Chattisgarh High Court
The New India Assurance Company Limited vs Smt. Pushpa Sagar on 11 June, 2025
Author: Parth Prateem Sahu
Bench: Parth Prateem Sahu
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2025:CGHC:25657
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
MAC No. 1084 of 2019
1. The New India Assurance Company Limited Through Its
Branch Manager, Branch Office-Transport Nagar Korba,
Tahsil And District- Korba, Chhattisgarh............(Non-Applicant
No.5), District : Korba, Chhattisgarh
... Appellant/Non-applicant No.5
Versus
1. Smt. Pushpa Sagar W/o Amritlal Sagar Aged About 40 Years
2. Amritlal Sagar S/o Late Mangal Ram Sagar Aged About 41
Years
3. Arun Kumar Sagar S/o Amritlal Sagar Aged About 16 Years
4. Aditya Kumar-Sagar S/o Amritlal Sagar Aged About 10 Years
Respondent No.3 & 4 are minor through their Father-Amritlal
Sagar,
All are Sarthi by caste, R/o Village Chhuri, Tahsil Katghora,
District- Korba, Chhattisgah……….
5. Narendra Kumar S/o Late Shri Gopal Prasad Tiwari Aged
About 40 Years R/o Melnadih, P.S.- Ratanpur, District-
Bilaspur, Chhattisgarh………….(Non-Applicant No.1),
6. Chittgovind S/o Hulasram Dubey R/o Police Line Korba,
District- Korba, Chhattisgarh…………(Non-Applicant No.2),
7. Rakesh Kumar S/o Shankar Dayal Shrivash R/o Vijay Nagar
Chakabuda, Tahsil Katghora, District- Korba,
Chhattisgarh…………(Non-Applicant No.3),
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8. M/s R. K. Transport & Company Limited Korba, Address-Plot
No. 65a Transport Nagar, Korba, District- Korba,
Chhattisgarh., District : Korba, Chhattisgarh
… Respondent(s)
For Appellant : Mr. Dashrath Gupta, Advocate
For Respondent No.1 to 3 : Mr. Praveen Dhurundhar, Advocate
For Respondents 4 to 8 : None
Hon’ble Shri Justice Parth Prateem Sahu
Judgment On Board
11/06/2025
1. Appellant-Insurance Company has preferred this appeal
challenging the award dated 15.3.2019 passed by the learned
Additional Motor Accident Claims Tribunal, Katghora District
Korba (for short ‘the Claims Tribunal’) on the ground that the
Claims Tribunal has awarded exorbitant compensation under
the head of loss of dependency to the claimants, who are
parents and siblings of deceased child.
2. Facts of the case in brief are that on 22.5.2017 the Scooty
Moped in which Alok Kumar (deceased) was traveling as a
pillion was dashed by Indica Vista car bearing registration
mark CG12-D-9062 as a result Alok Kumar fell on road from
Scooty, came under the wheel of truck coming from behind
and got crushed as a result he sustained fatal injuries and
died on the spot. An application under Section 166 of the
Motor Vehicles Act, 1988 (for short ‘the Act of 1988’) seeking
compensation to the tune of Rs.90,00,000/- with interest was
filed by the claimants, who are parents and siblings of the
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deceased child.
3. Considering the age of the deceased, the Tribunal adopting
the minimum wage of a labour considered a sum of
Rs.8,190/- per month as the notional monthly income of
deceased for calculating loss of dependency, added 40%
towards future prospects; applied 50% deduction towards
personal expenses and multiplier of 15 and awarded a total
compensation of Rs.10,31,940/-. A sum of Rs.15,000/- for
funeral expense, Rs.20,000/- for pains and suffering etc. and
Rs.15,000/- for loss of estate was also added, leading to total
compensation of Rs.10,81,940 with interest @ 7% p.a.
4. Learned counsel for appellant vehemently contended that
award of Rs.10,81,940/- as compensation for the death of a
14 years old child is highly exorbitant, excessive and against
the principles laid down by Hon’ble Supreme Court regarding
payment of compensation for the death of minor child. He
submits that at any rate, award of compensation of
Rs.5,00,000/- would have been the maximum amount
awardable in this case. He submits that the Claims Tribunal
has fallen in serious error by assuming income of Rs.8,190/-
in respect of the child on basis of prevalent minimum wage
rate in the State. As the deceased was only a 14 years old
child, therefore, the loss of dependency ought to have been
determined on notional basis and not by applying the
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minimum wages as notified by the State of Chhattisgarh. He
next contended that the deceased was a minor who had no
income and therefore, the question for grant of future
prospects with regard to him does not arise. Thus, the method
adopted by Claims Tribunal in calculating the compensation in
case of death of a child in a motor vehicular accident is not
correct and liable to be interfered with. In support of his
contentions, he relied upon decisions of Hon’ble Supreme
Court in case of Lata Wadhwa v. State of Bihar reported in
(2001) 8 SCC 197 and Kishan Gopal and another vs. Lala and
others, reported in (2014) 1 SCC 244.
