Motor accident compensation must be computed using applicable minimum wages and legally prescribed conventional heads.

Late Santram Kewat, aged approximately 33 years, died in a motor-vehicle accident on 04.06.2020.

His widow, three minor children, and two other claimants instituted a claim before the Motor Accident Claims Tribunal in Claim Case No. 16/2020.

The Tribunal assessed the deceased’s monthly income at ₹7,500, applied a 40% addition towards future prospects, deducted one-fourth towards personal expenses, applied a multiplier of 16, and awarded ₹15,92,000, including ₹80,000 under conventional heads.

The claimants preferred an appeal under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement on the grounds that the deceased’s income should have been assessed according to the applicable minimum wages of ₹8,860 per month and that the amount awarded under conventional heads was inadequate.

1. Whether the deceased’s monthly income should have been assessed at ₹8,860, instead of ₹7,500, on the basis of the applicable Chhattisgarh minimum-wage notification?

2. Whether the compensation awarded under future prospects, deduction for personal expenses, loss of dependency, and conventional heads required enhancement in accordance with the applicable Supreme Court precedents?

3. What enhanced compensation and interest, if any, were the appellants entitled to receive?

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988, concerning enhancement of compensation in a motor-accident death claim.

It applied the principles in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, governing the addition for future prospects and conventional heads; Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, governing the deduction for personal and living expenses and the selection of the multiplier; and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram, (2018) 18 SCC 130, concerning compensation under conventional heads, including consortium.

In the absence of documentary proof of the deceased’s claimed income, the Court treated the applicable statutory minimum wage as the appropriate basis for assessing income.

The Court found that although the claimants asserted that Santram earned ₹18,000 per month as a mason, no documentary evidence supported that assertion.

However, the Tribunal’s assessment of ₹7,500 per month was below the applicable minimum wage of ₹8,860 for an unskilled labourer under the Chhattisgarh Minimum Wages Notification; therefore, the Court reassessed the annual income at ₹1,06,320.

Applying a 40% addition for future prospects, the annual income became ₹1,48,848.

Since the deceased left six dependants, the Court deducted one-fourth towards personal expenses, resulting in an annual contribution of ₹1,11,636.

Applying the multiplier of 16, consistent with the deceased’s age, the loss of dependency was calculated at ₹17,86,176.

The Court further enhanced the amount under conventional heads from ₹80,000 to ₹2,97,000, comprising consortium and other permissible conventional components in accordance with the cited precedents.

The total compensation was consequently recalculated at ₹20,83,176.

The appellants were held entitled to an additional ₹4,91,176, carrying interest at 6% per annum from the date of filing of the claim application until realization.

All other conditions of the Tribunal’s award were maintained, and the Registry was directed to communicate the enhanced amount to the claimants in Hindi, with assistance from paralegal workers where necessary.