Supreme Court Restored Higher Award, Holds Exchange Rate As On Filing Date And Applies Multiplier 14 For Foreign Currency Earner

A bench of Justices Sanjay Karol and Prashant Kumar Mishra heard an appeal challenging the Telangana High Court's reduction of compensation in a motor accident claim; the primary issues were whether conversion to rupees should occur at the exchange rate prevailing on the date of the accident or on the date of filing the claim petition, and whether the multiplier applied to a 43‑year‑old plaintiff earning in foreign currency could be reduced.

The Court allowed the civil appeal, held that the proper date for fixing the rate of exchange for computing compensation was the date of filing of the claim petition, fixed the conversion rate at Rs.57 per US Dollar, and reinstated the multiplier of 14 for a deceased aged 43 years. The Court observed that established precedents required application of the standard multiplier regardless of the currency of earnings and cited prior rulings on the exchange rate point. The Court, in its reasoning, observed: “On the second issue, as per National Insurance Co. Ltd. v. Pranay Sethi the law is settled that the multiplier for a person aged 43 must be 14. No exception is made for a person earning in foreign currency.” The appeal resulted in recalculation of compensation to Rs.9,64,52,220/- (equivalent to $16,88,960 at Rs.57), with interest as awarded by the Motor Accident Claims Tribunal (MACT).

Background The dispute arose from a fatal collision on 13 June 2009 in which Lakshmi Nagalla (aged 43) died when a bus operated by the Andhra Pradesh State Road Transport Corporation collided with the car in which she was travelling. Dependants — her husband and two daughters — filed a claim petition before the MACT seeking compensation of Rs.9 crore, stating that the deceased was a permanent U.S. resident earning $11,600 per month as a software engineer and real‑estate commission salesperson in Georgia, U.S.A.

The MACT found the bus driver to have driven rashly and awarded Rs.8,03,42,476/- (equivalent to $16,88,960) applying a multiplier of 14 and future prospects at 30%, with interest at 7.5% per annum. The Transport Corporation appealed to the High Court contending that the MACT erred in finding rashness and in applying a multiplier of 14; the High Court affirmed the income finding but reduced the multiplier to 10, relying on this Court's decision in United India Insurance Co. v. Patrica Jean Mahajan, and awarded Rs.5,75,68,982/-.

The claimants approached this Court by civil appeal. The Court framed two issues: (a) whether conversion to rupees must use the exchange rate on the date of accident or on the date of filing the claim petition, and (b) whether the multiplier could be reduced merely because the deceased earned in foreign currency. The bench noted that respondents did not appear despite service. Relying on this Court’s prior rulings — Jiju Kuruvila v. Kunjujamma Mohan (that the date of filing is the proper date for fixing exchange rate) and DLF Ltd. v. Koncar Generators & Motors Ltd. — the Court fixed the conversion rate at Rs.57, the rate prevailing on the date of filing. It further held, following National Insurance Co. Ltd. v. Pranay Sethi, that the multiplier of 14 applied to a 43‑year‑old and that no exception arose from earnings in foreign currency. The Civil Appeal was allowed and the award dated 27 December 2014 was modified to grant total compensation of Rs.9,64,52,220/-, with interest as originally awarded by the Tribunal. Pending applications stood disposed of.

Case Details: Case No.: Civil Appeal No.2324 of 2025 (Arising out of SLP(C) No.818/2025) Case Title: Shyam Prasad Nagalla & Ors. v. The Andhra Pradesh State Road Transport Corporation & Ors. Appearances: For the Petitioner(s): [Counsel not indicated in the order] For the Respondent(s): [Respondents did not enter appearance / counsel not indicated]