5. Learned counsel appearing on behalf of claimants/respondents
No.1 to 5 opposing submissions of learned counsel for
appellant, would submit that calculation of compensation done
by the Claims Tribunal is correct and does not call for any
inference.
6. Heard learned counsel for the respective parties and perused
the impugned award and documents available in record of the
Claims Tribunal.
7. Point for determination in this appeal is whether the method
adopted by the Claims Tribunal for calculation of income in order
to determine the compensation in case of death of a child below
15 years was appropriate or not.
8. To determine the compensation for the death of a child, the
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initial trend was to award a lump sum money depending on the
age of the child. However, in case of Lata Wadhwa (supra),
Hon’ble Supreme Court divided children into two categories, one
comprised children in between the age group of 5 to 10 years
and second between 10 to 15 years. For the first category, flat
compensation was fixed whereas for second category the
Hon’ble Supreme Court fixed the notional income as well as
multiplier. Later on, the method of awarding lump sum money
for the death of children below the age of 10 years was
discarded and the multiplier method came be to adopted as the
single standard method for determining the compensation
payable in cases of death of children of any age. Initially, in the
case of death of a child upto 15 years, notional income of
Rs.15,000/- in terms of Second Schedule to Section 163A of the
Act of 1988, was being adopted which was from time to time
corrected/enhanced by taking into consideration the cost
inflation index etc.
9. In case of Kishan Goptal (supra) Hon’ble Supreme Court,
while assessing the notional Income of 10 years old deceased
child who died in a road accident on 19.7.1992, declined to fix
the income as Rs.15,000 p.a. (the amount specified in the
Second Schedule for a non-earning member) by observing
that value of Rupee has come down drastically since 1994
and the amount mentioned in the Second Schedule would be
inadequate. Therefore, Hon’ble Supreme Court determined
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notional income at Rs.30,000/- p.a., by taking into
consideration the Cost Inflation Index etc. The Second
Schedule however, stands deleted w.e.f. 01.09.2019 and the
trend thereafter, has been to calculate the dependency of a child
on the basis of minimum wages prescribed by the competent
authority in the State.
10. In the case of Kajal vs. Jagdish Chand & ors, reported in
(2020) 4 SCC 413, while computing loss of earning for
calculating compensation to be granted to a 12 years old girl
child who suffered permanent disability in a road accident dated
18.10.2007, Hon’ble 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
completing studies the child could have worked and would have
earned much more than Rs 15,000 p.a. Hence, the Supreme
Court applied the Minimum 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.
11. Subsequently, in case of Master Ayush v. Branch Manager,
Reliance General Insurance Co. Ltd. & another, reported in
(2022) 7 SCC 738, Hon’ble Supreme Court while considering
the grant of compensation to the parents on account of injuries
suffered by a five-year-old child in accident dated 21.9.2010,
relying upon its decision in case of Kajal (Supra), observed that
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the notional income should be calculated on the basis of
minimum wages payable to a skilled worker. It has also been
observed that in addition to the Minimum Wages for skilled
worker, the Claimants would also be entitled to 40% for future
prospects in view of the judgment of National Insurance
Company Limited vs. Pranay Sethi & ors, reported in (2017) 16
SCC 680.
12. In case of Master Jyothis Raj Krishna represented by his next
friend and father Rajesh Kumar vs. Sunny George, reported in
2024 SCC Online Ker 6875, the High Court of Kerala has
observed that “This Court is conscious of the fact that by
referring to the provisions of the Minimum Wages Act, 1948,
for the purpose the notional income of a minor child, this
Court has never ignored the future of a blooming young mind
nor has closed its eyes over the bright future of the child and
the prospects which he may have secured but for this fatal
accident.”
