Tribunal, Madurai under Section 166 of the Motor Vehicles Act, 1988. The MACT opined that the permanent disability of 31.1% would have to be considered and applied the multiplier method to calculate the loss of earning power. It held that the State Corporation is liable to pay Rs. 35,24,288/-  interest @ 7.5% per annum from the date of petition till the date of realization with costs. Partly allowing the appeal filed by the Corporation, the High Court reduced the compensation to Rs. 25,00,000/- primarily on the ground that the multiplier method for quantifying loss of earning power has been wrongly applied as it had not come on record as to how the injuries suffered by the appellant would have a bearing on her earning capacity as a software engineer. 

Priya, therefore approached the Apex Court, claiming that she is entitled to enhancement of compensation even over and above what was granted by the MACT.

The court agreed with her contention that, in the age group of 15- 25 years, the multiplier has to be '18' along with factoring in the extent of disability. Referring to , the bench comprising Justices Sanjay Kishan Kaul, Ajay Rastogi and Aniruddha Bose said:

In para 42 of the said judgment, the Constitution Bench effectively affirmed the multiplier method to be used as mentioned in the table in the case of Sarla Verma (Smt) and Others. v. Delhi Transport Corporation and Another. .

In the age group of 15- 25 years, the multiplier has to be '18' along with factoring in the extent of disability. The aforesaid position is not really disputed by learned counsel for the respondent State Corporation and, thus, we come to the conclusion that the multiplier to be applied in the case of the appellant has to be '18' and not '17'.

The court also noted that in Jagdish v. Mohan, it was observed that the  award of compensation must cover Loss of income including future income. it said:

"he aforesaid principle has also been emphasized in an earlier judgment, i.e. the Sandeep Khanuja case (supra) opining that the 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."

It has  been opined in para 12 of Sandeep Khanuja case (supra) that while applying the multiplier method, future prospects on advancement in life and career are also to be taken into consideration."

Allowing the appeal, the bench held that Priya will be entitled to the compensation of Rs. 41,69,831/- along with simple interest at the rate of 9% per annum from the date of application till the date of payment.

Case no.: CIVIL APPEAL NOS. 2811-2812 OF 2020

Case name: ERUDHAYA PRIYA  vs. STATE EXPRESS TRANSPORT CORPORATION LTD.

Coram: Justices Sanjay Kishan Kaul, Ajay Rastogi and Aniruddha Bose 

Click here to Read/Download Judgment

Read Judgment