[Motor Accident] Kerala High Court Adopts Notional Income Of Deceased Child As ₹30,000; Enhances Compensation Under 'Loss Of Dependency'

The Kerala High Court recently enhanced the compensation awarded by a Motor Accident Tribunal under the head of 'Loss of Dependancy' to the parents and sibling of a deceased child, who had been a victim of a motor accident. 

Justice Devan Ramachandran, relying on various precedents, adopted Rs.30,000/- as the notional income of the deceased child in the present case, and thereby partly allowed the appeal, and enhanced the compensation under the aforementioned head of 'Loss of Dependancy'. 

The parents and sibling of a deceased minor child filed the present appeal, impugning the award of the Motor Accidents Claims Tribunal, Irinjalakkuda, which had granted a compensation of Rs.5,30,000/-, against their claim for Rs.28,35,000/- limited to Rs.13,00,000/-.

It was contended by the Advocate A.N. Santhosh on behalf of the appellants that since there was no dispute regarding the accident or the negligence of the driver of the offending vehicle, the Tribunal ought to have granted an amount of Rs.4,50,000/- under the head ‘Loss of Dependency’, as had been claimed by the petitioners, and not merely Rs. 4,00,000/-. It was submitted that instead of the same, the Tribunal had adopted the notional income of the child as Rs.40,000/- per annum and then deducted 1/3rd of it towards ‘Personal Expenses’, which he contended was impermissible, as indicated by various precedents. He thus prayed that the Award of the Tribunal be set aside to the extent assailed and that the compensation also be enhanced. 

On the other hand, it was argued on behalf of the respondent that as per the Apex Court precedents, only an amount of Rs.30,000/- per year had been taken as the notional income of a child, for computing compensation under the head ‘Loss of Dependency’ by the Courts in the past. The counsels relied upon the decision in Meena Devi v. Nunu Chand Mahto @ Nemchand Mahto (2023) to show that in the case of death of a 12½ old child in the year 2003, the notional income that was adopted had been Rs.30,000/-. It was further pointed out that in Rajendra Singh & Others v. National Insurance Co. Ltd. & Ors. (2020), though an amount of Rs.36,000/- per annum was taken as the notional income, one half was deducted towards ‘Personal Expenses’. It was thus prayed that the Appeal be dismissed since the compensation awarded was just and proper. 

The Court in this case observed that the deduction made by the Tribunal from the notional income of R. 40,000 towards personal expenses was impermissible, as had been pointed out by the counsel for the appellants. It noted that although in Rajendra Singh case (2020), such deduction had been made, the same was done only on account of the peculiar facts involved in that case. The Court took note of a few other precedents in this regard, and observed that the same, 

"...would render it ineluctable that it will be justified and prudent for this Court to adopt Rs.30,000/- as the notional income of the deceased child in this case; in which event, the compensation as claimed by the appellants would become eligible to them under the head 'Loss of Dependency'". 

The appeal was thus partly allowed by the Court and the compensation under 'Loss of Dependency' was enhanced to Rs. 4,50,000/-. 

"In all other heads, the compensation granted by the Tribunal will remain intact," the Court clarified.

The Court granted liberty to the appellants to recover the enhanced compensation from the Insurance Company, along with interest at the rate of 8%, as awarded by the Tribunal, from the date of claim until it was recovered. The Court added that the appellants would be entitled to proportionate costs on the enhanced amount as ordered by the Tribunal. 

The respondents were represented by Standing Counsel for New India Assurance Co. P. Jacob Mathew, and Senior Advocate Mathews Jacob

Case Title: Bijumon & Ors v. The New India Assurance Co. 

Citation: 2023 LiveLaw (Ker) 123

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