Thursday, November 18, 2021

Motor Accident Cases-Future rise in income applicable even if deceased wasn't earning at time of death: Supreme Court

The Supreme Court on Thursday held that future rise in income should be considered while determining future income for calculating compensation in motor accident claims, even with respect to a deceased who was not earning, working or self-employed at the time of death (Smt. Meena Pawaia vs. Ashraf Ali). (Read Judgment)

"We are of the opinion that even in case of a deceased who was not serving at the time of death and had no income at the time of death, their legal heirs shall also be entitled to future prospects by adding future rise in income as held by this court in the case of Pranay Sethi i.e. addition of 40% of the income determined on guesswork considering the educational qualification, family background etc., where the deceased was below the age of 40 years," the Court held.

The Court placed reliance on several Supreme Court decisions, income for future economic loss is to be done through guesswork while considering circumstances such as educational qualification, family background etc.
Further, it was not expected that the income of a deceased who was not serving would remain stagnant.
".. to have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time.”
Therefore, the Bench stated, “We are of the opinion that the income of the deceased at least ought to have been considered at least ₹10,000­ per month, more particularly considering the fact that the labourers/skilled labourers were getting ₹5,000­ per month even under the Minimum Wages Act in the year 2012.”

In this regard, the Court adverted to a Constitution Bench decision in the case of National Insurance Company Limited vs. Pranay Sethi in which it was held that 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.

The same principle should apply even to a deceased who was not serving and/or was not having any income at the time of the accident, the Court held.


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