KIRTI vs. ORIENTAL INSURANCE COMPANY LIMITED

Case Type: Civil Appeal

Date of Judgment: 05-01-2021

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Full Judgment Text

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.19­20 of 2021 [Arising out of Special Leave Petition(C) Nos.18728­29 of 2018]
Kirti & Anr. Etc...... Appellant(s)
VERSUS
Oriental Insurance Company Ltd...... Respondent(s)
JUDGMENT Surya Kant, J: Leave Granted.  2. These   civil   appeals,   which   have   been   heard   through   video conferencing, have been filed by three surviving dependents (who are two minor daughters and father) of the two deceased, impugning the judgment dated 17.07.2017 of the High Court of Delhi through which the motor accident compensation of Rs 40.71 lakhs awarded by the Signature Not Verified Digitally signed by SATISH KUMAR YADAV Date: 2021.01.05 17:44:53 IST Reason: Motor Accident Claims Tribunal, Rohini (hereinafter, “Tribunal”) on 24.12.2016 under Section 168 of the Motor Vehicle Act, 1988 (“MV Page  | 1 Act”), was reduced to Rs 22 lakhs. F ACTUAL  M ATRIX 3. The deceased couple, Vinod and Poonam, while commuting on a motorcycle in Delhi at around 7AM on 12.04.2014 were hit at an intersection by a Santro Car bearing registration ‘DL 7CA 1053’. The impact immediately incapacitated both the deceased and they soon passed away from cranio­cerebral damage and haemorrhagic shock caused by the accident’s blunt­force trauma.   4. An FIR was registered under Sections 279 and 304 of the Indian Penal   Code,   1860   (hereinafter,   “IPC”)   against   the   driver,   and   the statement of an independent eyewitness (Constable Vishnu Dutt) was recorded, which evidenced rash driving and negligence on part of the car­driver. Subsequently, a claim petition was filed under Section 166 of   the   MV   Act   by   the   two   toddler­daughters   and   septuagenarian­ parents of the deceased. This was contested by the driver and owner claiming that the deceased were themselves driving negligently and the accident was as a result of their very own actions. Two witnesses were   examined   by   the   appellant­claimants   and   none   by   the respondents. The insurance company (Respondent No. 1) offered as settlement a compensation of Rs 6.47 lakhs for the death of Poonam and Rs 10.71 lakhs for Vinod. Page  | 2 5. The Tribunal took note of the chargesheet filed against the driver in the criminal case and also his failure to step­into the witness box. Relying on the strong testimony of the independent witness, it was concluded   that   the   car­driver   was   indeed   driving   rashly   and   thus liability ought to be fastened on the respondent­insurer. Regarding the quantum  of compensation, the Tribunal  began by determining the ages of Poonam and Vinod as being 26 and 29 years respectively. Consequently,   an   age­multiplier   of   17   was   adopted.   Although   the deceased’s father took a plea that Vinod was earning Rs 14,000 every month as a teacher at the Pratap Public School in Delhi, but he was unable   to   substantiate   his   claim   with   any   documentary   evidence. Thus, minimum wage in Delhi was adopted for computation of loss of dependency.   An   additional   25%   income   was   accounted   for   future rd prospects   of   Poonam,   and   1/3   of   Vinod’s   salary   was   deducted towards personal expenses. Rs 2.50 lakhs was given for each deceased as compensation for loss of love and affection, estate, and funeral charges. Thus, the Tribunal awarded a total sum of Rs 40.71 lakhs for both deceased to the claimants. 6. This   computation   was   challenged   by   the   respondent­insurer before the High Court, on grounds that the Tribunal had erroneously relied upon the minimum wage as notified by Government of Delhi as there was no proof that the deceased were employed in Delhi. Instead, Page  | 3 given   their   established   residence   in   Haryana,   the   minimum   wage notified for that State ought to be the basis for calculation of loss of dependency. Simultaneously, addition of future prospects as well as non­deduction of personal  expenses for Poonam  was prayed to be reversed. Further, compensation was sought to be halved on grounds of   contributory   negligence.   A   categorical   submission   was   made highlighting the then divergent law on the issue of payment of ‘future prospects’ to non­permanent employees, pending resolution of which, it was prayed that no such addition be granted to the claimants. 