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Fixing notional income at Rs.15,000/- per annum for nonearning members is not just and reasonable

In Kurvan Ansari alias Kurvan Ali & Anr v. Shyam Kishore Murmu & Anr, appeal was filed before the Supreme Court against the judgment of the High Court of Jharkhand at Ranchi, in relation to the compensation awarded by the High Court for the accidental death of a 7 year old boy.

Background

The Motor Accident Claim Tribunal, as per Schedule-II of the Motor Vehicles Act, 1988 which is applicable to the claims made under Section 163-A of the Motor Vehicles Act, 1988, considering notional income of the deceased (being a non earning member) at Rs.15,000/- per annum, by applying multiplier ‘15’, awarded compensation of Rs.2,25,000/- with interest @6% per annum from the date of judgment. Since the driver of the offending motorcycle Mr.Sunil Gurum was not possessing valid driving licence at the time of accident, the Tribunal directed respondent No.2 -Insurance Company to pay the compensation to the claimants and recover the same from its owner.

The High Court partly allowed the appeal of the claimant for enhancement of compensation by awarding a further sum of Rs.15,000/- towards funeral expenses. 

The Appellants/Claimants submitted before the Supreme Court that the notional income of Rs.15,000/- was fixed as early as in the year 1994 and somehow, the same is continued in the statute without any amendment in spite of repeated directions by this Court.

Judgment

Agreeing with the Appellants/Claimants, the SC observed that the Central Government was bestowed with the duties to amend Schedule-II in view of Section 163-A(3) of the Motor Vehicles Act 1988, but it failed to do so. In view of the same, specific directions were issued to the Central Government to make appropriate amendments to Schedule-II keeping in mind the present cost of living. That is why till such amendments are made, the SC ordered higher compensation in similar situations. In  Puttamma & Ors. v. K.L. Narayana Reddy & Anr. 2013) 15 SCC 45, directions were issued for award of compensation by fixing a sum of Rs.1,00,000/- (Rupees one lakh only) towards compensation for the non-earning children up to the age of 5 (five) years old and a sum of Rs.1,50,000/- (Rupees one lakh fifty thousand only) for the nonearning persons of more than 5 (five) years old. In the case of Kishan Gopal & Anr. (2014) 1 SCC 244  where the deceased was a ten years old child, this Court has fixed his notional income at Rs.30,000/- per annum.

In this case, it is to be noted that the accident was on 06.09.2004. In spite of repeated directions, Schedule-II is not yet amended. Therefore, fixing notional income at Rs.15,000/- per annum for nonearning members is not just and reasonable.

In view of the judgments in the cases in Puttamma & Ors. (2013) 15 SCC 45 , R.K. Malik & Anr. (2009) 14 SCC 1  and Kishan Gopal & Anr. (2014) 1 SCC 244 , the SC was of the view that it is a fit case to increase the notional income by taking into account the inflation, devaluation of the rupee and cost of living. 

In view of the above, the SC deemed it appropriate to take notional income of the deceased at Rs.25,000/- (Rupees twenty five thousand only) per annum. Accordingly, when the notional income is multiplied with applicable multiplier ‘15’, as prescribed in Schedule-II for the claims under Section 163-A of the Motor Vehicles Act 1988, it comes to Rs.3,75,000/- (Rs.25,000/- x Multiplier 15) towards loss of dependency. The appellants are also entitled to a sum of Rs.40,000/- each towards filial consortium and Rs.15,000/- towards funeral expenses.

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