Quantum of compensation for minor claimants must be based on prevailing minimum wages and future prospects.

On August 3, 2011, the appellant, a 6-year-old minor, was traveling in a school bus when the driver (Opponent No. 1) lost control due to rash and negligent driving, causing the vehicle to fall into a pit and overturn.

The claimant sustained injuries and filed a petition under the Motor Vehicles Act. The Motor Accident Claims Tribunal (MACT), Junagadh, awarded Rs. 18,500 with 9% interest, assessing the minor’s notional income at Rs. 15,000 per annum.

The appellant moved the High Court seeking enhancement of the quantum of compensation, arguing that the income should be based on minimum wages and should include future prospects.

1. Whether the income of a minor claimant for calculating future loss of income should be based on the prevailing minimum wages and include future prospects.

2. Whether the compensation awarded under non-pecuniary heads like pain, shock, and suffering was adequate given the nature of injuries.

The Court applied the principles of the Motor Vehicles Act regarding "just compensation" and standards for assessing the notional income of non-earning minors.

It relied on the Government of Gujarat’s notification on minimum wages for skilled workers to determine the base income in the absence of cogent evidence.

The court applied the doctrine of "Future Prospects" (adding 40% for those below 40 years/non-earning) and the multiplier system (multiplier of 18 for children) as established in Sarla Verma v. Delhi Transport Corporation and National Insurance Co. Ltd. v. Pranay Sethi.

The Court found the Tribunal’s assessment of Rs. 15,000 per annum to be erroneously low. It held that since the accident occurred in 2011, the minimum wage for a skilled worker (Rs. 4,660 per month, rounded to Rs. 5,000) should serve as the benchmark.

To this base, the Court added 40% for future prospects (totaling Rs. 7,000 per month) based on the legal recognizes that a child's future earning potential would increase over time.

Applying the undisputed 6% functional disability and the age-appropriate multiplier of 18, the Court recalculated the future loss of income to Rs. 90,720.

Furthermore, the court determined that the lump-sum amount for pain and suffering was "meagre" and enhanced it to Rs. 20,000 to reflect the hospitalization and physical trauma.

The court ordered the Respondent-Insurance Company to deposit the additional amount of Rs. 92,220 with 9% interest per annum within six weeks.

The holding affirms that for minor claimants, notional income must align with contemporary economic realities (minimum wages) and include future prospects to qualify as "just compensation".