No Split Multiplier Under the MV Act: Supreme Court Mandates Uniform Age-Based Multiplier and Triennial Enhancement of Conventional Heads

Introduction

In Preetha Krishnan & Ors. v. The United India Insurance Co. Ltd. & Ors., 2025 INSC 1293 (Supreme Court of India, 6 November 2025), the Supreme Court resolved a long-standing conflict among High Courts on whether a “split multiplier” may be applied while computing compensation in motor accident claims under Section 166 of the Motor Vehicles Act, 1988. The Court held that the split multiplier is impermissible and “foreign to the Motor Vehicles Act,” mandating instead the uniform application of the age-based multiplier as per Sarla Verma v. DTC. The Court also reiterated the triennial 10% enhancement to conventional heads per Pranay Sethi and clarified that income as on the date of death is the basis for computation.

The case arose from a fatal motor accident involving a 51-year-old Assistant Engineer, whose dependents (wife and children) had been awarded compensation by the Motor Accidents Claims Tribunal (MACT), later reduced by the High Court by employing a split multiplier to account for post-retirement income reductions. The Supreme Court set aside the High Court’s approach, restored uniformity, and recalculated compensation.

Case Background and Procedural History

Accident and parties: On 3 August 2012, T.I. Krishnan, aged 51, Assistant Engineer (PWD), died from injuries sustained when a bus, driven rashly, collided with his car on Pala–Thodupuzha Road. Claimants were the widow and children.
Claim: A Section 166 MV Act claim was filed on 11 December 2012 seeking Rs. 60,00,000/-; monthly income pleaded at Rs. 47,860/-.
Tribunal award (2 April 2014): Rs. 44,04,912/- with 7.5% interest from the date of petition. It took monthly income as Rs. 45,408/- (post-tax), applied 15% future prospects (age 51), 1/4 deduction towards personal expenses, and a multiplier of 9. Conventional heads included consortium (Rs. 1,00,000), funeral (Rs. 25,000), love and affection (Rs. 40,000), estate (Rs. 5,000).
High Court appeals (28 June 2024): Compensation reduced to Rs. 35,10,144/- primarily by using a split multiplier to reflect post-retirement income fall; some adjustments to conventional heads; disbursement directed in a 70:10:10:10 ratio among four claimants.
Review petitions (27 November 2024): Dismissed by the High Court, which reasoned that split multiplier is possible if supported by reasons.
Supreme Court (6 November 2025): Leave granted; appeals allowed; split multiplier rejected categorically; compensation enhanced to Rs. 47,76,794/-; interest retained at 7.5% p.a. as awarded by the Tribunal.

The Court also recorded the systemic delay: MACT took 1 year 3 months 22 days; the High Court took 9 years 2 months 20 days; the Supreme Court disposed of the appeals in 8 months 23 days, underscoring the need for uniform principles to avoid avoidable litigation and inconsistent outcomes.

Summary of the Judgment

Core holding: The “split multiplier” method is impermissible in claims under the MV Act. The applicable multiplier is determined solely by the age of the deceased, following Sarla Verma. Superannuation is not an exceptional circumstance justifying divergence. The Court described split multiplier as “foreign to the Motor Vehicles Act, 1988.”
Income benchmark: The income as on the date of death is to be taken for computation. Speculation about post-retirement reduction or continuation of earnings is irrelevant to reduce compensation.
Future prospects and conventional heads: For ages 50–60, the 15% addition for future prospects applies (per Pranay Sethi). Conventional heads are to be enhanced by 10% every three years from 2017 (thus 2017 → 2020 → 2023), leading to amounts of Rs. 18,150 each for funeral and estate, and Rs. 48,400 per consortium unit as of 2025.
Recalculated compensation: Rs. 47,76,794/- (as against MACT’s Rs. 44,04,912/- and High Court’s Rs. 35,10,144/-). Interest remains as per MACT (7.5% p.a.). Amount to be remitted directly to claimants by 30 November 2025, with particulars to be shared among counsel.
Prospective application and judicial discipline: The ruling on split multiplier applies prospectively; past High Court judgments listed in the decision are not disturbed. The Court admonished intra-court divergences and reminded High Courts that coordinate bench conflicts must be referred to a larger bench.

