Sikkim HC: The Motor accident claim tribunal can not grant Future prospects or any other additional non-pecuniary heads in petition U/S 163A of Motor vehicle Act

 In light of all the foregoing discussions, we hold that

under Section 163A Future prospects or any other additional

non-pecuniary heads find no place and compensation in a Claim

Petition under Section 163A of the M. V. Act is to be strictly

computed on the structured formula provided in the Second

Schedule to the Act. The reference stands answered

accordingly. {Para 20}

 THE HIGH COURT OF SIKKIM : GANGTOK

(Civil Appellate Jurisdiction)

MAC App. No.10 of 2018

Shriram General Insurance Company Limited Vs  Dilu Rai and Others

DIVISION BENCH : THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE

THE HON’BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE

Author: Meenakshi Madan Rai, J.

DATED : 4th APRIL, 2022.

Print Page

Madras HC: How to calculate compensation under S 163A of Motor vehicle Act?

 Further, the Tribunal has awarded a sum of Rs.15,000/- towards loss of love and affection, Rs.20,000/- towards loss of consortium and Rs.5,000/- towards funeral expenses. The appellants are entitled only for a sum of Rs.5,000/- towards loss of consortium, Rs.2,000/- towards funeral expenses and Rs.2,500/- towards loss of estate. In view of the excess amount granted by the Tribunal under conventional heads, the appellants are not entitled to any enhancement.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

C.M.A.No.400 of 2020

Sendhiammal  Vs. Ramshuklal

CORAM:

THE HONOURABLE MS.JUSTICE V.M.VELUMANI

DATED: 13.02.2020.

Read full judgment here: Click here.

Print Page

Madras HC: Claimant is not entitled to get future prospect U/S 163A of Motor vehicle Act

From the award of the Tribunal, it is seen that the appellants claimed compensation for the death of one Munusamy. When the claim petition was filed under Section 163(A), the Tribunal has to follow structural formula contained in the Second Schedule of the Motor Vehicles Act. As per the Second Schedule, the claimants are entitled to compensation only if the income of the deceased is Rs.40,000/- per annum or less than the same. The claimants have claimed in the claim petition that the deceased was working as a coolie and was earning a sum of Rs.3,300/- per month and the Tribunal accepting the same, fixed the monthly income of the deceased at Rs.3,300/-, deducted 1/3rd towards personal expenses, fixed the age as 31 years as per Post Mortem Certificate, applied multiplier 17 and granted compensation as per the Second Schedule. As per structural formula, the appellants are not entitled for any enhancement towards future prospects. {Para 9}

IN THE HIGH COURT OF JUDICATURE AT MADRAS

C.M.A.No.400 of 2020

Sendhiammal  Vs. Ramshuklal

CORAM:

THE HONOURABLE MS.JUSTICE V.M.VELUMANI

DATED: 13.02.2020.

Print Page

Supreme court: Motor accident claim tribunal must give interest on future prospect while granting compensation for motor accident

 In fact, it is due to the repudiation of or refusal to consider the claim that the claimants are driven to the Tribunal. When the matter is pending before the Tribunal or in appeal before the higher forums, the claimants are deprived of the compensation for future prospects. If they are paid in time, it could be utilized by the claimants and on failure, the loss of dependency would force the claimants to source their livelihood from elsewhere. This is sought to be compensated at least minimally by award of interest, which oftener them ever is nominal also since only simple interest is awarded. If the amounts were disbursed to the claimants on a rough calculation, on intimation of the accident to the Insurance Company, subject to the award of the Tribunal, necessarily there would not have been any interest liability atleast to the extent of the disbursement made. {Para 11}

 IN THE SUPREME COURT OF INDIA

Special Leave Petition (C) Nos. 11340 of 2020 and 22136 of 2024

Decided On: 14.07.2025

The Oriental Insurance Co. Ltd. Vs. Niru and Ors.

Hon'ble Judges/Coram:

Sudhanshu Dhulia and K. Vinod Chandran, JJ.

Author: K. Vinod Chandran, J.

