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Future prospect must be granted in case of motor accident of a non-earning victim

In Kirti & Anr. Etc. vs Oriental Insurance Company Ltd., a married couple died in an accident leaving behind as dependents two elderly parents and 2 minor children. During the course of the litigation, one of the parents died. The matter subsequently came up before the Supreme Court on the issue of compensation. The Supreme Court in an elaborate judgment held -

1) 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 appellant­claimants cannot rely upon subsequent increases in minimum wages, the respondent­insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal proceedings. 

2) 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) Preserving the existing standard of living of a deceased’s family is a fundamental endeavour of motor accident compensation law.

4) 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 non­earning victim, such as a child, a student or a homemaker. Needless to say, compensation in such cases is extremely difficult to quantify.

5) Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.

6) Taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in the same as compared to men, the fixing of notional income of a homemaker attains special significance. It becomes a recognition of the work, labour and sacrifices of homemakers and a reflection of changing attitudes. It is also in furtherance of our nation’s international law obligations and our constitutional vision of social equality and ensuring dignity to all.

7) Various methods can be employed by the Court to fix the notional income of a homemaker, depending on the facts and circumstances of the case.

8) The Court should ensure while choosing the method, and fixing the notional income, that the same is just in the facts and circumstances of the particular case, neither assessing the compensation too conservatively, nor too liberally.

9) The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.


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