Kiran Raj

The Supreme Court Division Bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra set aside the Kerala High Court’s application of the “split multiplier” method in a motor accident compensation case and restored the compensation based on the multiplier system outlined in Sarla Verma v. DTC. The Court held that retirement or superannuation cannot be treated as an exceptional circumstance justifying a split multiplier and reaffirmed that compensation must be computed using the standard multiplier corresponding to the deceased’s age at the time of death. The Bench enhanced the compensation to ₹47.76 lakh, directed payment with interest as awarded by the Tribunal, and ordered that the ruling on the split multiplier will apply prospectively, with circulation of the judgment to all High Courts and Motor Accident Tribunals.

The case arose from a road accident on 3 August 2012 when a car driven by the deceased collided with a bus allegedly driven in a rash and negligent manner on the Pala–Thodupuzha Road in Kerala. The deceased, aged 51, succumbed to his injuries while being taken to the hospital. His wife and children filed a claim petition before the Motor Accidents Claims Tribunal (MACT), Pala, under Section 166 of the Motor Vehicles Act, 1988, seeking ₹60,00,000 as compensation. They stated that the deceased was employed as an Assistant Engineer in the Public Works Department, earning ₹47,860 per month.

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The Tribunal, after considering the evidence, determined the monthly income at ₹45,408 after tax deductions and applied a 15% addition for future prospects. Deducting one-fourth for personal expenses and applying a multiplier of nine, the Tribunal awarded ₹44,04,912 with 7.5% interest per annum.

Both sides appealed to the Kerala High Court—the insurer challenging the quantum and the claimants seeking enhancement. The High Court applied a split multiplier, reasoning that the deceased would have retired soon, and reduced the dependency compensation to ₹35,10,144. It also enhanced amounts under loss of consortium and affection but reduced funeral expenses. The claimants’ review petitions were dismissed, with the High Court holding that a split multiplier could be applied if reasons were recorded.

Aggrieved, the claimants approached the Supreme Court, contending that the deceased’s qualifications and experience could have ensured continued income post-retirement and that the High Court erred in applying a split multiplier contrary to established precedents.

The Court recorded that “there are divergent views of the High Courts regarding the use of split multiplier. Some judgments support its application while others explicitly reject the same.” It observed that such divergence “leaves the Tribunal bereft of guidance leading to differences in compensation awarded for no justifiable reason,” and stated that “when there are differences of opinion in benches of equal strength, it is incumbent upon the Court to seek to resolve by referring the issue to a bench of larger composition.”

The Bench stated that the judgment in Sarla Verma v. DTC “represented the coming of a much more structured, uniform method of calculation of compensation in motor accident cases insofar as the multiplier to be applied is concerned.” It quoted: “We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above... It is necessary to avoid this kind of inconsistency.”

The Court recorded that “a split multiplier is not to be adopted, as a matter of course, and is only to be used in the exceptional circumstances, with such circumstances being recorded.” Referring to N. Jayasree v. Cholamandalam MS General Insurance Co. Ltd., it noted that “the application of a split multiplier in a case involving a 52-year-old Assistant Professor of Mathematics was not justified.”

The Bench observed: “Superannuation from service hardly qualifies as such an exceptional circumstance, which would justify the use of split multiplier. It is only a natural progression that a person who enters service must also exit at some point in time.” It further stated: “The same cannot be taken as a negative circumstance against the deceased person or a person injured severely, leading to incapacitation or permanent disability.”

Quoting from Sumathi v. National Insurance Co. Ltd., the Court recorded: “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.”

The Court further stated: “The Constitution Bench in Pranay Sethi had, in para 59.7 observed that the age of the deceased is the criterion to be utilized for multiplier. It does not provide for any other possibilities… Split multiplier is a concept foreign to the Motor Vehicles Act, 1988 and is not to be used by the Tribunal and/or Courts in calculation of the compensation.”

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The Court directed: “The Civil Appeals are allowed in the aforesaid terms. The impugned Award dated 2nd April 2014 passed in O.P.(MV) No. 1105 of 2012 by the Tribunal, as modified by the High Court of Kerala, vide the impugned judgment dated 28th June 2024, passed in MACA Nos.210 of 2015 and 1219 of 2015; and judgement and order dated 27.11.24 in R.P.Nos.1165 and 1187 of 2024 shall stand modified accordingly. Interest on the amount is to be paid as awarded by the Tribunal.”

“The amount be directly remitted into the bank account of the claimant-appellants as directed by the High Court… The amount be remitted positively before 30th November, 2025. The directions issued by this order shall apply prospectively… A copy of this order is directed to be circulated by the Registrar (Judicial) of this Court to the learned Registrars General of all the High Courts… and to the Tribunals forthwith.”

Advocates Representing the Parties

For the Petitioners: Mr. Bijo Mathew Joy, AOR Ms. Gifty Marium Joseph, Adv.
For the Respondents: Mr. Pradeep Gaur, Adv. Mr. Amit Gaur, Adv. Ms. Sweta Sinha, Adv. Mr. Rameshwar Prasad Goyal, AOR

Case Title: Preetha Krishnan & Ors. v. United India Insurance Co. Ltd. & Ors.
Neutral Citation: 2025 INSC 1293
Case Number: Civil Appeal arising out of SLP (C) Nos. 9753–56 of 2025
Bench: Justice Sanjay Karol, Justice Prashant Kumar Mishra