SC Rejects “Split Multiplier” in Accident Compensation: Restores Tribunal’s Award for Victim’s Family

The case arose from a fatal accident in which T.I. Krishnan, a 51-year-old Assistant Engineer in the Public Works Department, died when his car was struck by a rashly driven bus on the Pala–Thodupuzha road in Kerala. His wife and children filed a claim under Section 166 of the Motor Vehicles Act, 1988, seeking ₹60 lakh as compensation. The Motor Accidents Claims Tribunal awarded ₹44,04,912 with interest, calculating the deceased’s monthly income at Rs. 45,408 and applying a 15% increase for future prospects, deducting one-fourth for personal expenses, and using a multiplier of nine.

Dissatisfied, both the insurer and the claimants appealed. The Kerala High Court reduced the compensation to Rs. 35,10,144 by introducing a “split multiplier” — reducing post-retirement income — while making minor revisions to other heads like consortium and funeral expenses. When the family’s review petitions were dismissed, they approached the Supreme Court, arguing that the split multiplier was contrary to settled principles laid down in Sarla Verma v. DTC and Pranay Sethi.

Central Issue: Whether courts can apply a “split multiplier” to reduce compensation on the ground that the deceased would have retired soon, despite clear Supreme Court precedents prescribing uniform multipliers based on age.

SC’s Rulling: Judgment authored by Justice Sanjay Karol and concurred by Justice Prashant Kumar Mishra, held that applying a split multiplier in motor accident cases is impermissible unless there exist “exceptional and cogent reasons,” which retirement from service does not constitute. The Court reaffirmed that the multiplier must be determined solely based on the age of the deceased, as per Sarla Verma v. DTC (2009) and the Constitution Bench ruling in Pranay Sethi (2017). It noted that creating income splits for pre- and post-retirement periods introduces arbitrariness and undermines the principle of “just compensation.”

Setting aside the Kerala High Court’s order, the Bench restored and enhanced the Tribunal’s computation, fixing total compensation at Rs. 47,76,794 with interest at 7.5% per annum. It directed United India Insurance Co. Ltd. to directly remit the amount to the claimants’ bank accounts by November 30, 2025, and circulated the judgment to all High Courts and Motor Accident Claims Tribunals to ensure uniform application of law. The ruling clarifies that the use of a split multiplier is “foreign to the Motor Vehicles Act” and should not be followed henceforth.

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