Citation:  MANU/SC/0894/2025,2025 INSC 822

Print Page

Bombay HC: Motor accident claim tribunal should grant interest on future prospect from the date of filing of the claim petition

 This Court has held in the case of Kalpana Madhu Gavali [supra] that interest on future prospects should not be paid. However, I have not applied the said judgment for the following reasons :

i] The Hon'ble Supreme Court in the various judgments, noted in para no.10 above, has granted interest on the future prospects and the same is not granted in exercise of powers under Article 142 of the Constitution of India.

ii] The entire compensation is computed based on loss of future income which includes future prospect.

iii] The compensation becomes payable from the date of filing of the claim petition and the interest is awarded by the tribunal from the date of filing of claim petition. The claim petition may be adjudicated within one year or may take 20 years up till the appellate stage. But, the amount becomes payable from the date of filing of the claim petition, as such, the interest is granted from the date of claim petition till it's realization. {Para 11}

12. The Hon'ble Supreme Court has consistently granted interest on future prospect from the date of filing of the claim petition. As such, the argument of the Insurance Company on that interest should not be granted on future prospect is rejected.

 IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

First Appeal No. 401 of 2014

Decided On: 01.10.2024

IFFCO-Tokio General Insurance Co. Ltd. Vs. Suvarna and Ors.

Hon'ble Judges/Coram:

Arun R. Pedneker, J.

Citation:  MANU/MH/6153/2024,2024:BHC-AUG:23391.

Print Page

Supreme Court : Motor accident claim tribunal should include HRA,PF contribution and other perquisites to salary of deceased before considering his annual income for grant of compensation

The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. {Para 19}

It has also been stated: ' "Income" signifies "what comes in" (per Selborne, C., Jones v. Ogle [(1861-73) All ER Rep 918]). "It is as large a word as can be used" to denote a person's receipts (per Jessel, M.R., Huggins, ex p., Re [51 LJ Ch 935]). Income is not confined to receipts from business only and means periodical receipts from one's work, lands, investments, etc. Secy. to the Board of Revenue, Income Tax v. Al. Ar. Rm. Arunachalam Chettiar & Bros. [  MANU/TN/0126/1920 : AIR 1921 Mad 427] Ref. Vulcan Insurance Co. Ltd. v. Corporation of Madras [AIR 1930 Mad 626 (2)].

21. If the dictionary meaning of the word 'income' is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income tax or professional tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute.

To the same effect is the decision of this Court in Oriental Insurance Company Limited v. Ram Prasad Varma and Ors. [  MANU/SC/0030/2009 : 2009:INSC:24 : (2009) 2 SCC 712: (2009) 1 SCC (Cri) 853: (2009) 1 Scale 598].

7. We, therefore, are of the opinion that "dearness allowance" and "house rent allowance" payable to the deceased should have been included for determining the income of the deceased and consequently the amount of compensation.

9. Recently in a judgment dated 11th July, 2024 in National Insurance Company Ltd. v. Nalini and Ors. [Petition for Special Leave to Appeal (C) No. 4230/2019], this Court held that, allowances under the heads of transport allowance, house rent allowance, provident fund loan, provident fund and special allowance ought to be added while considering the basic salary of the victim/deceased to arrive at the dependency factor.

10. Therefore, components of house rent allowance, flexible benefit plan and company contribution to provident fund have to be included in the salary of the deceased while applying the component of rise in income by future prospects to determine the dependency factor. The Accident Claims Tribunal was justified in factoring these components into the salary of the deceased, before applying 50% rise by future prospects due to future prospects, while calculating the total compensation payable to the Appellant.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. ... of 2024 .

Decided On: 23.07.2024

Meenakshi Vs. The Oriental Insurance Co. Ltd.

Hon'ble Judges/Coram:

Hima Kohli and Sandeep Mehta, JJ.

Citation: MANU/SC/0830/2024,2024 INSC 573.

Print Page

Whether agricultural labourer can be treated as self employed person for the purpose of grant of future prospects under motor accident claim petition?

