Holding

The Supreme Court held that the split multiplier method is impermissible without recorded special reasons and that the multiplier prescribed in Sarla Verma must be applied, resulting in a higher compensation award.

Summary

The appellants, family members of Laxman Das Mahour who died in a bus accident, challenged the High Court's reduction of compensation awarded by the Motor Accident Claims Tribunal. The Tribunal had calculated loss of dependency using a multiplier of 9 on the deceased's annual income of ₹4,57,000, arriving at a total award of ₹28,66,994. The High Court applied a split multiplier, separating pre‑retirement salary and post‑retirement pension, and reduced the award to ₹19,66,833. The Supreme Court held that the split method cannot be used without expressly recorded special reasons and reaffirmed the multiplier approach laid down in Sarla Verma. It also added 15% for future prospects, corrected loss of consortium awards, and affirmed the amounts for loss of estate and funeral expenses, raising the total compensation to ₹33,03,000. Consequently, the appeal was allowed and the High Court’s order set aside.

Issues considered

Whether the High Court was justified in applying the split multiplier method to calculate loss of dependency in a motor accident compensation case.
Whether the multiplier prescribed in Sarla Verma v. DTC must be applied absent special reasons.
Whether the claimants are entitled to additional compensation for future prospects, loss of consortium, loss of estate, and funeral expenses.

Subjects

Motor Vehicle Accident ClaimCompensationApplication of MultiplierSplit MethodLoss of estateFuneral expensesLoss of consortiumLoss of incomeFuture prospects

Judgment

[2025] 2 S.C.R. 602 : 2025 INSC 161

Maya Singh and Others
v.
The Oriental Insurance Co. Ltd. and Others
(Civil Appeal No. 2203 of 2025)
07 February 2025
[J.K. Maheshwari and Rajesh Bindal,* JJ.]

Issue for Consideration
The instant appeal has been filed against the impugned order dated
31.07.2019 passed by the High Court in a motor accident case.
The Tribunal assessed the compensation at ₹28,66,994/-. The High
Court applied the Split method for calculation of dependency and
reduced the compensation to ₹19,66,833/-.

Headnotes†
Motor Vehicle Accident Claim – The victim-deceased was
knocked down by the offending bus – Victim died on spot –
Deceased was 57-58 years of age and was employed as a
phone mechanic with BSNL – The Tribunal assessed the
compensation at ₹28,66,994/- – However, the High Court
reduced the compensation under the head of loss of
dependency by bifurcating the period for which the deceased
would have remained in service and post-retirement – The
total amount of compensation assessed by the High Court
was ₹19,66,833/- – Correctness:
Held: The Tribunal assessed the compensation on account of loss
of income taking the annual income of the deceased at ₹4,57,000/-
by applying a multiplier of 9 and applying a cut of one-third towards
personal expenses – The High Court applied a split method – The
High Court has erred in not considering the principles laid down
in the cases of Sarla Verma v. DTC and Sumathi v. M/s. National
Insurance Company Ltd. – Normally Courts and Tribunals have
to apply the multiplier as per the judgement of this Court in Sarla
Verma – Any deviation from the same warrants special reasons to
be recorded – In the case in hand, neither any special reason has
been recorded by the High Court while applying the split method

* Author
[2025] 2 S.C.R. 603

Maya Singh and Others v.
The Oriental Insurance Co. Ltd. and Others

nor there is one in the facts of the case – The deceased was a
technically qualified person and healthy – He would have continued
working even after retirement – Considering the aforesaid factual
aspects and position of law, the compensation on account of loss
of income while applying the multiplier of 9 by the Tribunal without
applying the split method is the correct calculation on that account –
Moreover, the Tribunal as well as the High Court had failed to award
future prospects while calculating the compensation – Considering
the age of the deceased, the appellant would be entitled to future
prospects @ 15% – On account of loss of estate and funeral
expenses, the amount of ₹15,000/- each awarded by the High
Court is as per law – As far as loss of consortium is concerned,
there are three claimants, namely, the widow, one son and one
daughter – They would be entitled to compensation on account
of loss of consortium @ ₹40,000/- each – Thus, the award of the
Tribunal is modified – The appellants are held to be entitled to
total compensation of ₹33,03,000/-. [Paras 11.1, 11.2, 11.5, 12. 14]

Case Law Cited
Sarla Verma v. DTC 2009 INSC 506 : [2009] 5 SCR 1098: (2009)
6 SCC 121, Sumathi v. M/s. National Insurance Company Ltd,
CIVIL APPEAL NO. 7729 OF 2021 decided on 15.12.2021 : 2022
ACJ 1315, Puttamma & Ors. v. K. L. Narayana Reddy & Anr. 2013
INSC 814 : [2013] 16 SCR 831 : (2013) 15 SCC 45 – relied on.
National Insurance Company Limited v. Pranay Sethi and
Others 2017 INSC 1068 : [2017] 13 SCR 100:(2017) 16 SCC
680 – referred to.