7. The   High   Court   concurred   with   these   contentions   and consequently   reduced   the   notional   income   for   both   deceased   by adopting the lowest minimum wage applicable for unskilled workers in rd Haryana, instead of Delhi. Similarly, 1/3   of Poonam’s income was deducted towards personal expenses and future prospects were denied to both deceased. However, given the totality of circumstances and Poonam’s contribution to her household, 25% additional gratuitous income was added to her salary. The High Court thus brought down the total compensation payable to the claimants to Rs 22 lakhs. ONTENTIONS OF ARTIES C    P 8. This reduction has been assailed before us by learned counsel for the claimants. Re­computation is sought of compensation for loss Page  | 4 of dependency consequent to the decision of the Constitutional Bench 1 of this Court in  National Insurance Co Ltd v. Pranay Sethi which authoritatively settles the law on future prospects for non­permanent employees as well. Furthermore, the anomaly between the gratuitous increase of income  between Vinod and  Poonam, and  the usage  of unskilled minimum wage for Vinod have been brought to our notice.  9. Learned Counsel for the respondent­insurer, on the other hand, has sought to forestall any increase in compensation, including under the ground of future prospects. It is claimed that the High Court’s decision was a consent order, and that the counsel for the appellants had   conceded   to   a   lower   computation   under   the   head   of   loss   of dependency, which thus cannot be challenged before this Court. A NALYSIS I. Deduction for Personal Expenses 10. We   have   thoughtfully   considered   the   rival   submissions.     It cannot be disputed that at the time of death, there in fact were four dependents of the deceased and not three. The subsequent death of the   deceased’s   dependent   mother   ought   not   to   be   a   reason   for reduction of motor accident compensation. Claims and legal liabilities crystallise at the time of the accident itself, and changes post thereto 1   (2017) 16 SCC 680. Page  | 5 ought   not   to   ordinarily   affect   pending   proceedings.   Just   like   how appellant­claimants   cannot   rely   upon   subsequent   increases   in minimum wages, the respondent­insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal proceedings. Similarly, any concession in law made in this regard by either counsel would not bind the parties, as it is legally settled that advocates cannot throw­away legal rights or enter into arrangements 2 contrary to law.   11. Any   compensation   awarded   by   a   Court   ought   to   be   just, reasonable   and   consequently   must   undoubtedly   be   guided   by 3 principles of fairness, equity, and good conscience.  Not only did the family of the deceased consist of septuagenarian parents, but there were also two toddler­girls, aged merely 3 and 4 years; each of whom requires exceptional care and expenditure till they reach the stage of self­dependency.   Tragically,   in   addition   to   the   married   couple,   the negligence of the driver also extinguished the life of the family’s third child who was a foetus in Poonam’s womb at the time of the accident. Thus, the appropriate deduction for personal expenses for both Vinod th rd and Poonam ought to be 1/4  only, and not 1/3  as applied by the Tribunal and the High Court, more so when there were four family members dependent on the deceased. 2   Director of Elementary Education v. Pramod Kumar Sahoo, (2019) 10 SCC 674, ¶ 11. 3   See , Helen C Rebello v. Maharashtra State Road Transport Corp, (1999) 1 SCC 90, ¶ 28. Page  | 6 II. Assessment of monthly income 12. Second ,   although   it   is   correct   that   the   claimants   have   been unable to produce any document evidencing Vinod’s income, nor have they established his employment as a teacher; but that doesn’t justify adoption  of  the lowest­tier  of  minimum  wage while  computing  his income. From the statement of witnesses, documentary evidence­on­ record and circumstances of the accident, it is apparent that Vinod was comparatively more educationally qualified and skilled. Further, he   maintained   a   reasonable   standard   of   living   for   his   family   as evidenced by his use of a motorcycle for commuting. Preserving the existing standard of living of a deceased’s family is a fundamental 4 endeavour of motor accident compensation law.   Thus, at the very least, the minimum wage of Rs 6197 as applicable to skilled workers during April 2014 in the State of Haryana ought to be applied in his case.  