Detailed Analysis

Precedents Cited and Their Influence

Sarla Verma v. DTC, (2009) 6 SCC 121: The cornerstone for multiplier selection. It rejected linking the multiplier to remaining years of service and adopted the Davies method, prescribing an age-based schedule (M-11 for 51–55). The Supreme Court in this case reaffirms Sarla Verma’s uniformity imperative and treats deviations like split multipliers as the very confusion Sarla Verma sought to end.
National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680: Constitution Bench specifying future prospects and conventional heads. The Court relies on para 59.7 (age as the criterion for multiplier) and para 59.8 (fixed conventional heads) and emphasizes 10% triennial enhancement post-2017. Importantly, the Court reads Pranay Sethi as leaving “no scope whatsoever” for split multipliers.
N. Jayasree v. Cholamandalam MS General Insurance Co. Ltd., (2022) 14 SCC 712: Refused split multiplier for a 52-year-old Assistant Professor; reiterated adherence to 15% future prospects for 50–60 age bracket.
Sumathi v. National Insurance Co. Ltd., 2021 SCC OnLine SC 3697: Held that split multiplier cannot be applied unless specific reasons are recorded; mere proximity to retirement is not a special reason. The present judgment moves beyond Sumathi by holding the split multiplier impermissible altogether, solidifying the rule.
K.R. Madhusudhan v. Administrative Officer, (2011) 4 SCC 689, and Puttamma v. K.L. Narayana Reddy, (2013) 15 SCC 45: These decisions, sometimes cited to justify departures, actually demand cogent reasons for any deviation. The Supreme Court clarifies they do not endorse a split multiplier and, post-Pranay Sethi, the space for such deviations is closed.
United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780; Rajwati @ Rajjo v. United India Insurance Co. Ltd., 2022 SCC OnLine SC 1699: On the conceptualization of consortium (spousal, parental, filial) and the move away from “loss of love and affection” as a separate head. The Court applies consortium amounts consistently with these rulings.

Legal Reasoning

Uniformity and certainty: The Court prioritizes a uniform, predictable formula, essential for “just compensation” under a beneficial legislation. Age is the sole determinant for the multiplier, removing forum-dependent variability.
Split multiplier rejected in principle: Earlier dicta tolerated split multipliers only in “exceptional” cases with reasons. The present judgment, however, crystallizes a bright-line rule: after Pranay Sethi’s age-centric approach, no scope remains for split multipliers. Superannuation is a foreseeable event and cannot serve as a negative factor to curtail compensation.
Income at the date of death: The Court rejects conjecture regarding post-retirement income. The computation must begin with the actual income at death, adjusted per settled norms (future prospects, deductions, multiplier).
Judicial discipline and institutional guidance: The Court identifies intra-court and inter-court divergence on split multipliers and reiterates that when benches of equal strength differ, reference to a larger bench is mandatory. It directs circulation of the judgment to High Courts and Tribunals to restore coherence.
Conventional heads: Consistent with Pranay Sethi and subsequent application, the Court applies the 10% triennial enhancement (2017 → 2020 → 2023) to arrive at Rs. 18,150 (funeral and estate) and Rs. 48,400 per consortium unit.

Impact and Forward-Looking Consequences

Elimination of split multipliers: Tribunals and High Courts must apply a single age-based multiplier from Sarla Verma; split multipliers are out of bounds. This should reduce inconsistent awards and limit appeals driven by forum-specific practices.
Likely increase in compensation in some jurisdictions: Where High Courts had routinely reduced dependency by splitting pre- and post-retirement phases, awards will now likely be higher (or at least not reduced on that ground), benefiting dependents of deceased earners close to retirement.
Prospective application: The Court expressly applies this clarification prospectively and does not unsettle earlier High Court judgments cited in its survey. However, the rule applies to this very case and should guide pending and future cases.
Administrative guidance: Mandatory circulation to Registrars General of all High Courts and Tribunals indicates strong institutional intent to standardize practice.
Reaffirmation of heads of claim: “Loss of love and affection” as a separate head is not revived; consortium, estate, and funeral expenses remain the conventional heads, with periodic enhancement.

