A) ABSTRACT / HEADNOTE

Maya Singh & Ors. v. The Oriental Insurance Co. Ltd. & Ors., [2025] 2 S.C.R. 602 : 2025 INSC 161, considers proper method for quantifying dependency in a fatal motor-vehicle claim where the deceased was aged about 57–58 years and employed in BSNL as a phone mechanic. The Tribunal awarded compensation using the conventional Sarla Verma multiplier approach (annual net income ₹4,57,000; multiplier 9; one-third deduction for personal expenses) resulting in a sizeable award. The High Court, however, applied a split-multiplier / split-period approach dividing pre-retirement salary years and post-retirement pension years and substantially reduced dependency.

The Supreme Court held that deviation from the Sarla Verma multiplier regime requires recorded special reasons; mere proximity to retirement is not by itself a sufficient rationale to apply a split multiplier. The Court restored the Tribunal’s approach, added future prospects @ 15% (given the deceased’s technical qualifications and continuing capacity to work), adjusted heads for loss of consortium (three dependants @ ₹40,000 each), funeral and estate expenses (₹15,000 each), and directed interest as earlier awarded. The appeal was allowed and the award modified to ₹33,03,300 (rounded). Keywords: Motor Vehicle Accident Claim; Multiplier; Split Method; Future Prospects; Loss of Consortium; Loss of Estate.

Keywords: Motor Vehicle Accident Claim; Split Multiplier; Sarla Verma; Future Prospects; Loss of Dependency.

B) CASE DETAILS 

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The appeal arises from a fatal road accident on 07.03.2014 in which Laxman Das Mahour died after being hit by an offending bus. The claimants his widow, a son and a daughter pursued statutory compensation. The Claims Tribunal accepted the deceased’s proved income (₹39,500/month; net annual ₹4,57,000) and, applying the Sarla Verma multiplier appropriate to the deceased’s age group, awarded dependency by using multiplier 9 with a one-third deduction for personal expenses. The insurer challenged the award before the High Court which adopted a split method calculating compensation for a finite pre-retirement wage period and lower post-retirement pension figures substantially reducing dependency and the overall award. The claimants challenged the High Court decision before the Supreme Court.

Two discrete tensions frame the background. First, the continuing validity and primacy of the Sarla Verma multiplier regime versus incremental judicial innovations such as split multipliers or post-retirement adjustments. Second, the correct allowance for future prospects and other heads (loss of consortium, funeral, estate) where the deceased was a technically skilled worker nearing retirement. The Supreme Court was called upon to resolve whether the High Court’s split approach was permissible without specific, recorded, case-specific reasons and whether additional heads (future prospects, adjusted consortium amounts) were warranted.

D) FACTS OF THE CASE

On 07.03.2014 at about 3 p.m., Laxman Das Mahour alighted from a bus and while walking on the road was struck by the bus bearing registration MP-06/B-1725 and died on the spot. The deceased was employed as a phone mechanic with BSNL, aged approximately 57–58 years, survived by his widow and four children (two of whom were held non-dependent). The claim petition was filed before Claim Case No. 65 of 2014. The Tribunal recorded proved monthly gross salary ₹39,500 (annual gross ₹4,74,000; net after tax ₹4,57,000).

The bus owner and driver were proceeded ex parte; the insurer contested negligence and income quantum. The Tribunal awarded ₹28,66,994 (including dependency calculated as ₹4,57,000 × 9 × 2/3), ₹1,00,000 for loss of consortium, and ₹25,000 for funeral. On appeal the High Court applied a split calculation: short term full salary for immediate months, then pension at 50% of last drawn salary for the post-retirement period, reduced consortium to ₹40,000 and reduced funeral/estate heads, producing a total of ₹19,66,833. The claimants appealed to the Supreme Court.

E) LEGAL ISSUES RAISED

1. Whether a split-multiplier (separating pre-retirement salary years and post-retirement pension years) can be applied in calculating loss of dependency absent recorded special reasons?

2. Whether the Tribunal ought to have awarded future prospects, and if so at what rate, given the deceased’s age, qualification and employment?

3. Whether the reduced awards under loss of consortium, funeral, and estate made by the High Court accord with precedents such as Pranay Sethi?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for Petitioners/Appellants submitted that: the Tribunal correctly applied the Sarla Verma multiplier methodology using net annual income ₹4,57,000 and multiplier 9, with usual one-third deduction; the High Court’s split-method was an impermissible departure from Sarla Verma and Sumathi unless special reasons are recorded; the deceased being technically qualified and healthy would likely have continued work and income growth and thus is entitled to future prospects @ 15%; Tribunal’s award should be restored and augmented to include loss of estate and proper consortium amounts.

G) RESPONDENT’S ARGUMENTS

The counsels for Respondent/Insurer submitted that: the deceased was close to retirement (approx. 57–58 years) and would have received pension post-retirement, not full salary; therefore the High Court’s split approach reflects economic reality and prevents over-compensation; pension entitlement (about 50% of last salary) should form the post-retirement dependency base; High Court’s reductions to consortium and other heads are reasonable. Respondent accepted that Pranay Sethi requires certain heads but sought to limit dependency calculation to realistic post-retirement loss.

