Lawfarm Team
Asked May 30, 2016

compensation in motor accident cases

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In motor accident cases , if the claimant is a Housewife, how much our salary fixed, that is, how is compensation calculated?

Answer 1

Courts have recognised that there can be no exact uniform rule for measuring the value of the human life and the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case. For instance, parents are entitled to recover the present cash value of the prospective service of a deceased minor child, including compensation for loss of pecuniary benefits reasonably to be expected after the child attains majority.[1] In India, Courts have acknowledged that the contribution made by the wife to the house is invaluable and cannot be computed in terms of money. The Supreme Court recognised that for the purpose of award of compensation to the dependents, some pecuniary estimate has to be made of the services of housewife/mother. In this context, the term 'services' needed to be given a broad meaning, and the loss of personal care and attention given by the deceased to her children as a mother and to her husband as a wife, was sought to be included.[2] Though, back in 2010, in the absence of any other definite criteria for determination of compensation payable to the dependents of a non-earning housewife/mother, the Supreme Court held that it would be reasonable to rely upon the criteria specified in clause (6) of the Second Schedule of the Motor Vehicles Act, and then apply appropriate multiplier[3], the Supreme Court also asked the Parliament in this case to come up with rules/laws that can help arrive at a fair compensation when the victim of a motor vehicle accident is a housewife/homemaker. The Supreme Court looked at Section 163A of the Motor Vehicles Act, which talks about payment of compensation on structured formula basis, and said that it is highly unfair, unjust and inappropriate to compute the compensation payable to the dependents of a deceased wife/mother, who does not have regular income, by comparing her services with that of a housekeeper or a servant or an employee, who works for a fixed period. The gratuitous services rendered by wife/mother to the husband and children cannot be equated with the services of an employee and no evidence or data can possibly be produced for estimating the value of such services. It is virtually impossible to measure in terms of money the loss of personal care and attention suffered by the husband and children on the demise of the housewife. In assessing damages in motor vehicle accident cases, all relevant materials should be placed before the court so that it can come to a conclusion in the matter of affectation of pecuniary benefit by reason of the unfortunate death. Though mathematical exactness is not required but a rough and ready estimate can be had from the records claiming damages.[4] In a 2012 case[5] the Delhi High Court admitted that to assess the value of services rendered by a homemaker/housewife in order to calculate loss of dependency in case of her death in a road accident was an uphill task, since services rendered by housewife might differ from case to case considering her qualification, financial strata and social status of family to which she belonged. In this particular case, The Delhi High Court held the following: The loss of dependency on account of gratuitous services rendered by a housewife shall be: (i) Minimum salary of a Graduate where she is a Graduate. (ii) Minimum salary of a Matriculate where she is a Matriculate. (iii) Minimum salary of a non-Matriculate in other cases. (iv) There will be an addition of 25% in the assumed income in (i), (ii) and (iii) where the age of the homemaker is upto 40 years; the increase will be restricted to 15% where her age is above 40 years but less than 50 years; there will not be any addition in the assumed salary where the age is more than 50 years. (v) When the deceased home maker is above 55 years but less than 60 years; there will be deduction of 25%; and when the deceased home maker is above 60 years there will be deduction of 50% in the assumed income as the services rendered decrease substantially. Normally, the value of gratuitous services rendered will be NIL (unless there is evidence to the contrary) when the home maker is above 65 years. (vi) If a housewife dies issueless, the contribution towards the gratuitous services is much less, as there are greater chances of the husband's re-marriage. In such cases, the loss of dependency shall be 50% of the income as per the qualification stated in (i), (ii) and (iii) above and addition and deduction thereon as per (iv) and (v) above. (vii) There shall not be any deduction towards the personal and living expenses. (viii) As an attempt has been made to compensate the loss of dependency, only a notional sum which may be upto Rs.25,000/- (on present scale of the money value) towards loss of love and affection and Rs. 10,000/- towards loss of consortium, if the husband is alive, may be awarded. (ix) Since a homemaker is not working and thus not earning, no amount should be awarded towards loss of estate." A similar stand has been taken by the Delhi High Court in several cases.[6]       [1] M. S. Grewal and Another v Deep Chand Sood and Others (2001) 8 SCC 151 [2] Arun Kumar Agrawal And Another v National Insurance Company And Others (2010) 9 SCC 21 [3] Arun Kumar Agrawal And Another v National Insurance Company And Others (2010) 9 SCC 21 [4] M. S. Grewal and Another v Deep Chand Sood and Others (2001) 8 SCC 151 [5] Royal Sundaram Alliance Insurance Company Limited and others v Master Manmeet Singh and others 2013 (1) ACC 360 [6] Such as Oriental Insurance Company Limited v Ganesh Chaurasia and others 2015 (4) ACC 883
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