Computation Adopted by the Supreme Court (Key Elements)

Monthly income (post-tax): Rs. 45,408/- (as found by the Tribunal)
Annual income: Rs. 5,44,896/-
Future prospects (15% for age 51): Rs. 81,734/-, yielding Rs. 6,26,630/-
Deduction towards personal/living expenses: The Court’s arithmetic corresponds to 1/3rd (resulting in Rs. 4,17,754/-), although the table labels it “1/4.” The multiplicand used by the Court is Rs. 4,17,754/-.
Multiplier: 11 (for age 51–55 per Sarla Verma)
Loss of dependency: Rs. 4,17,754 x 11 = Rs. 45,95,294/-
Conventional heads (with two triennial enhancements):
- Loss of estate: Rs. 18,150/-
- Funeral expenses: Rs. 18,150/-
- Loss of consortium: 3 units x Rs. 48,400 = Rs. 1,45,200/-
Total compensation: Rs. 47,76,794/-
Interest: As awarded by the Tribunal, 7.5% p.a. from the date of claim petition
Disbursement: To be remitted directly to claimants, consistent with High Court directions, by 30 November 2025

Note: The Court’s tabular deduction heading reads “1/4,” but the arithmetic used is for a 1/3 deduction. The figures and the final total therefore align with a 1/3 deduction, not 1/4. This does not alter the Court’s declared total and should be read as an arithmetical consistency with the dependency assessment actually applied.

Complex Concepts Simplified

Multiplier method: A standard technique to compute future loss of income by multiplying the annual loss of dependency by a factor (multiplier) based on the deceased’s age. Sarla Verma provides the age-wise schedule (e.g., M-11 for 51–55).
Split multiplier: A disapproved practice of using different multipliers for different phases (e.g., pre- and post-retirement) to mirror expected income changes. The Supreme Court now bans this practice under the MV Act.
Future prospects: A percentage added to the actual income to reflect likely incremental earnings had the deceased lived. For ages 50–60, the addition is 15% (Pranay Sethi).
Conventional heads: Standard, non-pecuniary amounts for funeral expenses, loss of estate, and consortium. Starting with amounts fixed in 2017, these are to be enhanced by 10% every three years.
Consortium: A composite head covering spousal, parental, and filial consortium. Separate “loss of love and affection” is not awarded post-Pranay Sethi/Satinder Kaur.
Prospective application: The Court’s new clarification applies going forward (and to the present case), avoiding reopening of past concluded judgments listed in the decision.

Practical Checklist for MACTs and High Courts Post-Preetha Krishnan

Do not apply split multipliers under any circumstance.
Determine the multiplier strictly by the age of the deceased (Sarla Verma schedule).
Use the income as on the date of death; do not reduce for post-retirement assumptions.
Add future prospects per Pranay Sethi (15% for ages 50–60).
Deduct personal/living expenses per Sarla Verma (guided by number of dependents).
Apply conventional heads with 10% enhancement every three years from 2017.
Avoid “loss of love and affection” as a separate head; award appropriate consortium instead.
Maintain judicial discipline; refer conflicts between coordinate benches to a larger bench.

Why This Judgment Matters

Ends inter- and intra-court divergence: The ruling definitively settles the debate on split multipliers, ensuring equal treatment across jurisdictions.
Reinforces the beneficial character of the MV Act: By prohibiting reductions based on predictable retirement, the Court protects dependents’ rights to “just compensation.”
Promotes speed and predictability: Uniform rules can reduce appeal volumes grounded in computational disagreements, improving adjudicatory efficiency.
Administrative compliance: Direction to circulate the judgment to all High Courts and MACTs underscores its immediate operational relevance.

Conclusion

Preetha Krishnan v. United India Insurance Co. Ltd. establishes a clear and consequential precedent: split multipliers have no place in motor accident compensation under Section 166 of the MV Act. The multiplier must be selected solely with reference to the age of the deceased, applying Sarla Verma’s schedule. The Court reiterates Pranay Sethi’s regime on future prospects and conventional heads, including the 10% triennial enhancement. Superannuation is not an exceptional circumstance to justify any departure.

Beyond recalibrating the compensation in this case to Rs. 47,76,794/- (with interest as fixed by the Tribunal), the judgment performs a systemic function: it restores doctrinal clarity, admonishes intra-court inconsistencies, and deploys prospective application to stabilize the law without unsettling finality in earlier decisions. For tribunals, practitioners, insurers, and claimants, the path forward is now both simpler and fairer: age determines the multiplier, income at death anchors the calculus, conventional heads are standardized and periodically adjusted, and speculative reductions based on retirement are out of bounds.