 Admittedly, the deceased was an agricultural labourer. Learned Counsel for the MSRTC has first tried to submit that an agricultural labourer neither fits into the category of self employed nor being on a fixed salary, and therefore, the concept of future prospects cannot be applied. She has also sought to invoke the dictionary meaning of the word 'self employed'. Firstly, no doubt, self employed would mean earning income directly from one's own business, trade, or profession rather than as a specified salary or wages from an employer, however, in my view, an agricultural labourer is a service provider of agricultural labour and can be said to be engaged in his profession like a carpenter or a cobbler. He has the skill of agriculture labour and is specialized in performing agriculture labour. Therefore, in my view, an agricultural labourer earning income from the profession of agriculture labour is a self employed person. No contrary view or decision has been brought to my notice. {Para 11}

 IN THE HIGH COURT OF BOMBAY

First Appeal No. 1579 of 2006

Decided On: 21.09.2023

Kalpana Madhu Gavali and Ors. Vs. Maharashtra State Road Transport Corporation

Hon'ble Judges/Coram:

Abhay Ahuja, J.

Citation: MANU/MH/3837/2023.

Print Page

Supreme Court: The court must grant compensation towards future prospects for death of child in case of motor accident claim petition

 It is well settled legal principle that in addition to awarding compensation for pecuniary losses, compensation must also be granted with regard to the future prospects of the children. It is incumbent upon the Courts to consider the said aspect while awarding compensation. Reliance in this regard may be placed on the decisions rendered by this Court in General Manager, Kerala S. R. T. C. v. Susamma Thomas   MANU/SC/0389/1994 : AIR1994SC1631 ; Sarla Dixit v. Balwant Yadav   MANU/SC/0338/1996 : (1993)IILLJ664SC ; and Lata Wadhwa case (supra). {Para 31}

32. In view of discussion made hereinbefore, it is quite clear the claim with regard to future prospect should have been be addressed by the courts below. While considering such claims, child's performance in school, the reputation of the school etc. might be taken into consideration. In the present case, records shows that the children were good in studies and studying in a reasonably good school. Naturally, their future prospect would be presumed to be good and bright. Since they were children, there is no yardstick to measure the loss of future prospects of these children. But as already noted, they were performing well in studies, natural consequence supposed to be a bright future. In the case of Lata Wadhwa (supra) and M. S. Grewal (supra), the Supreme Court recognised such future prospect as basis and factor to be considered. Therefore, denying compensation towards future prospects seems to be unjustified.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3608 of 2009.

Decided On: 15.05.2009

R.K. Malik and Ors. Vs. Kiran Pal and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and Mukundakam Sharma, JJ.

Author: Mukundakam Sharma, J.

Equivalent citations: AIR 2009 SUPREME COURT 2506, 2009 (14) SCC 1, 2009 AIR SCW 4381, (2009) 4 ALLMR 978 (SC), MANU/SC/0809/2009

Print Page

Supreme Court: Motor Accident claim tribunal should not grant any further compensation under the separate head of "future prospects" in case of death of child

The deduction on account of contributory negligence has already been held by us to be unsustainable. The determination of a just and proper compensation to the Appellants with regard to the deceased child, in the entirety of the facts and circumstances of the case does not persuade us to enhance the same any further from Rs. 2,95,000/- by granting any further compensation under the separate head of "future prospects". It may only be noticed that R.K. Malik (supra) does not consider Satender (supra) on the grant of future prospects as far as children are concerned.

{Para 15}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2624 of 2020.

Decided On: 18.06.2020

Rajendra Singh and Ors. Vs. National Insurance Company Limited and Ors.

Hon'ble Judges/Coram:

Navin Sinha and B.R. Gavai, JJ.

Author: Navin Sinha, J.

Neutral Citation: 2020 INSC 438

Citation:  MANU/SC/0486/2020.

Print Page

Madras HC: Minors are non earning members and hence money should not be deducted towards their personal expenses in motor accident claim petition

 So far as minors are concerned, they are non earning members and there is no occasion for them to spend money towards the personal expenses and there cannot be any deduction towards their personal expenses. In Lata Wadhwa case (cited supra) and Kishan Gopal case (cited supra). The Hon'ble Supreme Court after fixing the notional monthly income of the minor applied the multiplier and taken the entire amount as the loss of dependency and no deduction was made for their personal expenses. In the above circumstances, this Court is of the view that there cannot be any deduction towards personal expenses from the notional income of deceased minors.{Para 18}

 IN THE HIGH COURT OF MADRAS

C.M.A. No. 1625 of 2020 and C.M.P. No. 11960 of 2020

Decided On: 10.11.2020

Reliance General Insurance Company Limited Vs. H. Mallika Bee and Ors.

