Delhi High Court
Rakesh Sharma & Anr. vs Ashok & Ors. on 4 March, 2025
Author: Neena Bansal Krishna
Bench: Neena Bansal Krishna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Pronounced on: 4th March, 2025
+ MAC.APP. 282/2022
1. RAKESH SHARMA @ RAKESH
S/o Sh. Balbir .....Appellant No.1
2. PUJA SHARMA
W/o Sh. Rakesh Sharma
Both r/o H.No. A-1, Prem Nagar-1, Kirari Road
Nangloi, Delhi-110086. ....Appellant No.2
Through: Mr. Jatinder Kamra, Advocate.
versus
1. ASHOK
S/o Ram
R/o Villae Bahram Ka Bas, Post Rampur,
Tehsil Bansur, Alwar, Rajasthan ..Respondent No.1
2. SUWA LAL
S/o Sh. Bhanwar Singh
r/o Dhani Gomakawali Jaje Kalan,
Jaipur, Rajasthan …Respondent No.2
3. CHOLAMANDALAM MS GENERL INSURANCE CO.
LTD.
Through its Manager
Second Floor, E-52, C-Scheme Jaipur,
Also at Plot No. 39, 2nd Floor, Samyak Tower,
Pusa Road Near Metrol Pillar 120, Karol Bagh,
New Delhi-11005 ….Respondent No. 3
Through: Ms. Suman Bagga, Advocate for
R-3.
CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA
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J U D G M E N T
1. Appeal under Section 173 of the Motor Vehicles Act, 1988
has been filed by the Appellants/ parents of the child, Harsh
Sharma, aged about 14 years 10 months, who died in the road
accident on 28.09.2017, to seek enhancement of compensation in
the sum of Rs.10,20,000/- along with interest @ 6% per annum,
granted vide Award dated 26.05.2022.
2. Briefly stated, on 28.09.2017 at about 11:15 p.m., Sh.
Satyendra along with his friend, Ajay was going on a Scooty, while
Chanden with Harsh as the pillion rider, was driving the
Motorcycle to Chattarpur Temple, Delhi. As they climbed down
from Naraina Flyover, the Motorcycle driven by Chanden slightly
hit another Motorcycle, and lost its balance and fell. At this point,
the Offending Truck bearing No.RJ-52GA-2449 being driven by
Respondent No.1 in a rash and negligent manner, came from
behind and hit Harsh Sharma/pillion rider on the Motorcycle
causing him injuries. Subsequently, Harsh Sharma (hereinafter
referred to as “deceased”) was taken to DDU Hospital where he
was declared “Brought Dead”.
3. The FIR No.219/17 under Section 279/304-A of the Indian
Penal Code, 1860 was registered at Police Station Naraina.
Subsequently, Detailed Accident Report was filed by the
Investigating Officer, which was treated as the Claim Petition for
determination of Compensation.
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4. After trial, the learned Tribunal granted a compensation in
the sum of Rs.10,20,000/- along with interest @ 6% per annum to
the Claimants on account of fatal injuries suffered by their
son/Harsh Sharma.
5. The main ground for seeking enhancement of
Compensation is that the child was in Class 11th and was a
Matriculate and therefore, the compensation should have been
calculated by taking the Minimum Wages of a Matriculate.
6. Learned counsel on behalf of Insurance Company, however,
has submitted that the child was below 15 years and, therefore, the
calculation of compensation has been done correctly and the
Award does not warrant any interference.
7. Submissions heard and record perused.
Loss of Dependancy:-
Assessment of Notional Income:-
8. The Appellant/Claimants have challenged the calculation of
Loss of Income of the deceased which has been determined on the
basis of the “inflation correction method/formula” by taking the
Notional Income of the deceased as per the Second Schedule of the
MV Act, 1988, as prescribed in the case of Chetan Malhotra vs.
Lala Ram, MAC. APP. 554/2010, decided on 13.05.2016.
9. The core issue herein is what should be the principle for
determination of Loss of Income in case of demise of the child in a
road accident.
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10. 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, succinctly observed that in motor accident cases,
the goal is to return the dependents or claimants to the pre-accident
state. The Apex Court deemed it appropriate to refer to the notional
income mentioned in the Second Schedule, to determine the
pecuniary loss of the claimants/dependants.
11. Thus, traditionally, in the case of death of a child upto 15
years, the notional income of Rs. 15,000/- in terms of Second
Schedule to Section 163-A of the Motor Vehicle Act, 1988, was
being adopted which was from time to time, corrected by taking
into consideration the Cost Inflation Index.
