# KIRTI & ANR. ETC v. ORIENTAL INSURANCE COMPANY LTD

- **Citation:** [2021] 1 S.C.R. 989
- **Court:** Supreme Court of India
- **Decided:** 2021-01-05
- **Case number:** Civil Appeal Nos.19-20 of 2021
- **Bench:** N.V. Ramana, S. Abdul Nazeer, Surya Kant
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kirti-anr-etc-v-oriental-insurance-company-ltd-34810
- **Pages:** 24

## Headnote

Motor Vehicles Act, 1988: Claims and legal liabilities
crystallise at the time of accident itself - Any changes post thereto,
ought not to ordinarily affect pending proceedings - Just like how
claimants cannot rely upon subsequent increases in minimum wages,
the insurer too cannot seek benefit of the subsequent death of a
dependent during the pendency of legal proceedings - Similarly,
any concession in law made in this regard by either counsel would
not bind the parties.
Concession in law: Permissibility, extent of - Held: Advocates
cannot throw away legal rights or enter into arrangements contrary
to law - Motor Vehicles Act, 1988.
Motor Vehicles Act, 1988: Assessment of income in the absence
of evidence - Held: In the instant case, although it is correct that
the claimants were unable to produce any document evidencing
victim-husband's income, nor they established his employment as a
teacher; but that would not justify adoption of the lowest-tier of
minimum wage while computing his income - From the statement of
witnesses, documentary evidence-on-record and circumstances of
the accident, it is apparent that victim was comparatively more
educationally qualified and skilled - Further, he maintained a
reasonable standard of living for his family as evidenced by his use
of a motorcycle for commuting - Preserving theexisting standard of
living of a deceased's family is a fundamental endeavour of motor
accident compensation law - Thus, the minimum wage of Rs 6197
as applicable to skilled workers applied in his case.
Motor Vehicles Act, 1988: Future prospects - In case the
deceased was self-employed or on a fixed salary, an addition of
40% of the established income should be the warrant where the
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deceased was below the age of 40 years - An addition of 25%
where the deceased was between the age of 40 to 50 years and
10% where the deceased was between the age of 50 to 60 years
should be regarded as the necessary method of computation - The
established income means the income minus the tax component -
The argument that no future prospects ought to be allowed for those
with notional income, is both incorrect in law and without merit
considering the constant inflation-induced increase in wages.
Motor Vehicles Act, 1988: Calculation of notional income for
homemakers and the grant of future prospects with respect to them,
for the purposes of grant of compensation - Determining factors,
discussed. (Per N.V. Ramana, J - Supplementing)
Partly allowing the appeals, the Court
HELD:
Per SURYA KANT, J.:
1. It cannot be disputed that at the time of death, there in
fact were four dependents of the deceased and not three. The
subsequent death of the deceased's dependent mother ought not
to be a reason for reduction of motor accident compensation.
Claims and legal liabilities crystallise at the time of the accident
itself, and changes post thereto ought not to ordinarily affect
pending proceedings. Just like how appellant-claimants cannot
rely upon subsequent increases in minimum wages, the
respondent-insurer too cannot seek benefit of the subsequent
death of a dependent during the pendency of legal proceedings.
Similarly, any concession in law made in this regard by either
counsel would not bind the parties, as it is legally settled that
advocates cannot throw-away legal rights or enter into
arrangements contrary to law. [Para 10][998-G; 999-A-B]
2.1 Any compensation awarded by a Court ought to be just,
reasonable and consequently must undoubtedly be guided by
principles of fairness, equity, and good conscience. Not only did
the family of the deceased consist of septuagenarian parents, but
there were also two toddler-girls, aged merely 3 and 4 years;
each of whom requires exceptional care and expenditure till they
reach the stage of self-dependency. Tragically, in addition to the
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married couple, the negligence of the driver also extinguished
the life of the family's thir

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 [2021] 1 S.C.R. 989
989
KIRTI & ANR. ETC.
v.
ORIENTAL INSURANCE COMPANY LTD.
(Civil Appeal Nos.19-20 of 2021)
JANUARY 05, 2021
[N.V. RAMANA, S. ABDUL NAZEER
AND SURYA KANT, JJ.]
Motor Vehicles Act, 1988: Claims and legal liabilities
crystallise at the time of accident itself - Any changes post thereto,
ought not to ordinarily affect pending proceedings - Just like how
claimants cannot rely upon subsequent increases in minimum wages,
the insurer too cannot seek benefit of the subsequent death of a
dependent during the pendency of legal proceedings - Similarly,
any concession in law made in this regard by either counsel would
not bind the parties.
Concession in law: Permissibility, extent of - Held: Advocates
cannot throw away legal rights or enter into arrangements contrary
to law - Motor Vehicles Act, 1988.
