Motor Accident Claims - Reliance Can't Be Placed On Minimum Wages Notification When There Is Positive Evidence Regarding Income : Supreme Court

The Supreme Court recently held that a notification issued under the Minimum Wages Act can only be a guiding factor in determining the income of the deceased in a motor accident claims case. When there is positive evidence regarding the income, reliance cannot be placed on minimum wages notification.

In this case, the Supreme Court was considering an appeal filed by the claimants against a judgment of the Punjab and Haryana High Court which reduced the compensation awarded by the Motor Accidents Claims Tribunal.

The deceased was a 25 year old man, who was earning livelihood as a contractor. Although the claimed monthly income was Rs. 50,000/-, the Tribunal reckoned Rs 25,000 as the monthly income. The Tribunal took into account factors such as the deceased was paying monthly instalment of Rs.11,550/- towards the loan of a tractor purchased by him from 10.03.2014 onwards and the entire loan liability was discharged by 24.03.2015 with payment being made even after his death. Keeping in mind the rate at which EMI was being paid, the Tribunal held that the deceased must be earning at least Rs.25,000/- per month prior to his death in the accident.

The High Court came to the conclusion that the mere fact that the deceased had paid instalments of the loan could not itself be an evidence that the money actually represented his income or can form the basis for assessment of income of the deceased at Rs.25,000/- per month. Taking into consideration the Notification issued by the State of Haryana, fixing minimum wage at the relevant time, the High Court assessed the income of the deceased at Rs.7,000/- per month, and on this premise, the compensation was reduced.

The Supreme Court disapproved the High Court's verdict and observed that the Tribunal had followed a just and reasonable approach.

"In our considered view, the Tribunal's approach is quite justified in law as well as on facts. In the summary proceedings where the approach of the Tribunal's determination must be in conformity with the object of the welfare legislation, it was rightly held that the monthly income of the deceased could not be less than Rs.25,000/-. The reason assigned by the High Court to reduce the monthly income of the deceased is totally cryptic and has no rationale"

The bench comprising Justices Surya Kant and MM Sundresh further stated :

"The Notification of Minimum Wages Act can be a guiding factor only in a case where there is no clue available to evaluate monthly income of the deceased. Where positive evidence has been led, no reliance on the Notification could be placed, particularly when it was nobody's case that the deceased was a labourer as presumed by the High Court"

Accordingly, the appeal was allowed by restoring the order of the Tribunal.

Case Title : Gurpreet Kaur and others versus United India Insurance Company and others

Citation : 2022 LiveLaw(SC) 821

Motor Accident Claims - Motor Vehicles Act 1988 - Section 168 - The Notification of Minimum Wages Act can be a guiding factor only in a case where there is no clue available to evaluate monthly income of the deceased. Where positive evidence has been led, no reliance on the Notification could be placed, particularly when it was nobody's case that the deceased was a labourer as presumed by the High Court-Para 9

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