Future Prospects in Motor Accident Compensation Can be Granted Even in Cases Pertaining to Notional Income

Future prospects in motor accident compensation can be granted even in cases pertaining to notional income

Advocates cannot throw­-away legal rights or enter into arrangements contrary to law, noted the Apex Court. The Court also has that future prospects can be granted even in cases pertaining to notional income.

The Court made this observation while disposing off an appeal arising out of Motor Accident Compensation Claim filed by heirs of a deceased couple who died in an accident.

Brief Facts of the Case

  • In the case in hand, the Motor Accident Claims Tribunal awarded a total sum of Rs 40.71 lakhs for both deceased to the claimants.  
  • Partly allowing the appeal filed by Insurance Company, the High Court reversed the addition of future prospects.
  • Thus, the claimants filed appeal before the Top Court.

Contention of insurance company

  • It argued that the High Court’s decision in this case was a consent order, and that the counsel for the claimants had conceded to a lower computation under the head of loss of dependency, which thus cannot be challenged in appeal proceedings.
  • In this case, the Delhi High Court, in its judgment had held thus: “The learned counsel for the claimants fairly concedes to the above submissions. She agrees that the loss of dependency may be re- computed on the basis of minimum wages payable to the workers in State of Haryana as in force on the date of accident (12.04.2014), the rate being Rs.5547.10p. She further concedes that in calculating loss of dependency in the case of death of Poonam, one-third may be deducted towards personal and living expenses and that there is no occasion for any element of future prospects of increase being added since there was no proof of regular employment.”

Observation of the Court

  • Any concession in law made in this regard by either counsel would not bind the parties, as it is legally settled that advocates cannot throw­away legal rights or enter into arrangements contrary to law“, the bench observed.

  • Considering the facts of the case, the bench further noted “It cannot be disputed that at the time of death, there in fact were four dependents of the deceased and not three. The subsequent death of the deceased’s dependent mother ought not to be a reason for reduction of motor accident compensation. 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 appellant­ claimants cannot rely upon subsequent increases in minimum wages, the respondent ­insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal proceedings”
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  • Allowing the appeal, the bench boosted the compensation to Rs 33.20 lakhs
  • “Given how both deceased were below 40 years and how they have not been established to be permanent employees, future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional income, is both incorrect in law and without merit considering the constant inflation ­induced increase in wages,” observed the Court while holding that future prospects can be granted even in cases pertaining to notional income.
  • Once the victim has been proved to be employed 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. When it comes to the second category of cases, relating to notional income for non­earning 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, in his separate concurring opinion, Justice Ramana observed.

Case Name: Kirti vs. Oriental Insurance Company Ltd

Citation: LL 2021 SC 3

Coram: Justices NV Ramana, S. Abdul Nazeer and Surya Kant

Future Prospects in Motor Accident Compensation Can be Granted Even in Cases Pertaining to Notional Income

Also Read: The Karnataka High Court Struck Down The Karnataka Parliamentary Secretaries Salaries, Allowances And Miscellaneous Provisions Act, 1963

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