Update: 26 March 2025

In recent times, the Supreme Court of India ruled that the multiplier in motor accident assertions cannot be lowered because the person who perished had been making foreign currency; the multiplier is set based on the victim’s chronological age and cannot be changed because of foreign earnings; additionally, the Court ruled that a currency exchange rate that was in effect on the date the petition for compensation was filed must be used.

In Jiju Kuruvila v. Kunjujamma Mohan (2013) and DLF Ltd. v. Koncar Generators & Motors Ltd., the court pointed out that the rate of exchange should be determined by the date the petition for reimbursement was filed. The previous case law was cited by a bench consisting of Justice Sanjay Karol and Justice Prashant Kumar Mishra. The complainants had contested the Telangana High Court‘s ruling upholding the Motor Accident Claims Tribunal (MACT) conclusions, and it raised the amount that the tribunal had granted them. The deceased’s foreign currency earnings were used by the High Court to lower the multiplier from 14 to 10.

Background of the case:

After a deadly collision with a vehicle, the appellants—the deceased’s spouse and two daughters—had applied for reimbursement from MACT. When her automobile clashed with one operated by the Andhra Pradesh State Road Transport Corporation, the person who died, a 43-year-old software engineer living in the United States, perished. After deducting income tax and setting future possibilities at 30%, the Tribunal determined the deceased individual’s monthly income to be $11,600. The Appeal Tribunal determined that Rs. 8.05 crores would be the total amount to be compensated.

The Court of Appeal, however, applied a 10-multiplier to lower the settlement amount, citing the decedent’s foreign currency earnings as justification. The grant was for Rs. 5.75 crore. The Supreme Court rejected the High Court’s justification for lowering the multiplier. In National Insurance Co. Ltd. v. Pranay Sethi (2017), the Court reaffirmed that a 43-year-old person should be subject to a 14-multiplier, irrespective of their overseas revenues. According to National Insurance Co. Ltd. v. Pranay Sethi, the law has established that a person 43 years of age must have a multiplier of 14. For someone who earns foreign currency, there is no exemption whatsoever.

The Supreme Court ruled that the rate of currency exchange should be set at Rs. 57/-, reflecting the going rate when the claim case was filed in 2012. The remuneration was adjusted to Rs. 9.64 crores after the Court decided in favor of the petitioners.