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Madras High Court (Madurai Bench)· 24 July 2026

Must the Tribunal apply the multiplier method automatically whenever permanent disability is proved?

C.M.A(MD)No.574 of 2019
C.M.A(MD)No.574 of 2019 · C.M.A(MD)No.574 of 2019
Coram: K.Murali Shankar
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Answer

No; the Tribunal must first ascertain whether the disability affects earning capacity by considering the nature and extent of disablement, the claimant's avocation and the impact on it, before invoking the multiplier method.

Headnote

Motor Vehicles Act, 1988 — Compensation — Permanent disability — Multiplier method — Loss of earning capacity — Assessment of monthly income — Motor Vehicles Act, 1988 — Permanent disability — Multiplier method not automatic on every disability — Held: Ascertainment of loss of earning capacity is not automatic upon proof of permanent disability; the Tribunal must consider the nature and extent of disablement, the claimant's avocation, and the impact of disability on that avocation before applying the multiplier method. (¶6) Motor Vehicles Act, 1988 — Disability assessment — Medical and Lok Adalat evidence supports 60% disability — Held further: On facts, the medical records, disability certificates and the examination before the Lok Adalat established that the claimant sustained permanent disability at 60% with inability to stand or move without support, justifying invocation of the multiplier method. (¶7) Motor Vehicles Act, 1988 — Income assessment — Notional income where employment abroad unproved — Held further: Where a claimant fails to produce documentary proof of foreign salary but bank credits and other evidence on record support a reasonable earning, the Tribunal may fix a reasonable monthly income notionally. (¶9) National Insurance Company Ltd. v. Pranay Sethi; Sarla Verma v. Delhi Transport Corporation — Deduction for personal expenses and multiplier application — Held further: The Tribunal correctly deducted 40% towards personal and living expenses and applied the multiplier of 15 corresponding to the claimant's age of 37 years, and the compensation of Rs.20,93,000/- awarded under conventional and pecuniary heads is just and reasonable, warranting no interference. Appeal dismissed. (¶10, 11)

In the Court's own words
Paragraph 6Considering the above, it is very much clear that in all cases of injury or permanent disablement, the ascertainment of future loss of income or loss of earning capacity is not automatic, that the Tribunal is duty bound to take into consideration the various factors such as nature and extent of disablement, avocation of the injured and the impact of the disability on the avocation and that the multiplier method cannot be applied mechanically.
Acts & Sections
Motor Vehicles Act, 1988

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Also decided in this judgment
Can the Tribunal fix a claimant's monthly income notionally where foreign employment salary is unproved?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court (Madurai Bench). Corrections