Motor Vehicles Act, 1988: Assessment of income in the absence
of evidence - Held: In the instant case, although it is correct that
the claimants were unable to produce any document evidencing
victim-husband's income, nor they established his employment as a
teacher; but that would not justify adoption of the lowest-tier of
minimum wage while computing his income - From the statement of
witnesses, documentary evidence-on-record and circumstances of
the accident, it is apparent that victim was comparatively more
educationally qualified and skilled - Further, he maintained a
reasonable standard of living for his family as evidenced by his use
of a motorcycle for commuting - Preserving theexisting standard of
living of a deceased's family is a fundamental endeavour of motor
accident compensation law - Thus, the minimum wage of Rs 6197
as applicable to skilled workers applied in his case.
Motor Vehicles Act, 1988: Future prospects - In case the
deceased was self-employed or on a fixed salary, an addition of
40% of the established income should be the warrant where the
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deceased was below the age of 40 years - An addition of 25%
where the deceased was between the age of 40 to 50 years and
10% where the deceased was between the age of 50 to 60 years
should be regarded as the necessary method of computation - The
established income means the income minus the tax component -
The argument that no future prospects ought to be allowed for those
with notional income, is both incorrect in law and without merit
considering the constant inflation-induced increase in wages.
Motor Vehicles Act, 1988: Calculation of notional income for
homemakers and the grant of future prospects with respect to them,
for the purposes of grant of compensation - Determining factors,
discussed. (Per N.V. Ramana, J - Supplementing)
Partly allowing the appeals, the Court
HELD:
Per SURYA KANT, J.:
1. It cannot be disputed that at the time of death, there in
fact were four dependents of the deceased and not three. The
subsequent death of the deceased's dependent mother ought not
to be a reason for reduction of motor accident compensation.
Claims and legal liabilities crystallise at the time of the accident
itself, and changes post thereto ought not to ordinarily affect
pending proceedings. Just like how appellant-claimants cannot
rely upon subsequent increases in minimum wages, the
respondent-insurer too cannot seek benefit of the subsequent
death of a dependent during the pendency of legal proceedings.
Similarly, any concession in law made in this regard by either
counsel would not bind the parties, as it is legally settled that
advocates cannot throw-away legal rights or enter into
arrangements contrary to law. [Para 10][998-G; 999-A-B]
2.1 Any compensation awarded by a Court ought to be just,
reasonable and consequently must undoubtedly be guided by
principles of fairness, equity, and good conscience. Not only did
the family of the deceased consist of septuagenarian parents, but
there were also two toddler-girls, aged merely 3 and 4 years;
each of whom requires exceptional care and expenditure till they
reach the stage of self-dependency. Tragically, in addition to the
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married couple, the negligence of the driver also extinguished
the life of the family's third child who was a foetus in victim-lady's
womb at the time of the accident. Thus, the appropriate deduction
for personal expenses for both victims (couple) ought to be 1/4th
only, and not 1/3rd as applied by the Tribunal and the High Court,
more so when there were four family members dependent on the
deceased. [Para 11][999-C-E]
Director of Elementary Education v. Pramod Kumar
Sahoo (2019) 10 SCC 674 Helen C Rebello v.
Maharashtra State Road Transport Corp, (1999) 1 SCC
90 - relied on
2.2 Second, although it is correct that the claimants have
been unable to produce any document evidencing victimhusband's income, nor have they established his employment as
a teacher; but that doesn't justify adoption of the lowest-tier of
minimum wage while computing his income. From the statement
of witnesses, documentary evidence-on-record and circumstances
of the accident, it is apparent that victim was comparatively more
educationally qualified and skilled. Further, he maintained a
reasonable standard of living for his family as evidenced by his
use of a motorcycle for commuting. Preserving theexisting
standard of living of a deceased's family is a fundamental endeavour
of motor accident compensation law. Thus, at the very least, the
minimum wage of Rs 6197 as applicable to skilled workers during
April 2014 in the State of Haryana ought to be applied in his case.
[Para 12][999-E-G; 1000-A]
RK Malik v. Kiran Pal (2019) 14 SCC 1 - relied on
2.3 Third and most importantly, it is unfair on part of the
respondent-insurer to contest grant of future prospects
considering their submission before the High Court that such
compensation ought not to be paid pending outcome of the Pranay
Sethi reference. Nevertheless, the law on this point is no longer
res integra, and stands crystalised, as it was held therein that in
case the deceased was self-employed or on a fixed salary, an
addition of 40% of the established income should be the warrant
where the deceased was below the age of 40 years. An addition
of 25% where the deceased was between the age of 40 to 50
KIRTI & ANR. ETC. v. ORIENTAL INSURANCE
COMPANY LTD.
