Motor Accident | Continuing In Existing Job Doesn't Mean No Future Earning Loss From Permanent Disability: Gujarat High Court

The Gujarat High Court enhanced the compensation awarded to an accident victim to over Rs. 8 Lakh, ruling that the mere continuation of employment of the accident victim after suffering 30% functional disability does not justify adopting a reduced multiplier or denying loss of future prospects.

Justice J. C. Doshi observed that while an injured claimant may continue in their existing service, their overall capacity and future employability elsewhere stand diminished and that a Motor Accident Claims Tribunal cannot apply a reduced “split” multiplier to compute the award.

“What is noticeable that, though after recovering from the accidental injury and having suffered 30% functional disability, claimant has joined the service of Maghmani Organic Limited, but one cannot deny the fact that claimant's function has been reduced by 30% and his capacity to earn is reduced by that much. He may be continued in his existing service, but his chance and ability to serve in some elsewhere employment has been diminished and this hard fact cannot be ignored or rather, employed to apply split multiplier,” the court said. 

The appeal was filed against a Motor Accident Claims Tribunal (MACT) order. The appellant had been involved in a road accident and suffered a 60% physical impairment. He admitted that his functional abilities had been reduced by 30% for the body as a whole.

The tribunal noted that the claimant, after recovering, continued his service with the firm Maghmani Organic Limited, and thus, concluded that he had not suffered any future financial loss or loss of future prospects.The tribunal applied a multiplier of 5 and calculated the compensation at Rs 3,26,795. Aggrieved by this, the claimant moved before the High Court.

The High Court placed reliance on Preetha Krishnan & Ors. v. The United India Insurance Co. Ltd. (2025), wherein the Apex Court has criticised the adoption of applying split multiplier, stating, “It has been held time and again by this Court that a split multiplier is not to be adopted, as a matter of course, and is only to be used in the exceptional circumstances, with such circumstances being recorded… 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.”

In the present case, the High Court said, the age-based multiplier as per the ruling in National Insurance Co. Ltd. v. Pranay Sethi (2017) must be applied.

“The School Leaving Certificate, produced by the claimant proves that on the age of the date of the accident, the claimant was 35 years old, which reflects the adoption of multiplier of 16 should be applied as per the judgment in case of Pranay Sethi (Supra),” the Court said while dismissing the tribunal's adoption of reduced multiplier of 5 for computing the award.

“There is no dispute in regards the monthly salary of the claimant at Rs.7,322/-. The law is quite settled on the granting of loss of future prospect would apply to the facts of the case, as claimant has received 30% functional disability. In absence of permanent sort of employment, he would be entitled to 40% of his actual income towards loss of future prospects,” the Court added.

Taking into account the trauma, pain, hospitalisation for a long period and loss of future prospects, the High Court found that the tribunal erred in granting compensation by applying a multiplier of 5 and not granting compensation towards the loss of future prospects.

Accordingly, the Court allowed the appeal and enhanced the compensation amount by over Rs 4.8 lakh, to Rs 8,15,400.

Case: RAKESHKUMAR NAVNITLAL SHAH Versus HIRENKUMAR KIRITKUMAR SHAH & ORS.

R/FIRST APPEAL NO. 636 of 2012

Click Here To Read/Download Order