Determination Of Motor Accident Compensation By Applying Two Multipliers Erroneous ; Age Of Deceased Should Be The Basis: Supreme Court

The Supreme Court observed that the method of determination of compensation applying two multipliers is erroneous.

The suitable multiplier is to be applied keeping in view the age of the deceased, the bench comprising Justices Hemant Gupta and V. Ramasubramanian said.

In this case, in an appeal filed against the order of Motor Accidents Claim Tribunal, the Madras High Court affirmed the findings recorded by the Tribunal in respect of multiplier of 3 upto the date of superannuation and thereafter multiplier of 8 keeping in view the dependency of life for 10 years. 

Challenging this judgment, the appellant- claimants contended before the Apex court bench that the multiplier methodology adopted by the Tribunal and affirmed by the High Court was erroneous and not sustainable. It was contended that the multiplier is applied keeping in view the age of deceased and income at the time of death and not by considering the remaining years of service. On the other hand, the respondents relied on some High Court judgments to justify the applicability of split multiplier.

The bench noted that, in National Insurance Company Limited v. Pranay Sethi (2017) 16 SCC 680 , it has been held that the age of the deceased should be the basis for applying the multiplier. The judgments referred to justify split multiplier is prior to the enunciation of law in Pranay Sethi. The court, therefore, observed:

"Thus, we find that the method of determination of compensation applying two multipliers is clearly erroneous and run counter to the judgment of this Court in Pranay Sethi, affirming the judgment in Sarla Verma. Since the deceased was 54 years of age on the date of incident, therefore, the suitable multiplier would be as per the judgment of this Court in Sarla Verma approved by this Court in Pranay Sethi"

Allowing the appeal, the bench held that the claimants are entitled to compensation of Rs. 24,33,064/- with interest @ 9% from the date of filing of the claim application till realisation.