Hon'ble Judges/Coram:

V. Bharathidasan, J.

Citation:  MANU/TN/6628/2020.

Print Page

Whether it is duty of respondent in motor accident claim petition to prove that victim could make up for the loss of income by changing his vocation or by adopting another means of livelihood?

 Any scaling down of the compensation should require something more tangible than a hypothetical conjecture that notwithstanding the disability, the victim could make up for the loss of income by changing his vocation or by adopting another means of livelihood. The party advocating for a lower amount of compensation for that reason must plead and show before the Tribunal that the victim enjoyed some legal protection (as in the case of persons covered by the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995) or in case of the vast multitude who earn their livelihood in the unorganised sector by leading cogent evidence that the victim had in fact changed his vocation or the means of his livelihood and by virtue of such change he was deriving a certain income. {Para 13}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2567 of 2020

Decided On: 17.09.2020

Pappu Deo Yadav Vs. Naresh Kumar and Ors.

Hon'ble Judges/Coram:

L. Nageswara Rao, Krishna Murari and S. Ravindra Bhat, JJ.

Author: S. Ravindra Bhat, J.

Citation:  MANU/SC/0696/2020, AIR 2020 SUPREME COURT 4424, AIRONLINE 2020 SC 733.

Read full Judgment here: Click here.

Print Page

Whether the claimant in case of permanent disablement due to motor accident can claim future prospects?

 Two questions arise for consideration: one, whether in cases of permanent disablement incurred as a result of a motor accident, the claimant can seek, apart from compensation for future loss of income, amounts for future prospects too; and two, the extent of disability. On the first question, the High Court no doubt, is technically correct in holding that Pranay Sethi2 involved assessment of compensation in a case where the victim died. However, it went wrong in saying that later, the three-judge bench decision in Jagdish3 was not binding, but rather that the subsequent decision in Anant5 to the extent that it did not award compensation for future prospects, was binding. This Court is of the opinion that there was no justification for the High Court to have read the previous rulings of this Court, to exclude the possibility of compensation for future prospects in accident cases involving serious injuries resulting in permanent disablement. Such a narrow reading of Pranay Sethi2 is illogical, because it denies altogether the possibility of the living victim progressing further in life in accident cases - and admits such possibility of future prospects, in case of the victim's death.

{Para 7}

8. This Court has emphasized time and again that "just compensation" should include all elements that would go to place the victim in as near a position as she or he was in, before the occurrence of the accident.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2567 of 2020

Decided On: 17.09.2020

Pappu Deo Yadav Vs. Naresh Kumar and Ors.

Hon'ble Judges/Coram:

L. Nageswara Rao, Krishna Murari and S. Ravindra Bhat, JJ.

Author: S. Ravindra Bhat, J.

Citation:  MANU/SC/0696/2020, AIR 2020 SUPREME COURT 4424, AIRONLINE 2020 SC 733.

Print Page

Supreme Court: What are the basis for grant of Future Prospects in Motor accident claim petition?

 8.1. With respect to the issue of Future Prospects, a Constitution Bench of this Court in Pranay Sethi (supra) has held that in case the deceased was self-employed or on a fixed salary, and was below 40 years of age, an addition of 40% of the established income should be granted towards Future Prospects.

Future Prospects are to be awarded on the basis of:

i. the nature of the deceased's employment; and

ii. the age of the deceased.

In the present case, it is claimed by the family of the deceased that he was engaged in making namkeen, and was earning a monthly income of about Rs. 15,000 per month. However, no evidence was brought on record to establish the same. The MACT as well as the High Court assessed the income of the deceased on the basis of the minimum wage of an unskilled worker. The nature of his employment being taken as a self-employed person.

