The Supreme Court has increased the motor accident compensation by using the minimum wages for skilled workers to calculate the potential loss of earnings for a child.
The Supreme Court raised the compensation to ₹34 lakh in a motor vehicle accident case, noting that minimum wages for skilled workers are more appropriate than those for unskilled labor, especially since the victim was a school-aged child. The Court was reviewing a Civil Appeal that argued the High Court’s compensation amount was too low. Justices Sanjiv Khanna and Sanjay Kumar remarked that the High Court used the minimum wage for unskilled labor, set at ₹169 per day, without justification, given that the victim was a school-going child. They pointed out that the minimum wage for skilled workers, according to a Government of Assam notification from March 1, 2013, was ₹175 per day, which is more fitting.
In the incident, a girl under twelve sustained 75% permanent disability after a Max Pick-Up Van collided with her father’s vehicle. Her father filed a claim with the Motor Accident Claims Tribunal (MACT) against the van’s insurer, which initially awarded ₹5.59 lakh in compensation, including interest. Unhappy with this amount, the family appealed, and the Gauhati High Court later raised the compensation to ₹18.97 lakh. The High Court acknowledged her full 75% disability, calculated future earnings based on minimum wages, and added ₹3 lakh each for pain and loss of marriage prospects. Medical expenses were covered as per submitted bills, and interest remained the same. The Appellant then filed the current appeal, believing the compensation was still insufficient.
The Court referenced a Supreme Court ruling in Kajal v. Jagdish Chand and others, stating, “In that case, the child experienced a 90% permanent disability from the accident. The argument presented was that since the child was only twelve years old, a notional income of ₹15,000 per year should be used. However, this Court dismissed that argument and chose to use the minimum wage for a skilled worker to calculate the child’s potential loss of earnings.” In the current case, the Court also took into account the additional costs, as the Appellant would need help. As a result, the Court granted the Appeal.
Cause Title: Miss Rushi @ Ruchi Thapa v. M/s. Oriental Insurance Co. Ltd. and Another (Neutral Citation: 2024 INSC 837)
