Author: Anjali Gupta.
(2021) 2 SCC 166.
NAMES OF PARTIES
Appellants: Kirti & Anr.;
Respondent: Oriental Insurance Company Ltd.
Justice N.V. Ramana;
Justice Surya Kant;
Justice Aniruddha Bose.
The case is related to the compensation for non-earning deceased person calculation. The Supreme Court made it clear that in order to determine fair, just, and reasonable compensation for deceased, non-earning victims of motor vehicle accidents (including homemakers), a “notional” income should be taken into account. Future prospects should also be evaluated based on this notional income.
The High Court’s decision to invalidate the future possibilities granted by the Motor Accident Claims Tribunal for a deceased victim who worked as a homemaker was the subject of an appeal before the Supreme Court. This article aims to study the recognition of income for women working as home-maker and to study article 14 of the Indian constitution which states that every person is equal in the eyes of the law.
- The deceased couple, Vinod and Poonam, who was 29 and 26 years old, respectively, were hit by the Santro Car at a crossroads early on April 12, 2014, when the accident happened. The couple passed away from their wounds that very day.
- Under Sections 279 and 304 of the Indian Penal Code, 1860, a First Information Report (FIR) was filed against the car driver for rash and careless driving, and the statement of one eyewitness was also recorded.
- The claim petition under Section 166 of the MV Act was simultaneously submitted by the deceased’s parents, two daughters, and two septuagenarian relatives.
- The Tribunal determined compensation in the number of Rs. 40.71 Lakhs after taking into account a number of variables, including the driver’s rash driving, Delhi’s minimum wage, the deceased wife’s future prospects, and the deduction of one-third of the deceased man’s salary for personal expenses.
- In contrast, the Delhi High Court reduced the amount of compensation to Rs. 22 Lakhs on the grounds of the deceased couple’s shared negligence, the lack of documentation demonstrating the deceased man’s employment in Delhi (as a result, the minimum wage of Haryana, where the deceased had lived permanently, was taken into account rather than that of Delhi), and the denial of future prospects to both the deceased.
- Because of this, the deceased’s heirs appealed the High Court’s ruling to the Supreme Court.
- Should the portion of personal expense deduction be calculated after considering the death of the mother?
- Which tier of minimum wages should be considered for the income evaluation?
- Should the deceased be compensated for their potential futures in the absence of any documentation of employment or a fixed source of income?
The court noted that the deceased’s four dependents were present at the time of the accident. The court ruled that changes made after the accident date would not have an impact on the proceedings and that dependents as of the accident date itself must be taken into account when calculating the amount of compensation. Poonam was pregnant at the time of the collision, and the fetus inside her died as a result of the driver’s hasty and careless actions. As a result, instead of being reduced by 1/3 as the Tribunal found, the personal cost deduction for the two deceased should instead be reduced by one-fourth. The court referred to the ruling made by the Constitutional Bench of the Supreme Court in the case of National Insurance Co Ltd v. Pranay Sethi, which stated that if the deceased was under 40 years old and self-employed or receiving a fixed salary, an additional 40% of the established income should be the warrant: The respondent-insurer’s argument that future prospects cannot be considered in cases of notional income was rejected by the court.1
The Supreme Court rejected this court’s observations in Hem Raj v Oriental Insurance Company Limited (2018) stating in the case of Hem Raj they believe that it is impossible to draw a distinction between situations in which there is concrete proof of income and those in which the minimal income is estimated based on specific facts and circumstances of a case.2 Both circumstances are equally valid. As a result, an addition of 40% to the income determined by the Tribunal in the current case is necessary. Vinod and Poonam (ages 29 and 26, respectively), both of whom were under 40, were therefore given future prospects equal to 20% of their current Income.
Analyzing if the deceased mother’s personal expenses should be considered, The survey’s major findings indicate that, on average, women spend roughly 299 minutes per day providing unpaid domestic services for household members compared to men’s 97 minutes per day. In a similar vein, women spend on average 134 minutes per day providing unpaid care for family members as opposed to men’s average of 70 minutes. The situation in India is further apparent when you consider how much time is spent on these activities every day. Unpaid domestic work and unpaid caregiving took up, respectively, 16.9 and 2.6 percent of the average woman’s day.