The deceased was 24 years old at the time of the accident. Hence, future Prospects ought to have been awarded at 40% of the actual income of the deceased, instead of 50% as awarded by the High Court.

Hence, the judgment of the High Court on this issue is modified to that extent.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 9581 of 2018.

Decided On: 18.09.2018

Magma General Insurance Co. Ltd. Vs. Nanu Ram and Ors.

Hon'ble Judges/Coram:

Rohinton Fali Nariman and Indu Malhotra, JJ.

Author: Indu Malhotra, J.

Citation:  MANU/SC/1012/2018,(2018) 18 Supreme Court Cases 130.

Read full Judgment here: Click here.

Print Page

Supreme Court: Father and Unmarried sister of deceased are entitled to get compensation under Motor Vehicles Act

 8.4. The Insurance Company has submitted that the father and the sister of the deceased could not be treated as dependents, and it is only a mother who can be dependent of her son. This contention deserves to be repelled. The deceased was a bachelor, whose mother had pre-deceased him. The deceased's father was about 65 years old, and an unmarried sister. The deceased was contributing a part of his meagre income to the family for their sustenance and survival. Hence, they would be entitled to compensation as his dependents.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 9581 of 2018.

Decided On: 18.09.2018

Magma General Insurance Co. Ltd. Vs. Nanu Ram and Ors.

Hon'ble Judges/Coram:

Rohinton Fali Nariman and Indu Malhotra, JJ.

Author: Indu Malhotra, J.

Citation:  MANU/SC/1012/2018,(2018) 18 Supreme Court Cases 130.

Read full Judgment here: Click here.

Print Page

Leading Supreme Court Judgment on grant of compensation under the head "Loss of Consortium"

8.7 A Constitution Bench of this Court in Pranay Sethi (supra) dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is Loss of Consortium.

In legal parlance, "consortium" is a compendious term which encompasses 'spousal consortium', 'parental consortium', and 'filial consortium'.

The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse.1

Spousal consortium is generally defined as rights pertaining to the relationship of a husband-wife which allows compensation to the surviving spouse for loss of "company, society, co-operation, affection, and aid of the other in every conjugal relation."2

Parental consortium is granted to the child upon the premature death of a parent, for loss of "parental aid, protection, affection, society, discipline, guidance and training."

Filial consortium is the right of the parents to compensation in the case of an accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love, affection, companionship and their role in the family unit.

Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. Modern jurisdictions world-over have recognized that the value of a child's consortium far exceeds the economic value of the compensation awarded in the case of the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of the love, affection, care and companionship of the deceased child.

The Motor Vehicles Act is a beneficial legislation aimed at providing relief to the victims or their families, in cases of genuine claims. In case where a parent has lost their minor child, or unmarried son or daughter, the parents are entitled to be awarded loss of consortium under the head of Filial Consortium.

Parental Consortium is awarded to children who lose their parents in motor vehicle accidents under the Act.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 9581 of 2018.

Decided On: 18.09.2018

Magma General Insurance Co. Ltd. Vs. Nanu Ram and Ors.

Hon'ble Judges/Coram:

Rohinton Fali Nariman and Indu Malhotra, JJ.

Author: Indu Malhotra, J.

Citation:  MANU/SC/1012/2018,(2018) 18 Supreme Court Cases 130.

Print Page

Supreme Court: The court should grant compensation on notional income for future prospects on account of death of homemaker

 Once notional income has been determined, the question remains as to whether escalation for future prospects should be granted with regard to it. Initially, the awarding of future prospects by this Court was related to the stability of the job held by the victim. {Para 37}

38. However, there was a shift in jurisprudence regarding future prospects with the five-Judge Bench decision of this Court in Pranay Sethi (supra). This Court extended the benefit regarding future prospects to even self-employed persons, or those on a fixed salary. The Court held as follows:

57. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardisation, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated Under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities....Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.

(emphasis supplied)

39. The rationale behind the awarding of future prospects is therefore no longer merely about the type of profession, whether permanent or otherwise, although the percentage awarded is still dependent on the same. The awarding of future prospects is now a part of the duty of the Court to grant just compensation, taking into account the realities of life, particularly of inflation, the quest of individuals to better their circumstances and those of their loved ones, rising wage rates and the impact of experience on the quality of work.