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years and 10% where the deceased was between the age of 50 to
60 years should be regarded as the necessary method of
computation. The established income means the income minus
the tax component. [Para 13][1000-B-D]
National Insurance Co Ltd v. Pranay Sethi (2017) 16
SCC 680 - followed
3. Given how both deceased were below 40 years and how
they have not been established to be permanent employees, future
prospects to the tune of 40% must be paid. The argument that
no such future prospects ought to be allowed for those with
notional income, is both incorrect in law and without merit
considering the constant inflation-induced increase in wages. It
was held in Hem Raj v. Oriental Insurance Co. Ltd. that there
cannot be distinction where there is positive evidence of income
and where minimum income is determined on guesswork in the
facts and circumstances of a case. Both the situations stand at
the same footing. Accordingly, in the present case, addition of
40% to the income assessed by the Tribunal is required to be
made.." [Para 14][1000-E-G]
Sunita Tokas v. New India Insurance Co Ltd 2019 SCC
OnLine SC 1045; Hem Raj v. Oriental Insurance Co.
Ltd. (2018) 15 SCC 654 - relied on
Per N.V. RAMANA, J. (Supplementing):
1. There are two distinct categories of situations wherein
the Court usually determines notional income of a victim. The
first category of cases relates to those wherein the victim was
employed, but the claimants are not able to prove her actual
income, before the Court. In such a situation, the Court "guesses"
the income of the victim on the basis of the evidence on record,
like the quality of life being led by the victim and her family, the
general earning of an individual employed in that field, the
qualifications of the victim, and other considerations. The second
category of cases relates to those situations wherein the Court
is called upon to determine the income of a non-earning victim,
such as a child, a student or a homemaker. Needless to say,
compensation in such cases is extremely difficult to quantify.
[Paras 2, 3][1002-B-D]
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2. The Court often follows different principles for
determining the compensation towards a non-earning victim in
order to arrive at an amount which would be just in the facts and
circumstances of the case. Some of these involve the
determination of notional income. One category of non-earning
victims that Courts are often called upon to calculate the
compensation for are homemakers. A housemaker often prepares
food for the entire family, manages the procurement of groceries
and other household shopping needs, cleans and manages the
house and its surroundings, undertakes decoration, repairs and
maintenance work, looks after the needs of the children and any
aged member of the household, manages budgets and so much
more. In rural households, they often also assist in the sowing,
harvesting and transplanting activities in the field, apart from
tending cattle. However, despite all the above, the conception
that housemakers do not "work" or that they do not add economic
value to the household is a problematic idea that has
persisted for many years and must be overcome. [Paras 4, 5,
10][1002-D-E, F; 1005-D-F]
3. On considering the growing awareness around this issue,
the United Nations Committee on the Elimination of
Discrimination against Women adopted General Recommendation
No. 17 on the "Measurement and quantification of the
unremunerated domestic activities of women and their recognition
in the gross national product" in 1991. The General
Recommendation affirmed that "the measurement and
quantification of the unremunerated domestic activities of women,
which contribute to development in each country, will help to reveal
the de facto economic role of women". It is worth noting that the
above General Recommendation is passed in furtherance of Article
11 of the Convention on the Elimination of All Forms of
Discrimination against Women which relates to ending
discrimination against women in the field of employment,
a Convention that India has ratified. [Paras 13, 14][1006-F-G;
1007-A]
4. The issue of fixing notional income for a homemaker,
therefore, serves extremely important functions. It is a
recognition of the multitude of women who are engaged in this
activity, whether by choice or as a result of social/cultural norms.
KIRTI & ANR. ETC. v. ORIENTAL INSURANCE
COMPANY LTD.
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It signals to society at large that the law and the Courts of the
land believe in the value of the labour, services and sacrifices of
homemakers. It is an acceptance of the idea that these activities
contribute in a very real way to the economic condition of the
family, and the economy of the nation, regardless of the fact that
it may have been traditionally excluded from economic analyses.
It is a reflection of changing attitudes and mindsets and of our
international law obligations. And, most importantly, it is a step
towards the constitutional vision of social equality and ensuring
dignity of life to all individuals. Returning to the question of how
such notional income of a homemaker is to be calculated, there
can be no fixed approach. It is to be understood that in such
cases the attempt by the Court is to fix an approximate economic
value for all the work that a homemaker does, impossible though
that task may be. Courts must keep in mind the idea of awarding
just compensation in such cases, looking to the facts and
circumstances. [Para 15, 16][1007-B-E]
R.K. Malik v. Kiran Pal (2009) 14 SCC 1;
M.R.
Krishna Murthi v. New India Assurance Co. Ltd. 2019
SCC OnLine SC 315; Lata Wadhwa v. State of Bihar
(2001) 8 SCC 197 : [2001] 1 Suppl. SCR 578;
Arun Kumar Agrawal v. National Insurance Co. Ltd.
