“Multiplier Cannot Be Reduced Based on Quantum of Compensation”: Kerala High Court Enhances Motor Accident Compensation by ₹73.66 Lakhs for Nurse Working Abroad
Isabella Mariam
The Single Bench of the Kerala High Court at Ernakulam, through Justice Johnson John, dismissed a motor accident appeal filed by the insurance company and allowed the connected appeal filed by the legal heirs of the deceased, enhancing the total compensation by ₹73,66,408. The Bench held that the Tribunal had erred in calculating the income and applying an incorrect multiplier in determining loss of dependency. The Court directed the enhanced compensation amount to carry 7% annual interest from the date of application till realisation, excluding a delay period of 91 days.
The matter arose from a motor vehicle accident that occurred on 9 May 2013 in which Smt. Shiby Abraham, who was employed as a registered nurse in Australia, died while riding pillion on a motorcycle. The motorcycle was ridden by her father when it was hit by a lorry alleged to have been driven in a rash and negligent manner by the first respondent. The lorry was owned by the second respondent and insured by the third respondent, the National Insurance Company Ltd.
The legal heirs of the deceased, including her husband and minor children, filed a claim before the Additional Motor Accidents Claims Tribunal, Pathanamthitta. The Tribunal awarded a total compensation of ₹2,92,19,000, holding all respondents jointly and severally liable.
The insurance company filed M.A.C.A. No. 1287 of 2019 challenging the compensation awarded, while the claimants filed M.A.C.A. No. 2853 of 2019 seeking enhancement. Both appeals were heard together and disposed of by common judgment on 11 March 2025.
The appellants submitted that the deceased was 34 years old at the time of the accident and was employed in Australia with a bi-weekly salary of AUD 2,872, as established through employment and bank records (Exhibits A19 and A31). They contended that the Tribunal erred in fixing her monthly income as AUD 6,000 instead of the correct figure based on four-week earnings. The counsel for the insurance company argued that the Tribunal had made a computational error and also objected to the exchange rate used for converting the income into Indian currency.
The appellants argued that the Tribunal wrongly adopted a multiplier of 10 instead of 16, which is applicable for the age group of 31–35 years as per the decision in Sarla Verma v. Delhi Transport Corporation. It was contended that the Tribunal’s reasoning—reducing the multiplier to avoid a high compensation amount—was not legally sustainable.
On the issue of exchange rate, the appellants filed an affidavit stating that on the date of filing the claim petition, 19 October 2013, the exchange rate was ₹59.23 per AUD, which was not disputed by the insurance company. The Tribunal had, however, used the rate as on the date of the accident.
Further, the insurance company contended that the Tribunal failed to deduct adequate personal expenses of the deceased, considering she was residing abroad. Relying on the decision in United India Insurance Co. Ltd. v. Satinder Kaur @ Satwinder Kaur, it was submitted that 50% of the income should be deducted toward personal and living expenses due to the high cost of maintaining a household in a foreign country.
The High Court examined the material evidence on record and reviewed the Tribunal’s application of legal principles. It recorded that the deceased had an annual gross income of AUD 68,928. After applying a tax deduction of AUD 13,948 at the rate of 32.5% on earnings exceeding AUD 37,001, the net annual income was computed as AUD 54,980. Converting this to Indian currency using the exchange rate of ₹59.23, the Court arrived at an annual income of ₹32,56,465.
The Court observed: “The Tribunal is not justified in not following the principles laid down by the Honourable Supreme Court in Sarla Verma v. Delhi Transport Corporation... the correct multiplier applicable is 16.” The Tribunal’s reasoning that using the appropriate multiplier would result in a high compensation was expressly rejected.
Regarding future prospects, the Court upheld the Tribunal’s 40% addition in line with National Insurance Co. Ltd. v. Pranay Sethi, noting that the deceased was below 40 years and was on a fixed salary.
On the issue of personal expenses, the Court agreed with the insurance company and applied the principles from United India Insurance Co. Ltd. v. Satinder Kaur, stating: “Considering the fact that the deceased was working in Australia and taking note of the personal and living expenses... 50% of the income can be deducted towards personal and living expenses of the deceased.”
The Court further recorded: “When the loss of dependency is calculated as per the revised criteria, the same would come to ₹3,64,72,408.” It noted that the Tribunal had already awarded ₹2,91,06,000 under this head, and therefore, an additional compensation of ₹73,66,408 was granted to the claimants.
The Court also held that the compensation awarded under conventional heads by the Tribunal was in accordance with the guidelines laid down in Pranay Sethi and found no basis for interference in that component of the award.
The High Court disposed of the connected appeals with the following directions:
“M.A.C.A. No. 1287 of 2019 is dismissed and M.A.C.A. No. 2853 of 2019 is allowed. A total amount of ₹73,66,408 (Rupees Seventy-Three Lakhs Sixty-Six Thousand Four Hundred and Eight only) is awarded as enhanced compensation. The said amount shall carry interest at the rate of 7% per annum from the date of the application till realisation, excluding the period of delay of 91 days in filing the appeal.”
It was further directed: “The claimants shall furnish the details of the bank account to the insurance company for transfer of the amount.”
Advocates Representing the Parties
For the Appellant: George Cherian, Senior Advocate; K.S. Santhi, Advocate; Latha Susan Cherian, Advocate
For the Claimants: A.N. Santhosh, Advocate
Case Title: John Thomas and Others v. National Insurance Co. Ltd.
Neutral Citation: 2025:KER:20442
Case Number: M.A.C.A. No. 1287 of 2019 and M.A.C.A. No. 2853 of 2019
Bench: Justice Johnson John
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