Compensation for a child’s death must be calculated using at least the minimum wages payable to a skilled worker.

Rajkumar, aged about 11, died in a road accident on 18 November 2021.

The Motor Accident Claims Tribunal awarded his parents ₹5,00,000 in compensation and, finding a breach of policy conditions, exonerated the insurer while directing it to pay and recover.

The parents appealed under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement, arguing that the deceased child’s income should be assessed by reference to minimum wages for a skilled worker.

The insurer opposed the claim, relying on the policy breach.

Whether compensation for the death of a minor child should be assessed by adopting the minimum wages payable to a skilled worker, rather than by awarding a lump sum.

Whether the Tribunal’s award of ₹5,00,000 should be enhanced, and what compensation and interest should be awarded.

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against an award of a Claims Tribunal.

In Hitesh Nagjibhai Patel v. Bababhai Nagjibhai Rabari, 2025 SCC OnLine SC 3446, the Supreme Court held that a child who dies or suffers permanent disability in a motor accident should not be treated as a non-earning individual merely because the child was not employed; loss of income must be assessed, at minimum, using the wages payable to a skilled worker in the relevant State at the relevant time.

The Court also relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, for future prospects and conventional heads; Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, for the multiplier methodology; and Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 1306, in computing compensation under conventional heads.

Applying Hitesh Nagjibhai Patel, the Court assessed Rajkumar’s monthly income at ₹10,710, the minimum wage for a skilled worker in Chhattisgarh on the date of the accident.

It added 40% for future prospects, deducted one-half for personal expenses, and applied a multiplier of 15, based on the parents’ average age of 38.

The resulting loss-of-income component was ₹13,49,460; adding ₹1,21,000 under conventional heads produced total compensation of ₹14,70,460.

The insurer’s policy-breach objection did not alter the enhancement; the Tribunal’s remaining directions were left intact.

The award was enhanced from ₹5,00,000 to ₹14,70,460, entitling the appellants to an additional ₹9,70,460, with interest at 6% per annum from the date of filing the claim application until realization.

All other conditions of the Tribunal’s award remained unchanged.