12. In Kishan Gopal vs. Lala, (2014) 1 SCC 244, the son of the
Claimants, aged ten years, had died in an accident that occurred
on 19.07.1992. The Apex Court assessed the notional income of
the deceased 10-year-old, took Rs. 30,000/- p.a. instead of
Rs.15,000/- p.a. (as specified in the Second Schedule to MV Act
1988 for a non-earning member), by taking into consideration the
Cost Inflation Index. It was observed that the Rupee value has
come down drastically since 1994 and the amount mentioned in the
Second Schedule would be inadequate.
13. Likewise, in the case of Chetan Malhotra (Supra), the
Coordinate Bench of this Court while deciding the Claim Petitions
arising out of death of 15 children, observed that the notional
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income specified in the Second Schedule in November 1994, needs
to be corrected as the amount specified therein, cannot hold good
even after elapse of more than two decades because the value of
money stands eroded on account of the effect of inflation. Thus, on
the basis of inflation correction method, the method of Calculation
was defined thus:
“71. Subject to all other requisite conditions
being fulfilled, for the foregoing reasons, in order
to bring about consistency and uniformity in
approach to the issue, it is held that claims for
compensation on account of death of children
shall be determined as follows :-
(i). Till such time as the law is amended by the
legislature, or the Central Government notifies
the amendment to the Second Schedule in exercise
of the enabling power vested in it by Section 163-
A (3) of the Motor Vehicles Act, 1988, and except
in cases wherein the prospects of employability
and earnings (in future or present) of the
deceased child are proved by cogent and
irrefutable evidence, this having regard, inter
alia, to the academic record or training in special
talents or skills, for computing the pecuniary
damages on account of the loss to estate, the
notional income of non-earning persons
(`15000/- p.a.) as specified in the Second
Schedule (brought in force from 14.11.1994),
shall be assumed to be the income of the
deceased child, and taken into account after it is
inflation- corrected with the help of Cost
Inflation Index (CII) as notified by the
Government of India from year to year
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under Section 48 of the Income Tax Act, 1961,
by applying the formula indicated hereinafter.
(ii) For inflation-correction, the financial year
of 1997- 1998 shall be treated as the “base year”
and the value of the notional income relevant to
the date of cause of action shall be computed in
the following manner :- 15,000/- x A ÷331
[wherein the figure of „`15,000/-‟ represents the
notional income specified in the second schedule
requiring inflation-correction; „A‟ represents the
CII for the financial year in which the cause of
action arose (i.e. the accident / death occurred);
and the figure of „331‟ represents the CII for the
„base year‟]
(iii). After arriving at an appropriate figure of the
present equivalent value of the notional income
(i.e. inflation-corrected amount), it shall be
rounded off to a figure in next thousands of
rupees.
(iv). The amount of notional income thus
calculated shall be reduced to two-third, the
deduction to the extent of one- third being
towards personal & living expenses of the
deceased, the balance taken as the annual loss to
estate (hereinafter also referred to as “the
multiplicand”).
(v). For assessment of the pecuniary damages on
account of the death of children upto the age of 10
years, the loss to estate shall be calculated,
capitalizing the multiplicand, by applying the
multiplier of ten (10).
(vi). For children of the age-group of more than
10 years upto 15 years, the loss to estate shall beMAC.APP. 282/2022 Page 6 of 16
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calculated by applying the multiplier of fifteen
(15).
(vii). For children of the age-group of more than
15 years but less than 18 years, the loss to estate
shall be calculated by applying the multiplier of
eighteen (18).
(viii). After the pecuniary loss to estate has been
worked out in the manner indicated above, an
amount equivalent to the amount thus computed
shall be added to it as the composite non-
pecuniary damages taking care of not only the
conventional heads but also towards future
prospects as awarded in R.K. Malik v. Kiran
Pal (2009) 14 SCC 1.
(ix). The final sum thus arrived at, appropriately
rounded off, if so required to the nearest (if not
next) thousands of rupees, shall be awarded as
compensation for the death of the child.”
14. The Apex Court, in Rajendra Singh vs. National Insurance
Company Ltd., 2020 SCC OnLine SC 521 upheld the
determination by MACT, the notional income of a 12-year-old
child who died in an accident prior to 2019, as Rs. 36,000/- p.a.,
by observing that the structured formula provided in the Second
Schedule was inadequate to assess the compensation.
15. Similarly, in Kurvan Ansari, (supra), the Apex Court
assessed the notional income of a deceased 7-year-old victim as
Rs. 25,000/- p.a. considering the devaluation of the Rupee since
the introduction of Second Schedule. Relying on this judgment, the
Apex Court, in Meena Devi vs. Nunu Chand Mahto & Ors.,
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decided on October 13, 2022, observed that for the 12-year-old
(deceased) victim, the appropriate notional income would be Rs.
30,000/-. Pertinently, here also the basis was the Notional Income
which was adjusted in accordance with the Cost Inflation Index.
16. The general trend thus, was to take the base of notional
income as per the Second Schedule which was time to time
adjusted by taking into consideration the Cost Inflation Index.