H) JUDGEMENT

The Supreme Court allowed the appeal, setting aside the High Court’s split-multiplier approach. The Court reaffirmed that the Sarla Verma multiplier regime is the norm and any departure requires specific, case-based reasons to be recorded. Relying upon prior decisions including Sumathi and Puttamma, the Court held that mere nearness to retirement and leftover service of a few years is not in itself a “special reason”. The deceased’s technical skill set and general health made it reasonable to presume continued employment, potential increments and post-retirement earning capacity; hence the Tribunal’s application of multiplier 9 on net annual income ₹4,57,000 (with one-third deduction) was appropriate.

The Court observed both Tribunal and High Court omitted future prospects an established compensation component and directed future prospects @ 15% given the deceased’s age and qualification. The Court corrected consortium awards recognizing three dependants (widow, one son and one daughter) each entitled to ₹40,000, rather than the Tribunal’s aggregate ₹1,00,000. Loss of estate and funeral expenses were upheld at ₹15,000 each (as per High Court). Compounded into the corrected dependency amount (including 15% prospect), and adding other heads, total award was fixed at ₹33,03,300 (rounded to ₹33,03,000). Interest as earlier granted by the Tribunal was maintained.

a. RATIO DECIDENDI

The core legal ratio is twofold:

(1) the Sarla Verma multiplier grid is the starting point in fatal dependency calculations and should be applied by default;

(2) departure from the multiplier principle by application of a split multiplier (distinguishing salary years pre-retirement and pension years post-retirement) is permissible only if the court records specific, case-based reasons that justify the split.

The Court emphasized that proximity to retirement alone is insufficient as such a reason. The ratio further mandates that future prospects must be considered where appropriate and quantified based on age, nature of employment and qualifications. The ratio thus preserves predictability while allowing adjustments when clearly justified on record.

b. OBITER DICTA

The Court offered obiter observations reinforcing jurisprudential consistency: technical or skilled workers often continue to contribute economically and may secure increments or other post-retirement engagements; hence courts should be cautious in assuming immediate conversion of earning capacity to pension without clear evidence. The Court reiterated that assessment of consortium and non-pecuniary heads must consider number and relationship of dependants; mechanical aggregation of nominal figures is to be avoided. Additionally, the Court expressed that awarded rates for funeral/estate are in the discretion of the tribunal but must align with Pranay Sethi principles to avoid arbitrariness.

c. GUIDELINES 

1. Apply the Sarla Verma multiplier schedule as the normative starting point in dependency calculations.

2. Any deviation (including split multipliers) must be explicitly recorded with special reasons particular to the facts. General observations (e.g., “near retirement”) are inadequate.

3. Evaluate future prospects in every case where age, qualification, nature of employment or career trajectory reasonably indicate potential income growth; quantify prospect percentage consistent with precedents and facts.

4. Determine post-retirement loss not by assumption but by evidence: proof of pension rules, employer policy, expected pension percentage, and probability of alternative income streams.

5. Allocate loss of consortium individually among entitled dependants reflecting relationship and dependency, rather than a single aggregate figure where multiple claimants exist.

6. Maintain compensation for loss of estate and funeral in line with Pranay Sethi and reasoned tribunal discretion.

7. Record clear findings on dependency status of each family member; exclude non-dependent relatives from claimant pool with explicit reasoning.

8. Preserve interest awards as appropriate to ensure timely compensation; follow tribunal’s rate unless good cause to vary is recorded.

I) CONCLUSION & COMMENTS

The judgment firmly confirms the jurisprudential primacy of the Sarla Verma multiplier approach and constrains judicial experimentation with split multipliers unless compelling, recorded reasons exist. This promotes uniformity in motor claim awards and guards against ad hoc reductions tied solely to age or retirement proximity. The Court’s insistence on future prospects underlines the holistic view of compensation it must reflect not only immediate lost earnings but also the deceased’s likely career path and earning dynamics. Practically, the decision benefits skilled workers nearing retirement by preventing automatic truncation of dependency into pension figures without evidential basis.

For practitioners this decision stresses meticulous fact-finding tribunals and appellate courts must document pension entitlement, expected rates, any medical or vocational evidence about continued employability, and justify deviations from standard multipliers. Claimant counsels should ensure proof of continuous employment capacity, qualifications, and increment patterns; respondent counsels seeking reductions must provide specific pension rules or clear documentary evidence to support split calculations. The Court’s approach balances predictability and fairness; it deters mechanical discounting of dependency and reinforces compensatory principles aimed at restoring claimant families as far as monetary compensation can.

J) REFERENCES

a. Important Cases Referred

1. Sarla Verma v. Delhi Transport Corporation, (2009) 6 S.C.C. 121; [2009] 5 S.C.R. 1098 (2009 INSC 506).

2. Sumathi v. M/s. National Insurance Company Ltd., Civil Appeal No. 7729 of 2021, decided 15.12.2021; reported 2022 ACJ 1315.

3. Puttamma & Ors. v. K. L. Narayana Reddy & Anr., (2013) 15 S.C.C. 45; [2013] 16 S.C.R. 831 (2013 INSC 814).

4. National Insurance Company Ltd. v. Pranay Sethi & Ors., (2017) 16 S.C.C. 680; 2017 INSC 1068.

5. Maya Singh & Ors. v. The Oriental Insurance Co. Ltd. & Ors., [2025] 2 S.C.R. 602 : 2025 INSC 161.

b. Important Statutes Referred

• Motor Vehicles Act, 1988 (relevant provisions governing claims and compensation as applied by tribunals and courts).