Future prospects must be considered to offset inflation when computing compensation for a minor's death.

The Appellants’ 9-year-old son, Master Justin/Joy, died on July 20, 2016, after falling into an uncovered, water-filled pit on a vacant plot owned by the Delhi Jal Board (Respondent No. 1).

The site lacked boundary walls, barricades, or guards despite being known for children playing nearby.

A post-mortem confirmed the cause of death as ante-mortem drowning.

The Appellants filed a Writ Petition seeking compensation. A learned Single Judge awarded ₹22,00,000/- with 6% interest, based on the father’s income of ₹20,000/month as a starting point.

The Appellants filed the present Letters Patent Appeal (LPA) seeking an enhancement of the compensation to include "future prospects" and an increase in the interest rate to 9%.

1. Whether the calculation of pecuniary compensation for the death of a minor must include a multiplier factor to account for future prospects, inflation, and erosion in money value.

2. Whether the rate of interest awarded (6% per annum) warrants modification to 9% per annum.

The Court applied the principles governing compensation for the death of non-earning minors established in M.S. Grewal v. Deep Chand Sood [(2001) 8 SCC 151], which mandates estimating potential earning capacity based on parental status and academic background.

Following Kamla Devi v. Govt. of NCT of Delhi [2004 SCC OnLine Del 721], the Court utilized the Consumer Price Index for Industrial Workers (CPI-IW) to adjust "standard compensation" for inflation.

The Court relied on Laxmi Narayan v. Govt. of NCT of Delhi [2019:DHC:1454-DB] and Sharafat Khan v. Northern Railway [2023:DHC:4108-DB], which established that a multiplier factor of 1.5 must be applied to the base income to offset the effects of inflation and devaluation of money when determining pecuniary loss.

The Division Bench found that while the Single Judge correctly identified the father’s income (₹20,000) as the base for the child’s potential earnings, the judge erred by failing to apply the "inflation correction" factor.

The Court rejected the Respondent's argument that adding 50% for future prospects constitutes "double benefit"; rather, it is a recognized legal measure to ensure compensation remains realistic over time.

Applying the formula from Laxmi Narayan, the Court adjusted the monthly income to ₹30,000 (₹20,000 x 1.5), deducted 50% for personal expenses (₹15,000), and applied the standard multiplier of 15, totaling ₹27,00,000 for pecuniary loss.

Regarding the interest rate, the Court declined the increase to 9%, noting that 6% is consistent with established precedents in similar cases.

The Court partially allowed the appeal. The court maintained the interest rate at 6% per annum, calculated from the date of the incident (July 20, 2016) until the date of realization. The Impugned Judgment was modified accordingly.