A homemaker’s domestic services must be monetised through notional income based on skilled-worker minimum wages.

Smt. Hirdesh alias Hirdeyash died in a motor accident on 29 January 2010 at Ibrahimpur Road, Kadipur, Delhi, due to the rash and negligent driving of vehicle no. DL-8SV-4256. The vehicle was owned by respondent no. 6 and insured with the appellant Insurance Company.

The Motor Accident Claims Tribunal awarded compensation of ₹11,47,242 with interest at 9% per annum.

The Insurance Company appealed, principally contending that the Tribunal had made no deduction towards the deceased’s personal expenses despite there being four dependants.

The claimants contested the assessment of income, submitting that the deceased was engaged in selling milk and also rendered substantial gratuitous services as a homemaker.

Whether the Tribunal erred in failing to deduct an appropriate amount towards the deceased’s personal expenses while computing the loss of dependency?

Whether the deceased’s notional income should be reassessed by taking into account her work as a milk seller and her contribution as a homemaker?

Whether the amounts awarded under future prospects, loss of consortium, loss of estate, funeral expenses, and loss of love and affection required modification in accordance with prevailing legal principles?

The Court applied the principles in Sarla Verma v. Delhi Transport Corporation, which prescribe a one-fourth deduction towards personal expenses where the deceased leaves four dependants.

National Insurance Co. Ltd. v. Pranay Sethi, which governs future prospects and conventional heads of compensation.

It relied on United India Insurance Co. Ltd. v. Satinder Kaur, holding that a separate award for loss of love and affection is impermissible where consortium is awarded.

The Court also applied the principles recognising the economic value of gratuitous homemaker services, as discussed in Uma Rani v. Simranjeet Singh, and the Supreme Court’s decision in Shishu Pal @ Shish Ram v. Surjeet, which recognised loss of domestic care as a compensable aspect of a homemaker’s contribution.

Compensation is to represent “just compensation” under the Motor Vehicles Act, 1988, assessed with reference to the deceased’s circumstances and the applicable income on the date of the accident.

The Court found that the Tribunal had incorrectly made no deduction for personal expenses. Since the deceased left four dependants—her husband, daughter, and two sons—a one-fourth deduction was required under Sarla Verma.

Although the Tribunal had adopted income on the basis of minimum wages for a non-matriculate, the Court recognised the deceased’s milk-selling activity and, more significantly, the economic value of her domestic, maternal, and spousal services as a homemaker.

In view of the minimum wages applicable to a skilled worker on the accident date, namely ₹6,448 per month, the Court adopted ₹6,500 per month as the notional income.

Applying 25% future prospects for a deceased aged 47 years, deducting one-fourth for personal expenses, and applying a multiplier of 13, the loss of dependency was calculated at ₹9,50,625.

The Court further removed the award for loss of love and affection, increased consortium to ₹40,000 for each of the four claimants, and reduced loss of estate and funeral expenses to ₹15,000 each.

The reduction of ₹3,167, together with accrued interest, was directed to be refunded to the Insurance Company within four weeks.

The balance compensation was directed to be released to the claimants in accordance with the Tribunal’s earlier directions, including the orders concerning release of the deposited amount.

The statutory deposit, if any, was ordered to be refunded to the Insurance Company subject to compliance with the deposit directions.