17. The Second Schedule however, was deleted w.e.f.
01.09.2019. Thus, the question as to what would should the basis
of assessing the notional income of a child i.e. a non-earning
member below 15 years of age, who is a victim of a motor vehicle
accident, became a subject of extensive judicial discourse.
18. A definitive change of Principle of determination of the
income of a deceased/disabled Child from Notional income with its
correction on the basis of Cost Inflation Index to Minimum Wages
was reflected in Kajal vs. Jagdish Chand & Ors., (2020) 4 SCC
413, wherein while computing the Loss of earning for calculating
compensation to be granted to an injured girl child aged around
12 years, who suffered permanent disability, the Supreme Court
observed that the Courts have erred in taking notional income of Rs
15,000 p.a. as the girl was a young child of 12 years and held that
this was not a proper way of assessing the future loss of income,
because after studying, the child could have worked and would
have earned much more than Rs.15,000 p.a. Hence, the Supreme
Court assessed the notional income on the basis of the Minimum
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Wages payable to a skilled workman and opined that the same
would be reflective of the minimum amount which she would have
earned on becoming major.
19. Subsequently, in Master Ayush vs. Branch Manager,
Reliance General Insurance Co. Ltd., (2022) 7 SCC 738, the Apex
Court while considering the grant of compensation to the parents
on account of injuries suffered by a five-year-old child, relied
upon Kajal (Supra) and observed that the notional income should
be calculated on the basis of minimum wages payable to a skilled
worker.
20. The Minimum Wage criteria has been adopted by Supreme
Court in the recent judgment of Baby Sakshi Greola vs. Manzoor
Ahmad Simon &Anr., SLP (C) No. 10996/2018, wherein the Apex
Court applied the approach taken in Kajal (supra) and Master
Ayush (supra) and ascertained the notional income of a 7-year-old
injured child on the basis of the ‘Minimum Wages paid to a
skilled worker on a fulltime basis’.
21. Similar observations were made in Minor Roopa vs. The
Divisional Manager, New India Assurance Company Ltd., Civil
Appeal No.5069 of 2022 decided on 03.08.2022 and the Apex
Court assessed the compensation based on minimum wages
notified by the State of Karnataka.
22. The principle of Minimum Wages for skilled Worker has
been adopted as the principle to calculate the Income of a deceased
child by the Co-ordinate Bench of this Court in United India
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Insurance Company Ltd. vs. Jamaluddin Khan & Ors., NC No.
2023:DHC:6242; Om Prakash vs. Reliance Gen Ins Co. Ltd. and
Ors., 2023 SCC OnLine Del 6526 and Oriental Insurance vs.
Reena Raghav, 2023 SCC OnLine Del 6695.
23. In light of the aforementioned Judgments, it emerges that the
Minimum Wage criteria is the uniform standard for being applied
for compensation calculation, especially after the deletion of
Second Schedule in 2019.
24. In the present case, to prove the educational qualification of
the deceased, PW-1/Sh. Rakesh Sharma, the father of the
deceased in his Affidavit of Evidence, Ex. PW1/A deposed that his
son, was studying in class 11th in BSM Public School, Baljit Nagar,
Delhi at the time of the accident. He has also placed on record the
Matriculate Certificate of the deceased Ex. PW1/2 in support
thereof.
25. Thus, considering that the deceased was a matriculate,
the compensation has to be re-calculated on the basis of
Minimum Wages of a Matriculate in Delhi in 2017, i.e.
Rs.16,182/- p.m.
Future Prospects: –
26. The learned Tribunal has placed reliance on the “Inflation
Correction Method” to calculate the compensation towards
pecuniary heads but has not granted any amount towards Future
Prospects of the deceased child.
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27. In the case of Master Ayush, (supra), it was observed that in
addition to the Minimum Wages for skilled worker, the Claimants
would also be entitled to 40% for future prospects as laid down in
the judgment of National Insurance Company Limited v. Pranay
Sethi & Ors; (2017) 16 SCC 680.
28. Thus, the deceased is held entitled to 40% Future
Prospects as per Pranay Sethi (supra).
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Deduction of personal expenses:-
29. The learned Tribunal has deducted 1/3rd amount of the
Notional Income towards personal and living expenses of the
deceased.
30. However, in light of the judgment of the Supreme Court
in Sarla Verma (Smt) & Ors. vs. Delhi Transport Corporation &
Anr., (2009) 6 SCC 121, and United India Insurance Co. Ltd. vs.
Satinder Kaur alias Satwinder Kaur & Ors., (2021) 11 SCC 780,
out of the above amount so assessed, 50% has to be deducted on
account of personal and living expenses for a bachelor.
Multiplier:-
31. The learned Tribunal has computed the compensation by
applying a Multiplier of 15, by considering the age of the deceased.
