Continued employment after permanent disability does not justify applying a split multiplier.

The claimant, aged approximately 35 years, was employed with Maghmani Organic Limited and sustained multiple serious injuries in a motor vehicle accident, including open Grade III fractures of the right femur and foot, crush injuries, and multiple rib fractures.

The injuries resulted in 60% physical impairment; the claimant voluntarily accepted 30% functional disability of the whole body, which was not disputed by the insurer.

Although the claimant resumed employment after recovery, the Motor Accident Claims Tribunal applied a multiplier of 5 and awarded ₹3,26,795, reasoning that he had not suffered actual future financial loss.

The claimant challenged the award under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement of compensation.

The insurer had not challenged the finding of liability.

Whether the Tribunal was justified in applying a split multiplier of 5 merely because the claimant continued in employment after the accident, instead of applying the regular multiplier based on his age?

Whether the claimant was entitled to compensation for loss of future earning capacity and future prospects despite continuing in his existing employment after sustaining 30% functional disability?

Whether the amounts awarded under pain, shock and suffering and other heads required enhancement?

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

Under Sarla Verma v. Delhi Transport Corporation and National Insurance Co. Ltd. v. Pranay Sethi, the multiplier is to be determined primarily with reference to the age of the deceased or injured claimant; the use of a split multiplier is not permissible as a matter of course and requires exceptional and cogent reasons.

Relying on Preetha Krishnan v. United India Insurance Co. Ltd., the Court held that retirement or continuation of employment is not an exceptional circumstance justifying a split multiplier and that the split multiplier is conceptually foreign to the Motor Vehicles Act.

Under Raj Kumar v. Ajay Kumar and Mohd. Sabeer v. Regional Manager, U.P. State Road Transport Corporation, compensation for permanent disability depends upon its effect on earning capacity, not merely on the percentage of physical disability; the Court must assess the functional impact of the injury.

Applying Pranay Sethi, a claimant below 40 years without permanent employment is entitled to 40% addition towards future prospects.

The Court found that the Tribunal had erroneously treated the claimant’s continuation in employment as proof that he suffered no future economic loss.

The claimant’s accepted 30% functional disability reduced his physical capacity and diminished his ability to compete for or perform alternative employment, even if he retained his existing job.

Since continued employment and ordinary career progression could not constitute exceptional circumstances, the Tribunal’s application of a multiplier of 5 was impermissible under Preetha Krishnan, Sarla Verma and Pranay Sethi.

As the claimant was 35 years old, the Court applied the regular multiplier of 16.

It accepted the monthly income of ₹7,322, added 40% towards future prospects, applied the 30% functional disability, and calculated future loss of income at ₹5,90,400.

In view of the serious fractures, surgical treatment, prolonged hospitalisation and continuing trauma, the Court also enhanced compensation for pain, shock and suffering from ₹20,000 to ₹50,000.

The Court held that the Tribunal had wrongly applied a multiplier of 5 and that the claimant was entitled to the regular multiplier of 16, together with 40% future prospects and compensation based on 30% functional disability.

The total compensation was reworked from ₹3,26,795 to ₹8,15,400, resulting in additional compensation of ₹4,88,605.

The enhanced amount was directed to carry interest at 7.5% per annum from the date of the claim petition until realization.

The insurer was directed to deposit the enhanced compensation with accrued interest before the Tribunal within eight weeks, after which the Tribunal was directed to disburse the amount to the claimant in accordance with law.