III. Addition of Future Prospects 13. Third   and   most   importantly,   it   is   unfair   on   part   of   the respondent­insurer to contest grant of future prospects considering their submission before the High Court that such compensation ought not   to   be   paid   pending   outcome   of   the   Pranay   Sethi   (supra) 4    See,  RK Malik v. Kiran Pal, (2019) 14 SCC 1, ¶ 9. Page  | 7 reference. Nevertheless, the law on this point is no longer  res integra, and stands crystalised ,   as is clear from the following extract of the 5 afore­cited Constitutional Bench judgment : “59.4. In case the deceased was self­employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary   method   of   computation.   The   established   income means the income minus the tax component.” [Emphasis supplied] 14.   Given how both deceased were below 40 years and how they have   not   been   established   to   be   permanent   employees,   future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional 6 income, is both incorrect in law   and without merit considering the constant inflation­induced increase in wages. It would be sufficient to quote   the   observations   of   this   Court   in   Hem   Raj   v.   Oriental 7 . , as it puts at rest any argument concerning non­ Insurance Co. Ltd payment of future prospects to the deceased in the present case:  “7. We are of the view that there cannot be distinction where there   is   positive   evidence   of   income   and   where   minimum 5   National Insurance Co Ltd v. Pranay Sethi, (2017) 16 SCC 680, ¶ 59.4. 6   Sunita Tokas v. New India Insurance Co Ltd, 2019 SCC OnLine SC 1045. 7 (2018) 15 SCC 654. Page  | 8 income   is   determined   on   guesswork   in   the   facts   and circumstances of a case. Both the situations stand at the same footing. Accordingly, in the present case, addition of 40% to the income assessed by the Tribunal is required to be made..” [Emphasis supplied] IV. Other heads and division of compensation 15. Finally,   given   the   lack   of   arguments   on   the   other   heads   of funeral charges, loss of estate, love, and affection; there arises no cause of alteration. We similarly see no infirmity with the High Court’s adoption of 17 as the age­multiplier, award of 9% interest, calculation of Poonam’s notional income or the division of total compensation in the ratio of 1:2:2 between the grandfather and the two girls. For ready reference, a comparative table of revised compensation after suitable increases would thus be as follows:
TRIBUNALHIGH COURTSUPREME COURT
HeadVinodPoonamVinodPoonamVinodPoonam
AMonthly Income855494385547.15547.16197.15547.1
BDeduction<br>towards Personal<br>Expenses33%None33%33%25%25%
CAge Multiplier171717171717
DAdjustment for<br>Future ProspectsNone25%NoneNone40%40%
EIncrease for<br>Special<br>CircumstancesNoneNoneNone25%None25%
FFuneral Charges<br>& Loss of Estate250000250000250000250000250000250000
Page  | 9
GTotal per<br>deceased141334426566901004406119300715774191735236
(rounded off)141400026570001005000119500015800001740000
Total<br>compensation407100022000003320000
C ONCLUSION 16. For the reasons afore­stated, the appeals are allowed in­part. The total motor accident compensation of Rs 22 lakhs awarded by the High Court to the claimant­appellants is increased by Rs 11.20 lakhs to reach a new total of Rs 33.20 lakhs. The enhanced amount of compensation shall be paid within two months along with interest @ 9% p.a. from the date of filing of the Detailed Accident Report i.e. 23.05.2014, and shall be apportioned per the terms laid down by the Tribunal. …………………………….. J. (N.V. RAMANA) …………………………… J. (S. ABDUL NAZEER) …………………………...J. (SURYA KANT) NEW DELHI DATED : 05.01.2021 Page  | 10 Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION   CIVIL APPEAL NOS. 19­20 O F  2021   ( ARISING   OUT   OF  SLP (C) N OS . 18728­18729  OF  2018) K IRTI  & A NR . E TC .             …A PPELLANT ( S ) V ERSUS RIENTAL NSURANCE O TD ESPONDENT O  I  C . L .                         …R   J UDGMENT     N.V. R AMANA , J.   I have had the advantage of perusing the judgment prepared 1. by   my   learned   brother,   Surya   Kant,   J.,   and   am   in   complete agreement   with   him.   However,   I   thought   to   supplement   the reasoning   in   his   judgment,   with   respect   to   the   question   of notional  income   of  a  housewife  and  whether  future  prospects should apply to the same or not.  2. There are two distinct categories of situations wherein the Court usually determines notional income of a victim. The first category   of   cases   relates   to   those   wherein   the   victim   was employed, but the claimants are not able to prove her actual income,   before   the   Court.   