While applying the multiplier method, future prospects on advancement in life and career are also to be taken into consideration

In Erudhaya Priya Vs. State Express Transport Corporation Ltd., the appeal was filed before the Supreme Court seeking enhancement of compensation even over and above what was granted by the MACT.

The appellant had suffered permanent disability of 31.1% due to accident and the MACT applied the multiplier method to calculate the loss of earning power. The total quantification of the compensation by the MACT was of Rs. 35,24,288 payable by the Respondent State Corporation along with interest @ 7.5% per annum from the date of petition till the date of realization with costs. 

The Respondent State Corporation on filling an appeal, the High Court, confirming the findings of negligence of the bus driver, reduced the compensation to Rs. 25,00,000 primarily on the ground that the multiplier method for quantifying loss of earning power has been wrongly applied as it had not come on record as to how the injuries suffered by the Appellant would have a bearing on her earning capacity as a software engineer. The interest rate was sustained.

The Supreme Court observed that a victim who suffers a permanent or temporary disability occasioned by an accident is entitled to the award of compensation. The award of compensation must cover among others, the following aspects: (i) Pain, suffering and trauma resulting from the accident; (ii) Loss of income including future income; (iii) The inability of the victim to lead a normal life together with its amenities; (iv) Medical expenses including those that the victim may be required to undertake in future; and (v) Loss of expectation of life. 

In Sandeep Khanuja v. Atul Dande and Ors., the Supreme Court has held that, the multiplier method was logically sound and legally well established to quantify the loss of income as a result of death or permanent disability suffered in an accident and that, while applying the multiplier method, future prospects on advancement in life and career are also to be taken into consideration. 

The Supreme Court finding merit in the contention of the Appellant decided that the aforesaid principles with regard to future prospects must also be applied in the case of the Appellant taking the permanent disability as 31.1%. The quantification of the same on the basis of the judgment in National Insurance Co. Ltd. v. Pranay Sethi and Ors., more specifically considering the age of the Appellant, would be 50% of the actual salary in the present case.