Motor Accident Claim and 'Split Multiplier'; Supreme Court Reinstates Compensation

In the case of Maya Singh and Ors. vs The Oriental Insurance Co. Ltd. and Ors., the Supreme Court thought over the correct methodology for determining compensation in motor accident claims, specifically relating to the application of the "split multiplier". The appeal has been preferred from a motor accident, wherein the High Court has reduced the compensation granted by the Tribunal.

The case had arisen after Laxman Das Mahour met his untimely death in a bus accident. His family, the appellants, filed a claim against the Oriental Insurance Company Ltd. (the respondent), which contested the claim on the grounds of the bus driver's alleged lack of negligence and challenges to the deceased's income. The Tribunal had awarded ₹28,66,994, but the High Court subsequently reduced this to ₹19,66,833, applying a "split multiplier" method to calculate the dependency.

The Supreme Court, in its analysis, made several critical observations:

The Court found that the High Court had erred in applying a "split multiplier" to the deceased's income. The Court asserted that judgments by it in previous cases, amongst which were, Sarla Verma & Ors. vs Delhi Transport Corporation (Click to Download) and Sumathi vs Ms. National Insurance Company Ltd ., had very clearly laid down the principles thereof. In fine, a multiplicand split only in cases that are specific to and justifiably warrant application of such multipliers.

The Court reaffirmed that compensation should be determined based on the multiplier method, as outlined in the Sarla Verma case, and the principles therein should govern the calculation of dependency.

The Court also took into account the deceased's age and technical qualifications, suggesting that these factors could imply the potential for continued employment even post-retirement.

Additionally, the Court noted the failure to award compensation for future prospects and clarified the issue of compensation for the loss of consortium.

As a result of these findings, the Supreme Court allowed the appeal, set aside the High Court’s decision, and restored the Tribunal’s original award. The appellants were entitled to a revised compensation of ₹33,03,300. Furthermore, the appellants were entitled to interest at the same rate as awarded by the Tribunal.

Coram: Justice J.K. Maheshwari and Justice Rajesh Bindal
Case: Maya Singh and Ors. vs The Oriental Insurance Co. Ltd. and Ors
Judgment Date: 07-02-2025