Kirti & Anr. v. Oriental Insurance Company Ltd. (05 January 2021), the Supreme Court of India while hearing a civil appeal in the case of a motor vehicle accident causing a deceased couple, Vinod (29) and Poonam (26) who suffered from cranio-cerebral damage and haemorrhagic shock. A ‘Santro’ Car had hit the couple and a FIR was registered under Section 279 and 304 of the IPC against the driver. Poonam was pregnant while the accident occurred, killing the foetus inside Poonam’s womb.
A claim petition by the daughters (aged 3 and 4) and septuagenarian parents of the deceased was filed under Section 166 of the Motor Vehicle Act. The driver contested the petition claiming that It was the deceased couple that was negligently driving. Subsequently, the insurance company offered a compensation of Rs. 6.47 lakhs for death of mother (Poonam) and Rs. 10.71 lakhs for death of father (Vinod).
The Tribunal while counting the compensation, calculated the amount as-
- Minimum wage in Delhi
- Additional 25% income was accounted for future prospects of Poonam
- 1/3rd of Vinod’s salary was deducted towards expenses
- 2.5 lakhs compensation to each deceased as compensation for loss of love, affection, estate, and funeral charges.
- Total Amount= Rs. 40.71 lakhs
This was challenged in the High Court as there was negligence in part of the deceased as well. The final amount was halved to Rs. 22 lakhs. In the present case the amount decided in the High Court was challenged.
The Apex Court increased the amount from Rs. 22 lakhs to Rs. 33.2 lakhs on the basis of-
1. Deduction for Personal Expenses-
- Four dependents of deceased at not three (even though mother of deceased died later)
- Both the parents and children require exceptional care. Therefore, deduction of personal expenses should be 1/4th and not 1/3rd
2. Assessment of Monthly Income-
- Minimum wages shouldn’t be adopted as the family had better standard of living
- Existing standard of living is to be preserved and that is fundamental endeavor of motor accident compensation law
3. Addition of Future Prospects-
- Both the deceased were below the age of 40 years, therefore future prospects should be upto 40%
- Not giving future prospects for those with notional income is incorrect in law
The Supreme Court ordered that the said amount of Rs. 33.20 lakhs shall be paid within two months along with interest @ 9% p.a. from the date of filing of the detailed accident report- i.e. 23rd May 2014.
Justice N.V. Ramana supplemented the reasoning in the judgement with respect to the question of notional income of a housewife and whether future prospects should apply or not-
Deciding Notional Income-
- In cases of Compensation, Notional Income is determined for two different categories:
1. Victim was employed, even though no evidence is available, the court guesses on the basis of standard of living and quality of life, general income of a person in the same field, qualifications of victim, etc.
2. Victim has no earning, such as-
i. Student- Course that the student is pursuing, academic proficiency, family background. All these to be considered to determine and fix what they could earn in future
ii. Homemakers- Age group, value of services rendered to the house, one-third of the income of the earning surviving spouse, facts and circumstances of the case
The Court observed that according to a survey, women spend nearly 299 minutes a day on unpaid domestic services for household members, 134 minutes on unpaid caregiving services for household members. The amount of work that women put in is more than work any other man does for the household.
Deciding Future Prospects-
Awarding Future Prospects is no longer merely about the type of professions, however, the percentage awarded is dependent on the same. In both category of cases the principles of deciding future prospects should apply equally, especially in cases of homemakers.
Recognition of a homemakers’ work, labour, sacrifices and reflection of changing attitudes, social equality and ensuring dignity to all, are to be considered while calculating the percentages.
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