What Should Be The Notional Income Of A 5-Yr-Old Minor In A Motor Accident Claim? Kerala High Court Answers

The Kerala High Court has fixed the notional income at rupees 17, 325 per month for a 5-year-old minor boy, who has been in a state of paraparesis and lost his childhood since a 2016 accident.The Insurance Company challenged the Tribunal's decision to fix the notional income to rupees 8,000 per month. Justice Easwaran S. referred to Master Ayush v. The Branch Manager, Reliance General Insurance Co. Ltd and Others (2022) wherein the Apex Court granted over 50 lakh rupees as compensation to a 5 year old victim who was paralysed for life in an accident. Relying on it, the High Court observed that Courts must undertake a progressive thinking while fixing notional income of a minor child and must not apply a restrictive mind. “As far as the State of Kerala is concerned, the Government has brought the minimum rates at which the wages are to be paid. In G.O.(P).No.56/2017/Fin dated 28.04.2017, the Government of Kerala had revised the minimum wages for skilled workers w.e.f 01.04.2016 and the same is fixed at ₹17,325/- per month. Therefore, this Court is of the considered view that the notional income of the claimant can be fixed as ₹17,325/-. By formulating the above proposition, this Court would hope that the same would bring succor to the claimants in cases where fixation of notional income of the minor child is involved.”Background FactsIn this case, a 5-year-old boy who was studying in UKG was hit by a car in the year 2016 which was being driven rashly and negligently. The boy is in a vegetative state for the past 8 years and has lost his childhood. The Medical Board assessed that the boy has a 77 per cent disability. The Tribunal fixed the notional income of the minor boy as 8,000 rupees per month and ordered for a compensation of rupees 44,94,223. Both the claimant and insurance company have preferred appeals challenging the compensation awarded by the Tribunal. The Insurance Company contended that the notional income of rupees 8,000 fixed by the Tribunal is high. It was also argued that Tribunal erred in granting interest on compensation for future medical treatment. It was also stated that granting compensation for disability, alongside allowing compensation towards loss of earning power was impermissible. On the other hand, the claimants argued that since the minor boy is in a vegetative state, functional disability should have been fixed at 100 percent, instead of 77 per cent. The compensation granted under various heads was also challenged as insufficient. ObservationsThe Court found that the Tribunal had not given any reasoning before fixing rupees 8,000 as notional income. It stated that there are no precedents before the Court for fixing the notional income of a minor boy who was losing his childhood in a vegetative state. The Court stated that Courts and Tribunals have to grant fair and just compensation per the principles enshrined under the Motor Vehicles Act. Relying upon the Apex Court decision in Mater Ayush (supra) and provisions of the Minimum Wages Act, the Court fixed the notional income as 17, 325 rupees per month. It further clarified thus, “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. The above exercise is purely intended to serve as a guidance for the purpose of calculation of the notional income without which the claimants would be left foundered.”Further, the stated that the Insurance Company cannot fix meagre amount of rupees 5000 as attendant charges as this was not an appeal for enhancement against a minor injury. The Court stated cautioned that the Insurance Companies have corporate social responsibility and stated that multiplier system must be applied for calculation of attendant charges/bystander expenses by relying upon the Apex Court decision in Kajal v. Jagdish Chand and Others (2020). “Hence this Court is of the view that while fixing attendant charges there is no absolute rule that only Rs.5,000/- alone can be granted. The Court cannot shut its eyes to the realities of life and simply believe that for attending a child in paraparesis state, services of an attendant will be readily available for Rs 5,000/”, added the Court.The Court clarified that the attendant charges have to be fair and reasonable and emphasized that it need not be calculated solely relying upon the Minimum Wages Act. The Court stated that solely relying upon the Act would bring an anomalous situation where compensation awarded would go out of proportion, since minimum wages in Kerala are among the highest in the country. The Court thus fixed rupees 10, 500 as monthly income for calculating the attendant charges and stated that it was appropriate to fix attendant charges for two persons to take...

What Should Be The Notional Income Of A 5-Yr-Old Minor In A Motor Accident Claim? Kerala High Court Answers

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