Compensation for minor's death must be based on skilled worker's minimum wages and a multiplier of eighteen.

In brief

The question

1. Whether the notional income of a deceased minor should be determined based on the minimum wages of a skilled worker instead of an unskilled worker

The court held

The Court dismissed the Insurance Company's appeal and allowed the claimants' appeal for enhancement. It held that the appropriate multiplier is 18 and the income must be based on skilled wages

It also directed

The total compensation was enhanced from Rs. 23,03,490/- to Rs. 32,92,534/- with interest at 7.5% per annum. The Insurance Company was directed to deposit the balance amount within six weeks, with specific directions for the creation of periodic Fixed Deposit Receipts (FDRs) to ensure the financial security of the claimants

01Facts

On July 13, 2023, an 11-and-a-half-year-old boy named Deepanshu was killed when a truck (Registration No. UP-21CT-0427) hit him from behind at a high speed

¶ 2

The Motor Accident Claims Tribunal (MACT) awarded Rs. 23,03,490/- by treating the deceased as a non-earning minor, using minimum wages for an unskilled worker and applying a multiplier of 15

¶ 3

Both the Insurance Company (seeking reduction) and the claimants (seeking enhancement) filed cross-appeals challenging the award dated April 4, 2025

¶ 1

02Issues

i.1. Whether the notional income of a deceased minor should be determined based on the minimum wages of a skilled worker instead of an unskilled worker

¶ 4

ii.2. Whether the appropriate multiplier for a deceased minor child is 18 or 15

¶ 4

03Law Applied

The court primarily relied on the principles established in Kajal v. Jagdish Chand and Hitesh Nagjibhai Patel v. Bababhai Nagjibhai Rabari, which mandate that compensation for a minor child must be assessed based on the minimum wages of a skilled worker rather than treating them as a non-earning individual

¶ 4

It further applied the multiplier of '18' for victims below 15 years of age as per Sarla Verma v. DTC (reaffirmed in Pranay Sethi) and recent precedents such as Baby Sakshi Greola v. Manzoor Ahmad Simon

¶ 4

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 166

04Reasoning

The Court observed that the Tribunal erred by using minimum wages for an unskilled worker and a multiplier of 15

¶ 3

Applying its recent decision in Rubi Devi v. New India Assurance, the Court reasoned that since a child has the potential to study and earn comfortably in the future, the "skilled worker" wage benchmark is the minimum standard for compensation

¶ 4

Regarding the multiplier, the Court rejected the use of the parents' age or the lower multiplier of 15, clarifying that Sarla Verma and subsequent Supreme Court rulings dictate a multiplier of 18 for children in the age group of 0-15 years to account for the lost decades of life

¶ 4

Consequently, the Court recalculated the monthly income at Rs. 20,903/-, added 40% for future prospects, deducted 50% for personal expenses, and applied the multiplier of 18

¶ 5-7

05Holding

The Court dismissed the Insurance Company's appeal and allowed the claimants' appeal for enhancement. It held that the appropriate multiplier is 18 and the income must be based on skilled wages

¶ 5, 7

¶ 6, 7, 10, 11

LawLens.Delhi High Court

Original Court PDF