Notional Income Of Ordinary Worker Must Be Determined Based On Fair Wages At Time Of Awarding Compensation: Kerala High Court

The appellant had approached the High Court challenging the award of rupees 75,000 by the Motor Accident Claims Tribunal.

Justice Johnson John stated that earning less than fair wages at the time of the accident should not be a reason to deprive parity in notional income.

“It cannot be disputed that even a casual worker is entitled for fair wages and the notional income of an ordinary worker has to be fixed after considering the fair wages at the relevant time and only because the appellant was earning less than the fair wages at the time of occurrence, he cannot be denied parity in the matter of notional income, as it is well settled that beneficial legislations with social objective are expected to be interpreted in favour of those for whose benefit the said legislations are made.”

The appellant while riding his motorcycle was hit by an autorickshaw that was being driven rashly and negligently. He fell down and sustained grievous injuries.

The Tribunal awarded compensation of rupees 74,000 which is challenged by the appellant before the High Court.

The appellant submitted that he was 21 years old at the time of the accident and was working as a salesman with a monthly income of rupees 4,500. It was stated that the Tribunal had not fixed the notional income correctly and fixed a notional income of rupees 3,000. It was also argued that the Tribunal failed to grant compensation towards the loss of his earning capacity.

The Court referred to the Apex Court decision in Ramachandrappa v. Royal Sundaram Alliance Insurance Co.Ltd. (2011) and Syed Sadiq and Others v. Divisional Manager, United India Insurance Company (2014) to state even in the absence of evidence, monthly income of an ordinary worker must be fixed at rupees 4,500 and for subsequent years, the monthly income could be adjusted by adding rupees 500 per year.

Court said, “If the monthly income of the appellant is calculated by adopting the above principle, it will come to Rs.7,500/- as the accident occurred in the year 2010.”

Relying upon the Apex Court decision in National Insurance Co.Ltd. v Pranay Sethi (2018), the Court stated that the benefit of future prospects must not be confined to persons with permanent jobs, but would also extend to self-employed persons.

After considering the medical reports assessing the disability of the appellant, the Court noted that 20 per cent functional disability could be fixed for the calculation of the loss of earning capacity of the appellant.

After considering all other factors such as pain and suffering, nature of injuries, period of treatment and disability, the Court awarded a total compensation of rupees 4,82,100 to the appellant.

As such, the appeal was allowed.

Counsel for Petitioners: Advocate K P Harish

Counsel for Respondents: Advocates V S Shiraz Bava, Lal K Joseph

Case Number: MACA NO. 2441 OF 2014

Case Title: Niyas v Mohana

Citation: 2024 LiveLaw (Ker) 716