List of Keywords
Motor Vehicle Accident Claim; Compensation; Application of
Multiplier; Split Method; Loss of estate; Funeral expenses; Loss
of consortium; Loss of income; Future prospects.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2203 of 2025
From the Judgment and Order dated 31.07.2019 of the High Court
of Madhya Pradesh at Gwalior in MA No. 568 of 2015
604 [2025] 2 S.C.R.

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Appearances for Parties
Dinesh Kr Tiwary, Santosh Kumar Tripathi, Chandan Kr, Ms. Anita
Pandey, Rakesh Ranjan, Ms. Jaya Kumari, Advs. for the Appellants.
Sumit Sinha, Mrs. Anjali Rajput, Somanatha Padhan, Ashok Anand,
Advs. for the Respondent.

Judgment / Order of the Supreme Court

Judgment

Rajesh Bindal, J.

1. Leave granted.
2. This appeal has been filed against the impugned order dated
31.07.20191 passed by the High Court2 in a motor accident case.3
The Tribunal4 awarded compensation of ₹28,66,994/- under various
heads along with interest @ 7.5% per annum from the date of filing
of the claim petition till realisation. However, the High Court reduced
the compensation to ₹19,66,833/- observing that the deceased was
to remain in service only for another 02 years and thereafter would
have retired. Split method for calculation of dependency was applied.
3. The facts on record are that on 07.03.2014 at about 03.00 p.m.,
Laxman Das Mahour (deceased) was travelling with his son Jugal
Kishore, on a bus. After getting off the bus, he was walking on the
road when the offending bus bearing Registration No. MP-06/B-1725
dashed against him. Tragically, Laxman Das succumbed to his
injuries at the scene of the accident. The appellants are the family
of the deceased, who filed the claim petition seeking compensation.
4. Before the Tribunal, the owner and the driver of the offending bus
did not appear despite service, hence, were proceeded against ex-
parte. Respondent/Insurance Company challenged the claim of the
appellants by, inter alia, denying the negligence of the bus driver
and disputing the income earned by the deceased.

1 MA No. 568 of 2015.
2 High Court of Madhya Pradesh at Gwalior.
3 Claim Case No. 65 of 2014.
4 First Additional Motor Accidental Claims Tribunal, Dist. Gwalior (M.P.).
[2025] 2 S.C.R. 605

Maya Singh and Others v.
The Oriental Insurance Co. Ltd. and Others

5. After considering the materials produced by the parties in evidence,
the Tribunal assessed the compensation at ₹28,66,994/-. The details
thereof are as under:

Heads Compensation (₹)
Loss of dependency 27,41,994
(₹4,57,000 x 9 x 2/3)
Loss of consortium to wife 1,00,000
Funeral expense 25,000
Total 28,66,994

with interest @ 7.5% p.a.

6. Aggrieved against the award of the Tribunal, the Insurance Company
preferred appeal before the High Court. The High Court partially
allowed the same and reduced the compensation under the head of
loss of dependency by bifurcating the period for which the deceased
would have remained in service and post-retirement. The amount of
consortium payable to the widow was reduced from ₹1,00,000/- to
₹40,000/-. The total amount of compensation assessed by the High
Court was ₹19,66,833/-. The details thereof are as under:

Heads Compensation (₹)
Salary (March 2014 to Dec. 2015) – 8,69,000
₹39,500 x 22 months

Salary (January 2016 to July 2016) – 2,97,500
₹42,500 x 7 months
Pension – ₹21,250 x 79 months 16,78,750
Dependency – 1/3 reduction
rd
(-) 9,48,416
Loss of estate 15,000
Loss of funeral expense 15,000
Loss of consortium 40,000
Total 19,66,833
with interest @ 7.5% p.a.
606 [2025] 2 S.C.R.

