Potential Earning Capacity of Deceased Students Justifies Applying Minimum Wages of a Graduate for Notional Income

On May 18, 2024, at approximately 2:15 a.m., Avinash Singh and Piyush Chauhan were riding a motorcycle near Hanuman Mandir Flyover, Delhi, when an offending truck (HR-73A-8155) struck them from behind and ran over them, causing their deaths.

The Motor Accident Claims Tribunal (MACT) held the truck driver negligent and awarded compensation of ₹40,32,890 and ₹40,86,130 respectively, with 9% interest.

The MACT assessed their notional income at ₹25,000 per month based on purported employment as an Office Assistant and Computer Operator.

The Insurance Company appealed, contending that since there was no evidence of such employment and the deceased were students, notional income should be based on minimum wages for intermediate/non-graduates rather than ₹25,000.

1. Whether the MACT was justified in assessing the notional income of the deceased students at ₹25,000 per month in the absence of documentary evidence of employment or specific income.

2. Whether the potentiality of future earnings of students should be the benchmark for determining notional income for the purpose of calculating loss of dependency.

The court applied the principle of "potentiality of income" for students as established in S. Mohammed Hakkim v. National Insurance Co. Ltd., which recognizes high future earning potential for professional students.

Reliance on Navjot Singh v. Harpreet Singh (2025) 10 SCC 263, acknowledging that students can reasonably secure employment with specific minimum salaries.

New India Assurance Co. Ltd. v. Dilip Kumar (2018), where the court adjusted excessive tribunal assessments to reflect realistic prospective monthly income for fresh graduates.

The Court observed that while the claimants failed to provide evidence of the deceased’s employment at M/s Freshco Facilities, the "potentiality of income" must be considered for students enrolled in or entering graduation.

The Court rejected the Insurance Company's argument for "intermediate" minimum wages but also found the MACT’s assessment of ₹25,000 excessive.

Aligning with judicial precedents that allow for a reasonable benchmark for students with future prospects, the Court determined that the minimum wages of a "graduate" (₹23,732 per month) served as the appropriate legal benchmark for loss of dependency.

The Court maintained the 40% future prospects, the multiplier of 18, and the 50% deduction for personal expenses as the deceased were bachelors.

The Court partially allowed the appeals. Consequently, the total compensation was reduced by ₹1,91,721 in both cases, resulting in revised awards of ₹38,41,168.40 (for Avinash Singh) and ₹38,94,408.40 (for Piyush Chauhan).

The Appellant was directed to deposit the revised amount within four weeks.