Supreme Court Holds Split Multiplier Must Not Be Used Routinely in Motor Accident Compensation

A bench of Justices Sanjay Karol and Prashant Kumar Mishra heard appeals by the claimants challenging the Kerala High Court’s application of a split multiplier in assessing compensation in a motor accident claim arising from the death of a 51‑year‑old government engineer. The appeals arose from orders in MACA Nos. 210 and 1219 of 2015 and related review petitions, and the Court considered whether reduction of the multiplier on account of impending superannuation was justified.

The Court allowed the civil appeals, restored and revised the award in favour of the claimants and held that a split multiplier was not to be adopted as a rule but only in exceptional circumstances with such reasons recorded. The Court emphasized established precedents including Sarla Verma and Pranay Sethi and held that “superannuation from service hardly qualifies as such an exceptional circumstance” to justify a split multiplier. The Court, in its reasoning, observed: “Superannuation from service hardly qualifies as such an exceptional circumstance, which would justify the use of split multiplier. ... In other words, 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.” The Court further noted that “Split multiplier cannot be applied unless specific reasons are recorded.” The award for loss of dependency was recalculated on the basis of income as on the date of death and conventional principles, resulting in total compensation of Rs.47,76,794/-. Interest as awarded by the Tribunal was to be paid and the amount was directed to be remitted directly to the claimants’ bank accounts before 30 November 2025. The Court clarified that its directions on split multiplier would apply prospectively and ordered circulation of the judgment to all High Courts and Tribunals.

Background The dispute arose from a collision on 3 August 2012 on Pala‑Thodupuzha Road in which the deceased, T.I. Krishnan (age 51), an Assistant Engineer in the Public Works Department, died. Claimants (his wife and children) filed a claim under Section 166 of the Motor Vehicles Act seeking Rs.60,00,000/-. The Motor Accidents Claims Tribunal awarded Rs.44,04,912/-, treating the deceased’s monthly income as Rs.45,408/-, applying 15% future prospects, a 1/4 deduction for personal expenses and a multiplier of 9, and awarding amounts under heads of consortium, funeral expenses, loss of love and affection and loss of estate.

Both the insurer and the claimants appealed to the Kerala High Court. The High Court applied a split multiplier to account for an assumed post‑retirement reduction in income and reduced the dependency portion from Rs.42,29,712/- to Rs.35,10,144/-. It adjusted other heads (increasing consortium and love and affection, reducing funeral expenses, and altering distribution) and later refused review petitions that sought restoration of the Tribunal’s award. The claimants then approached the Supreme Court.

The Supreme Court analyzed divergent High Court authorities on split multipliers and reiterated that the Sarla Verma framework and subsequent precedents governed multiplier application. Relying on earlier decisions including Pranay Sethi and Sumathi, the Court held that retirement or impending superannuation did not, by itself, constitute an exceptional circumstance warranting a split multiplier. The Court restored the award as modified by it, computed loss of dependency on the deceased’s income as on date of death with 15% future prospects and applied multiplier 11 to arrive at Rs.45,95,294/- for loss of income and a total award of Rs.47,76,794/-. The Court directed immediate remittance to the claimants’ bank accounts, required counsel to supply account particulars, and ordered circulation of the judgment; it made its conclusions on split multiplier prospective so as not to disturb the High Courts’ earlier orders noted in the judgment.

Case No.: 2025 INSC 1293 Case Title: Preetha Krishnan & Ors. v. The United India Insurance Co. Ltd. & Ors. Appearances: For the Petitioner(s): [Advocates not mentioned in the judgment] For the Respondent(s): [Advocates not mentioned in the judgment]