(2010) 9 SCC 218 : [2010] 9 SCR 303; Rajendra Singh
v. National Insurance Co. Ltd. 2020 SCC OnLine SC
521; National Insurance Co. Ltd. v. Minor Deepika rep.
by guardian and next friend, Ranganathan 2009 SCC
OnLine Mad 828; Kajal v. Jagdish Chand (2020) 4
SCC 413; General Manager, Kerala State Road
Transport Corporation, Trivandrum v. Susamma Thomas
(Mrs), (1994) 2 SCC 176; Sarla Dixit (Smt)
v. Balwant Yadav (1996) 3 SCC 179 : [1996] 3 SCR
30; Sarla Verma (Smt) v. Delhi Transport Corporation
(2009) 6 SCC 121: [2009] 5 SCR 1098 - relied on.
5. The rationale behind the awarding of future prospects is
therefore no longer merely about the type of profession, whether
permanent or otherwise, although the percentage awarded is still
dependent on the same. The awarding of future prospects is now
a part of the duty of the Court to grant just compensation, taking
into account the realities of life, particularly of inflation, the quest
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of individuals to better their circumstances and those of their
loved ones, rising wage rates and the impact of experience on
the quality of work. [Para 23][1010-H; 1011-A-B]
National Insurance Company Limited v. Pranay
Sethi (2017) 16 SCC 680 : [2017] 13 SCR 100
- followed.
6. Taking the above rationale into account, the situation is
quite clear with respect to notional income determined by a Court
in the first category of cases outlined earlier, those where the
victim is proved to be employed but claimants are unable to prove
the income before the Court. Once the victim has been proved
to be employed at some venture, the necessary corollary is that
they would be earning an income. It is clear that no rational
distinction can be drawn with respect to the granting of future
prospects merely on the basis that their income was not proved,
particularly when the Court has determined their notional income.
When it comes to the second category of cases, relating to notional
income for non-earning victims, the above principle applies with
equal vigor, particularly with respect to homemakers. Once
notional income is determined, the effects of inflation would
equally apply. Further, no one would ever say that the
improvements in skills that come with experience do not take
place in the domain of work within the household. [Paras 24,
25][1011-B-E]
Hem Raj v. Oriental Insurance Company Limited (2018)
15 SCC 654; Sunita Tokas v. New India Insurance Co.
Ltd. (2019) 20 SCC 688 - relied on.
Case Law Reference
Per SURYA KANT, J.
(2019) 10 SCC 674
relied on
Para 10
(1999) 1 SCC 90
relied on
Para 11
(2009) 14 SCC 1
relied on
Para 12
(2017) 16 SCC 680
relied on
Para 13
(2018) 15 SCC 65
relied on
Para 14
Per N.V. RAMANA, J.
(2001) 8 SCC 197
relied on
Para 5
KIRTI & ANR. ETC. v. ORIENTAL INSURANCE
COMPANY LTD.
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(2010) 9 SCC 218
relied on
Para 6
[2019] 6 SCR 402
relied on
Para 16
(2017) 16 SCC 680
followed
Para 20
(2020) 4 SCC 413
relied on
Para 20
(1994) 2 SCC 176
relied on
Para 20
(1996) 3 SCC 179
relied on
Para 20
(2009) 6 SCC 121
relied on
Para 21
(2018) 15 SCC 654
relied on
Para 25
(2019) 20 SCC 688
relied on
Para 25
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 19-20
of 2021.
From the Judgment and Order dated 17.07.2017 by the High Court
of Delhi at New Delhi in MAC. APP. Nos. 336 of 2017 and 375 of
2017.
Mritunjay Kumar Sinha, S.N. Parasar, Ranjan Kumar Pandey,
K.K. Bhat for the appearing parties.
The Judgment of the Court was delivered by
SURYA KANT, J.
Leave Granted.
2. These civil appeals, which have been heard through video
conferencing, have been filed by three surviving dependents (who are
two minor daughters and father) of the two deceased, impugning the
judgment dated 17.07.2017 of the High Court of Delhi through which
the motor accident compensation of Rs 40.71 lakhs awarded by the
Motor Accident Claims Tribunal, Rohini (hereinafter, "Tribunal") on
24.12.2016 under Section 168 of the Motor Vehicle Act, 1988 ("MV
Act"), was reduced to Rs 22 lakhs.
FACTUAL MATRIX
3. The deceased couple, Vinod and Poonam, while commuting on
a motorcycle in Delhi at around 7AM on 12.04.2014 were hit at an
intersection by a Santro Car bearing registration 'DL 7CA 1053'. The
impact immediately incapacitated both the deceased and they soon passed
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away from cranio-cerebral damage and haemorrhagic shock caused by
the accident's blunt-force trauma.