32. The appropriate Multiplier applicable to the different age
Groups was laid down in the case of Sarla Verma (supra) but it
starts from the age of 15 and is silent on the Multiplier to be used
for the victims under 15 years of age.
33. This incongruity in the matter of selection of multiplier in
the case of persons in the age group up to 15 years was noted in by
the Apex the case of Divya vs. National Insurance Company Ltd.,
Civil Appeal No. 7605/2022. Furthermore, in the case of Baby
Sakshi Greola vs. Manzoor Ahmad Simon &Anr., SLP (C) No.
10996/2018, while referring to the judgments of Kajal (supra) and
Master Ayush (supra), the Apex Court has applied the multiplier of
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18 for a minor.
34. In the present case, as per the Matriculate Certificate of the
deceased, Ex.PW-1/2, his date of birth is 21.11.2002. The accident
occurred on 28.09.2017. Thus, the deceased was less than 15 years
old at the time of accident. Therefore, the Multiplier of ’18’ shall
be applicable.
35. Thus, the Total Loss of Dependency is calculated as under: –
i. Rs. 16,182/- p.m. + 40% (Future Prospects) = Rs.
22,654.8/- p.m.
ii. Rs. 22,654.8 – 50% (personal expenses) = Rs.11,327.4/-
p.m.
iii. Rs. 11,238 x 12 x 18 = Rs. 24,46,848/-.
36. Therefore, the Total Loss of Dependency is determined
as Rs. 24,46,848/-.
Non-Pecuniary Heads:-
37. The learned Tribunal referred to the case of Chetan
Malhotra (supra) to award compensation for Non-Pecuniary
Losses, and granted an amount equal to the amount awarded under
pecuniary losses, thereby granting a total compensation of Rs.
5,10,000/- for each head.
38. However, the Appellants/Claimants shall be entitled to the
compensation under Non-Pecuniary Heads in terms of National
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Insurance Company Limited vs. Pranay Sethi And Others, (2017)
16 SCC 680 wherein it was held that in the case of death,
Rs.15,000/- each is liable to be paid towards the Loss of Estate and
Funeral Charges, while Rs.40,000/- was payable towards the Loss
of Consortium to each legal heir and the same may be enhanced by
10% every three years.
39. The total compensation towards the Non-Pecuniary Heads is
re-calculated as under: –
i. Loss of Consortium: Rs. 40,000 + (10% of 40,000) = Rs.
44,000/- to each Claimant i.e. total of Rs. 88,000/-.
ii. Loss of Estate: Rs.15,000 + (10% of 15,000) = Rs.
16,500/-
iii. Funeral Charges: Rs.15,000 + (10% of 15,000) = Rs.
16,500/-
40. Therefore, the total compensation towards the non-
pecuniary heads comes to Rs. 1,21,000/-.
Conclusion:-
41. In view of the above observations, the modified final amount
of compensation, is encapsulated in the tabular chart as under:-
S. Heads Compensation Final Amount /
No. granted by the Enhanced
Tribunal Compensation
Pecuniary Heads
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1. Income of Deceased Rs.15,000/- Rs.16,182/-
p.a. p.m.
2. Add-Future - 40%
Prospects
3. Less-Personal 1/3 1/2
Expenses of
Deceased
4. Monthly loss of - Rs. 11,328/-
Dependency
5. Annual loss of - Rs. 1,35,936/-
Dependency
6. Multiplier 15 18
7. Total loss of Rs.5,10,000/- Rs.24,46,848/-
Dependency
[Reliance
placed on the
principle of
Cost Inflation
Index method
as per Chetan
Malhotra
(supra)]
8. Medical Expenses Nil. Nil.
Non - Pecuniary Heads
9. Compensation for Rs.5,10,000/- Rs.88,000/-
loss of Consortium (Rs.44,000/- to
(equivalent each Claimant)
10. Compensation for amount added Rs. 33,000/-
loss of Estate towards
11. Compensation composite non- (Rs.16,500/-
towards funeral pecuniary each)
expenses damages)
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12. TOTAL Rs. Rs.
COMPENSATION 10,20,000/- 25,67,848/-
(rounded off
to Rs.
25,68,000/-)
Relief:-
42. Thus, the total compensation granted to the Claimants, is
revised as Rs.25,68,000/- along with interest @ 6% per annum
from the date of the Claim till deposit of the amount, in terms of
the Impugned Award dated 26.05.2022 of the learned Tribunal.
43. The additional amount be deposited within three months, to
be disbursed in terms of the Award dated 26.05.2022. The statutory
deposit be returned to the Insurance Company in accordance with
law.
44. The Appeal is accordingly disposed of along with the
pending Application(s), if any.
(NEENA BANSAL KRISHNA)
JUDGE
MARCH 4, 2025
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