The Supreme Court of India has ruled that the concept of a “split multiplier” is not applicable under the Motor Vehicles Act, 1988, when calculating compensation for victims of motor accidents. The court made this decision while awarding enhanced compensation to the wife and children of a man who died in a motor accident in 2012. The deceased, aged 51, was driving his car when a bus collided with it, causing severe injuries that led to his death.
The claimant-appellants, the wife and children of the deceased, had filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation of Rs 60 lakh, based on the deceased’s monthly income of Rs 47,860 as an Assistant Engineer in the Public Works Department. The Motor Accidents Claims Tribunal awarded Rs 44,04,912, which was later reduced by the High Court to Rs 35,10,144 by applying a split multiplier.
The Supreme Court, however, held that the split multiplier is a concept foreign to the Motor Vehicles Act, 1988, and should not be used by the Tribunal and/or Courts in calculating compensation. The court emphasized that when dealing with beneficial legislation, it is essential to tread the path of certainty, especially in the context of age, which is the primary basis for computing compensation.
The court noted that there were diverging opinions on the application of the split multiplier among High Courts, but ultimately decided that superannuation from service is a natural progression and does not qualify as an exceptional circumstance to justify the use of a split multiplier. Instead, the court held that the income as on the date of death should be taken to calculate the compensation.
The Supreme Court allowed the appeal and granted a compensation of Rs 47,76,794, enhancing the amount awarded by the Tribunal. The court also directed that the compensation should be disbursed to the claimant-appellants in the ratio of 70:10:10:10. The judgment highlights the importance of certainty and consistency in calculating compensation under the Motor Vehicles Act, 1988, and sets a precedent for future cases.