4. An FIR was registered under Sections 279 and 304 of the Indian
Penal Code, 1860 (hereinafter, "IPC") against the driver, and the
statement of an independent eyewitness (Constable Vishnu Dutt) was
recorded, which evidenced rash driving and negligence on part of the
car-driver. Subsequently, a claim petition was filed under Section 166 of
the MV Act by the two toddler-daughters and septuagenarian-parents
of the deceased. This was contested by the driver and owner claiming
that the deceased were themselves driving negligently and the accident
was as a result of their very own actions. Two witnesses were examined
by the appellant-claimants and none by the respondents. The insurance
company (Respondent No. 1) offered as settlement a compensation of
Rs 6.47 lakhs for the death of Poonam and Rs 10.71 lakhs for Vinod.
5. The Tribunal took note of the chargesheet filed against the
driver in the criminal case and also his failure to step-into the witness
box. Relying on the strong testimony of the independent witness, it was
concluded that the car-driver was indeed driving rashly and thus liability
ought to be fastened on the respondent-insurer. Regarding the quantum
of compensation, the Tribunal began by determining the ages of Poonam
and Vinod as being 26 and 29 years respectively. Consequently, an agemultiplier of 17 was adopted. Although the deceased's father took a plea
that Vinod was earning Rs 14,000 every month as a teacher at the Pratap
Public School in Delhi, but he was unable to substantiate his claim with
any documentary evidence. Thus, minimum wage in Delhi was adopted
for computation of loss of dependency. An additional 25% income was
accounted for future prospects of Poonam, and 1/3rd of Vinod's salary
was deducted towards personal expenses. Rs 2.50 lakhs was given for
each deceased as compensation for loss of love and affection, estate,
and funeral charges. Thus, the Tribunal awarded a total sum of Rs 40.71
lakhs for both deceased to the claimants.
6. This computation was challenged by the respondent-insurer
before the High Court, on grounds that the Tribunal had erroneously
relied upon the minimum wage as notified by Government of Delhi as
there was no proof that the deceased were employed in Delhi. Instead,
given their established residence in Haryana, the minimum wage notified
for that State ought to be the basis for calculation of loss of dependency.
Simultaneously, addition of future prospects as well as non-deduction of
KIRTI & ANR. ETC. v. ORIENTAL INSURANCE
COMPANY LTD. [SURYA KANT, J.]
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personal expenses for Poonam was prayed to be reversed. Further,
compensation was sought to be halved on grounds of contributory
negligence. A categorical submission was made highlighting the then
divergent law on the issue of payment of 'future prospects' to nonpermanent employees, pending resolution of which, it was prayed that
no such addition be granted to the claimants.
7. The High Court concurred with these contentions and
consequently reduced the notional income for both deceased by adopting
the lowest minimum wage applicable for unskilled workers in Haryana,
instead of Delhi. Similarly, 1/3rd of Poonam's income was deducted
towards personal expenses and future prospects were denied to both
deceased. However, given the totality of circumstances and Poonam's
contribution to her household, 25% additional gratuitous income was added
to her salary. The High Court thus brought down the total compensation
payable to the claimants to Rs 22 lakhs.
CONTENTIONS OF PARTIES
8. This reduction has been assailed before us by learned counsel
for the claimants. Re-computation is sought of compensation for loss of
dependency consequent to the decision of the Constitutional Bench of
this Court in National Insurance Co Ltd v. Pranay Sethi1, which
authoritatively settles the law on future prospects for non-permanent
employees as well. Furthermore, the anomaly between the gratuitous
increase of income between Vinod and Poonam, and the usage of unskilled
minimum wage for Vinod have been brought to our notice.
9. Learned Counsel for the respondent-insurer, on the other hand,
has sought to forestall any increase in compensation, including under the
ground of future prospects. It is claimed that the High Court's decision
was a consent order, and that the counsel for the appellants had conceded
to a lower computation under the head of loss of dependency, which
thus cannot be challenged before this Court.
ANALYSIS
I.Deduction for Personal Expenses
10. We have thoughtfully considered the rival submissions. It cannot
be disputed that at the time of death, there in fact were four dependents
of the deceased and not three. The subsequent death of the deceased's
1(2017) 16 SCC 680.
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dependent mother ought not to be a reason for reduction of motor accident
compensation. Claims and legal liabilities crystallise at the time of the
accident itself, and changes post thereto ought not to ordinarily affect
pending proceedings. Just like how appellant-claimants cannot rely upon
subsequent increases in minimum wages, the respondent-insurer too
cannot seek benefit of the subsequent death of a dependent during the
pendency of legal proceedings. Similarly, any concession in law made in
this regard by either counsel would not bind the parties, as it is legally
settled that advocates cannot throw-away legal rights or enter into
arrangements contrary to law.2
11. Any compensation awarded by a Court ought to be just,
reasonable and consequently must undoubtedly be guided by principles
of fairness, equity, and good conscience.3 Not only did the family of the
deceased consist of septuagenarian parents, but there were also two
toddler-girls, aged merely 3 and 4 years; each of whom requires
exceptional care and expenditure till they reach the stage of selfdependency. Tragically, in addition to the married couple, the negligence
of the driver also extinguished the life of the family's third child who was
a foetus in Poonam's womb at the time of the accident. Thus, the
appropriate deduction for personal expenses for both Vinod and Poonam
ought to be 1/4th only, and not 1/3rd as applied by the Tribunal and the
High Court, more so when there were four family members dependent
on the deceased.