In   such   a   situation,   the   Court 1 “guesses” the income of the victim on the basis of the evidence on record, like the quality of life being led by the victim and her family, the general earning of an individual employed in that field, the qualifications of the victim, and other considerations. The   second   category   of   cases   relates   to   those   situations 3. wherein the Court is called upon to determine the income of a non­earning victim, such as a child, a student or a homemaker. Needless to say, compensation in such cases is extremely difficult to quantify. The Court often follows different principles for determining 4. the compensation towards a non­earning victim in order to arrive at an amount which would be just in the facts and circumstances of the case. Some of these involve the determination of notional income. Whenever notional income is determined in such cases, different considerations and factors are taken into account. For instance, for students, the Court often considers the course that they   are   studying,   their   academic   proficiency,   the   family background, etc., to determine and fix what they could earn in the future. [ See  M. R. Krishna Murthi v. New India Assurance , 2019 SCC OnLine SC 315Co. Ltd. 5. One category of non­earning victims that Courts are often 2 called upon to calculate the compensation for are homemakers. The granting of compensation for homemakers on a pecuniary basis, as in the present case, has been considered by this Court earlier   on   numerous   occasions.   A   three­Judge   Bench   of   this Court in  Lata Wadhwa v. State of Bihar , (2001) 8 SCC 197 , while dealing with compensation for the victims of a fire during a function, granted compensation to housewives on the basis of the services   rendered   by   them   in   the   house,   and   their   age.   This Court, in that case, held as follows:
10.So far as thedeceased housewives are
concerned, in the absence of any data and as
the housewives were not earning any income,
attempt has been made to determine the
compensation on the basis of services
rendered by them to the house. On the basis of
the age group of the housewives, appropriate
multiplier has been applied, but the estimation of
the value of services rendered to the house by the
housewives, which has been arrived at Rs 12,000
per annum in cases of some and Rs 10,000 for
others, appears to us to be grossly low. It is true
that the claimants, who ought to have given data
for determination of compensation, did not assist
in any manner by providing the data for
estimating the value of services rendered by such
housewives. But even in the absence of such
data andtaking into consideration the
multifarious services rendered by the
housewives for managing the entire family,
even on a modest estimation, should be Rs
3000 per monthand Rs 36,000 per annum…”
(emphasis supplied)
3 In  6. Arun Kumar Agrawal v. National Insurance Co. Ltd. , (2010) 9 SCC 218 , this Court, while dealing with the grant of compensation for the death of a housewife due to a motor vehicle accident, held as follows:
26.In India the courts have recognised that
the contribution made by the wife to the
house is invaluable and cannot be computed
in terms of money. The gratuitous services
rendered by the wife with true love and
affection to the children and her husband and
managing the household affairs cannot be
equated with the services rendered by others.
A wife/mother does not work by the clock. She is
in the constant attendance of the family
throughout the day and night unless she is
employed and is required to attend the
employer's work for particular hours. She takes
care of all the requirements of the husband and
children including cooking of food, washing of
clothes, etc. She teaches small children and
provides invaluable guidance to them for their
future life. A housekeeper or maidservant can do
the household work, such as cooking food,
washing clothes and utensils, keeping the house
clean, etc., but she can never be a substitute for
a wife/mother who renders selfless service to her
husband and children.
27.It is not possible to quantify any amount
in lieu of the services rendered by the
wife/mother to the family i.e. the husband
and children.However, for the purpose of
award of compensation to the dependants,
some pecuniary estimate has to be made of
the services of the housewife/mother. In that
context, the term “services” is required to be
given a broad meaning and must be construed by
taking into account the loss of personal care and
4
attention given by the deceased to her children
as a mother and to her husband as a wife. They
are entitled to adequate compensation in lieu of
the loss of gratuitous services rendered by the
deceased. The amount payable to the dependants
cannot be diminished on the ground that some
close relation like a grandmother may volunteer
to render some of the services to the family which
the deceased was giving earlier.”
