High Court of Gujarat Partly Allows Insurance Company's Appeal in Motor Accident Claim, Reducing Compensation Due to Multiplier Error. Multiplier of 13 Applied Instead of 18 for Deceased Aged 48 Years Under Motor Vehicles Act, 1988.

High Court: Gujarat High Court In Favour of Prosecution

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2026-05-19 01:58:21

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Case Note & Summary

The case arises from a motor accident claim petition filed by the legal heirs of Naranbhai Parmar, who died in a vehicular accident on 25.02.2013. The deceased was a pedestrian near Godhra Civil Hospital when a truck bearing registration No. GJ-18-U-6109, driven rashly and negligently by the original opponent No.1 (respondent No.7), hit him, causing fatal injuries. The claimants, being the widow and children of the deceased, filed M.A.C.P. No. 423 of 2013 before the Motor Accident Claims Tribunal (Aux.), Panchmahals at Godhra, seeking compensation. The Tribunal partly allowed the claim petition and awarded Rs. 40,30,606/- with interest at 9% per annum from the date of filing till realization. The appellant, Reliance General Insurance Co. Ltd., being the insurer of the truck, challenged the award on the grounds that the compensation was excessive and the Tribunal erred in applying a multiplier of 18 instead of 13 for a deceased aged 48 years, and in deducting only 1/3rd towards personal expenses instead of 1/4th. The High Court analyzed the evidence and found that the deceased was 48 years old, self-employed, and had 6 dependents. Following the principles laid down in Sarla Verma v. DTC and National Insurance Co. Ltd. v. Pranay Sethi, the Court held that the appropriate multiplier is 13 and the deduction for personal expenses should be 1/4th. The Court recalculated the compensation: monthly income Rs. 3,000 (notional) + 50% future prospects = Rs. 4,500; annual income Rs. 54,000; less 1/4th deduction = Rs. 40,500; multiplied by 13 = Rs. 5,26,500; plus conventional heads Rs. 70,000 (loss of consortium, funeral expenses, loss of estate) = Rs. 5,96,500. The Court also reduced the interest rate from 9% to 7.5% per annum. The appeal was partly allowed, modifying the award to Rs. 5,96,500/- with interest at 7.5% per annum.

Headnote

A) Motor Accident Claims - Compensation - Multiplier - The Tribunal applied multiplier of 18 for a deceased aged 48 years, which is contrary to the settled law in Sarla Verma v. DTC, (2009) 6 SCC 121, where the appropriate multiplier for age 46-50 is 13. The High Court corrected the multiplier to 13. (Paras 5-6)

B) Motor Accident Claims - Compensation - Deduction of Personal Expenses - The Tribunal deducted 1/3rd towards personal expenses of the deceased, but since the deceased had 6 dependents, the deduction should be 1/4th as per Sarla Verma. The High Court modified the deduction to 1/4th. (Paras 5-6)

C) Motor Accident Claims - Compensation - Future Prospects - The Tribunal added 50% towards future prospects, which is correct as per Pranay Sethi for self-employed persons aged 40-50. The High Court upheld this addition. (Para 5)

D) Motor Accident Claims - Compensation - Interest Rate - The Tribunal awarded interest at 9% per annum, which is on the higher side. The High Court reduced it to 7.5% per annum, following the trend in similar cases. (Para 7)

Issue of Consideration

Whether the compensation awarded by the Motor Accident Claims Tribunal is just and proper, particularly regarding the multiplier applied and deduction of personal expenses.

Final Decision

Appeal partly allowed. The impugned judgment and award is modified. The appellant is directed to pay Rs. 5,96,500/- with interest at 7.5% per annum from the date of filing of the claim petition till realization. The amount already deposited, if any, shall be adjusted. The award is modified accordingly.

Law Points

Motor Accident Claims
Compensation Calculation
Multiplier Determination
Deduction of Personal Expenses
Contributory Negligence
Interest Rate

Case Details

2026 LawText (GUJ) (01) 236

R/First Appeal No. 2162 of 2021

2026-01-19

Mool Chand Tyagi

Mr. Rathin P Raval for Appellant, Mr. Nishit A Bhalodi for Respondents 1-6

Reliance General Insurance Co Ltd

Madhuben Naranbhai Parmar & Ors.

Nature of Litigation

First Appeal against judgment and award of Motor Accident Claims Tribunal in a claim petition under Section 166 of Motor Vehicles Act, 1988.

Remedy Sought

Appellant (Insurance Company) sought reduction of compensation awarded by Tribunal.

Filing Reason

Appellant challenged the award on grounds of excessive compensation, incorrect multiplier, and wrong deduction of personal expenses.

Previous Decisions

Motor Accident Claims Tribunal (Aux.), Panchmahals at Godhra, partly allowed M.A.C.P. No. 423 of 2013 and awarded Rs. 40,30,606/- with 9% interest.

Issues

Whether the multiplier of 18 applied by the Tribunal is correct for a deceased aged 48 years? Whether the deduction of 1/3rd towards personal expenses is appropriate when there are 6 dependents? Whether the interest rate of 9% per annum is excessive?

Submissions/Arguments

Appellant argued that the multiplier should be 13 as per Sarla Verma and deduction should be 1/4th. Respondents supported the Tribunal's award.

Ratio Decidendi

For a deceased aged 48 years, the appropriate multiplier is 13 as per Sarla Verma. For 6 dependents, deduction towards personal expenses is 1/4th. Future prospects of 50% are allowed for self-employed persons aged 40-50 as per Pranay Sethi. Interest rate of 7.5% is reasonable.

Judgment Excerpts

The Tribunal has applied multiplier of 18 which is contrary to the settled law. The deduction towards personal expenses should be 1/4th as the deceased had 6 dependents. The interest rate of 9% is on the higher side and is reduced to 7.5%.

Procedural History

Claim petition M.A.C.P. No. 423 of 2013 was filed before Motor Accident Claims Tribunal (Aux.), Panchmahals at Godhra, which partly allowed it on 19.01.2021. The Insurance Company filed First Appeal No. 2162 of 2021 before the High Court of Gujarat, which was decided on 19.01.2026.