41. When it comes to the second category of cases, relating to notional income for non-earning victims, it is my opinion that the above principle applies with equal vigor, particularly with respect to homemakers. Once notional income is determined, the effects of inflation would equally apply. Further, no one would ever say that the improvements in skills that come with experience do not take place in the domain of work within the household. It is worth noting that, although not extensively discussed, this Court has been granting future prospects even in cases pertaining to notional income, as has been highlighted by my learned brother, Surya Kant, J., in his opinion [Hem Raj v. Oriental Insurance Company Limited,   MANU/SC/1799/2017 : (2018) 15 SCC 654; Sunita Tokas v. New India Insurance Co. Ltd.,   MANU/SC/1105/2019 : (2019) 20 SCC 688].

 The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 19-20 of 2021 

Decided On: 05.01.2021

Kirti and Ors. Vs. Oriental Insurance Co. Ltd.

Hon'ble Judges/Coram:

Surya Kant, S. Abdul Nazeer and N.V. Ramana, JJ.

Authored By : Surya Kant, N.V. Ramana

Surya Kant, J.

Citation: MANU/SC/0004/2021.

Read full Judgment here: Click here.

Print Page

Supreme court explains different theories for ascertaining the value of a homemaker's unpaid labour for grant of compensation under motor vehicles Act

The Second Schedule to the Motor Vehicles Act gives a value to the compensation payable in respect of those who had no income prior to the accident and for a spouse, it says that one-third of the income of the earning surviving spouse should be the value. Exploration on the internet shows that there have been efforts to understand the value of a homemaker's unpaid labour by different methods. One is, the opportunity cost which evaluates her wages by assessing what she would have earned had she not remained at home, viz., the opportunity lost. The second is, the partnership method which assumes that a marriage is an equal economic partnership and in this method, the homemaker's salary is valued at half her husband's salary. Yet another method is to evaluate homemaking by determining how much it would cost to replace the homemaker with paid workers. This is called the Replacement Method. {Para 10}

(emphasis supplied)

35. However, it must be remembered that all the above methods are merely suggestions. There can be no exact calculation or formula that can magically ascertain the true value provided by an individual gratuitously for those that they are near and dear to. The attempt of the Court in such matters should therefore be towards determining, in the best manner possible, the truest approximation of the value added by a homemaker for the purpose of granting monetary compensation.

36. Whichever method a Court ultimately chooses to value the activities of a homemaker, would ultimately depend on the facts and circumstances of the case. The Court needs to keep in mind its duty to award just compensation, neither assessing the same conservatively, nor so liberally as to make it a bounty to claimants [National Insurance Co. Limited v. Pranay Sethi,   MANU/SC/1366/2017 : (2017) 16 SCC 680; Kajal v. Jagdish Chand,   MANU/SC/0126/2020 : (2020) 4 SCC 413].

42. Therefore, on the basis of the above, certain general observations can be made regarding the issue of calculation of notional income for homemakers and the grant of future prospects with respect to them, for the purposes of grant of compensation which can be summarized as follows:

a. Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.

b. Taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in the same as compared to men, the fixing of notional income of a homemaker attains special significance. It becomes a recognition of the work, labour and sacrifices of homemakers and a reflection of changing attitudes. It is also in furtherance of our nation's international law obligations and our constitutional vision of social equality and ensuring dignity to all.

c. Various methods can be employed by the Court to fix the notional income of a homemaker, depending on the facts and circumstances of the case.

d. The Court should ensure while choosing the method, and fixing the notional income, that the same is just in the facts and circumstances of the particular case, neither assessing the compensation too conservatively, nor too liberally.

e. The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 19-20 of 2021 

Decided On: 05.01.2021

Kirti and Ors. Vs. Oriental Insurance Co. Ltd.

Hon'ble Judges/Coram:

Surya Kant, S. Abdul Nazeer and N.V. Ramana, JJ.

Authored By : Surya Kant, N.V. Ramana

Surya Kant, J.

Citation: MANU/SC/0004/2021.

