A road accident death or injury claim in India is generally decided by a Motor Accident Claims Tribunal (MACT) using the structured, multiplier-based formula the Supreme Court set out in National Insurance Co. Ltd. v. Pranay Sethi (2017): the deceased's income, an age-based multiplier from the Sarla Verma table, a percentage addition for future prospects, and standard deductions for personal living expenses, plus fixed conventional heads such as loss of estate, funeral expenses, and loss of consortium. A claim petition generally must be filed before the MACT within a limitation period commonly cited as six months from the date of the accident, though courts retain some discretion to condone delay in appropriate cases. NRI claimants and dependents can generally pursue and be represented in a MACT claim from abroad through an Indian lawyer and a Power of Attorney.
The Pranay Sethi structured formula: how compensation is actually calculated
In National Insurance Co. Ltd. v. Pranay Sethi (2017), a Constitution Bench of the Supreme Court laid
down a structured method Tribunals now generally apply to calculate compensation for a motor accident
death. The starting point is the deceased's annual income, to which a percentage is added for
“future prospects” -- commonly cited guidance suggests roughly 50 percent for a permanent
job-holder under 40, tapering down for older age brackets, and somewhat lower percentages for the
self-employed and those on a fixed salary without prospect of increase. From that adjusted income, a
standard deduction is made for the deceased's own personal and living expenses -- commonly cited as
one-third where there are two or three dependents, one-fourth for four to six dependents, and one-fifth
for more than six, with a higher deduction for a bachelor. The resulting net dependency figure is then
multiplied by an age-based multiplier drawn from the Sarla Verma table (ranging from a high multiplier for
younger victims down to a low one for the elderly) to arrive at the loss of dependency, on top of which
fixed “conventional heads” are added for loss of estate, funeral expenses, and loss of
consortium for each eligible dependent -- figures which are periodically revised and should be confirmed
against the current position rather than assumed fixed.
Filing before the Tribunal, limitation period, and the burden of proof
A claim petition is filed before the Motor Accident Claims Tribunal having jurisdiction over the place
of the accident, the claimant's residence, or the respondent's residence/business, generally naming both
the vehicle owner and the insurer as respondents. Post-2019 amendments to the Motor Vehicles Act are
commonly understood to set a limitation period, cited in industry guidance as around six months from the
date of the accident, for filing a claim petition, though Tribunals retain some discretion to condone
delay where sufficient cause is shown -- this platform recommends filing as promptly as possible rather
than relying on that discretion. The claimant generally needs to establish the accident, the resulting
death or injury, and the income or earning capacity of the victim, typically through the police
First Information Report, post-mortem or medical records, income documents (salary slips, income tax
returns, or, for the self-employed, other credible evidence), and witness testimony.
Appeals, interest, and interim compensation
An award of the Tribunal can generally be appealed to the jurisdictional High Court, typically within
a limitation period specific to that appeal, and Tribunals commonly award interest on the compensation
amount from the date of the claim petition until payment, at a rate the Tribunal considers reasonable in
the circumstances. Courts have also increasingly directed interim compensation in appropriate cases --
particularly where the family's financial position is precarious pending the final award -- and appellate
courts have shown willingness to enhance awards where the Tribunal's calculation departed from the
Pranay Sethi structure without adequate justification. This platform recommends that claimants,
particularly those without a lawyer already engaged, seek qualified legal representation promptly given
how technical the applicable formula and evidentiary requirements are.
Common mistakes people make with MACT claims:
- Delaying filing well beyond the roughly six-month limitation period without a strong justification
for the delay.
- Not preserving income documentation for the deceased or injured victim, which is central to how
compensation is calculated under the Pranay Sethi formula.
- Assuming the formula produces a fixed, non-negotiable number -- multiplier tables, future-prospects
percentages, and conventional-head amounts are periodically revisited by courts and should be checked
against current appellate guidance.
