Kerala High Court: Motor Accident Claim Compensation Should Be Calculated Using Exchange Rate On Date Of Filing Of Petition
The Court granted an enhanced compensation to the legal heirs of the deceased upon noting that the Tribunal had erred in applying the multiplier and calculating the exchange rate.
The Kerala High Court held that compensation for motor accident claims involving foreign income should be calculated based on the exchange rate prevailing on the date of filing the petition, not the date of the accident.
A Single Bench of Justice Johnson John observed, “The Tribunal calculated the exchange rate of Australian dollar as on the date of occurrence. But, the decision of the Honourable Supreme Court in Shyam Prasad Nagalla v. Andhra Pradesh State Board Transport Corporation [2025 KHC Online 7117] shows that compensation should be calculated at the exchange rate prevailing on the date of filing of the petition.”
The Court added, “…considering the fact that the deceased was working in Australia and taking note of the personal and living expenses of the deceased in Australia, I find that 50% of the income can be deducted towards personal and living expenses of the deceased.”
Senior Advocate George Cherian represented the insurer, while Advocate A.N. Santhosh appeared for the legal heirs of the deceased.
Brief Facts
The deceased died in a motor vehicle accident. While traveling as a pillion rider on a motorcycle ridden by her father, the deceased was struck by a lorry driven in a rash and negligent manner. As a result, both the deceased and father fell and sustained serious injuries, ultimately succumbing to them.
The Additional Motor Accident Claims Tribunal (Tribunal) arrived at a finding that the accident occurred because of negligence on the part of the driver and that the owner of the vehicle, the driver as well the insurer were jointly and severally liable to pay compensation of Rs.2,92,19,000/- to the Appellants. Both the legal heirs as well as the Insurer, disputing the amount awarded as compensation by the Tribunal, approached the High Court.
The legal heirs contended that the deceased, at the time of the accident, was working in Australia as a registered nurse and claimed she had a monthly income of Rs. 4,75,000/. Further, based on the bank statements presented, the Tribunal noted that the deceased was drawing $2872/- per month. They further submitted that the multiplier applicable for persons aged between 31-35 years was 16 and the Tribunal had applied the multiplier of ‘10’ for the reason that if compensation was calculated by adopting the multiplier of 16, the amount would have been much greater, hence, the said reasoning of the Tribunal was not legally sustainable.
The insurer contended that the Tribunal, after arriving at a finding that the deceased was drawing $2872 approximately every two weeks, fixed her monthly salary as $6000/- and the same was incorrect.
Reasoning of the Court
The Court observed that the Tribunal had erred in selecting a multiplier of 10, despite the settled law that the multiplier should be determined based on the age of the deceased at the time of the accident.
The Bench noted that the Tribunal had awarded compensation based on the exchange rate of the Australian dollar as on the date of the occurrence, however, it should be calculated as per the prevailing rate of exchange on the date of filing the petition, as per the decision of the Supreme Court in Shyam Prasad Nagalla v. Andhra Pradesh State Board Transport Corporation (2025).
The Bench noted that considering the fact that the deceased was working in Australia and taking into account their personal and living expenses there, 50% of the income could be deducted towards personal and living expenses.
“When the loss of dependency is calculated as per the revised criteria, the same would come to Rs.3,64,72,408/- [(32,56,465 + 40%) x 16 x 1⁄2]. The Tribunal had already granted Rs.2,91,06,000/- under this head. Therefore, an additional compensation of Rs.73,66,408/- is granted to the appellants/claim petitioners under this head”, the Court added.
The Court observed that the Tribunal had granted compensation under the other heads were reasonable and required no interference.
Consequently, the Court granted the legal heirs an enhanced compensation of Rs.73,66,408/- along with interest and proportionate costs, and directed the insurer to transfer the amount to them.
Cause Title: National Insurance Co. Ltd. v. John Thomas & Ors. (Neutral Citation No: 2025:KER:20442)
Appearance:
Appellant: Senior Advocate George Cherian, K.S. Santhi, Latha Susan Cherian
Respondents: Advocate A.N. Santosh