Multiplier method upheld for permanent disability compensation despite claimants being non-earning college students.

On 5 February 2018, Nijakith was riding a motorcycle with Shahul Hameed Jaman as pillion rider when a Tata Indigo Manza car allegedly driven rashly and negligently by the first respondent collided with the motorcycle at Erode.

Both claimants, aged approximately 20 years and studying engineering, sustained grievous injuries and underwent hospitalisation.

They filed separate claims under the Motor Vehicles Act: Shahul claimed Rs.50,00,000 in MCOP No.486 of 2018, while Nijakith claimed Rs.75,00,000 in MCOP No.495 of 2018.

The driver-cum-owner was set ex parte.

The insurer denied negligence and contended that the motorcycle rider caused the accident.

The Tribunal, relying on the claimants’ evidence, medical evidence, and disability certificates, found the car driver negligent.

It awarded Rs.13,39,000 to Shahul and Rs.22,06,000 to Nijakith, calculating loss of earning power by applying a monthly notional income of Rs.9,000, 50% future prospects, the relevant multiplier of 18, and disabilities of 32% and 53%, respectively.

The claimants appealed for enhancement, while the insurer appealed against the quantum and the adoption of the multiplier method, future prospects, and 9% interest.

Whether the Tribunal’s adoption of a monthly notional income of Rs.9,000, addition of 50% future prospects, and multiplier method for assessing permanent disability and loss of earning power was legally and factually sustainable?

Whether the claimants were entitled to additional compensation under the heads of attendant charges, future medical expenses, and extra nourishment?

Whether the rate of interest awarded by the Tribunal at 9% per annum required modification?

Whether the compensation awarded by the Tribunal was excessive and liable to be reduced, as contended by the insurer?

The appeals were filed under Section 173 of the Motor Vehicles Act, which permits an appeal against an award of the Motor Accidents Claims Tribunal.

The Court applied the principles in Sarla Verma v. Delhi Transport Corporation concerning the selection of multiplier and National Insurance Co. Ltd. v. Pranay Sethi concerning future prospects and computation of loss of earning capacity.

It also relied on Andal v. Avinav Kannan in approving the assessment of notional income for a young student injured in a motor accident.

The Court accepted that, where the evidence establishes continuing disability affecting earning capacity, compensation may be calculated by the multiplier method rather than merely applying a percentage-based lump sum.

Compensation must also be awarded under appropriate consequential heads, including attendant charges, future medical expenses, and extra nourishment, based on the medical evidence and period of hospitalisation.

The Court upheld the Tribunal’s finding that the accident resulted from the car driver’s negligence, noting that the insurer had not produced evidence to substantiate its allegation that the motorcycle rider was responsible.

Although the insurer challenged the multiplier method and the addition of future prospects, the Court found the assessment justified because both claimants were young engineering students and the medical evidence established permanent disabilities, including brain and pulmonary complications in Shahul’s case and continuing difficulty in chewing, oral complications, and skin-grafting consequences in Nijakith’s case.

The Court therefore retained the notional income of Rs.9,000, 50% future prospects, multiplier of 18, and disability assessments of 32% and 53%.

However, the Tribunal had omitted attendant charges and future medical expenses and had awarded inadequate amounts for extra nourishment.

Considering Shahul’s 50-day inpatient treatment, the Court awarded Rs.50,000 for attendant charges, Rs.50,000 for future medical expenses, and enhanced extra nourishment to Rs.25,000.

For Nijakith, considering nine days of inpatient treatment and the possibility of future oral complications, it awarded Rs.10,000 for attendant charges, Rs.50,000 for future medical expenses, and enhanced extra nourishment to Rs.25,000.

The Court also considered 9% interest excessive and reduced it to 7.5% per annum.

The compensation payable to Shahul Hameed Jaman was enhanced from Rs.13,39,000 to Rs.14,54,000, and the compensation payable to Nijakith was enhanced from Rs.22,06,000 to Rs.22,85,000.

The insurer’s challenge to the multiplier method, notional income, future prospects, and disability-based computation was rejected.

The enhanced compensation, after adjusting amounts already deposited or withdrawn, was directed to be paid by the insurer with interest at 7.5% per annum from the date of the claim petitions until deposit, excluding any default period, within four weeks of receipt of the order.

No costs were awarded, and the connected miscellaneous petitions were closed.