In the Supreme Court of India
|NAME OF THE CASE
|Kirti And Another V. Oriental Insurance Company Limited
|Civil Appeals Nos. 19-20 0f 2021
|DATE OF THE JUDGEMENT
|JANUARY 5, 2021
|Kirti and Another
|Oriental Insurance Company Limited
|N.V. Ramana, S. Abdul Nazeer and Surya Kant
|Motor Vehicles Act, 1988; Indian Penal Code, 1860
|IMPORTANT SECTIONS INVOLVED
|Motor Vehicles Act, 1988: Section 168, Section 166 Indian Penal Code, 1860: Section 279 and 304
After having received fair judgement from the Tribunal under the Motor Vehicle Act, 1988, the appellants were satisfied but the respondents appealed to the High Court of the unjust compensation awarded to the dependants of the deceased, they were deceased of the road accident and their toddler daughters and old father went to claim compensation under Section 166 and 168 of the Motor Vehicles Act. The case followed to the Supreme Court in want of justice on the part of both the parties to decide the compensation and the issue of notional income revolving around the case.
The focus is totally on the notional income and the application of future prospects in the case of a housewife. Clearly, notional income means the income that is not received, although it might be deemed to be properly chargeable to income tax.  Notional income is taxable only when it is specifically given in the Income Tax Act, 1961 (ITA). The court takes the provision of determining the notional income under two categories:
Firstly, when the victim’s actual income is not proved but the victim was employed, herein the court uses the ‘guesses’ to calculate the income on the account of the evidences, the lifestyle of the victim, the earning of an individual with the same field, the family, the educational qualifications and other such criteria.
Secondly, when the victims are not earning and the Court has to decide their income, such as those of a student, a child, or a homemaker, Whenever notional income is to be determined for the second category of cases, the court takes into account various factors, such as, for students, the student’s course, academic proficiency, and background of the family, which are taken into consideration to comprehend what a student can earn in the future.
Homemakers form another aspect of the non- earning victims who are often termed as people who do not contribute to the economic value of the household. “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.”
The plethora of activities undertaken by a homemaker should not be ignored, she prepares food, looks after children, manages the budget of the house, repairs, maintenance and the groceries procurement, and several other things, the women in rural areas apart from the above work, sow, harvest and feed the cattle and the community tags them as “non- workers”. “Justice is conscience, not a personal conscience but the conscience of the whole of humanity”, said by Alexander Solzhenitsyn holds true when the court determines the notional income of the non- earning victims. The work of a woman if she earns by working or she does the household chores amounts to the definition of a working woman and it is to be noted that Article 11 of the Convention on the Elimination of All Forms of Discrimination against Women has been ratified by India and it deals with ending discrimination against women in the field of employment.
FACTS OF THE CASE
The dreary incident of the accident took the lives of the couple, Vinod and Poonam who were commuting to Delhi on a motorcycle at 7 AM on 12.04.2014 and were hit by a collision with a Santro car that bore the registration number as ‘DL 7CA 1053’. The couple died at the spot of the craniocerebral damage and haemorrhagic shock.
Consequently, an FIR against the driver was registered under Sections 279 and 304 of the Indian Penal Code, 1860 (IPC). The statement of the only eyewitness, constable Vishnu Dutt was recorded that spoke about the rash driving and negligence by the driver of the car.
A claim petition was filed by the two infant daughters and their septuagenarian parents under Section 166 of the Motor Vehicles Act, 1988 (MV Act). This statement was called into question by the driver and the owner, stating that there was negligence on the part of the deceased, which eventually resulted into an accident. Respondent No.1, that is, the insurance company offered a compensation of Rs. 6.47 lakhs for the death of Poonam and an amount of Rs. 10.71 lakhs for Vinod. Thus, the tribunal under the MV Act looked into the chargesheet filed against the driver and took cognizance of the only eyewitness.
It made the car driver liable, and the liability was put on the respondent insurer. The tribunal also went through the compensation being offered by determining the ages of the deceased couple. “Consequently, an age multiplier of 17 was adopted.” After repeated calculations such as 25 percent income of future prospects of Poonam, one third of Vinod’s salary was deducted towards personal expenses and Rs. 2.5 lakhs as compensation for loss of love and funeral charges, a total amount of Rs. 40.71 was awarded as compensation.
