A multiplier of five applies where the deceased is aged above 65 years, despite being over 70.

On 8 April 2022, Mohan, aged approximately 71 years, was riding a bicycle when a motorcycle bearing registration no. TN 82 V 7839 allegedly hit him from behind near Medavakkam, Chennai. He sustained fatal injuries and died on the same day.

His wife, two daughters, and son filed a claim petition under the Motor Vehicles Act, 1988, seeking ₹20,00,000 as compensation.

The Motor Accidents Claims Tribunal held that the accident resulted from the rash and negligent riding of the motorcycle and awarded ₹10,01,000 with interest, calculating loss of dependency on a monthly income of ₹16,000, adding 10% towards future prospects, applying a one-fourth deduction for personal expenses, and adopting a multiplier of 5.

The insurer challenged only the quantum of compensation, contending that future prospects should not have been added, the correct multiplier was 3, the income was excessive, and one-third rather than one-fourth should have been deducted towards the deceased’s personal expenses, particularly since the adult children were married or not shown to be dependants.

Whether the Tribunal erred in adding 10% towards future prospects when the deceased was 71 years old?

Whether the multiplier of 5, rather than 3, was appropriate for calculating loss of dependency?

Whether one-third, instead of one-fourth, ought to have been deducted towards the deceased’s personal expenses?

Whether the compensation awarded under the remaining heads, including consortium, loss of estate, and funeral expenses, required interference?

The appeal was filed under Section 173 of the Motor Vehicles Act, 1988, against the Tribunal’s award.

The Court applied the principles in National Insurance Co. Ltd. v. Pranay Sethi, holding that future prospects are not ordinarily to be added where the deceased was above 60 years of age.

It relied on Sarla Verma v. Delhi Transport Corporation, which prescribes the multiplier based on the deceased’s age and provides a multiplier of 5 for the age group of 66–70 years.

For personal expenses, the Court followed United India Insurance Co. Ltd. v. Mary Victoria, which held that, in the case of an elderly deceased person, one-third may be deducted having regard to the person’s age-related expenditure and personal needs.

The Court found no dispute regarding the accident, the motorcycle’s involvement, or the negligence of its rider.

Since Mohan was 71 years old, the Tribunal’s addition of 10% towards future prospects was inconsistent with Pranay Sethi and was therefore deleted.

However, the Court rejected the insurer’s argument for a multiplier of 3. Applying the multiplier principles in Sarla Verma, it held that the Tribunal’s adoption of multiplier 5 was appropriate for a deceased above 65 years of age.

The Court nevertheless modified the deduction for personal expenses from one-fourth to one-third, relying on the age-specific reasoning in Mary Victoria.

Accordingly, loss of dependency was recalculated as ₹16,000 × 12 = ₹1,92,000, less one-third, multiplied by 5, resulting in ₹6,40,000.

The awards for consortium of ₹1,76,000, loss of estate of ₹16,500, and funeral expenses of ₹16,500 were found reasonable and left undisturbed.

The Tribunal’s award of ₹10,01,000 was reduced to ₹8,49,000, comprising ₹6,40,000 towards loss of dependency, ₹1,76,000 towards consortium, ₹16,500 towards loss of estate, and ₹16,500 towards funeral expenses.

The modified amount was directed to carry interest at 7.5% per annum from the date of the claim petition until deposit, with the insurer directed to deposit the balance amount, after adjusting any prior deposit, within four weeks.

The claimants were permitted to withdraw the compensation according to the Tribunal’s existing apportionment order, subject to adjustment of amounts already withdrawn.