Where income evidence is absent, motor accident compensation may be assessed using applicable minimum wages.

Late Sohan Yadav, aged approximately 45 years, died in a road accident on 3 September 2021 involving vehicle No. C.G. 06 GS 5575.

His claimants—his wife and sons—were awarded compensation of ₹12,42,000 by the Motor Accident Claims Tribunal in M.A.C. No. 1304/2021 by award dated 28 October 2022.

The Tribunal assessed the deceased’s monthly income at ₹7,800, applied a 25% addition towards future prospects, deducted one-third towards personal expenses, applied a multiplier of 14, and awarded ₹1,50,000 under conventional heads.

The claimants filed an appeal under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement, contending that the deceased’s income should have been assessed at ₹9,200 per month in accordance with the applicable minimum wages and that the conventional compensation was inadequate.

Whether the deceased’s monthly income should be reassessed at ₹9,200, being the applicable minimum wage for unskilled labour, instead of ₹7,800 assessed by the Tribunal?

Whether the compensation awarded under the conventional heads required enhancement in accordance with the applicable principles governing future prospects, deduction for personal expenses, multiplier, and consortium?

Whether the claimants were entitled to enhancement of the total compensation awarded by the Tribunal?

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988, to examine the adequacy of compensation.

For computation of loss of dependency, it relied on National Insurance Co. Ltd. v. Pranay Sethi, which governs addition towards future prospects and conventional heads; Sarla Verma v. Delhi Transport Corporation, which provides the method for deduction towards personal expenses and selection of the multiplier; and Magma General Insurance Co. Ltd. v. Nanu Ram, concerning compensation for consortium.

In the absence of documentary proof of the deceased’s claimed earnings, the Court accepted the applicable Chhattisgarh minimum wage for unskilled labour as a reasonable basis for income assessment.

The Court found that although the claimants asserted that the deceased earned ₹1,000 per day as a street-food vendor, no supporting documentary evidence was produced.

It therefore reassessed his income on the basis of the Chhattisgarh Minimum Wages Notification and fixed his monthly income at ₹9,200 instead of ₹7,800.

Applying a 25% addition towards future prospects, the annual income became ₹1,38,000.

After deducting one-third towards personal expenses, the annual contribution to the dependants was calculated at ₹92,000.

Since the deceased was 45 years old, the Court applied a multiplier of 14, resulting in ₹12,88,000 towards loss of dependency.

It further enhanced the conventional heads from ₹1,50,000 to ₹1,65,000, comprising ₹16,500 each for loss of estate and funeral expenses and ₹44,000 each for consortium payable to three claimants, thereby increasing the total compensation to ₹14,53,000.

The compensation was enhanced from ₹12,42,000 to ₹14,53,000.

After adjusting the amount already awarded, the claimants were held entitled to an additional ₹2,11,000, carrying interest at 6% per annum from the date of filing of the claim application until realization.

The remaining terms and conditions of the Tribunal’s award were left undisturbed.

The Registry was also directed to communicate the enhanced amount to the claimants in Hindi, with assistance from paralegal workers where necessary.