Supreme Court: The court should grant permanent alimony enhancement at the rate of 5% every two years due to inflation

The Appellant-wife, who has remained unmarried and is living independently, is entitled to a level of maintenance that is reflective of the standard of living she enjoyed during the marriage and which reasonably secures her future. Furthermore, the inflationary cost of living and her continued reliance on maintenance as the sole means of financial support necessitate a reassessment of the amount.

8. In our considered opinion, a sum of Rs. 50,000/- per month would be just, fair and reasonable to ensure financial stability for the Appellant-wife. This amount shall be subject to an enhancement of 5% every two years. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 10209 of 2024 

Decided On: 29.05.2025

Rakhi  Vs. Raja 

Hon'ble Judges/Coram:

Vikram Nath and Sandeep Mehta, JJ.

Author: Vikram Nath, J.

Citation: 2025 INSC 789, MANU/SC/0793/2025

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How to ascertain impact of inflation while calculating damages for medical negligence?

This Court has referred to case law from a number of
other major common law jurisdictions on the question of
accounting for inflation in the computation of awards in medical
negligence cases. It is unnecessary to discuss it in detail. It is
sufficient to note that the principle of apportioning for
inflationary fluctuations in the final lump sum award for damages has been upheld and applied in numerous cases
pertaining to medical negligence. In the United States of
America, most states, as in Ireland and the United Kingdom,
require awards for future medical costs to be reduced to their
present value so that the damages can be awarded in the form
of a one-time lump sum. The leading case in the United States,
which acknowledges the impact of inflation while calculating
damages for medical negligence was Jones & Laughlin Steel
Corporation v. Pfeifer (1983) 462 US 523
, wherein that court recognized the
propriety of taking into account the factors of present value and
inflation in damage awards. Similarly, in O'Shea v Riverway

Towing Co.(1982) 677 F.2d 1194, at 1199 (7th Cir)
, Posner J., acknowledged the problem of personal
injury victims being severely under compensated as a result of
persistently high inflation.
In Taylor v. O’ Connor [1971] A.C. 115
, Lord Reid accepted the importance of
apportioning for inflation:
“It will be observed that I have more than once
taken note of present day conditions - in particular
rising prices, rising remuneration and high rates of
interest. I am well aware that there is a school of
thought which holds that the law should refuse to
have any regard to inflation but that calculations
should be based on stable prices, steady or slowly
increasing rates of remuneration and low rates of
interest. That must, I think, be based either on an
expectation of an early return to a period of stability
or on a nostalgic reluctance to recognise change. It
appears to me that some people fear that inflation
will get worse, some think that it will go on much as
at present, some hope that it will be slowed down,
but comparatively few believe that a return to the
old financial stability is likely in the foreseeable
future. To take any account of future inflation will
no doubt cause complications and make estimates
 even more uncertain. No doubt we should not
assume the worst but it would, I think, be quite
unrealistic to refuse to take it into account at all.”
In the same case Lord Morris of Borth-y-Gest also upheld the
principle of taking into account future uncertainties. He
observed:
“It is to be remembered that the sum which is
awarded will be a once-for-all or final amount which
the widow must deploy so that to the extent
reasonably possible she gets the equivalent of what
she has lost. A learned judge cannot be expected to
prophesy as to future monetary trends or rates of
interest but he need not be unmindful of matters
which are common knowledge, such as the
uncertainties as to future rates of interest and
future levels of taxation. Taking a reasonable and
realistic and common-sense view of all aspects of
the matter he must try to fix a figure which is
neither unfair to the recipient nor to the one who
has to pay. A learned judge might well take the
view that a recipient would be ill-advised if he
entirely ignored all inflationary trends and if he
applied the entire sum awarded to him in the
purchase of an annuity which over a period of years
would give him a fixed and predetermined sum
without any provision which protected him against
inflationary trends if they developed.”
More recently the Judicial Committee of the UK Privy Council in
Simon v. Helmot [2012] UKPC 5
 has unequivocally acknowledged the principle,
that the lump sum awarded in medical negligence cases should
be adjusted so as to reflect the predicted rate of inflation.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL No. 8065 OF 2009
V. KRISHNAKUMAR .. APPELLANT
VERSUS
STATE OF TAMIL NADU & ORS. ..RESPONDENTS
With
 CIVIL APPEAL No. 5402 OF 2010
Citation;(2015) 9 SCC388

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