Legal Review and Analysis of Preetha Krishnan & Ors vs United India Insurance Co Ltd & Ors 2025 INSC 1293

In-Short

Case: Preetha Krishnan & Ors. vs. United India Insurance Co. Ltd. & Ors. (2025 INSC 1293)The Supreme Court categorically outlawed the use of the "split multiplier" in motor accident compensation cases, holding it to be a concept foreign to the Motor Vehicles Act, 1988. The Court reaffirmed that compensation must be calculated using a uniform, age-based multiplier as per the established precedents of Sarla Verma and Pranay Sethi.

1. Heading of the Judgment

Case Title: Preetha Krishnan & Ors. vs. United India Insurance Co. Ltd. & Ors.
Citation: 2025 INSC 1293
Court: Supreme Court of India
Judges: Justice Sanjay Karol and Justice Prashant Kumar Mishra
Date of Decision: November 6, 2025

2. Related Laws and Sections

The judgment primarily interprets and applies provisions under the Motor Vehicles Act, 1988, a beneficial legislation aimed at providing just compensation to victims of road accidents.

• Section 166 of the Motor Vehicles Act, 1988: This section provides the mechanism for filing an application for compensation arising from a motor vehicle accident.

• The judgment extensively relies on the principles for calculating compensation established in landmark Supreme Court precedents, including:
  Sarla Verma v. Delhi Transport Corporation (2009) 6 SCC 121
  National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680
  N. Jayasree & Ors. v. Cholamandalam MS General Insurance Co. Ltd. (2022) 14 SCC 712
  Sumathi v. National Insurance Co. Ltd. 2021 SCC Online SC 3697

3. Basic Judgment Details

This case originated from a fatal motor accident on August 3, 2012, which resulted in the death of T.I. Krishnan, a 51-year-old Assistant Engineer. His dependents (appellants) filed a claim petition before the Motor Accidents Claims Tribunal (MACT). The MACT awarded compensation. Dissatisfied, both the insurer and the claimants appealed to the High Court of Kerala. The High Court, in its impugned judgment, significantly reduced the compensation by applying a "split multiplier" methodology. The claimants' review petition was dismissed, leading to the present appeal before the Supreme Court.

4. Core Principle of the Judgment: The Inadmissibility of the 'Split Multiplier'

The Central Issue

The core legal question before the Supreme Court was whether the use of a "split multiplier" in calculating compensation under Section 166 of the Motor Vehicles Act, 1988, is legally permissible.

A "split multiplier" involves using two different multipliers for two different periods of the victim's expected life—one for the period until retirement from service (assuming a higher income) and another for the post-retirement period (assuming a reduced or no income). The High Court had applied this method, reducing the compensation on the assumption that the deceased's income would drop by approximately 50% after his superannuation.

The Supreme Court's Analysis and Ruling

The Supreme Court conducted an in-depth analysis and unequivocally rejected the application of the split multiplier. Its reasoning is structured as follows:

4.1. Judicial Inconsistency and Lack of Precedent
The Court began by highlighting the profound inconsistency in the approach of various High Courts. It provided a detailed survey of judgments from High Courts like Delhi, Bombay, Karnataka, Kerala, and others, showing that some benches applied the split multiplier while others from the same High Court rejected it. This intra-court and inter-court divergence created uncertainty and violated judicial discipline. The Court noted that such differences should have been resolved by referring the issue to a larger bench, which was not done.

4.2. Affirmation of the Structured Methodology from Sarla Verma and Pranay Sethi
The Supreme Court reaffirmed that the structured formula laid down in Sarla Verma (supra) and subsequently clarified in Pranay Sethi (supra) is the definitive guide for calculating compensation. It quoted paragraph 41 of Sarla Verma, which explicitly states that applying a multiplier equivalent to the balance years of service is a "confusion that has to be avoided." The Court emphasized that the multiplier is to be selected solely based on the age of the deceased at the time of death, as per the standardized table, and not on their remaining years of service.

4.3. Superannuation is Not an 'Exceptional Circumstance'
The Court firmly held that superannuation or retirement from service is not an "exceptional" or "cogent" reason to justify a departure from the standard multiplier method. It is a "natural progression" and a foreseeable event for any salaried person. To treat retirement as a negative factor reducing compensation would be contrary to the beneficial and compassionate object of the Motor Vehicles Act.

4.4. A "Concept Foreign" to the MV Act
In a definitive declaration, the Supreme Court stated, "split multiplier is a concept foreign to the Motor Vehicles Act, 1988 and is not to be used by the Tribunal and/or Courts in calculation of the compensation." (Paragraph 18). The Court ruled that the age-based multiplier system provides the necessary certainty and uniformity, and introducing the split multiplier creates arbitrariness.

5. Final Outcome and Directions

• Compensation Recalculated: The Supreme Court set aside the High Court's judgment and recalculated the compensation using the established principles from Pranay Sethi.
  Multiplier: Applied a multiplier of 11 (for the age group of 51-55 years) uniformly, without any split.
  Future Prospects: Granted an addition of 15% to the established income.
  Conventional Heads: Enhanced the amounts under conventional heads like loss of estate, funeral expenses, and consortium as per the latest precedents.

• Final Award: The total compensation was enhanced to Rs. 47,76,794/-, which is higher than the amounts awarded by both the MACT and the High Court.

• Prospective Application: The Court clarified that its ruling against the split multiplier will apply prospectively and will not reopen cases already decided by the High Courts.

• Circulation of Order: A copy of the judgment is to be circulated to all High Courts and Tribunals to ensure uniformity in future decisions.

6.  (MCQs) Based on the Judgment

Question 1: According to the Supreme Court in Preetha Krishnan v. United India Insurance (2025 INSC 1293), what is the primary criterion for selecting the multiplier in motor accident claim cases under Section 166 of the MV Act?
a) The number of years left until the victim's retirement.
b) The educational qualifications of the deceased.
c) The age of the deceased at the time of death.
d) The nature of the victim's employment.

Question 2: The Supreme Court declared the "split multiplier" methodology to be?
a) Mandatory in cases involving government employees.
b) A discretionary tool for Tribunals to ensure fairness.
c) A concept foreign to the Motor Vehicles Act, 1988, and not to be used.
d) Applicable only when exceptional circumstances are recorded.