Supreme Court enhances motor-accident award to Rs. 48 lakh, directs reassessment of non-pecuniary heads

A Bench of Justices Sanjay Karol and Prasanna B. Varale heard the civil appeal against the common order of the High Court of Madhya Pradesh that had partially allowed the claimant’s cross-appeal and enhanced only the head of loss of income. The appeal challenged awards made by the Motor Accidents Claims Tribunal (MACT), Bhopal, and the High Court’s limited interference with other heads of compensation after a serious 2009 road accident.

The Court allowed the appeal and enhanced the total compensation to Rs. 48,00,000, holding that while the High Court had correctly applied established principles in increasing the loss-of-income component, it had failed to examine and rectify shortfalls in awards under other heads such as future medical expenses, physiotherapy, attendant charges and non-pecuniary damages. The Court observed that “money cannot substitute a life lost but an effort has to be made for grant of just compensation so far as money can compensate.” The Court, in its reasoning, observed: "It is necessary to reiterate that the multiplier method is logically sound and legally well-established. ... The proper method of computation is the multiplier-method. Any departure, except in exceptional and extraordinary cases, would introduce inconsistency of principle, lack of uniformity and an element of unpredictability for the assessment of compensation. ... It must be borne in mind that the multiplier method is the accepted method of ensuring a 'just' compensation which will make for uniformity and certainty of the awards. We indicate that the multiplier method is the appropriate method, a departure from which can only be justified in rare and extraordinary circumstances and very exceptional cases."

Background The dispute arose from a collision on 3 October 2009 in which the appellant, then a B.Tech student, sustained severe injuries when the motorcycle he was riding collided with a truck driven on the wrong side. The petitioner underwent multiple surgeries and was assessed to be 60% permanently disabled. The MACT, by order dated 30 June 2014, awarded Rs. 19,43,800 with 7% interest, allocating amounts under heads including loss of income, speech therapy, physiotherapy, attendant expenses and non-pecuniary loss.

Both sides appealed: the claimant sought enhancement across heads; the insurer sought reduction. The High Court dismissed the insurer’s appeal and partly allowed the claimant’s appeal by enhancing the loss-of-income award from Rs. 11,23,200 to Rs. 27,21,600 after adopting a notional income of Rs.15,000 per month, applying a 40% addition for future prospects and a multiplier of 18. The claimant challenged the limited scope of enhancement before the Supreme Court, relying on precedents including Susamma Thomas, Sarla Verma, Pranay Sethi and Raj Kumar on multiplier application, future prospects and assessment of permanent disability.

At hearing the claimant argued for higher notional income, a greater addition for future prospects (invoking Sidram and Pranay Sethi), full compensation for attendant charges and extended future medical and therapy expenses in line with medical recommendations. The insurer relied on the MACT’s factual findings, medical evidence of improvement and the High Court’s adoption of established multipliers and prospect percentages.

The Supreme Court reviewed the authorities on the multiplier method and assessment of disability and earning capacity, held that the High Court was right in enhancing loss of income but erred in not scrutinising MACT’s awards under other heads against medical recommendations and the reality of continuing disability. Observing that MACT had limited awards for therapies and attendant charges to fixed short periods despite doctors’ indications of longer need and remaining reimbursements to the claimant’s family, the Court concluded that overall compensation required enhancement. The appeal was allowed and the total award was increased to Rs. 48,00,000, matching the amount claimed before the MACT. There was no order as to costs.

Case Details: Case No.: CIVIL APPEAL NO. 151 OF 2025 (@ SLP (C) No. 24205 of 2022) Case Title: Atul Tiwari v. Regional Manager, Oriental Insurance Company Limited Appearances: For the Petitioner(s): Shri Anil Lala (counsel appearing for the claimant; as noted in court) For the Respondent(s): (Not indicated in the reported text)