(emphasis supplied)
The above pronouncement has been followed by this Court in its recent judgment in  Rajendra Singh v. National Insurance Co. 2020 SCC OnLine SC 521,  wherein the notional income of Ltd.,  a deceased housewife was calculated for the purposes of granting compensation in a motor accident case. 7. Before   discussing   this   topic   further,   it   is   necessary   to comment on its gendered nature. In India, according to the 2011 Census,   nearly   159.85   million   women   stated   that   “household work”   was   their   main   occupation,   as   compared   to   only   5.79 million men.  8. In   fact,   the   recently   released   Report   of   the   National Statistical   Office   of   the   Ministry   of   Statistics   &   Programme Implementation, Government of India called “ Time Use   in India­ 2019 ”, which is the first Time Use Survey in the country and collates   information   from   1,38,799   households   for   the   period January,   2019   to   December,   2019,   reflects   the   same   gender 5 1 disparity.   The key findings of the survey suggest that, on an average,   women   spend   nearly   299   minutes   a   day   on   unpaid domestic   services   for   household   members   versus   97   minutes 2 spent by men on average.  Similarly, in a day, women on average spend 134 minutes on unpaid caregiving services for household members   as   compared   to   the   76   minutes   spent   by   men   on 3 average.  The total time spent on these activities per day makes the picture in India even more clear­ women on average spent 16.9 and 2.6 percent of their day on unpaid domestic services and   unpaid   caregiving   services   for   household   members 4 respectively, while men spent 1.7 and 0.8 percent. 9. It is curious to note that this is not just a phenomenon unique to India, but is prevalent all over the world. A 2009 Report by a Commission set up by the French Government, analyzing data from six countries,   viz . Germany, Italy, United Kingdom, France, Finland and the United States of America, highlighted similar findings:
117. Gender differences in time use are
significant. In each of the countries under
consideration,men spend more time in paid
work than women and the converse is true for
unpaid work. Men also spend more time on
leisure than women.The implication is that
1  National Statistical Office,  Time Use in India­ 2019  (September, 2020). 2   Id , at 56. 3   Id , at 54. 4   Id , at x. 6
women provide household services but other
members of the household benefit…
(emphasis supplied)
household work by individuals, who are more likely to be women than men, is not surprising when one considers the plethora of activities   a   housemaker   undertakes.   A   housemaker   often prepares food for the entire family, manages the procurement of groceries   and   other   household   shopping   needs,   cleans   and manages the house and its surroundings, undertakes decoration, repairs   and   maintenance   work,   looks   after   the   needs   of   the children   and   any   aged   member   of   the   household,   manages budgets and so much more. In rural households, they often also assist in the sowing, harvesting and transplanting activities in the field, apart from tending cattle [ See   Arun Kumar Agrawal (supra)National Insurance Co. Ltd. v. Minor Deepika rep. by ,   2009   SCC her   guardian   and   next   friend,   Ranganathan OnLine Mad 828 ]. However, despite all the above, the conception that   housemakers   do   not   “work”   or   that   they   do   not   add economic value to the household is a problematic idea that has persisted for many years and must be overcome.    11. The   concurring   opinion   in   the   Arun   Kumar   Agrawal 5  Stiglitz  et al. , Report of the Commission on the Measurement of Economic Performance and  Social Progress, 117 (2009). 7 judgment ( supra ), has highlighted this bias:
44.This bias is shockingly prevalent in the work
of census. In the Census of 2001 it appears that
those who are doing household duties like
cooking, cleaning of utensils, looking after
children, fetching water, collecting firewood have
been categorised as non­workers and equated
with beggars, prostitutes and prisoners who,
according to the census, are not engaged in
economically productive work. As a result of
such categorisation about 36 crores (367 million)
women in India have been classified in the
Census of India, 2001 as non­workers and
placed in the category of beggars, prostitutes and
prisoners. This entire exercise of census
operations is done under an Act of Parliament.”
