In absence of income proof, compensation must reflect applicable minimum wages and future prospects.

On 16 February 2021, Madhubhai Jerambhai Bhuriya was riding his motorcycle when a car bearing registration no. GJ-13-AH-2861, allegedly driven rashly and negligently by respondent no. 2, collided with the motorcycle.

The deceased sustained serious injuries and died as a result of the accident.

His legal representatives instituted MACP No. 28 of 2021 before the Motor Accident Claims Tribunal, Surendranagar.

The Tribunal partly allowed the claim petition and awarded ₹15,28,200 with interest at 9% per annum from the date of filing of the claim petition.

The claimants appealed, challenging the award solely on the ground of inadequacy of compensation, particularly the assessment of income and amounts granted under conventional heads.

1. Whether, in the absence of cogent proof of the deceased’s actual income, his monthly income ought to be assessed on the basis of the applicable minimum wages rather than at ₹7,000 per month?

2. Whether the claimants were entitled to enhancement under the heads of future loss of dependency, loss of consortium, loss of estate, and funeral expenses?

3. Whether the claimants were entitled to interest on the enhanced compensation at the rate of 9% per annum from the date of filing of the claim petition?

Where actual income is not proved by cogent evidence, the income may be assessed with reference to the minimum wages applicable at the time of the accident.

It applied the principle of future prospects recognised in National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, by adding 40% to the income of the 22-year-old deceased.

The Court applied the multiplier method and deducted one-third of the income towards the deceased’s personal expenses, considering three legal representatives.

For conventional heads, it relied on Pranay Sethi and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram, 2018 (18) SCC 130, holding that the widow, minor children, and father were each entitled to compensation for loss of consortium.

The Court found that the claimants had not established the deceased’s asserted income of ₹1,50,000 per annum through cogent evidence.

However, the Tribunal’s assessment of ₹7,000 per month was below the notified minimum wage for a skilled worker in Gujarat at the time of the accident.

The Court therefore reassessed the monthly income at ₹9,079, rounded to ₹9,100.

Since the deceased was approximately 22 years old, 40% was added towards future prospects, resulting in a monthly income of ₹12,740.

After deducting one-third for personal expenses and applying the multiplier of 18, the future loss of dependency was calculated at ₹18,34,704.

Applying the principles governing conventional compensation, the Court awarded ₹18,150 each for loss of estate and funeral expenses, and ₹1,45,200 for loss of consortium to three legal representatives at ₹48,400 each.

The total compensation was consequently recalculated at ₹20,16,204, resulting in an enhancement of ₹4,88,004 over the Tribunal’s award.

The claimants were held entitled to total compensation of ₹20,16,204, including the enhanced amount of ₹4,88,004, with interest at 9% per annum on the additional compensation from the date of filing of the claim petition until realisation.

Respondent no. 3, the insurance company, was directed to deposit the additional compensation with interest within six weeks of receiving the order.

The Tribunal was directed to disburse the compensation after due verification and deduction of any deficit court fee, if applicable.