The respondents were not satisfied with the calculations made on the part of the Tribunal; therefore, they appealed to the High Court. They contended that the tribunal had fallaciously reckoned on the minimum wage as given by the Government of Delhi since there was no evidence that the deceased worked in Delhi. Therefore, they contended that the computation should be based on the minimum wage given by their state of residence, that is, Haryana, and “the addition of future prospects as well as nondeduction of 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.” The High Court was satisfied with the contentions raised by the respondents and by adhering to the lowest minimum wages for the unskilled workers in Haryana reduced the notional income for both deceased. One third income of future prospects of Poonam were denied however, 25 percent additional gratuitous income was added to her salary. So, in total High Court brought down the total compensation to Rs. 22 lakhs.
ISSUES RAISED BEFORE THE COURT
- Can subsequent death of the deceased dependant’s be the reason for reduction of motor accident compensation in view of the personal expenses’ deduction?
- Can the condition of the deceased family be taken into consideration to compute the basis of income if the employment of the deceased has no evidence?
- Can future prospects be applied to determine the value of services of homemaker?
ARGUMENTS RAISED BY THE APPELLANT
- The learned counsel was dissatisfied with the High Court’s decision as there was a reduction in the amount of compensation.
- He repeatedly sought for re-calculation of compensation for the loss of dependency as he brought into the notice the National Insurance Co. Ltd. V. Pranay Sethi, that settled the law related to future prospects for non-permanent employees.
- He further brought into light the gratuitous increase of income between Poonam and Vinod.
- Learned counsel also contended before the court that in the case of Vinod, there was usage of the unskilled minimum wage.
ARGUMENTS RAISED BY THE RESPONDENT
- The learned counsel appealed to the Court not to increase the amount of compensation and that covers the ground of future prospects.
- The counsel also argued that the judgement and the decision given by the High Court was a consent order.
- In addition to the aforesaid point, he also contended that the claimants had conceded to lower computation on the account of loss of dependency and consequently this cannot be disputed or challenged in front of this court.
MOTOR VEHICLES ACT, 1988
- SECTION 166:
- Application for compensation. —
- An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made—
- by the person who has sustained the injury; or
- by the owner of the property; or
- where death has resulted from the accident, by all or any of the legal representatives of the deceased; or
- by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be: Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application. 1[(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed: Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.] 2[***] 3[(4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act.]
- SECTION 168
Award of the Claims Tribunal.—On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be: Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X.
2. The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.
3. When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct.
INDIAN PENAL CODE, 1860
- SECTION 279:
Rash driving or riding on a public way. —Whoever drives any vehicle, or rides, on any public way in a manner so rash or negligent as to endanger human life, or to be likely to cause hurt or injury to any other person, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
- SECTION 304:
Punishment for culpable homicide not amounting to murder.— Whoever commits culpable homicide not amounting to murder shall be punished with 1[imprisonment for life], or imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine, if the act by which the death is caused is done with the intention of causing death, or of causing such bodily injury as is likely to cause death, or with imprisonment of either description for a term which may extend to ten years, or with fine, or with both, if the act is done with the knowledge that it is likely to cause death, but without any intention to cause death, or to cause such bodily injury as is likely to cause death.
After having heard both the sides, the honourable court submitted firstly that there were four dependants of the deceased because at the time of the accident, the mother of the deceased was alive and “claims and liabilities crystallize at the time of the accident itself.” The aftereffect does not cause any hindrance in the proceedings. Therefore, like the claimants, the respondent could not ask for any benefit from the death of the deceased’s mother while the proceedings were pending. The court held that apart from the septuagenarian parents, there were two toddler girls and a foetus that was in Poonam’s womb that also died as a result of the negligence of the driver. Therefore, the personal expenses deduction should be one-fourth instead of one-third. “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.” 
The court slammed the respondents that although there was no evidence to support Vinod’s income and his employment, his income cannot be calculated by the usage of the lowest tier of minimum wages. It reasoned that since there are witnesses aiding Vinod’s intelligence, skills and his qualifications and the use of a motorcycle, hence the minimum wage of Rs. 6197 has to be applicable. Preserving the existing standard of living of a deceased’s family is a fundamental endeavour of motor accident compensation law. Another point that the court felt was disappointing about respondents that they contested the grant of future prospect however the law in this regard is “res integra”: “In case the deceased was selfemployed 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.” Hence the court said that the future prospects should not be “allowed for those with notional income, is incorrect in law” The court referred to Hem Raj case as it puts an end to the any further issues regarding the future prospects of notional income:
“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% of the income assessed by the Tribunal is required to be made.”
The court emphasised the issue of the notional income of the housewives, whether they can be awarded future prospects. In reference to the three-judge bench in the Lata Wadhwa V. State of Bihar case, the court ordered compensation to the fire victims during a function on the basis of their age and the services rendered by them: “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 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…”
In Arun Kumar Agrawal V. National Insurance Co. Ltd., the apex court ruled for the compensation for the death of a housewife in a motor vehicle accident. The court said that it recognises the endowment made by the woman, the love and affection rendered to the children and the family is recognised by the court: “It is not possible to quantify any amount in lieu of the services rendered by the wife/mother to the family, i.e., the husband and children. However, for the purpose of awarding compensation to the dependants, some pecuniary estimate has to be made of the services of the housewife/mother. “
Hence, the court viewed that the services rendered by the women who are homemakers do bequeath the house of its economic conditions; no fixed approach can be used to calculate the notional income of the housewives; therefore, the courts should compute after balancing out the circumstances of the case and it should be just and fair. The court also gave a method to calculate the notional income of a housewife, that is, by using the Second Schedule of the Motor Vehicles Act, 1988. The schedule stated that “the income of a spouse could be calculated as one-third of the income of the earning surviving spouse.” The court also referred to the Madras High Court judgement that the computation should be made according to the amount the housewife would have earned, had she not remained at home, and another by the means of the partnership method and the replacement method. Therefore, all these are just suggestions and the method to be applied should be decided by the court after equating the situation of every case.
The court settled the provision of future prospects by saying that before the Pranay Sethi case, the prospects were given according to the stability of the job held by the victims, but after the aforesaid case decided by a five-judge bench, the rationale behind the giving of future prospects is according to the “duty of the Court to grant just compensation, taking into account the realities of life, particularly of inflation, the quest 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.”
The court allowed the appeals in part; the amount of compensation for the appellate were raised to Rs. 33.20 lakhs from Rs. 22 lakhs and the court ordered the payment of the amount within two months with interest at 9% p.a. from the date of the Detailed Accident Report, 23.05.2014. Hence, the court pens down its decision by saying that the notional income for unemployed victims has to be calculated with the aforesaid methods, or the courts can choose their own ways, but it should be completely just, neither too conservative nor too liberal.
Every judgement has its own take on the issues involved with every judge using his rationale in determining things and reaching a conclusion. This case also an example that although the accident put forward questions, it made way for the sensitive issues of a housewife who is not a working woman but looks after the house and does the household chores, they are the hands that raise and love a child, never prioritizing their demands and selflessly looking after the whole family. Their death can have future prospects even if they do not do any business, any service but the services they render outweigh every other service or business, they are the ones who run the house despite these, they are called as people who do not work or do not add to the economics of the house.
No one believes but a housemaker’s hand does improve the quality of every work. The court recognizes such woman who themselves pursue this activity or by the social norms they also contribute 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 step towards dignity and social equality.
“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”.
 Author is 3rd semester student of Amity Law School, Lucknow.
 Oxford Reference, https://www.oxfordreference.com/view/10.1093/oi/authority.20110803100240223 (last visited Jul. 2, 2022).
 The Indian Penal Code,1860, § 279, No. 45, Acts of Parliament, 1860(India).
 The Indian Penal Code,1860, §304, No. 45, Acts of Parliament,1860(India).
 The Motor Vehicle Act, 1988, §166, No. 59, Acts of Parliament, 1988(India).
 National Insurance Co. Ltd. V. Pranay Sethi, (2017)15 SCC 654.
 The Motor Vehicle Act, 1988, §166(1), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, §166(1)(a), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, §166(1)(b), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, §166(1)(c), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, §166(1)(d), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, § 168, No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, § 168(2), No. 59, Acts of Parliament, 1988(India).
 The Motor Vehicle Act, 1988, § 168(3), No. 59, Acts of Parliament, 1988(India).
 The Indian Penal Code,1860, § 279, No. 45, Acts of Parliament, 1860(India).
 The Indian Penal Code,1860, § 304, No. 45, Acts of Parliament, 1860(India).
 Helen C. Rebello V. Maharashtra SRTC, (1999) 1 SCC 90.
 R.K. Malik V. Kiran Pal, (2009) 14 SCC 1.
 National Insurance Co. Ltd. V. Pranay Sethi, (2017) 16 SCC 680.
 Sunita Tokas V. New India Insurance Co. Ltd., (2019) 20 SCC 688.
 Hem Raj V. Oriental Insurance Co. Ltd., (2018) 15 SCC 654.
 Lata Wadhwa V. State of Bihar, (2001) 8 SCC 197.
 Arun Kumar Agrawal V. National Insurance Co. Ltd. (2010) 3 SCC (Civ) 664.
 National Insurance Co. Ltd. V. Deepika, 2009 SCC Online Mad 828.
 National Insurance Co. Ltd., V. Pranay Sethi, (2017) 16 SCC 680.