Motor Accident Claims | Multiplier Can't Be Reduced Because Victim Was Earning In Foreign Currency : Supreme Court

The Supreme Court recently held that the multiplier in motor accident claims cannot be reduced on the ground that the deceased was earning in foreign currency.  The multiplier is fixed on the basis of the age of the victim and cannot be altered based on the ground of foreign income.

The Court also held that the exchange rate which was prevalent on the date of the filing of the claim petition has to be adopted.

A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra relied on the precedent set in Jiju Kuruvila v. Kunjujamma Mohan (2013) and DLF Ltd. v. Koncar Generators & Motors Ltd where the Court held that the filing date of the claim petition should determine the exchange rate.

It increased the compensation awarded by the Motor Accident Claims Tribunal (MACT) to the appellants, who had challenged the Telangana High Court's decision affirming the tribunal's findings. The High Court had reduced the multiplier from 14 to 10, citing the deceased's earnings in foreign currency.

Case Background

The appellants—the husband and two daughters of the deceased—had sought compensation from MACT following a fatal road accident. The deceased, a 43-year-old software engineer residing in the U.S., died when a vehicle owned by the Andhra Pradesh State Road Transport Corporation collided with her car.

The Tribunal fixed the monthly income of the deceased as $11,600 per month after the deduction of income tax and fixing the future prospects at 30%. The Tribunal fixed the total compensation as Rs.8.05 crores.

However, the High Court reduced the compensation by applying a 10-multiplier, reasoning that the deceased earned in foreign currency. A sum of Rs.5.75 crore was awarded.

The Supreme Court disagreed with the High Court's reasoning for reducing the multiplier. Referring to National Insurance Co. Ltd. v. Pranay Sethi (2017), the Court reiterated that a 14-multiplier should apply to a 43-year-old individual, regardless of foreign earnings.

"..as per National Insurance Co. Ltd. v. Pranay Sethi, the law is settled that the multiplier for a person aged 43 must be 14. No exception is made for a person earning in foreign currency."

Regarding the exchange rate, the Supreme Court said that it has to be fixed at Rs.57/-, which was the prevalent figure at the time of filing the claim petition(2012).

The Court ruled in favor of the appellants, modifying the compensation accordingly and fixing it as Rs.9.64 crores.

Case Title: Shyam Prasad Nagalla & Ors. v. The Andhra Pradesh State Board Transport Corporation & Ors.

Citation : 2025 LiveLaw (SC) 351

Click here to read the judgment