Compensation for a minor’s death under Section 166 must reflect minimum wages and future prospects.

On 2 June 2012, minor Ashishkumar Amarsinhbhai Vaghela, aged approximately two years, was travelling with his mother in a jeep when a tractor with trolley, allegedly driven rashly and negligently by Respondent No. 1, collided with the jeep. The minor sustained grievous injuries and died as a result of the accident.

The claimants instituted proceedings under Section 166 of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal, Dahod, partly allowed the claim petition and awarded ₹2,04,500 with interest at 9% per annum up to 31 March 2021 and 7% per annum thereafter.

The claimants filed the present appeal seeking enhancement of compensation, principally contending that the Tribunal had improperly applied the Second Schedule applicable to Section 163-A instead of assessing compensation under Section 166.

Whether the compensation payable for the death of the minor claimant in a petition under Section 166 of the Motor Vehicles Act was required to be reassessed independently of the Second Schedule applied by the Tribunal?

Whether the claimants were entitled to enhanced compensation by applying minimum wages, future prospects, an appropriate multiplier, and amounts under conventional heads including loss of consortium?

Whether the claimants were entitled to additional compensation over and above the amount awarded by the Tribunal, together with corresponding interest?

The Court applied the principles governing assessment of compensation under Section 166 of the Motor Vehicles Act, 1988, where compensation must be just and is not confined to the formula under the Second Schedule to Section 163-A.

In assessing the deceased minor’s notional earning capacity, the Court relied on the minimum wages for a skilled worker notified by the Government of Gujarat, namely ₹4,980 per month.

It applied National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, for addition of 40% towards future prospects and for enhancement of compensation under loss of estate and funeral expenses to ₹18,150 each.

It applied a deduction of one-half towards personal expenses and a multiplier of 15 having regard to the deceased’s age.

It further relied on Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram, 2018 (18) SCC 130, holding that both parents were entitled to parental consortium, quantified at ₹48,400 each.

The Court found that the deceased had no actual income because he was a minor, but held that his income could be assessed with reference to the prevailing minimum wages for a skilled worker. Accordingly, it fixed the monthly income at ₹4,980 and added 40% for future prospects, resulting in ₹6,972 per month.

After deducting one-half for personal expenses, the monthly contribution was calculated at ₹3,486. Applying the multiplier of 15, the Court determined the future loss of dependency at ₹6,27,480.

It then enhanced the amounts for loss of estate and funeral expenses to ₹18,150 each and awarded ₹96,800 towards consortium to both parents under the principle recognised in Magma General Insurance.

The total compensation was therefore recalculated at ₹7,60,580, against the Tribunal’s award of ₹2,04,500.

The claimants were held entitled to total compensation of ₹7,60,580, resulting in additional compensation of ₹5,56,080 over the amount already awarded.

Interest on the additional amount was directed to be paid at 9% per annum from the date of filing of the claim petition until 31 March 2021 and thereafter at 7% per annum until realization.

Respondent No. 3, the concerned insurance company, was directed to deposit the additional compensation with interest within six weeks of receiving the order, after which the Tribunal was directed to disburse the amount to the claimants after verification and deduction of any deficit court fee.