Can't Compute Damages Based On Minimum-Wage Approach: Rajasthan HC Enhances Compensation To Kin Of Deceased MBBS Student To ₹1 Crore

Enhancing the compensation awarded by Motor Accidents Claims Tribunal to the kin of a deceased second year MBBS student from around Rs.12 Lakhs to over Rs.1 crore, the Rajasthan High Court said that computing deceased's income prospects based on the standard of minimum wage of skilled worker was wholly unrealistic, unduly pedantic and hypertechnical.

Justice Arun Monga opined that while dealing with young professionals, courts shall rise above "rigid arithmetical calculations" and insistence of income proof. Such minimum-wage based approach led to devaluing education, aspiration and merit, the court added.

"Having perused the impugned award, at the outset I may express my opinion that the learned Tribunal's approach has been wholly unrealistic, unduly pedantic, hypertechnical and very narrow leading to the too low assessment of the income potential of the deceased. The MACT awarded ₹12,52,429 based on the minimum wage for a skilled worker (₹7,774/- per month), even though the deceased, Sunil Bishnoi, was a second-year MBBS student, having cleared NEET — one of India's toughest competitive exams". 

Further, a realistic compensation not only ensured restorative justice for the family but also acted as a deterrent for the negligent driver, reinforcing accountability in road safety, it said. 

The Court was hearing an appeal filed by the parents of the deceased against the compensation awarded by the Tribunal pursuant to the death of their son, who was a second year MBBS student and had secured admission after clearing NEET.

It was argued by the appellants that the Tribunal ignored the deceased's academic background and future earning potential, and assessed the income by merely applying the standard of minimum wage of a skilled worker.

On the contrary, the insurance company argued that at the time of death, the deceased was not having any income, rather was a liability on the family who had to pay for his education.

After hearing the contentions, the Court opined the Tribunal's award to be a “grave error and gross underestimation”, and held that,

“It is common knowledge that on completion professional courses like MBBS or engineering, such students have the potential to earn far above and multiple times of the minimum wage of a skilled worker… Tribunal committed a manifest error in law by applying a rigid and overly conservative formula for assessment of notional income to a case where the deceased's future earnings and familial contribution were clearly poised for excellence. A corrective and compassionate course is warranted in the case in hand.”

The Court referred to a Supreme Court case of Bishnupriya Panda Vs. BasantiManjari Mohanty &Anr. in which the Apex Court had upheld the tribunal's assessment of a 4^th year MBBS student's notional income at Rs. 50,000 per month plus 40% towards future prospects, in 2013.

In this background, the Court observed that for a holistic, realistic and just approach to valuing life and earning potential of the deceased, the award had to be reassessed in light of the deceased's notional income.

In this light, the Court assessed deceased's notional income at Rs. 70,000 per month plus an additional of 40% for future prospects, totaling to Rs. 98,000 per month. Deducting 50% towards self-expenses, Rs. 49000 was considered as the dependency of the claimants.

Applying the appropriate multiplier, the reassessed award came out at Rs. 1,05,84,000.

Accordingly, the appeal was allowed.

Title: Indra & Anr. v Jagdish Chandra & Anr.

Citation: 2025 LiveLaw (Raj) 170

Click Here To Read/Download Order