SC Reinstates Compensation in Motor Accident Case – A Win for Dependents

(Hindi Translation Below)

In a crucial judgment, the Supreme Court of India recently overturned a ruling by the High Court in the case of Maya Singh & Others v. The Oriental Insurance Co. Ltd. & Others, reinstating the compensation awarded by the Motor Accident Claims Tribunal (MACT).

This decision underscores the importance of following established legal guidelines when calculating compensation for motor accident victims.

What Happened?

On March 7, 2014, Laxman Das Mahour, a 57-year-old phone mechanic working for Bharat Sanchar Nigam Limited (BSNL), was tragically hit by a bus and died on the spot. His family, including his wife, son, and daughter, filed a claim for compensation.

The MACT awarded ₹28,66,994/-, but the High Court of Madhya Pradesh reduced it to ₹19,66,833/- by using a “split multiplier” method, reasoning that Laxman would have retired in two years, leading to a reduced pension income.

What Did the Supreme Court Say?

Delivering the judgment, Justice Rajesh Bindal disagreed with the High Court’s decision. He emphasized that the split multiplier method is not to be used unless there are clear and compelling reasons to deviate from the standard multiplier method established in the landmark case Sarla Verma v. DTC. Since the High Court failed to provide a valid justification, the Supreme Court reversed its ruling.

Para 66 of the judgment of the case of Puttamma & Ors. v. K. L. Narayana Reddy & Anr. is relevant for the purpose of disposal of this appeal.

The relevant para 66 reads as under:

“66. In the appeal which was filed by the claimants before the High Court, the High Court instead of deciding the just compensation allowed a meagre enhancement of compensation. In doing so, the High Court introduced the concept of split multiplier and departed from the multiplier system generally used in the light of the decision in Sarla Verma case without disclosing any reason. The High Court has also not considered the question prospect of future increase in salary of the deceased though it noticed that the deceased would have continued in pensionable services for more than 10 years. When the age of the deceased was 48 years at the time of death it wrongly applied multiplier of 10 and not 13 as per decision in Sarla Verma. Thus, we fail to appreciate as to why the High Court chose to apply split multiplier and applied multiplier of 10. We, thus, find that the judgment of the High Court is perverse and contrary to the evidence on record and

is fit to be set aside for not having considered the future prospects of the deceased and also for adopting split multiplier method against the law laid down by this Court. In view of our aforesaid finding, we hold that the judgment of the High Court deserves to be set aside. We, accordingly, set aside the impugned judgment and hold that the claimants are entitled for total compensation of Rs.23,43,688. They shall also get interest on the enhanced compensation at the rate of 12% per annum from the date of filing of the complaint petition. Respondent 2 Insurance Company is directed to pay the enhanced/additional compensation and interest to the claimants within a period of three months by getting prepared a demand draft in their name.”

From a reading of the above judgment it is clear that

in normal course, the compensation is to be calculated by applying the multiplier, as per the judgment of this Court in the Case of Sarla Verma. Split multiplier cannot be applied unless specific reasons are recorded. The finding of the High Court that the deceased was having leftover service of only four years, cannot be construed as a special reason, for applying the split multiplier for the purpose of assessing the compensation. In normal course, compensation is to be assessed by applying multiplier as indicated by this Court in the judgment in the case of Sarla Verma. As no other special reason is recorded for applying the split multiplier, judgment of the High Court is fit to be set aside by restoring the award of the Tribunal.” (emphasis supplied)

In Sarla Verma’s case (supra), this Court has held that while calculating the compensation,

 the multiplier to be used should start with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years,

 and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.

From the above, it is clear that normally Courts and Tribunals have to apply the multiplier as per the judgement of this Court in Sarla Verma (supra). Any deviation from the same warrants special reasons to be recorded. In the case in hand, neither any special reason has been recorded by the High Court while applying the split

method nor we find there is one in the facts of the case. In the case in hand, the deceased was a technically qualified person and people are generally healthy at that age and continue working even after retirement.

Considering the aforesaid factual aspects and position of law, in our view, the compensation on account of loss of income while applying the multiplier of 9 by the Tribunal without applying the split method is the correct calculation on that account. Moreover, the Tribunal as well as the High Court had failed to award future prospects while calculating the compensation. Considering the age of the deceased, the appellant would be entitled to future prospects @ 15%. On account of loss of estate and funeral expenses, the amount of ₹15,000/- each awarded by the High Court is as per law.

As far as loss of consortium is concerned, there are three claimants, namely, the

widow, one son and one daughter. They would be entitled to compensation on account of loss of consortium @ ₹40,000/- each. The Tribunal had erred in awarding only a sum of ₹1,00,000/- in total

The Supreme Court restored the Tribunal’s calculation of loss of dependency using a multiplier of 9, adding 15% future prospects, considering the deceased’s age. It also revised the loss of consortium component, ensuring that the widow, son, and daughter each received ₹40,000/-, rather than a single lump sum of ₹1,00,000/- granted by the Tribunal.

