MV Act | Minimum Wage Can't Be Only Factor To Determine Compensation Payable To Claimant: Punjab & Haryana High Court

The Punjab & Haryana High Court has said that the Minimum Wages Act cannot be the only factor in determining the compensation payable to the claimants in motor accidents.

Justice Alka Sarin said, "No doubt minimum wages notification is a yardstick which is often used, however, the same cannot be the only factor to determine the compensation payable to the claimants. The Courts must strike a balance between inflated and unreasonable demands of the victim and the equally untenable claim of the opposite party saying that nothing is payable."

However, at the same time, the award must be just so as to ensure that the claimants are adequately restored to the position prior to the accident, the Court added.

The New India Assurance Company Limited had filed the appeal against the award passed by the Motor Accident Claims Tribunal, Karnal wherein it awarded a compensation of over Rs.35.5 lakhs.

A 23-year-old mason scummed to injuries after he was hit by a tractor while riding a motorcycle.

The insurance company challenged the award alleging that the present was a case of contributory negligence and that the accident occurred in the middle of the road.

It was further contended that while assessing the income of the deceased the same has been done as per the Deputy Commissioner rate in the area for the year 2020. It is further the contention that the same ought to have been assessed as per the minimum wages fixed by the State Government.

After hearing the submissions, the Court noted that the argument regarding contributory negligence was not raised before the Tribunal nor was any argument raised regarding the factum of contributory negligence. 

"In view of the fact that neither the plea was raised before the Tribunal nor any evidence was led qua the same, the said argument is rejected," it said.

Furthermore, the Court said the second argument that the income of the deceased ought to have been assessed as per the minimum wages and not as per the Deputy Commissioner rate also deserves to be rejected.

Reliance was placed upon the High Court's decision in National Insurance Company Limited v. Meena Devi & Ors., "wherein the income was assessed on the basis of the DC rates rather than the minimum wages." The judgement was challenged by the Insurance Company before the Supreme Court by filing SLP and the same was dismissed. 

The Court noted that the deceased was 23 years of age and left behind a widow is also 23 years old with two minor children and his parents. 

"The young widow of the deceased is 23 years of age and the minor children have their whole life ahead of them, their formal education, if started at all, would be at the very initial stage. The compensation cannot in any manner compensate them for the loss suffered by them because of the untimely death of the deceased, however, the amount should be adequate to mitigate the financial difficulties the family is likely to face," it said.

Justice Sarin said keeping in view of the peculiar circumstances, especially the fact that the widow is herself 23 years old and the children are at a very tender age with their whole life ahead of them, as also that there is no mandate of law to only apply the rates as prescribed under the Minimum Wages Act, 1948 and at best it can be only used as a yardstick, refused to interfere in the award passed by the Tribunal.

Consequently, the appeal was dismissed.

Deepak Suri, Advocate for the appellant.

Parveen Sharma, Advocate for the caveator-respondent No.1.

Citation: 2024 LiveLaw (PH) 102

Title: The New India Assurance Company Limited v. Pinki and Others

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