II. Assessment of monthly income
12. Second, although it is correct that the claimants have been
unable to produce any document evidencing Vinod's income, nor have
they established his employment as a teacher; but that doesn't justify
adoption of the lowest-tier of minimum wage while computing his income.
From the statement of witnesses, documentary evidence-on-record and
circumstances of the accident, it is apparent that Vinod was comparatively
more educationally qualified and skilled. Further, he maintained a
reasonable standard of living for his family as evidenced by his use of a
motorcycle for commuting. Preserving theexisting standard of living of
a deceased's family is a fundamental endeavour of motor accident
compensation law.4 Thus, at the very least, the minimum wage of Rs
2 Director of Elementary Education v. Pramod Kumar Sahoo, (2019) 10 SCC 674, ¶ 11.
3 See, Helen C Rebello v. Maharashtra State Road Transport Corp, (1999) 1 SCC 90, ¶
28.
4 See, RK Malik v. Kiran Pal, (2019) 14 SCC 1, ¶ 9.
KIRTI & ANR. ETC. v. ORIENTAL INSURANCE
COMPANY LTD. [SURYA KANT, J.]
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6197 as applicable to skilled workers during April 2014 in the State of
Haryana ought to be applied in his case.
III. Addition of Future Prospects
13. Third and most importantly, it is unfair on part of the respondentinsurer to contest grant of future prospects considering their submission
before the High Court that such compensation ought not to be paid pending
outcome of the Pranay Sethi (supra) reference. Nevertheless, the law
on this point is no longer res integra, and stands crystalised, as is clear
from the following extract of the afore-cited Constitutional Bench
judgment5:
"59.4. In case the deceased was self-employed or on a fixed
salary, an addition of 40% of the established income should
be the warrant where the deceased was below the age of 40
years. An addition of 25% where the deceased was between
the age of 40 to 50 years and 10% where the deceased was
between the age of 50 to 60 years should be regarded as the
necessary method of computation. The established income
means the income minus the tax component."
[Emphasis supplied]
14. Given how both deceased were below 40 years and how they
have not been established to be permanent employees, future prospects
to the tune of 40% must be paid. The argument that no such future
prospects ought to be allowed for those with notional income, is both
incorrect in law6 and without merit considering the constant inflationinduced increase in wages. It would be sufficient to quote the observations
of this Court in Hem Raj v. Oriental Insurance Co. Ltd.7, as it puts at
rest any argument concerning non-payment of future prospects to the
deceased in the present case:
"7. We are of the view that there cannot be distinction where
there is positive evidence of income and where minimum
income is determined on guesswork in the facts and
circumstances of a case. Both the situations stand at the same
footing. Accordingly, in the present case, addition of 40% to
the income assessed by the Tribunal is required to be made.."
[Emphasis supplied]
5 National Insurance Co Ltd v. Pranay Sethi, (2017) 16 SCC 680, ¶ 59.4.
6 Sunita Tokas v. New India Insurance Co Ltd, 2019 SCC OnLine SC 1045.
7 (2018) 15 SCC 654.
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IV. Other heads and division of compensation
15. Finally, given the lack of arguments on the other heads of
funeral charges, loss of estate, love, and affection; there arises no cause
of alteration. We similarly see no infirmity with the High Court's adoption
of 17 as the age-multiplier, award of 9% interest, calculation of Poonam's
notional income or the division of total compensation in the ratio of 1:2:2
between the grandfather and the two girls. For ready reference, a
comparative table of revised compensation after suitable increases would
thus be as follows:
CONCLUSION
16. For the reasons afore-stated, the appeals are allowed in-part.
The total motor accident compensation of Rs 22 lakhs awarded by the
High Court to the claimant-appellants is increased by Rs 11.20 lakhs to
reach a new total of Rs 33.20 lakhs. The enhanced amount of
compensation shall be paid within two months along with interest @ 9%
p.a. from the date of filing of the Detailed Accident Report i.e. 23.05.2014,
and shall be apportioned per the terms laid down by the Tribunal.
N. V. RAMANA, J.
1. I have had the advantage of perusing the judgment prepared by
my learned brother, Surya Kant, J., and am in complete agreement with
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him. However, I thought to supplement the reasoning in his judgment,
with respect to the question of notional income of a housewife and
whether future prospects should apply to the same or not.
