For a deceased minor, notional income is assessed using skilled-worker minimum wages, future prospects, and multiplier 15.

Gurpreet Singh, aged approximately 13 years and studying in Class VIII, died on 4 September 2012 after sustaining fatal injuries while alighting from bus No. JK-02H-6468 at Ramgarh Bazaar; the accident was alleged to have resulted from the rash and negligent driving of respondent Shamsher Chand.

His parents, Mohan Singh and Manjeet Kour, filed a claim petition before the Motor Accidents Claims Tribunal, Samba. The Insurance Company denied the accident and pleaded that the driver did not possess a valid and effective driving licence.

The Tribunal framed issues concerning negligence, validity of the driving licence, breach of policy conditions, and quantum of compensation.

Although the Insurance Company deposited diet expenses for summoning the driver, it failed to produce him despite several opportunities; its evidence was consequently closed.

By award dated 6 November 2019, the Tribunal awarded Rs. 3,94,000 with interest at 6% per annum from the date of filing of the claim petition.

The Insurance Company filed Mac App No. 160/2020, challenging its liability and the closure of its evidence, while the claimants filed Mac App No. 30/2021, challenging the assessment of income and filial consortium.

1. Whether the Tribunal erred in directing the Insurance Company to indemnify the insured despite the alleged absence of a valid driving licence with the offending vehicle’s driver.

2. Whether the Tribunal improperly closed the Insurance Company’s evidence despite the deposit of diet expenses and thereby denied it a proper opportunity to prove the driving-licence defence.

3. Whether the Tribunal correctly assessed the notional income and loss of dependency of the deceased minor.

4. Whether the claimants were entitled to filial consortium of Rs. 40,000 each rather than Rs. 40,000 collectively.

The Court applied the principle that an insurer asserting breach of policy conditions, including the absence of a valid driving licence, must establish that defence by adducing appropriate evidence; the mere pleading of a fake or invalid licence is insufficient.

Procedural opportunity to lead evidence is assessed in light of the conduct of the party and its compliance with directions for securing witnesses under the procedure contemplated by Order XVI of the Code of Civil Procedure.

For compensation payable for the death of a minor, the Court relied on Kajal v. Jagdish Chand, (2020) 4 SCC 413, and Master Ayush v. Branch Manager, Reliance General Insurance Co. Ltd., (2022) 7 SCC 738, which support assessment of notional income with reference to minimum wages for a skilled worker and addition of future prospects.

The Court applied National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, for the 40% addition towards future prospects, and Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65, for applying a multiplier of 15 in the case of a deceased minor.

The entitlement of each parent to filial consortium was recognised on the basis of Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram, (2018) 18 SCC 130.

The Court found that the Insurance Company had been afforded multiple opportunities to produce the driver and prove the driving-licence defence.

Although the driver had appeared on earlier dates, his evidence was not recorded, and he later failed to produce the original licence.

When summons were returned for an incomplete address, the Tribunal directed the Insurance Company to serve him through dasti summons. The Company failed to take that procedural step and consequently could not complain that it had been denied an opportunity to lead evidence.

The challenge to liability was therefore rejected.

On quantum, the Court treated the minimum wage for a skilled worker in 2012—Rs. 200 per day under the applicable Government notification—as the appropriate basis for monthly notional income, i.e., Rs. 6,000, added 40% for future prospects, deducted 50% towards personal expenses, and applied multiplier 15, resulting in loss of dependency of Rs. 7,56,000.

It further held that each parent was entitled to Rs. 40,000 towards filial consortium, making Rs. 80,000 in total, rather than the Rs. 40,000 collectively awarded by the Tribunal.

Mac App No. 30/2021 filed by the claimants was disposed of by enhancing the compensation from Rs. 3,94,000 to Rs. 8,66,000, comprising Rs. 7,56,000 for loss of dependency, Rs. 15,000 for funeral expenses, Rs. 15,000 for loss of estate, and Rs. 80,000 for filial consortium.

The interest component at 6% per annum remained unchanged.

The Insurance Company was directed to deposit the balance amount within one month, after which it was to be released to the claimants upon identification, deduction of requisite court fee, and furnishing of their bank-account details.