Summary
In a motor accident death claim for a 51-year-old government engineer, the Court held that a split multiplier, applied by the High Court because the deceased was nearing superannuation, is foreign to the Motor Vehicles Act, 1988. Compensation must be computed on the income at the date of death with the age-based multiplier, and it was recomputed at Rs.47,76,794 with the conventional heads enhanced under Pranay Sethi.
Issues
- Whether a split multiplier may be applied to reduce compensation on the ground that the deceased would soon have retired and his income would have fallen.
- What compensation is payable to the claimants on a correct application of Sarla Verma and Pranay Sethi.
Provisions considered
- Section 166, Motor Vehicles Act, 1988The claim was brought under Section 166; the Court applied the structured, age-based multiplier method of Sarla Verma and Pranay Sethi for such claims and held that a split multiplier has no place in computing just compensation under the Act. (¶¶ 4, 15, 18, 19)
Held
- High Courts have taken divergent views on the split multiplier, including within the same Court. Such intra-court disagreement leaves Tribunals without guidance and affects judicial discipline; where benches of equal strength differ, the issue should be referred to a larger bench. (¶¶ 13, 14)
- A split multiplier is not to be adopted as a matter of course and has been permitted only in exceptional circumstances with recorded reasons; superannuation is a natural progression in service and is not such a circumstance, nor a factor to be held against the deceased or a disabled claimant. (¶¶ 16, 17, 18)
- Since Pranay Sethi makes the age of the deceased the criterion for the multiplier and leaves no other possibility, the split multiplier is a concept foreign to the Motor Vehicles Act, 1988 and is not to be used by Tribunals or Courts in calculating compensation. (¶ 18)
- The income as on the date of death is to be taken for computing compensation, with 15% future prospects for a deceased aged between 50 and 60, a one-fourth deduction for personal expenses, and the conventional heads enhanced by 10% every three years as directed in Pranay Sethi. (¶¶ 16, 19)
- The conclusions on split multiplier apply prospectively and do not affect the High Court judgments noticed in the judgment, which were cited only to show the divergence of views. (¶ 22)
Result
Appeals allowed; compensation enhanced to Rs.47,76,794 with interest as awarded by the Tribunal, to be remitted to the claimants' bank accounts by 30/11/2025; direction on split multiplier to operate prospectively and to be circulated to all High Courts and Tribunals.