12. In fact, this unfortunate silence when it comes to the value of housework has been a problem which was identified as far back as in 1920, when the economist Pigou noted the oddity and contradictions when it came to the calculation of the contribution of women in the national income, by stating that:  “…the services rendered by women enter into the dividend when they are rendered in exchange for wages, whether in the factory or in the home, but do not enter into it when they are rendered by mothers   and   wives   gratuitously   to   their   own families. Thus, if a man marries his housekeeper or   his   cook,   the   national   dividend   is 6 diminished”. This   issue   was   further   focused   on   by   those   in   the   field   of feminism economics in the 1970s and 1980s, who criticized the traditional   labour   statistics   which   did   not   consider   unpaid 6  Cecil Pigou,  The Economics of Welfare , 44 (1920). 8 domestic work and therefore undervalued women’s role in the 7 economy.   13. On considering the growing awareness around this issue, the   United   Nations   Committee   on   the   Elimination   of Discrimination against Women adopted General Recommendation No.   17   on   the   “ Measurement   and   quantification   of   the unremunerated domestic activities of women and their recognition in   the   gross   national   product ”   in   1991.   The   General Recommendation   affirmed   that   “ the   measurement   and quantification of the unremunerated domestic activities of women, which   contribute   to   development   in   each   country,   will   help   to ”. reveal the de facto economic role of women 14. It is worth noting that the above General Recommendation is passed in furtherance of Article 11 of the Convention on the Elimination of All Forms of Discrimination against Women which relates to ending discrimination against women in the field of employment, a Convention that India has ratified.  15. The   issue   of   fixing   notional   income   for   a   homemaker, therefore,   serves   extremely   important   functions.   It   is   a recognition of the multitude of women who are engaged in this activity,   whether   by   choice   or   as   a   result   of   social/cultural 7  United Nations Economic Commission for Europe,  Guide on Valuing Unpaid Household Service  Work,  2 (2017). 9 norms. It signals to society at large that the law and the Courts of the land believe in the value of the labour, services and sacrifices of   homemakers.   It   is   an   acceptance   of   the   idea   that   these activities contribute in a very real way to the economic condition of the family, and the economy of the nation, regardless of the fact that it may have been traditionally excluded from economic analyses. It is a reflection of changing attitudes and mindsets and of our international law obligations. And, most importantly, it is a step   towards   the   constitutional   vision   of   social   equality   and ensuring dignity of life to all individuals.  16. Returning to the question of how such notional income of a homemaker is to be calculated, there can be no fixed approach. It is to be understood that in such cases the attempt by the Court is to fix an approximate economic value for all the work that a homemaker does, impossible though that task may be. Courts must keep in mind the idea of awarding just compensation in such cases, looking to the facts and circumstances [ See   R.K. , ].  Malik v. Kiran Pal  (2009) 14 SCC 1 17. One   method   of   computing   the   notional   income   of   a homemaker   is   by   using   the   formula   provided   in   the   Second Schedule to the Motor Vehicles Act, 1988, which has now been omitted by the Motor Vehicle (Amendment) Act, 2019. The Second 10 Schedule   provided   that   the   income   of   a   spouse   could   be calculated as one­third of the income of the earning surviving spouse. This was the method ultimately adopted by the Court in the   Arun   Kumar   Agrawal   (supra)   case.   However,   rationale behind fixing the ratio as one­third is not very clear. [ See   Arun Kumar Agrawal  (supra) ] 18. Apart from the above, scholarship around this issue could provide some  guidance   as  to  other   methods  to  determine  the 8 notional income for a homemaker.  