Standardised motor accident compensation includes future prospects, approved multiplier rules, and fixed conventional-head amounts for uniform awards.

The Supreme Court standardised motor accident compensation under the Motor Vehicles Act by holding that future prospects must be added even where the deceased was self-employed or on a fixed salary, because just compensation requires a fair and consistent income assessment. It approved the Sarla Verma multiplier approach, affirmed ordinary deductions for personal and living expenses, and rejected reliance on the Second Schedule for modern computation of conventional heads. Fixed, reasonable sums were prescribed for loss of estate, consortium, and funeral expenses to promote uniformity and periodic enhancement.

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Issues: (i) Whether, in claims for compensation under the Motor Vehicles Act, 1988, future prospects can be added to the established income of a deceased who was self-employed or on a fixed salary. (ii) What is the proper method for determining the multiplier, deductions for personal and living expenses, and compensation under conventional heads in death claims under Section 166 of the Motor Vehicles Act, 1988.

Issue (i): Whether, in claims for compensation under the Motor Vehicles Act, 1988, future prospects can be added to the established income of a deceased who was self-employed or on a fixed salary.

Analysis: The Court reconciled the earlier decisions on compensation and held that the principle of "just compensation" under Section 168 requires a standardized approach so that award of compensation is fair, reasonable, and consistent. It held that the distinction between a permanently employed person and a self-employed or fixed-salary person cannot justify denial of future prospects altogether, because income ordinarily rises with time, inflation, and changed economic conditions. The Court also held that a contrary view taken in a later coordinate-Bench decision could not prevail over the earlier binding view.

Conclusion: Future prospects must be added even in the case of self-employed or fixed-salary deceased persons, at the percentages laid down by the Court.

Issue (ii): What is the proper method for determining the multiplier, deductions for personal and living expenses, and compensation under conventional heads in death claims under Section 166 of the Motor Vehicles Act, 1988.

Analysis: The Court approved the standardised multiplier table earlier settled for claims under Section 166 and held that deductions for personal and living expenses should ordinarily follow the structured norms previously approved. It further held that the amounts under conventional heads require fixed and reasonable sums to ensure consistency, and that the Second Schedule is not a dependable basis for modern computation of such heads. The Court therefore prescribed standard figures for loss of estate, loss of consortium, and funeral expenses, with periodic enhancement.

Conclusion: The multiplier in Sarla Verma was approved, the existing norms on personal-expense deductions were affirmed, and fixed amounts were laid down for conventional heads.

Final Conclusion: The reference was answered by affirming a standardized method for motor accident compensation, including future prospects for self-employed and fixed-salary deceased persons, together with uniform rules for multiplier, deductions, and conventional heads.

Ratio Decidendi: In death claims under Section 166 of the Motor Vehicles Act, 1988, compensation must be computed on a standardized basis that includes future prospects, applies the approved multiplier table, follows ordinary deductions for personal and living expenses, and uses fixed conventional-head amounts to achieve just compensation.

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