Notional Income of Minor Deceased to be Assessed Based on Minimum Wages of Skilled Workers with Multiplier of Eighteen

On July 13, 2023, an 11-and-a-half-year-old child (Deepanshu) was struck from behind by a truck (registration No. UP-21CT-0427) driven rashly and negligently, resulting in fatal injuries.

The Motor Accident Claims Tribunal (MACT) awarded compensation of Rs. 23,03,490/- based on the minimum wages of an unskilled worker and a multiplier of 15.

Both the Insurance Company (seeking reduction) and the claimants (seeking enhancement) filed cross-appeals challenging the award.

1. Whether the benchmark income for a deceased minor should be based on the minimum wages of an unskilled or a skilled worker.

2. Whether the appropriate multiplier for a deceased minor child is 15 or 18.

The court primarily relied on Kajal v. Jagdish Chand and Hitesh Nagjibhai Patel v. Bababhai Nagjibhai Rabari, which established that for minor victims, compensation must be assessed based on the minimum wages of a skilled worker as they cannot be treated as non-earners.

Following Sarla Verma v. DTC and National Insurance Co. Ltd. v. Pranay Sethi, as interpreted in Rubi Devi v. New India Assurance and National Insurance Co. Ltd v. Sanju, the court affirmed that the multiplier of 18 is applicable for victims in the age group below 15 years.

Applying the "well-entrenched principle" from Kajal and Sanju, the Court reasoned that a child’s future potential must be valued at the rate of a skilled workman rather than an unskilled one, as the child would have likely entered the workforce as a major with at least minimal skills.

Regarding the multiplier, the Court noted that while Sarla Verma was silent on children under 15, subsequent Supreme Court and High Court precedents have consistently filled this gap by adopting a multiplier of 18.

The Court re-calculated the loss of dependency using the skilled wage of Rs. 20,903/-, adding 40% for future prospects, and applying the multiplier of 18.

It held that the compensation must be enhanced from Rs. 23,03,490/- to Rs. 32,92,534/- with interest at 7.5% per annum.

The Court directed the Insurance Company to deposit the balance amount within six weeks and provided a specific disbursement scheme involving fixed deposits to protect the interests of the claimants.