2. There are two distinct categories of situations wherein the Court
usually determines notional income of a victim. The first category of
cases relates to those wherein the victim was employed, but the claimants
are not able to prove her actual income, before the Court. In such a
situation, the Court "guesses" the income of the victim on the basis of
the evidence on record, like the quality of life being led by the victim and
her family, the general earning of an individual employed in that field, the
qualifications of the victim, and other considerations.
3. The second category of cases relates to those situations wherein
the Court is called upon to determine the income of a non-earning victim,
such as a child, a student or a homemaker. Needless to say, compensation
in such cases is extremely difficult to quantify.
4. The Court often follows different principles for determining the
compensation towards a non-earning victim in order to arrive at an amount
which would be just in the facts and circumstances of the case. Some of
these involve the determination of notional income. Whenever notional
income is determined in such cases, different considerations and factors
are taken into account. For instance, for students, the Court often
considers the course that they are studying, their academic proficiency,
the family background, etc., to determine and fix what they could earn in
the future. [See M. R. Krishna Murthi v. New India Assurance Co.
Ltd., 2019 SCC OnLine SC 315]
5. One category of non-earning victims that Courts are often called
upon to calculate the compensation for are homemakers. The granting
of compensation for homemakers on a pecuniary basis, as in the present
case, has been considered by this Court earlier on numerous occasions.
A three-Judge Bench of this Court in Lata Wadhwa v. State of Bihar,
(2001) 8 SCC 197, while dealing with compensation for the victims of
a fire during a function, granted compensation to housewives on the
basis of the services rendered by them in the house, and their age. This
Court, in that case, held as follows:
"10. So far as the deceased housewives are concerned, in
the absence of any data and as the housewives were not
earning any income, attempt has been made to determine
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the compensation on the basis of services rendered by them
to the house. On the basis of the age group of the housewives,
appropriate multiplier has been applied, but the estimation of the
value of services rendered to the house by the housewives, which
has been arrived at Rs 12,000 per annum in cases of some and Rs
10,000 for others, appears to us to be grossly low. It is true that
the claimants, who ought to have given data for determination of
compensation, did not assist in any manner by providing the data
for estimating the value of services rendered by such housewives.
But even in the absence of such data and taking into
consideration the multifarious services rendered by the
housewives for managing the entire family, even on a
modest estimation, should be Rs 3000 per month and Rs
36,000 per annum..."
(emphasis supplied)
6. In Arun Kumar Agrawal v. National Insurance Co. Ltd.,
(2010) 9 SCC 218, this Court, while dealing with the grant of
compensation for the death of a housewife due to a motor vehicle
accident, held as follows:
"26. In India the courts have recognised that the
contribution made by the wife to the house is invaluable
and cannot be computed in terms of money. The gratuitous
services rendered by the wife with true love and affection
to the children and her husband and managing the household
affairs cannot be equated with the services rendered by
others. A wife/mother does not work by the clock. She is in the
constant attendance of the family throughout the day and night
unless she is employed and is required to attend the employer's
work for particular hours. She takes care of all the requirements
of the husband and children including cooking of food, washing of
clothes, etc. She teaches small children and provides invaluable
guidance to them for their future life. A housekeeper or maidservant
can do the household work, such as cooking food, washing clothes
and utensils, keeping the house clean, etc., but she can never be a
substitute for a wife/mother who renders selfless service to her
husband and children.
27. It is not possible to quantify any amount in lieu of the
services rendered by the wife/mother to the family i.e. the
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husband and children.However, for the purpose of award
of compensation to the dependants, some pecuniary
estimate has to be made of the services of the housewife/
mother. In that context, the term "services" is required to be
given a broad meaning and must be construed by taking into account
the loss of personal care and attention given by the deceased to
her children as a mother and to her husband as a wife. They are
entitled to adequate compensation in lieu of the loss of gratuitous
services rendered by the deceased. The amount payable to the
dependants cannot be diminished on the ground that some close
relation like a grandmother may volunteer to render some of the
services to the family which the deceased was giving earlier."
(emphasis supplied)
The above pronouncement has been followed by this Court in its
recent judgment in Rajendra Singh v. National Insurance Co. Ltd.,
2020 SCC OnLine SC 521, wherein the notional income of a deceased
housewife was calculated for the purposes of granting compensation in
a motor accident case.
7. Before discussing this topic further, it is necessary to comment
on its gendered nature. In India, according to the 2011 Census, nearly
159.85 million women stated that "household work" was their main
occupation, as compared to only 5.79 million men.
