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Preetha Krishnan & Ors. vs The United India Insurance Co. Ltd. & Ors.

Not available · 2025 INSC 1293Decided 6 Nov 2025
Not available
Justice Sanjay Karol · Justice Prashant Kumar Mishra

Background

A 51-year-old Assistant Engineer died after his car was hit by a rashly driven bus. The Motor Accidents Claims Tribunal awarded his family about ₹44 lakh in compensation, applying the standard multiplier method used to calculate loss of future income. On appeal, the Kerala High Court reduced this to about ₹35 lakh by applying a "split multiplier": a method that assumes the deceased's income would have dropped sharply after his expected retirement, and calculates compensation differently for the pre- and post-retirement periods. The deceased's family appealed to the Supreme Court, arguing the reduction was unjustified.

Decision Breakdown

The Supreme Court sided with the family, holding that a split multiplier is not to be used routinely and requires genuinely exceptional, specifically recorded reasons, and that the mere fact a person was approaching retirement is not such an exceptional reason, since retirement is a normal, expected part of every career. The Court surveyed conflicting rulings from various High Courts (and even conflicting rulings within the same High Court) on this issue and found this inconsistency undesirable for legal certainty, reaffirming that a Constitution Bench ruling (Pranay Sethi) uses the deceased's age at death, not any assumption about post-retirement income drop, as the basis for the multiplier. Applying the standard method, the Court recalculated the compensation upward to about ₹47.77 lakh, higher than even the original Tribunal award, and directed the amount be paid directly into the family's bank account by a set deadline. It also directed that a copy of the ruling be circulated to all High Courts and Tribunals to promote uniform practice going forward.

Lesson Learnt

In motor accident compensation cases, courts should apply a consistent, age-based multiplier to calculate a family's loss rather than speculatively cutting compensation because the deceased was nearing retirement: any departure from the standard method requires clearly recorded, truly exceptional reasons, not just the ordinary fact of an approaching retirement age.

Official source (sci.gov.in)View Judgment (PDF)

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