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Laxmidhar Nayak & Ors. v. Jugal Kishore Behera & Ors.

Civil Appeal · 2017 INSC 1150Decided 28 Nov 2017
Civil Appeal No. 19856 of 2017
Justice Ranjan Gogoi · Justice R. Banumathi

Background

The children of Chanchali Nayak, an agricultural labourer, sought enhanced compensation after she was killed in a 1991 road accident caused by a head-on collision between a bus and a truck, which caused the bus to swerve and run her over. The Motor Accident Claims Tribunal had awarded only Rs. 70,600, assessing her income at a mere Rs. 25/day, and the Orissa High Court affirmed that amount while lowering the interest rate from 9% to 7%. The claimants appealed to the Supreme Court as dissatisfied with the low compensation quantum.

Decision Breakdown

The Supreme Court held that fixing the deceased's income at just Rs. 25/day was unrealistically low, and that the lower courts had wrongly ignored her unpaid contribution to household work and childcare as a mother of three. The Court revised her income upward to Rs. 4,500/month (combining labour income and the value of household work), applied the correct multiplier of 14 (per Sarla Verma guidelines for her age group of 41-45, rather than the multiplier of 12 wrongly used below), and added statutory amounts for loss of estate and funeral expenses per the Constitution Bench ruling in National Insurance Co. v. Pranay Sethi. This raised the total compensation from Rs. 70,600 to Rs. 5,34,000, payable with 7% interest from the date of the High Court's judgment, with the bus owner, truck owner and insurer held jointly and severally liable. The appeal was partly allowed.

Lesson Learnt

Courts calculating compensation for the death of a working woman must account for the economic value of her unpaid household labour and childcare, not just her formal wage, undervaluing a victim's income, as the lower courts did here, can shortchange a grieving family by a huge margin, as the Supreme Court's correction (from roughly Rs. 70,000 to over Rs. 5,30,000) shows.

Official source (sci.gov.in)View Judgment (PDF)

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