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7. Aggrieved against the aforesaid order, the claimants are before this
Court.
8. Learned counsel for the appellants submitted that the High Court
has committed grave error in reducing the amount of compensation
admissible to them under the head of loss of dependency. The High
Court has applied a novel method of splitting the income of pre and
post-retirement, as a result of which the amount of compensation
which the appellants are entitled to was considerably reduced. The
appellants are entitled to compensation on account of loss of income
as opined by the Tribunal and in addition are entitled to 15% increase
on account of future prospects considering the age of the deceased.
The Tribunal had rightly assessed the loss of income to the family
but had failed to grant compensation on account of loss of estate
in terms of Constitution bench judgment of this Court in National
Insurance Company Limited v. Pranay Sethi and Others.5
9. On the other hand, the learned counsel of the respondent submitted
that the compensation as assessed by the High Court is just and fair.
The deceased was close to 58 years of age and would have retired
in the next 02-03 years. Thereafter, he would have received pension
and not salary. It would have been about 50% of the last drawn salary.
The compensation has to be calculated with reference of loss to the
family post retirement. Loss to the family after retirement could not be
of the income of the deceased but of the amount of pension. However,
Respondent did not dispute the fact that in terms of Pranay Sethi
(supra), the appellants would be entitled to an increase on account of
future prospects and also specified compensation under other heads.
10. Heard learned counsel for the parties and perused the paperbook.
11. As is evident from the record, the accident in question took place on
07.03.2014. The deceased was knocked down by the offending bus
bearing Registration No. MP-06/B-1725. He died on the spot. He was
57-58 years of age and was employed as a phone mechanic with
Bharat Sanchar Nagar Limited (for short “BSNL”). He was survived
by his widow and four children. Two of his sons were held not to be
legally entitled to claim compensation as they were not financially
dependent on the deceased. The present appellants, namely the

5 (2017) 16 SCC 680 : 2017 INSC 1068.
[2025] 2 S.C.R. 607

Maya Singh and Others v.
The Oriental Insurance Co. Ltd. and Others

widow, a dependent son and a daughter of the deceased, are the
rightful claimants for compensation. The income as proved on record
was ₹39,500/- per month (₹4,74,000/- per annum), which after
deduction of income tax was ₹4,57,000/- per annum. To the aforesaid
facts, there is no dispute. The Tribunal assessed the compensation on
account of loss of income taking the annual income of the deceased
at ₹4,57,000/- by applying a multiplier of 9 and applying a cut of
one-third towards personal expenses.
11.1 The High Court applied a split method. It was opined that
after the death of the deceased in the accident he would
have drawn salary of ₹39,500/- for a period of 22 months.
Thereafter, an increment was due to him, by adding the
same for another 07 months before retirement, he would
have drawn salary of ₹42,500/- per month. Thereafter, the
deceased would have been entitled to pension of ₹21,250/-.
The compensation was assessed in terms thereof. As far as
loss of compensation on account of consortium is concerned,
the Tribunal had awarded ₹1,00,000/-, which was reduced
to ₹40,000/-. Additionally, amount of ₹15,000/- was granted
on account of loss of estate. The compensation granted on
account of funeral expenses was reduced from ₹25,000/- to
₹15,000/-. As against ₹28,66,994/- awarded by the Tribunal,
the High Court assessed the compensation at ₹19,66,833/-.
11.2 An examination of the High Court’s decision reveals that
substantial reduction in compensation is on account of
application of a ‘split multiplier’ to the income of deceased. In
our considered view, the High Court has erred in not considering
the principles laid down in the cases of Sarla Verma v. DTC6
and Sumathi v. M/s. National Insurance Company Ltd.7
11.3 This Court in Sumathi (supra) addressed a similar situation.
The deceased was 54 years of age and was due to retire
from government service in four years when the fatal accident
occurred. The High Court assessed the compensation by
taking the total salary of the deceased for the leftover period of
four years and fifty per cent of the salary for the post-retirement

6 (2009) 6 SCC 121 : 2009 INSC 506.
7 CIVIL APPEAL NO. 7729 OF 2021 decided on 15.12.2021 : 2022 ACJ 1315.
608 [2025] 2 S.C.R.

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period. The High Court awarded a total compensation of
₹25,25,000/- instead of ₹40,76,496/- awarded by the Tribunal.
This Court set aside the decision of High Court and held that
split multiplier cannot be applied unless specific reasons are
recorded. It was opined as under:
“9. The High Court has applied split multiplier by referring
to the judgment of this Court in the case of Puttamma &
Ors. v. K. L. Narayana Reddy & Anr.,8 without recording
any specific reason, contrary to the said judgment. The
High Court has applied split multiplier only on the ground
that the deceased was 54 years of age at the time of the
accident and leftover service was only four years. In the
case of Puttamma & Ors. v. K. L. Narayana Reddy &
Anr., in similar circumstances, where the split multiplier
was applied for the purpose of assessing compensation
by the High Court, this Court has allowed the appeal by
setting aside the judgment of the High Court. Para 66 of
the judgment of the case of Puttamma & Ors. v. K. L.
Narayana Reddy & Anr. is relevant for the purpose of
disposal of this appeal. The relevant para 66 reads as under:
“66. In the appeal which was filed by the claimants
before the High Court, the High Court instead of
deciding the just compensation allowed a meagre
enhancement of compensation. In doing so, the
High Court introduced the concept of split multiplier
and departed from the multiplier system generally
used in the light of the decision in Sarla Verma
case without disclosing any reason. The High Court
has also not considered the question of prospect of
future increase in salary of the deceased though it
noticed that the deceased would have continued in
pensionable services for more than 10 years. When
the age of the deceased was 48 years at the time
of death it wrongly applied multiplier of 10 and not
13 as per decision in Sarla Verma. Thus, we fail to
appreciate as to why the High Court chose to apply

