Constitution of India – Motor Vehicles Act, 1988 – Compensation Calculation – Split Multiplier Method – Future Prospects – Loss of Dependency.

Motor Vehicles Act, 1988 – Section 166 – Appeal against the reduction of compensation by the High Court – Tribunal’s award restored with modification for future prospects. Multiplier Application – The Supreme Court disapproved the High Court’s method of splitting the deceased’s income into pre-retirement and post-retirement phases – Held: Compensation should be calculated based on the standard multiplier method as per Sarla Verma v. DTC and Sumathi v. National Insurance Co. Ltd. Future Prospects – Tribunal and High Court erred in not awarding future prospects – Held: Appellants entitled to a 15% increase in the loss of dependency compensation. Loss of Consortium – Tribunal awarded ₹1,00,000/- in total – Held: Widow and two dependent children entitled to ₹40,000/- each. Final Compensation – Tribunal’s calculation of ₹28,66,994/- restored with modifications – Total amount enhanced to ₹33,03,300/- with interest.

Acts and Sections Discussed:

Motor Vehicles Act, 1988 – Section 166

Relevant Judgments Cited:

National Insurance Co. Ltd. v. Pranay Sethi, Sarla Verma v. DTC, Sumathi v. National Insurance Co. Ltd., Puttamma v. K.L. Narayana Reddy

Subjects:

Motor Accident Compensation – Multiplier Method – Future Prospects – Dependency Calculation – Loss of Consortium – Interest

Facts:

1. Nature of the Litigation – Appeal against the High Court’s reduction of compensation in a motor accident claim.

2. Who is Asking the Court and for What Remedy? – The legal heirs of the deceased sought restoration of the Tribunal’s award, challenging the High Court’s split multiplier method.

3. Reason for Filing the Case – The High Court reduced the compensation from ₹28,66,994/- to ₹19,66,833/- by splitting the deceased’s income into salary and pension periods.

4. What Has Already Been Decided Until Now?
(a) The Tribunal awarded ₹28,66,994/-
(b) The High Court reduced the amount to ₹19,66,833/-
(c) The Supreme Court restored the Tribunal’s method, increased compensation to ₹33,03,300/-

Issues:

Whether the High Court erred in applying a split multiplier?
Whether the appellants are entitled to future prospects?

Submissions/Arguments:

For the Appellants:
The High Court’s approach was erroneous as it deviated from settled law in Sarla Verma and Pranay Sethi.
The deceased was a government employee with stable income; future prospects should be considered.

For the Respondents:
The deceased was close to retirement, so post-retirement pension should be considered for compensation.

Decision:

The Supreme Court held that the split multiplier method was incorrectly applied by the High Court.
Future prospects at 15% were granted.
The total compensation was recalculated and enhanced to ₹33,03,300/- with interest.

Ratio:

Multiplier Should Be Applied Uniformly – Unless special reasons exist, the standard multiplier should be used instead of the split method.
Future Prospects Must Be Considered – The deceased’s dependents were entitled to a 15% increase in loss of income compensation.
Compensation for Consortium Should Be Just – Each dependent should receive ₹40,000/-.