The revised compensation is as follows:

• Loss of Dependency: ₹31,53,300

• Loss of Consortium: ₹1,20,000 (₹40,000 x 3)

• Funeral Expenses: ₹15,000

• Loss of Estate: ₹15,000

• Total Compensation: ₹33,03,300

in normal course, the compensation is to be calculated by

applying the multiplier, as per the judgment of this Court in

the Case of Sarla Verma. Split multiplier cannot be applied

unless specific reasons are recorded. The finding of the

High Court that the deceased was having leftover service of

only four years, cannot be construed as a special reason, for

applying the split multiplier for the purpose of assessing the

compensation. In normal course, compensation is to be

assessed by applying multiplier as indicated by this Court

in the judgment in the case of Sarla Verma. As no other

special reason is recorded for applying the split multiplier,

The appellants are held to be entitled to total compensation of ₹33,03,000/- (rounded off). They shall be entitled to payment of interest at the same rate as was awarded by the Tribunal

The Supreme Court reinforced that courts should follow established legal precedents like Sarla Verma and avoid arbitrary methods like the split multiplier approach unless absolutely necessary. also said that Even if a deceased person is close to retirement, their potential income growth should still be considered when calculating compensation.

Each dependent should receive individual compensation for loss of consortium, rather than a lump sum division, ensuring the emotional and financial impact on every family member is properly acknowledged.

This ruling is a huge relief for families of accident victims, ensuring that they receive fair and just compensation. It also serves as a reminder to lower courts to stick to legal principles and avoid arbitrary reductions that could adversely affect dependents.

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भारत के सर्वोच्च न्यायालय ने एक महत्वपूर्ण निर्णय में, हाई कोर्ट के फैसले को पलटते हुए, माया सिंह एवं अन्य बनाम ओरिएंटल इंश्योरेंस कंपनी लिमिटेड एवं अन्य के मामले में मोटर दुर्घटना दावा अधिकरण (MACT) द्वारा प्रदान किए गए मुआवजे को बहाल कर दिया।

यह निर्णय मोटर दुर्घटना पीड़ितों के लिए मुआवजा गणना करते समय स्थापित कानूनी दिशानिर्देशों का पालन करने के महत्व को रेखांकित करता है।

क्या हुआ था?

7 मार्च 2014 को, 57 वर्षीय लक्ष्मण दास महौर, जो भारत संचार निगम लिमिटेड (BSNL) में फोन मैकेनिक के रूप में कार्यरत थे, एक बस की चपेट में आ गए और मौके पर ही उनकी मृत्यु हो गई। उनकी पत्नी, पुत्र और पुत्री ने मुआवजे के लिए दावा दायर किया।

MACT ने ₹28,66,994/- का मुआवजा दिया, लेकिन मध्य प्रदेश हाई कोर्ट ने इसे घटाकर ₹19,66,833/- कर दिया। हाई कोर्ट ने "स्प्लिट मल्टीप्लायर" पद्धति का उपयोग किया, यह तर्क देते हुए कि लक्ष्मण महज दो वर्षों में सेवानिवृत्त हो जाते, जिससे उनकी पेंशन आय कम हो जाती।

सुप्रीम कोर्ट ने क्या कहा?

न्यायमूर्ति राजेश बिंदल ने हाई कोर्ट के फैसले से असहमति जताई। उन्होंने कहा कि "स्प्लिट मल्टीप्लायर" पद्धति का उपयोग तभी किया जाना चाहिए जब इसके लिए स्पष्ट और ठोस कारण हों।

यह मानक मल्टीप्लायर पद्धति से तभी अलग किया जा सकता है जब किसी विशेष कारण को न्यायसंगत ठहराया जाए, जैसा कि सारला वर्मा बनाम डीटीसी के ऐतिहासिक फैसले में निर्धारित किया गया था।

सुप्रीम कोर्ट ने पुत्तम्मा बनाम के.एल. नारायण रेड्डी मामले के पैराग्राफ 66 का संदर्भ दिया, जिसमें स्पष्ट रूप से कहा गया है कि हाई कोर्ट ने अनुचित रूप से स्प्लिट मल्टीप्लायर पद्धति का उपयोग किया और भविष्य की आय वृद्धि को नजरअंदाज किया।

सुप्रीम कोर्ट ने पाया कि:

• हाई कोर्ट द्वारा स्प्लिट मल्टीप्लायर अपनाने के लिए कोई विशेष कारण नहीं दिया गया था।

• मुआवजा गणना में स्थापित मानकों का पालन करना आवश्यक है, जैसा कि सारला वर्मा मामले में तय किया गया था।

• सेवानिवृत्ति के करीब होने के बावजूद, व्यक्ति की संभावित आय वृद्धि को मुआवजा निर्धारण में शामिल किया जाना चाहिए।

• प्रत्येक आश्रित को व्यक्तिगत रूप से संवेदनात्मक हानि (लॉस ऑफ कंसोर्टियम) का मुआवजा मिलना चाहिए, न कि एकमुश्त राशि।

संशोधित मुआवजा:

मुआवजा घटक	राशि
आश्रय हानि (लॉस ऑफ डिपेंडेंसी)	₹31,53,300
संवेदनात्मक हानि (लॉस ऑफ कंसोर्टियम)	₹1,20,000 (₹40,000 × 3)
अंतिम संस्कार खर्च	₹15,000
संपत्ति हानि (लॉस ऑफ एस्टेट)	₹15,000
कुल मुआवजा	₹33,03,300

सुप्रीम कोर्ट ने निचली अदालतों को निर्देश दिया कि वे स्थापित कानूनी सिद्धांतों का पालन करें और मनमाने ढंग से मुआवजे में कटौती करने से बचें। यह फैसला दुर्घटना पीड़ितों के परिवारों के लिए एक बड़ी राहत है और सुनिश्चित करता है कि उन्हें न्यायसंगत मुआवजा मिले।