Motor Vehicles Act, 1988 – Motor Accident Claim – Compensation – Calculation of – Application of split multiplier – Impermissibility – Deceased, an Assistant Engineer in the PWD, aged 51 years died in a car accident – Appellants (wife and children of the deceased) sought compensation of Rs.60,00,000/-, stating that the deceased earned Rs.47,860/p.m – Tribunal awarded Rs.44,04,912/- to the appellants with interest @ 7.5% p.a – High Court inter alia reduced the compensation under the head of loss of dependency from Rs.42,29,712/- to Rs.35,10,144/-, by applying a split multiplier considering the post-retirement reduction in the income of the deceased, thereby deducting the excess amount of Rs.7,19,568/- – Review petitions rejected by High Court – Challenge to:
Held: Split multiplier is a concept foreign to the Motor Vehicles Act, 1988 and is not to be used by the Tribunal and/or Courts in calculation of the compensation – The income as on the date of death is to be taken to calculate the compensation – A split multiplier is not to be adopted, as a matter of course, and is only to be used in the exceptional circumstances, with such circumstances being recorded – Superannuation from service hardly qualifies as such an exceptional circumstance, which would justify the use of split multiplier – It is only a natural progression that a person who enters service must also exit at some point in time – The same cannot be taken as a negative circumstance against the deceased person or a person injured severely, leading to incapacitation or permanent disability – High Court failed to comply with the directives issued in Pranay Sethi i.e., granting 10% enhancement, every three years under the conventional heads – Multiplier of
11 applied, compensation payable to the appellants enhanced to Rs.47,76,794/- – Impugned Award passed by the Tribunal, as modified by the High Court vide the impugned judgment; and judgement in review petitions, modified accordingly. [Paras 17-20] Directions by Supreme Court – Motor Vehicles Act, 1988 – Motor Accident Claim – Compensation – Calculation of – Application of split multiplier – Divergent opinion of High Courts: Held: Split multiplier is a concept foreign to the Motor Vehicles Act, 1988 and is not to be used by the Tribunal and/or Courts in calculation of the compensation – A split multiplier is not to be adopted, as a matter of course, and is only to be used in the exceptional circumstances, with such circumstances being recorded – Directions issued to apply prospectively and the conclusions arrived at regarding the split multiplier, shall not affect the judgments of the High Courts noticed – A copy of this order to be circulated to the Registrars General of all the High Courts for necessary information and compliance and also to the Tribunals. [Para 22]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.