13. In case of Royal Sundaram General Insurance Co. Ltd. vs.
Zeenat Khan & ors, reported in 2024 SCC Online Del 6941
the Delhi High Court while dealing with an appeal by
Insurance Company challenging the compensation awarded
by the Tribunal by presuming income of deceased child as per
minimum wages of a unskilled labourer in Himachal Pradesh
and adding future prospects @ 40%, has held that the Claims
Tribunal has rightly calculated the notional income of the child
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@ Rs.8,250/-. The Court has observed thus:-
16. In light of the aforementioned rulings by the
Supreme Court and this Court, the most reasonable
approach to assess loss of dependency, even for a
minor, would be to refer to the minimum wages
established by the State Government in the location
where the minor lived at the time of the accident.
17. As the notional income is being determined on
basis of the minimum wages, future prospects
would also be calculated on the basis of this income
at the rate of 40% by applying the principle laid in
National Insurance Company Limited vs Pranay
Sethi & others, (2017) 16 SCC 680.
18. Therefore, the Tribunal has rightly calculated the
notional income of the child @ Rs.8,250/-, which
was the minimum wages for unskilled worker in
Himachal Pradesh. The Annual income has thus
been rightly calculated as Rs.99,000/- p.a. 40% of
this Income, amounting to Rs.39,600/- has been
further added to this amount towards future
prospects in terms of Pranay Sethi (Supra). The
notional income thus, calculated as Rs.1,38,600/- is
in accordance with the observations made by the
Apex Court, as discussed above.”
14. In C.M.A. No.1767/2022, parties being Sheelarani vs
Sasirekha, wherein a nine year old child died in a road
accident occurred on 20.11.2017, the Madras High Court has
fixed notional income of deceased at Rs.60,000/- p.a. and
applied multiplier of 15 to assess the loss of dependency.
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The Court has observed thus:-
5.2 Stricto sensu, none can price a life. Still, a life,
whenever is lost in a tortious act, law imposes an
obligation on the tortfeasor to compensate the loss
with damages, and hence valuing life in monetary
terms becomes indispensable. The difficulty is in
valuing it fairly. And often the key factor that guides the
court is either the actual earning through a lawful
avocation, or an ability to earn assessable income on
the basis of a victim’s proven skills or education
qualification. Sadly a child does not fall in either of
these categories. Till not long ago, law has very
insensitively dealt with a child’s life as one without any
income and valued a child’s life at insulting rate. Law
has not realised that Sania and Sachin became what
they are because they as children were allowed to
blossom. Indeed, every child can achieve greatness
that its ability to grow and to utilise the opportunity may
grant it. To devalue a child’s life for no fault of it, might
not be the right approach. But law did it.
9.Turning to the facts of this case, the tragic accident
had taken place on 20.11.2017. This Court considers
that Rs. 60,000/- p.a., after considering the inflation
and cost of living at 2017 as determined by this Court
in Sakunthala and Govindaraj cases, is appropriate
notional income, and chooses to apply 15 as the
multiplier without any deduction.”
15. Thus, the position which emerges from the reading of above
judgments is that in the past the income of a child died in a
motor vehicular accident used to be assumed and notional
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income used to be fixed on the basis of 2 nd Schedule to the Act
of 1988, which has been increased from time to time by taking
into account the inflation, devaluation of the rupee and cost of
living. The Second Schedule to the Act of 1988 stands deleted
w.e.f. 01.09.2019, and the trend thereafter, has been to calculate
the dependency of child victim on the basis of minimum wage
fixed by the State Government for the location where such child
lived at the time of the accident.
16. In view of above, this Court is of the view that the Claims
Tribunal has rightly worked out the loss of dependency taking
income of deceased child on the basis of minimum wages as
notified by the competent authority in the State of
Chhattisgarh.
17. The claimants have pleaded and stated in the evidence that
the deceased child was studying in Class 8th and was a bright
student. Occupation of the mother of the child is mentioned
to be ‘teacher’ in the deposition sheet of the Claims Tribunal.
It has been reiterated time and again by the Tribunals / Courts
that if the deceased child had lived up to his normal age, after
becoming major, the minor would start earning and must be
spending some amount upon their parents; and with the
increase in income, the dependency of the parents on the
income of the minor would also increase. Therefore, the
future prospect theory would be applicable in case of
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determination of compensation for the death of minor child in
order to compensate the parents. Thus, in the considered
opinion of this Court, the Claims Tribunal has not committed
any mistake in adding 40% of income towards future
prospects while computing loss of dependency.
18. For the foregoing, there is no substance in the appeal filed on
behalf of appellant, the same is liable to be and is accordingly
SYED
ROSHAN dismissed.
ZAMIR ALI
Digitally
signed by Sd/-
SYED ROSHAN (Parth Prateem Sahu)
ZAMIR ALI
Judge
roshan/-