The judgment clarifies that compensation for child fatalities in accidents should pivot from notional income calculations to minimum wage assessments for a uniform compensation standard.

JUDGMENT

1. Appeal under Section 173 of the Motor Vehicles Act, 1988 has been filed on behalf of the Appellant-Insurance Company challenging the Award dated 05.09.2022 granting a compensation in the sum of Rs. 9,79,760/- along with interest @ 7% per annum, on account of death of an 11 years old child, in a road accident on 01.10.2015.

2. Briefly stated, on 01.10.2015 at about 9:30 p.m., Komal, aged 11 years (hereinafter referred to as “deceased”) was walking alongside the Bypass Road, Santosh Nagar, Faridabad with her Aunt-Hasmukhi, when she and her Aunt were hit by a car bearing No. DL4CAL4907 (hereinafter referred to as “offending vehicle”). Both the child and her Aunt were taken to Sarvodaya Hospital, Faridabad for medical treatment, wherefrom the deceased was referred to Safdarjung Hospital, Delhi where she expired on 04.10.2015 during the course of treatment.

3. The FIR No. 523/2015 was registered at PS Sarai Khawaja, Faridabad at the instance of one, Tek Ram. After investigation, Chargesheet was filed Section 279 /337/304-A of the Indian Penal Code, 1860 .

4. The Claim Petition was filed by the parents of the deceased under Section 166 read with Section 140 of the Motor Vehicle Act, 1988. After trial, the Claimants were granted a compensation of Rs. 9,79,760/- along with interest @ 7% per annum on account of death of their child, Komal in the road accident.

5. The learned Tribunal has granted recovery rights to the Insurance Company as the driver of the Offending Vehicle did not have a valid driving license.

6. The Appellant/Insurance Company has challenged the Award on the following ground:

(ii) that the compensation should have been calculated on the basis of Notional Income, for which reliance has been placed on the decision in Meena Devi vs. Nunu Chand Mahto @ Nemchand Mahto & Ors. decided vide Special Leave Petition (Civil) No. 5345/2019, Kurvan Ansari Alias Kurvan Ali & Anr. vs. Shyam Kishore Murmu & Anr., decided vide Civil Appeal No. 6902/2021 and Rajendra Singh and Others vs. National Insurance Company Limited and Others, (2020) 7 SCC 256 .

7. Learned counsel for the Respondents-Claimants have filed their Cross-Objections to the Appeal and have submitted that the compensation should have been calculated at Minimum Wages and the interest should be enhanced from @ 7% per annum to @ 9% per annum.

8. Submissions heard and record perused.

Loss of Dependancy:-

Calculation of Loss of Income:-

9. The Appellant/Insurance Company has challenged the Loss of Income of the deceased by the learned Tribunal, which has been determined on the basis of the “inflation correction method/formula” by taking the Notional Income of the deceased as Rs.15,000/- in terms of the Second Schedule of the MV Act, 1988, as prescribed in the case of Chetan Malhotra (supra).

10. The core issue is what should be the principle for determination of Loss of Income in case of demise of the child in a road accident.

11. In the landmark judgment of R.K. Malik vs. Kiran Pal, (2009) 14 SCC 1, the Apex Court, while considering the Claims arising on account of demise of 29 children in a road accident in November 1997, deemed it appropriate to refer to the notional income mentioned in the Second Schedule to determine the pecuniary loss of the claimants/dependants.

12. Thus, traditionally, in the case of death of a child upto 15 years, it was the notional income of Rs. 15,000/- in terms of Second Schedule to Section 163-A