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S. Chandrasekharan & Ors. vs M. Dinakar & Anr.

Civil Appeal · 2022 INSC 701Decided 11 Jul 2022
Civil Appeal Nos. 4688-4689 of 2022
Dinesh Maheshwari · Aniruddha Bose

Background

A road accident on 28 February 2011 in Chennai killed a 37-year-old homemaker, Bala Babitha, and injured her husband and minor daughter, when the auto-rickshaw they were travelling in was hit by another vehicle. The Motor Accident Claims Tribunal awarded compensation calculating the deceased's notional income as one-third of her husband's income (since she was not employed at the time of death), but the Madras High Court instead recalculated her income based on a salary she had earned in a job about three years before the accident, reducing the total compensation for her death from about Rs.36.9 lakh to about Rs.32.8 lakh. The claimants appealed to the Supreme Court on this point.

Decision Breakdown

The Supreme Court held that the High Court erred in using the deceased's stale, three-year-old salary as the basis for her notional income, since by the time of her death she had long been a homemaker and that old salary was an unreliable guide. It held that the Tribunal's approach (basing her notional income on her husband's income, per the Court's earlier ruling in Arun Kumar Agrawal) was more appropriate, especially since her minor children remained emotionally dependent on her care. The Court also added 40% for "loss of future prospects" (not considered by either lower forum) and corrected the personal-expense deduction to the standard one-third under Sarla Verma, while removing a separate "loss of love and affection" award as duplicative of loss of consortium per binding precedent (Satinder Kaur). This raised the pecuniary-loss component from Rs.30,94,740 to Rs.44,10,000, taking the total award to Rs.46,17,350.

Lesson Learnt

In motor accident claims involving a deceased homemaker who was not earning at the time of death, courts should compute notional income relative to a surviving spouse's income (or similar accepted formula) rather than an outdated old salary, and must remember to add "loss of future prospects" even where income is notionally assessed.

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

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