Minimum Wages Notification Can Be Considered To Determine Notional Income Of Deceased In Motor Accident Compensation Claims : Supreme Court

The Supreme Court observed that 'minimum wages notification' can be considered to determine the notional income of deceased in motor accident claim cases.

As per the claimants, the Deceased was a fish vendor­ cum­ driver and was earning at least Rs. 25,000/­ per month. The Motor Accident Claims Tribunal found that the Deceased was a driver and fixed his monthly income at Rs.14,000/­. Additionally, assuming that the Deceased received at least Rs.3,500/­ as rent, the Tribunal calculated his final notional income as Rs.17,500/­-. In appeal, the High Court observed that the maximum monthly income that could have been reckoned is Rs. 10,000/-. In view of this, the High Court substantially reduced the compensation granted by the Tribunal from Rs. 32,39,000/­ to Rs. 19,70,000/-.

Senior Advocate Thomas P. Joseph, who appeared for the appellants- claimants, brought to the notice of the court the Schedule B of the Kerala Motor Transport Workers' Payment of Fair Wages Act, 1971 as per which a 'driver' is classified as a 'Skilled worker' under Category III Skilled­ B. He also referred to the notification G.O. (Ms.) No. 123/2015/LBR dated 04.09.2015 issued by the Government of Kerala wherein, the pay scale for the year 2015 for each category of workers in Schedule B of the Act has been stipulated. It was contended that the Deceased being a registered transport motor driver, was entitled to be considered as a 'driver' as defined under the Kerala Fair Wages Act and his income was to be fixed in terms of the Notification.

Agreeing with this submission, the bench of Justices Surya Kant and Aniruddha Bose noted that there exists sufficient evidence to show that the Deceased was a fish vendor ­cum ­driver with a valid license. 

The court noted that in Chandra Alias Chanda Chandraram v. Mukesh Kumar Yadav (2022) 1 SCC 198, it was held that in the absence of a salary certificate, the minimum wages notification along with some amount of guesswork that is not completely detached from reality shall act as a yardstick to determine the income of the deceased. The court said:

"Schedule B­ Category III of the Kerala Fair Wages Act classifies a driver as a "Skilled worker". Reading this in conjunction with the Notification that came into effect from 01.01.2015 which amended Schedule A of the Kerala Fair Wages Act, prescribing a minimum pay scale of the workers listed in Schedule B, it is apparent that a 'driver' in Kerala earned a minimum of Rs. 15,600/­ in 2015. It appears to us that the aforesaid Act and the notification issued thereunder were not brought to the notice of the Tribunal or the High Court. As a result thereto, the High Court could not be cognizant of the statutory mandate prescribing minimum wages for a skilled worker like 'driver', and thus, erred in fixing the income of the Deceased at Rs.10,000/­. We are therefore inclined to fix the income of the Deceased notionally at Rs. 15,600/­ per month."

Another issue raised by the Insurance Company was regarding the determination of compensation under non­ conventional heads. In this regard, the bench said:

'We are however, not inclined to entertain this plea for the simple reason that the Insurance Company has not chosen to file any appeal against the judgment of the High Court. Having acquiesced, the Insurance Company cannot turn around and question a paltry amount of compensation awarded to the Appellants under the 'nonconventional heads'. However, question of law, in this regard, is kept open."

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

Case details

Manusha Sreekumar vs United India Insurance Co. Ltd | 2022 LiveLaw (SC) 858 | CA 7593 OF 2022 | 17 October 2022 | Justices Surya Kant and Aniruddha Bose

Headnotes

Motor Accident Compensation Claims - Fixing of notional income - In the absence of a salary certificate, the minimum wages notification along with some amount of guesswork that is not completely detached from reality shall act as a yardstick to determine the income of the deceased -Referred to Chandra Alias Chanda Chandraram and Anr. v. Mukesh Kumar Yadav and Ors (2022) 1 SCC 198 - High Court fixed the notional income of the Deceased driver as 10,000/- - As per notification issued under Kerala Fair Wages Act , a 'driver' in Kerala earned a minimum of Rs. 15,600/-­ in 2015 - Thus Supreme Court fixed income of the Deceased notionally at Rs. 15,600/­- per month. (Para 19-22)

Motor Accident Compensation Claims - Objective formula for calculating just compensation - Three factors that need to be established are: (a) age of the deceased; (b) income of the deceased; and (c) the number of dependents - The issues that are to be determined by the Tribunal to arrive at the loss of dependency are: (i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased. (Para 17-18)

Motor Vehicles Act, 1988 ; Section 168 - Motor Accident Compensation Claims - While determining compensation under the Act, section 168 of the Act makes it imperative to grant compensation that appears to be just. The Act being a social welfare legislation operates through economic conception in the form of compensation, which renders way to corrective justice. Compensation acts as a fulcrum to bring equality between the wrongdoer and the victim, whenever the equality gets disturbed by the wrongdoer's harm to the victim. It also endeavors to make good the human suffering to the extent possible and to also save families which have lost their breadwinners from being pushed to vagrancy. Adequate compensation is considered to be fair and equitable compensation. Courts shoulder the responsibility of deciding adequate compensation on a case­to­case basis. However, it is imperative for the courts to grant such compensation which has nexus to the actual loss. (Para 16)

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