Some of these methods were highlighted by a Division Bench of the Madras High Court in the case of  Minor Deepika   (supra)   which   held as follows: “  The Second Schedule to the Motor Vehicles 10. Act gives a value to the compensation payable in respect of those who had no income prior to the accident and for a spouse, it says that one­third of  the   income   of  the   earning  surviving   spouse should be the value. Exploration on the internet shows that there have been efforts to understand the   value   of   a  homemaker's   unpaid   labour   by different methods.  One is, the opportunity cost which evaluates her wages by assessing what she would have earned had she not remained at   home,   viz.,   the   opportunity   lost.   The second   is,   the   partnership   method   which assumes that a marriage is an equal economic partnership   and   in   this   method,   the homemaker's   salary   is   valued   at   half   her husband's   salary.   Yet   another   method   is   to evaluate   homemaking   by   determining   how 8   See  Ann Chadeau,  What is Households’ Non­Market Production Worth , OECD E CONOMIC  S TUDIES   N O . 18 (1992);  Also see  United Nations Economic Commission for Europe,  supra  note 7.  11 much it would cost to replace the homemaker with   paid   workers.   This   is   called   the Replacement Method .” (emphasis supplied) 19. However, it must be remembered that all the above methods are  merely   suggestions.   There   can   be   no   exact  calculation   or formula that can magically ascertain the true value provided by an individual gratuitously for those that they are near and dear to. The attempt of the Court in such matters should therefore be towards   determining,   in   the   best   manner   possible,   the   truest approximation   of   the   value   added   by   a   homemaker   for   the purpose of granting monetary compensation.  20. Whichever method a Court ultimately chooses to value the activities of a homemaker, would ultimately depend on the facts and circumstances of the case.  The Court needs to keep in mind its duty to award just compensation, neither assessing the same conservatively,   nor   so   liberally   as   to   make   it   a   bounty   to claimants [ National Insurance Company Limited v. Pranay Sethi , (2017) 16 SCC 680;  Kajal v. Jagdish Chand , (2020) 4 SCC 413 ]. 21. Once notional income has been determined, the question remains as to whether escalation for future prospects should be granted   with   regard   to   it.   Initially,   the   awarding   of   future 12 prospects by this Court was related to the stability of the job held by   the   victim   [ See   General   Manager,   Kerala   State   Road Transport   Corporation,   Trivandrum   v.   Susamma   Thomas (Mrs) , (1994) 2 SCC 176;  Sarla Dixit (Smt) v. Balwant Yadav , (1996) 3 SCC 179 ]. This focus on the stability of the job of the victim, while awarding future prospects, was continued in the judgment   of   this   Court   in   Sarla   Verma   (Smt)   v.   Delhi Transport Corporation , (2009) 6 SCC 121   wherein the Court held as follows:  
“24.InSusamma Thomas[(1994) 2 SCC 176]
this Court increased the income by nearly 100%,
inSarla Dixit[(1996) 3 SCC 179] the income was
increased only by 50% and inAbati
Bezbaruah[(2003) 3 SCC 148] the income was
increased by a mere 7%. In view of the
imponderables and uncertainties, we are in
favour of adopting as a rule of thumb, an
addition of 50% of actual salary to the actual
salary income of the deceased towards future
prospects, where the deceased had a
permanent job and was below 40 years. (Where
the annual income is in the taxable range, the
words “actual salary” should be read as “actual
salary less tax”). The addition should be only
30% if the age of the deceased was 40 to 50
years. There should be no addition, where the
age of the deceased is more than 50 years.
Though the evidence may indicate a different
percentage of increase, it is necessary to
standardise the addition to avoid different
yardsticks being applied or different methods of
calculation being adopted.Where the deceased
was self­employed or was on a fixed salary
13
(without provision for annual increments,
etc.), the courts will usually take only the
actual income at the time of death. A
departure therefrom should be made only in
rare and exceptional cases involving special
circumstances.”