The deceased’s family included two toddler girls, just 3 and 4 years old, who each require great care and expense until they reach the stage of self dependency, in addition to the deceased’s septuagenarian parents. Tragically, the driver’s carelessness resulted in the death of the married couple as well as the family’s third child, who was still a fetus in Poonam’s womb at the time of the tragedy. Because there were four family members who were dependent on the deceased, the proper deduction for personal costs for both Vinod and Poonam should be 1/4th only, not 1/3rd as imposed by the Tribunal and the High Court.
Even though it’s true that the claimants haven’t been able to find any proof of Vinod’s income or confirm his job as a teacher, that doesn’t make it okay to use the lowest tier of the minimum wage when calculating his income. It is clear from the testimony of witnesses, the documentation that is in the public domain, and the circumstances of the accident that Vinod had a higher level of training and experience. He also kept up a respectable standard of living for his family, as shown by the motorcycle he used for transportation. A primary goal of the law governing motor vehicle accident compensation is to maintain the family of the deceased’s current standard of living. Therefore, in his situation, at the very least, the State of Haryana’s minimum salary of Rs 6197 which was in effect for skilled workers in April 2014 should be used.
With regards to the issue of notional income and the grant of future possibilities, the court provided a summary of the entire judgment that homemakers for the following compensation:
- It is established legal doctrine that a homemaker is entitled to compensation on a financial basis.
- The determination of the notional income of a homemaker assumes special significance given the gendered character of housekeeping, with a preponderance of women engaging in the same tasks as men. It turns into an acknowledgment of the toil, labor, and sacrifices made by housewives as well as a window on shifting perspectives. Additionally, it advances our nation’s commitments under international law and our constitutional aim of promoting social equality and preserving human dignity for everyone.
- Depending on the specific facts and circumstances of the case, the Court may use a variety of techniques to determine the hypothetical income of a homemaker.
- The Court should make sure that the method it chooses and the notional income it fixes are fair given the specific case’s facts and circumstances, weighing compensation neither too conservatively nor too liberally.
- A part of just compensation is the provision of future prospects based on the hypothetical income determined in such instances.
Future prospects to the tune of 40% must be paid, given that both of the deceased were under 40 and had not been proven to be permanent employees. The claim that persons with notional income shouldn’t be granted such future prospectus is unfounded in legal terms and has no merit in light of the ongoing wage growth brought on by inflation.
Based on the above facts, it can be said that the judgment lacks in providing clarity of law since the mother’s personal expense was not considered, not granted future prospectus, along with that, the claimants were offered the lowest tier of minimum wage. Deduction of personal expense to be ¼ was rightly stated by the supreme court.
Despite everything stated above, it is imperative to dispel the long-held misconception that housekeepers are not “workers” and do not contribute financially to the family. Fixing a homemaker’s national income is therefore particularly important because it will recognize their effort, hard work, and sacrifices. Additionally, it advances India’s commitments under the Universal Declaration of Human Rights, which emphasizes that everyone is equal before the law and is entitled to equal protection of the law devoid of discrimination in Article 13.
However, there is no precise calculation or method that can miraculously determine the genuine worth that a person gives unselfishly to the people they care about. Therefore, the Court makes an effort to ascertain the closest approximation of the value added by a homemaker for the purpose of awarding monetary compensation in such cases.
The Supreme Court’s ruling disproves the idea that housewives do not “work,” bring value to the household economically, or do anything else. Therefore, this case law can be seen in positive sight courts and tribunals concerned with determining compensation for victims of motor vehicle accidents, particularly housewives, will find this decision’s instructions to be helpful. Therefore, this case law can be seen in a positive light.
- National Insurance Co. Ltd vs Pranay Sethi on 31 October 2017.
- Hem Raj v Oriental Insurance Company Limited (2018) 15 SCC 654.