8 July 2024


Supreme Court

Erudhaya Priya Vs. State Express Transport Corporation Ltd.



Motor Vehicles

While applying the multiplier method, future prospects on advancement in life and career are also to be taken into consideration

In present matter, the Appellant was travelling from Chennai to Bangalore in a bus owned by the Respondent State Corporation. While the bus was moving on the Kolar Bangalore National Highway, it ran into a stationary lorry. The collision resulted in multiple injuries to numerous passengers including the Appellant, and caused death of the bus conductor on the spot. The injuries to the Appellant were grievous including fractures in the arms and legs and she suffered a disability of 31.1% of the whole body.

An FIR was registered in pursuance of investigation naming the driver of the bus as an Accused. Chargesheet was filed. The Appellant filed a claim petition before the Motor Accident Claims Tribunal ("MACT"), under Section 166 of the Motor Vehicles Act, 1988 ("MV Act") read with Rule 3(1) of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 claiming compensation. The MACT concluded that, the accident occurred due to the rash and negligent manner of driving of the bus driver of the bus owned by the Respondent State Corporation and, thus, held the Respondent liable to pay compensation to the Appellant. In terms of the judgment, the MACT opined that the permanent disability of 31.1% would have to be considered and applied the multiplier method to calculate the loss of earning power. The total quantification of the compensation by the MACT was of Rs. 35,24,288 payable by the Respondent State Corporation along with interest @ 7.5% per annum from the date of petition till the date of realization with costs.

The Respondent State Corporation filed an appeal. The High Court, confirming the findings of negligence of the bus driver, reduced the compensation to Rs. 25,00,000 primarily on the ground that the multiplier method for quantifying loss of earning power has been wrongly applied as it had not come on record as to how the injuries suffered by the Appellant would have a bearing on her earning capacity as a software engineer. The interest rate was sustained. The Appellant has claimed before present Court that, she is entitled to enhancement of compensation even over and above what was granted by the MACT.

A victim who suffers a permanent or temporary disability occasioned by an accident is entitled to the award of compensation. The award of compensation must cover among others, the following aspects: (i) Pain, suffering and trauma resulting from the accident; (ii) Loss of income including future income; (iii) The inability of the victim to lead a normal life together with its amenities; (iv) Medical expenses including those that the victim may be required to undertake in future; and (v) Loss of expectation of life.

In Sandeep Khanuja v. Atul Dande and Ors., present Court opined that, the multiplier method was logically sound and legally well established to quantify the loss of income as a result of death or permanent disability suffered in an accident. In the factual contours of the present case, the disability certificate shows the admission/hospitalization on 8 occasions for various number of days over 1 ½ years from August 2011 to January 2013. It has been opined in Sandeep Khanuja v. Atul Dande and Ors. that, while applying the multiplier method, future prospects on advancement in life and career are also to be taken into consideration.

There is merit in the contention of the Appellant and the aforesaid principles with regard to future prospects must also be applied in the case of the Appellant taking the permanent disability as 31.1%. The quantification of the same on the basis of the judgment in National Insurance Co. Ltd. v. Pranay Sethi and Ors., more specifically considering the age of the Appellant, would be 50% of the actual salary in the present case.

The Appellant would, thus, be entitled to the compensation of Rs. 41,69,831 as claimed along with simple interest at the rate of 9% per annum from the date of application till the date of payment. The appeals are, accordingly, allowed.


Sandeep Khanuja v. Atul Dande and Ors. MANU/SC/0108/2017
, National Insurance Company Limited v. Pranay Sethi and Ors. MANU/SC/1366/2017

Tags : Accident Compensation Entitlement

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