( emphasis supplied ) 22. However, there was a shift in jurisprudence regarding future prospects with the five­Judge Bench decision of this Court in (supra) . This Court extended the benefit regarding Pranay Sethi  future prospects to even self­employed persons, or those on a fixed salary. The Court held as follows:
57.Having bestowed our anxious consideration,
we are disposed to think when we accept the
principle of standardisation,there is really no
rationale not to apply the said principle to the
self­employed or a person who is on a fixed
salary. To follow the doctrine of actual
income at the time of death and not to add
any amount with regard to future prospects to
the income for the purpose of determination
of multiplicand would be unjust. The
determination of income while computing
compensation has to include future prospects
so that the method will come within the
ambit and sweep of just compensation as
postulated under Section 168 of the Act. In
case of a deceased who had held a permanent job
with inbuilt grant of annual increment, there is
an acceptable certainty. But to state that the
legal representatives of a deceased who was on a
fixed salary would not be entitled to the benefit of
future prospects for the purpose of computation
of compensation would be inapposite. It is
because the criterion of distinction between the
14
two in that event would be certainty on the one
hand and staticness on the other. One may
perceive that the comparative measure is
certainty on the one hand and uncertainty on the
other but such a perception is fallacious.It is
because the price rise does affect a self­
employed person; and that apart there is
always an incessant effort to enhance one's
income for sustenance. The purchasing
capacity of a salaried person on permanent
job when increases because of grant of
increments and pay revision or for some other
change in service conditions, there is always a
competing attitude in the private sector to
enhance the salary to get better efficiency
from the employees. Similarly, a person who
is self­employed is bound to garner his
resources and raise his charges/fees so that
he can live with same facilities.…Taking into
consideration thecumulative factors, namely,
passage of time, the changing society,
escalation of price, the change in price index,
the human attitude to follow a particular
pattern of life, etc., an addition of 40% of the
established income of the deceased towards
future prospects and where the deceased was
below 40 years an addition of 25% where the
deceased was between the age of 40 to 50 years
would be reasonable.
( emphasis supplied ) 23. The rationale behind the awarding of future prospects is therefore no longer merely about the type of profession, whether permanent or otherwise, although the percentage awarded is still dependent on the same. The awarding of future prospects is now a part of the duty of the Court to grant just compensation, taking into account the realities of life, particularly of inflation, the quest 15 of individuals to better their circumstances and those of their loved ones, rising wage rates and the impact of experience on the quality of work.    24. Taking  the  above  rationale  into  account,  the  situation  is quite clear with respect to notional income determined by a Court in the first category of cases outlined earlier, those where the victim is proved to be employed but claimants are unable to prove the income before the Court. Once the victim has been proved to be employed at some venture, the necessary corollary is that they would   be   earning   an   income.   It   is   clear   that   no   rational distinction can be drawn with respect to the granting of future prospects merely on the basis that their income was not proved, particularly   when   the   Court   has   determined   their   notional income.  25. When it comes to the second category of cases, relating to notional income for non­earning victims, it is my opinion that the above principle applies with equal vigor, particularly with respect to homemakers. Once notional income is determined, the effects of inflation would equally apply. Further, no one would ever say that the improvements in skills that come with experience do not take place in the domain of work within the household. It is worth noting that, although not extensively discussed, this Court 16 has been granting future prospects even in cases pertaining to notional income, as has been highlighted by my learned brother, Surya Kant, J., in his opinion [ Hem Raj v. Oriental Insurance Company Limited , (2018) 15 SCC   654;   Sunita Tokas v. New ]. India Insurance Co. Ltd. , (2019) 20 SCC 688 26. Therefore,   on   the   basis   of   the   above,   certain   general observations can be made regarding the issue of calculation of notional   income   for   homemakers   and   the   grant   of   future prospects   with   respect   to   them,   for   the   purposes   of   grant   of compensation which can be summarized as follows: a. Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.  b. Taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in the same as compared to men, the fixing of notional income of a homemaker   attains   special   significance.   It   becomes   a recognition   of   the   work,   labour   and   sacrifices   of homemakers and a reflection of changing attitudes. It is also in furtherance of our nation’s international law obligations and our constitutional vision of social equality and ensuring dignity to all. c. Various methods can be employed by the Court to fix the notional income of a homemaker, depending on the facts and circumstances of the case. d. The Court should ensure while choosing the method, and fixing the notional income, that the same is just in the facts and circumstances of the particular case, neither assessing the compensation too conservatively, nor too liberally.  17 e. The granting of future prospects, on the notional income calculated   in   such   cases,   is   a   component   of   just compensation.  27. With the above observations, I concur with the opinion of my learned brother.      ........................J. (N.V. RAMANA) NEW DELHI;  January 05, 2021. 18