Print Page

Supreme Court: Motor accident claim tribunal must give compensation on account of future prospect to housewife on her notional income

 When it comes to the second category of cases, relating to notional income for nonearning victims, it is my opinion that the above principle applies with equal vigor, particularly with respect to homemakers. Once notional income is determined, the effects of inflation would equally apply. Further, no one would ever say that the improvements in skills that come with experience do not take place in the domain of work within the household. It is worth noting that, although not extensively discussed, this Court has been granting future prospects even in cases pertaining to notional income, as has been highlighted by my learned brother, Surya Kant, J., in his opinion [Hem Raj v. Oriental Insurance Company Limited, (2018) 15 SCC 654; Sunita Tokas v. New India Insurance Co. Ltd., (2019) 20 SCC 688]. {Para 25}

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.1920 of 2021

Kirti & Anr. Etc. Vs Oriental Insurance Company Ltd.

Author: Surya Kant, J:

Dated: January 05, 2021.

Read full Judgment here: Click here.

Print Page

What are parameters for ascertaining notional income of housewife in motor accident claim petition?

Therefore, on the basis of the above, certain general

observations can be made regarding the issue of calculation of

notional income for homemakers and the grant of future

prospects with respect to them, for the purposes of grant of

compensation which can be summarized as follows:

a. Grant of compensation, on a pecuniary basis, with respect

to a homemaker, is a settled proposition of law.

b. Taking into account the gendered nature of housework, with

an overwhelming percentage of women being engaged in the

same as compared to men, the fixing of notional income of a

homemaker attains special significance. It becomes a

recognition of the work, labour and sacrifices of

homemakers and a reflection of changing attitudes. It is also

in furtherance of our nation’s international law obligations

and our constitutional vision of social equality and ensuring

dignity to all.

c. Various methods can be employed by the Court to fix the

notional income of a homemaker, depending on the facts

and circumstances of the case.

d. The Court should ensure while choosing the method, and

fixing the notional income, that the same is just in the facts

and circumstances of the particular case, neither assessing

the compensation too conservatively, nor too liberally.

e. The granting of future prospects, on the notional income

calculated in such cases, is a component of just

compensation. {Para 26}

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.1920 of 2021

Kirti & Anr. Etc. Vs Oriental Insurance Company Ltd.

Author: Surya Kant, J:

Dated: January 05, 2021.

Print Page

Supreme court: In cases of permanent disablement caused by a motor accident, the claimant is entitled to future prospects

FUTURE PROSPECTS

17. The High Court has not applied the quantum for future prospect in the compensation granted. In its reasoning, the High Court has stated that the Income tax returns relied upon by the Appellant show that despite the injury the Appellant's income had subsequently increased and hence it cannot be said that there is a loss of future earnings.

18. It is a well settled position of law that in cases of permanent disablement caused by a motor accident, the claimant is entitled to not just future loss of income, but also future prospects. It has been reiterated by this Court in multiple instances that "just compensation" must be interpreted in such a manner as to place the claimant in the same position as he was before the accident took place.

19. The accident that caused the injury took place on 12.06.2009. The acknowledgement of both the Income Tax Returns produced by the Appellant show that Tax Returns were till 31.03.2008 and 31.03.2009. Both the Income Tax Returns produced as proof of income were from before the accident took place, and hence the High Court's finding that the income of the Appellant has increased after the disability is incorrect.

20. It is also to be noted that even if the income of the Appellant had increased after the accident, it would not be enough grounds to disable the Appellant from claiming compensation for future prospect as the rise in income may be attributed to multiple other factors.

21. In light of National Insurance Co. Limited v. Pranay Sethi and Ors. MANU/SC/1366/2017 : (2017) 16 SCC 680, the applicable 40% addition of future prospects will be given as compensation to the Appellant herein.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 9070-9071 of 2022.

Decided On: 09.12.2022

Mohd. Sabeer Vs. Regional Manager, U.P. State Road Transport Corporation

Hon'ble Judges/Coram:

Krishna Murari and S. Ravindra Bhat, JJ.

Author: Krishna Murari, J.

Citation:  MANU/SC/1597/2022, 2022 SCCONLINE 1701.

Print Page