8 (2013) 15 SCC 45 : 2013 INSC 814
[2025] 2 S.C.R. 609

Maya Singh and Others v.
The Oriental Insurance Co. Ltd. and Others

split multiplier and applied multiplier of 10. We, thus,
find that the judgment of the High Court is perverse
and contrary to the evidence on record and is fit to
be set aside for not having considered the future
prospects of the deceased and also for adopting
split multiplier method against the law laid down by
this Court. In view of our aforesaid finding, we hold
that the judgment of the High Court deserves to be
set aside. We, accordingly, set aside the impugned
judgment and hold that the claimants are entitled
for total compensation of Rs.23,43,688. They shall
also get interest on the enhanced compensation at
the rate of 12% per annum from the date of filing
of the complaint petition. Respondent 2 Insurance
Company is directed to pay the enhanced/additional
compensation and interest to the claimants within a
period of three months by getting prepared a demand
draft in their name.”
From a reading of the above judgment, it is clear that in
normal course, the compensation is to be calculated by
applying the multiplier, as per the judgment of this Court in
the Case of Sarla Verma. Split multiplier cannot be applied
unless specific reasons are recorded. The finding of the
High Court that the deceased was having leftover service of
only four years, cannot be construed as a special reason,
for applying the split multiplier for the purpose of assessing
the compensation. In normal course, compensation is to
be assessed by applying multiplier as indicated by this
Court in the judgment in the case of Sarla Verma. As
no other special reason is recorded for applying the split
multiplier, judgment of the High Court is fit to be set aside
by restoring the award of the Tribunal.”
(emphasis supplied)

11.4 In Sarla Verma’s case (supra), this Court has held that while
calculating the compensation, the multiplier to be used should
start with an operative multiplier of 18 (for the age groups of
15 to 20 and 21 to 25 years), reduced by one unit for every
five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35
610 [2025] 2 S.C.R.

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years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and
M-13 for 46 to 50 years, then reduced by two units for every
five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60
years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.
11.5 From the above, it is clear that normally Courts and Tribunals
have to apply the multiplier as per the judgement of this
Court in Sarla Verma (supra). Any deviation from the same
warrants special reasons to be recorded. In the case in hand,
neither any special reason has been recorded by the High
Court while applying the split method nor we find there is one
in the facts of the case. In the case in hand, the deceased
was a technically qualified person and people are generally
healthy at that age and continue working even after retirement.
12. Considering the aforesaid factual aspects and position of law, in our
view, the compensation on account of loss of income while applying
the multiplier of 9 by the Tribunal without applying the split method
is the correct calculation on that account. Moreover, the Tribunal as
well as the High Court had failed to award future prospects while
calculating the compensation. Considering the age of the deceased,
the appellant would be entitled to future prospects @ 15%. On account
of loss of estate and funeral expenses, the amount of ₹15,000/- each
awarded by the High Court is as per law. As far as loss of consortium
is concerned, there are three claimants, namely, the widow, one
son and one daughter. They would be entitled to compensation on
account of loss of consortium @ ₹40,000/- each. The Tribunal had
erred in awarding only a sum of ₹1,00,000/- in total.
13. In view of our aforesaid discussions, the compensation to which the
appellants would be entitled to is as per the calculations here under:

Heads Compensation (₹)
Loss of dependency 31,53,300
(₹4,57,000 x 9 x 2/3 x 115/100)
Loss of consortium (₹40,000 x 3) 1,20,000
Funeral expense 15,000
Loss of estate 15,000
Total 33,03,300
[2025] 2 S.C.R. 611

Maya Singh and Others v.
The Oriental Insurance Co. Ltd. and Others

14. For the reasons mentioned above, the present appeal is allowed, the
impugned order passed by the High Court is set aside. The award of
the Tribunal is modified to the extent mentioned above. The appellants
are held to be entitled to total compensation of ₹33,03,000/- (rounded
off). They shall be entitled to payment of interest at the same rate
as was awarded by the Tribunal.
15. Pending application (if any) shall stand disposed of.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan