TaxTMI 
TaxTMI 
2021 (1) TMI 1123
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....t immediately incapacitated both the deceased and they soon passed 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 wi....
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.... 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 Sethi (2017) 16 SCC 680, 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 d....
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....denced by his use of a motorcycle for commuting. Preserving the existing standard of living of a deceased's family is a fundamental endeavour of motor accident compensation law. See, R.K. Malik v. Kiran Pal (2019) 14 SCC 1, p. 9. 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. III. Addition of Future Prospects 13. 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 (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 aforecited Constitutional Bench judgment National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, p. 59.4.: 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 ....
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.... advantage of perusing the judgment prepared by my learned brother, Surya Kant, J., and am in complete agreement with 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. 18. 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. 19. 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. 20. The Court often follows different principles....
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....hicle 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 husband an....
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....t x. 25. 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..." Stiglitz et al., Report of the Commission on the Measurement of Economic Performance and Social Progress, 117 (2009). (emphasis supplied) 26. 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 man....
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....rvalued women's role in the economy. United Nations Economic Commission for Europe, Guide on Valuing Unpaid Household Service Work, 2 (2017). 29. 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" 30. 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. 31. 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 a....
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....s that one-third of the income of the earning surviving spouse should be the value. Exploration on the internet shows that there have been efforts to understand the value of a homemaker's unpaid labour by different methods. One is, the opportunity cost which evaluates her wages by assessing what she would have earned had she not remained at home, viz., the opportunity lost. The second is, the partnership method which assumes that a marriage is an equal economic partnership and in this method, the homemaker's salary is valued at half her husband's salary. Yet another method is to evaluate homemaking by determining how much it would cost to replace the homemaker with paid workers. This is called the Replacement Method. (emphasis supplied) 35. However, it must be remembered that all the above methods are merely suggestions. There can be no exact calculation or formula that can magically ascertain the true value provided by an individual gratuitously for those that they are near and dear to. The attempt of the Court in such matters should therefore be towards determining, in the best manner possible, the truest approximation of the value added by a homemaker for....
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.... rare and exceptional cases involving special circumstances. (emphasis supplied) 38. However, there was a shift in jurisprudence regarding future prospects with the five-Judge Bench decision of this Court in Pranay Sethi (supra). This Court extended the benefit regarding future prospects to even self-employed persons, or those on a fixed salary. The Court held as follows: 57. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardisation, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated Under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal r....
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....mployed 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. 41. When it comes to the second category of cases, relating to notional income for non-earning victims, it is my opinion that 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. It is worth noting that, although not extensively discussed, this Court has been granting future prospects even in cases pertaining to notional income, as has been highlighted by my learned brother, Surya Kant, J., in his opinion [Hem Raj v. Oriental Insurance Company Limited, (2018) 15 SCC 654; Sunita Tokas v. New India Insurance Co. Ltd., (2019) 20 SCC 688]. 42. Therefore, on the basis of the above, certain general observations c....