8. In fact, the recently released Report of the National Statistical
Office of the Ministry of Statistics & Programme Implementation,
Government of India called "Time Use in India- 2019", which is the
first Time Use Survey in the country and collates information from
1,38,799 households for the period January, 2019 to December, 2019,
reflects the same gender disparity.1 The key findings of the survey suggest
that, on an average, women spend nearly 299 minutes a day on unpaid
domestic services for household members versus 97 minutes spent by
men on average.2 Similarly, in a day, women on average spend 134 minutes
on unpaid caregiving services for household members as compared to
the 76 minutes spent by men on average.3 The total time spent on these
activities per day makes the picture in India even more clear- women on
average spent 16.9 and 2.6 percent of their day on unpaid domestic
1 National Statistical Office, Time Use in India- 2019 (September, 2020).
2 Id, at 56.
3 Id, at 54.
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services and unpaid caregiving services for household members
respectively, while men spent 1.7 and 0.8 percent.4
9. It is curious to note that this is not just a phenomenon unique to
India, but is prevalent all over the world. A 2009 Report by a Commission
set up by the French Government, analyzing data from six countries, viz.
Germany, Italy, United Kingdom, France, Finland and the United States
of America, highlighted similar findings:
"117. Gender differences in time use are significant. In each of
the countries under consideration, men spend more time in paid
work than women and the converse is true for unpaid work.
Men also spend more time on leisure than women. The
implication is that women provide household services but
other members of the household benefit..."5
(emphasis supplied)
10. The sheer amount of time and effort that is dedicated to
household work by individuals, who are more likely to be women than
men, is not surprising when one considers the plethora of activities a
housemaker undertakes. A housemaker often prepares food for the entire
family, manages the procurement of groceries and other household
shopping needs, cleans and manages the house and its surroundings,
undertakes decoration, repairs and maintenance work, looks after the
needs of the children and any aged member of the household, manages
budgets and so much more. In rural households, they often also assist in
the sowing, harvesting and transplanting activities in the field, apart from
tending cattle [See Arun Kumar Agrawal (supra); National Insurance
Co. Ltd. v. Minor Deepika rep. by her guardian and next friend,
Ranganathan, 2009 SCC OnLine Mad 828]. However, despite all
the above, the conception that housemakers do not "work" or that they
do not add economic value to the household is a problematic idea that
has persisted for many years and must be overcome.
11. The concurring opinion in the Arun Kumar Agrawal judgment
(supra), has highlighted this bias:
"44. This bias is shockingly prevalent in the work of census. In
the Census of 2001 it appears that those who are doing household
4 Id, at x.
5 Stiglitz et al. , Report of the Commission on the Measurement of Economic
Performance and Social Progress, 117 (2009).
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duties like cooking, cleaning of utensils, looking after children,
fetching water, collecting firewood have been categorised as nonworkers and equated with beggars, prostitutes and prisoners who,
according to the census, are not engaged in economically
productive work. As a result of such categorisation about 36 crores
(367 million) women in India have been classified in the Census
of India, 2001 as non-workers and placed in the category of
beggars, prostitutes and prisoners. This entire exercise of census
operations is done under an Act of Parliament."
12. In fact, this unfortunate silence when it comes to the value of
housework has been a problem which was identified as far back as in
1920, when the economist Pigou noted the oddity and contradictions
when it came to the calculation of the contribution of women in the
national income, by stating that:
"...the services rendered by women enter into the dividend when
they are rendered in exchange for wages, whether in the factory
or in the home, but do not enter into it when they are rendered by
mothers and wives gratuitously to their own families. Thus, if a
man marries his housekeeper or his cook, the national dividend is
diminished".6
This issue was further focused on by those in the field of feminism
economics in the 1970s and 1980s, who criticized the traditional labour
statistics which did not consider unpaid domestic work and therefore
undervalued women's role in the economy.7
13. On considering the growing awareness around this issue, the
United Nations Committee on the Elimination of Discrimination against
Women adopted General Recommendation No. 17 on the "Measurement
and quantification of the unremunerated domestic activities of women
and their recognition in the gross national product" in 1991. The
General Recommendation affirmed that "the measurement and
quantification of the unremunerated domestic activities of women,
which contribute to development in each country, will help to reveal
the de facto economic role of women".
14. It is worth noting that the above General Recommendation is
passed in furtherance of Article 11 of the Convention on the Elimination
6 Cecil Pigou, The Economics of Welfare, 44 (1920).
7 United Nations Economic Commission for Europe, Guide on Valuing Unpaid
Household Service Work, 2 (2017).
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of All Forms of Discrimination against Women which relates to ending
discrimination against women in the field of employment, a Convention
that India has ratified.
15. The issue of fixing notional income for a homemaker, therefore,
serves extremely important functions. It is a recognition of the multitude
of women who are engaged in this activity, whether by choice or as a
result of social/cultural norms. It signals to society at large that the law
and the Courts of the land believe in the value of the labour, services and
sacrifices of homemakers.