Minimum wages for skilled workers must be used to calculate dependency when actual income is unproven.

On October 11, 2023, 85-year-old Parshottambhai Umiyashankarbhai Dave was driving his Activa when a Kia car, driven in a rash and negligent manner at excessive speed, collided with him on the Morbi-Rajkot State Highway.

He succumbed to his injuries at the scene.

The Tribunal (MACP No. 37/2023) awarded the claimants ₹3,18,000/- with 7% interest, assessing the deceased’s income at a nominal ₹5,000/- per month due to lack of documentary evidence.

Dissatisfied with the quantum, the original claimants/appellants filed this appeal seeking enhancement.

1. Whether the Tribunal erred in assessing the income of the deceased at ₹5,000/- per month in the absence of cogent evidence, rather than applying the prevailing minimum wage.

2. Whether the compensation awarded under conventional heads (consortium, funeral expenses, loss of estate) was inadequate based on established judicial precedents.

The Court applied the principles of determining "just compensation" under the Motor Vehicles Act, 1988.

It relied on the landmark judgment in National Insurance Company Ltd. v. Pranay Sethi (2017) 16 SCC 680 to standardize awards under conventional heads.

Magma General Insurance Company Limited v. Nanu Ram @ Chuhru Ram (2018) 18 SCC 130 to grant spousal and parental consortium to all legal representatives.

The Court utilized the Minimum Wages notified by the Government of Gujarat for skilled workers to determine income when proof of actual earnings is missing.

The Court found that while the deceased’s specific income from a grocery shop and agriculture was not proved, the Tribunal's assessment of ₹5,000/- was contrary to the state-notified minimum wage for skilled workers (₹12,870/- per month at the time of the accident).

Applying the Sarla Verma formula, the Court deducted 1/3 for personal expenses (since there were two dependents) and applied a multiplier of 5 based on the deceased's age (85 years), totaling ₹5,14,800/- for dependency loss.

Following Pranay Sethi and Magma General, the Court increased the consortium to ₹40,000 per claimant (adjusted for inflation to ₹48,400) and updated funeral expenses and loss of estate to ₹18,150 each.

It enhanced the total compensation from ₹3,18,000/- to ₹6,47,900/-. The respondent-insurance company was directed to deposit the additional amount of ₹3,29,900/- with 7% interest from the date of the claim petition within six weeks.

The Tribunal was directed to disburse the entire amount to the claimants upon verification.