In absence of cogent income proof, compensation must be assessed using applicable minimum wages and future prospects.

On 14 February 2011, Nareshbhai Rathod was riding motorcycle No. GJ-5-FM-1535 with Vijay Rathod as pillion rider when truck No. GJ-5-T-3193, allegedly driven rashly and negligently by Respondent No. 1, collided with the motorcycle from behind. Nareshbhai sustained serious injuries and subsequently died. His widow, two children and both parents filed a claim petition before the Motor Accident Claims Tribunal, Surat.

The Tribunal partly allowed the petition and awarded ₹8,47,100 with interest at 9% per annum from the date of filing until realization. The claimants challenged the award solely on the ground of inadequate compensation, particularly the assessment of income, future prospects and conventional heads of compensation.

The claimants asserted that the deceased earned ₹6,000 per month from employment with M/s Pollucon Enterprise and from an egg stall. The insurer contended that the proved salary was ₹2,900 per month and that income from the egg stall was not established. The Tribunal had assessed the monthly income at ₹3,500.

1. Whether the deceased’s monthly income ought to have been reassessed with reference to the applicable minimum wages instead of ₹3,500 assessed by the Tribunal?

2. Whether the claimants were entitled to an addition towards future prospects and what deduction for personal expenses and multiplier were applicable in calculating loss of dependency?

3. Whether the compensation under funeral expenses, loss of estate and loss of consortium required enhancement in accordance with the applicable Supreme Court precedents?

4. Whether the claimants were entitled to additional compensation with interest at 9% per annum?

The Court applied the principles governing computation of compensation under the Motor Vehicles Act, 1988, including assessment of a deceased person’s income on the basis of reliable evidence or, in its absence, applicable minimum wages.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, it applied the principle of adding 40% of income towards future prospects for a deceased aged below 40 years and the standardized amounts for funeral expenses and loss of estate.

Relying on Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram, (2018) 18 SCC 130, it recognized the entitlement of each eligible legal representative to compensation for loss of consortium.

Where precise income was not proved, the Court treated the notified minimum wage for a skilled worker in Gujarat—₹4,370 per month—as the appropriate basis and rounded it to ₹4,400.

The Court found that the claimants had not sufficiently proved the asserted income of ₹6,000 per month, including earnings from the egg stall. However, the Tribunal’s assessment of ₹3,500 was below the applicable minimum wage for a skilled worker. Accordingly, the Court reassessed the monthly income at ₹4,400.

Since the deceased was approximately 25 years old, 40% was added for future prospects, resulting in a monthly income of ₹6,160. As five legal representatives survived him, one-fourth was deducted towards personal expenses, leaving ₹4,620 per month as the contribution to the family. Applying the multiplier of 18, the loss of dependency was calculated at ₹9,97,920.

Applying Pranay Sethi, the Court enhanced funeral expenses to ₹18,150 and awarded ₹18,150 for loss of estate.

Applying Nanu Ram, it awarded consortium of ₹48,400 to each of the five legal representatives, totalling ₹2,42,000.

The total compensation was therefore recalculated at ₹12,76,220, against the Tribunal’s award of ₹8,47,100.

The additional amount was directed to carry interest at 9% per annum from the date of filing of the claim petition until realization.

Respondent No. 3, the insurer, was directed to deposit the additional compensation and interest within six weeks of receiving the judgment.

The Tribunal was directed to disburse the amount after deducting any deficit court fees and completing due verification.

No order as to costs was made.