Minimum Wages For Assessing Motor Accident Compensation Cannot Be Fixed Solely Based On Educational Qualification: Supreme Court
The Apex Court rejected the submission that minimum wages for computing loss of income must be assessed merely on the educational qualification of the victim without any reference to the nature of work carried on.
Justice K. Vinod Chandran, Justice NV Anjaria, Supreme Court
The Supreme Court has ruled that minimum wages, when applied for determining compensation in motor accident claims, cannot be assessed based on the victim’s educational qualification alone. The Bench clarified that the determination must take into account the nature of the work carried on by the deceased/claimant.
The Apex Court was hearing an appeal arising out of a motor accident compensation claim, where the dispute pertained to the computation of loss of income based on minimum wages.
A Bench comprising Justice K. Vinod Chandran and Justice N.V. Anjaria, while deciding the matter, observed that, “we were not convinced that the minimum wages would be determined on the basis of the educational qualification alone without reference to the nature of work carried on.”
Senior Advocate Vinay Kumar Garg appeared for the appellant, while Advocate J.P.N. Shahi represented the respondents.
Background
The claim petition arose from a motor accident in which a young pillion rider sustained severe spinal injuries resulting in paraplegia after being run over by a negligently driven car. The victim remained bedridden for two decades until he died in 2021. His mother, as legal representative, pursued the claim for enhanced compensation.
The Tribunal had awarded compensation of ₹18,03,512, adopting monthly wages of ₹3,339 based on minimum wages. The High Court further increased the amount to ₹32,46,388, fixing income at ₹3,352 per month, and allowed limited medical expenses. Dissatisfied, the appellant approached the Supreme Court seeking reassessment of both income and medical costs.
Court’s Observations
The Supreme Court noted that the Insurance Company had verified bills amounting to ₹21 lakhs as genuine. Since the High Court had already granted ₹1 lakh, the Supreme Court directed payment of an additional ₹20 lakhs towards medical expenses incurred in sustaining the victim’s life over 20 years of disability.
Rejecting reliance solely on minimum wages applicable to a skilled worker, the Bench emphasised that educational qualifications and future employability must also be considered. The Bench held that even if the victim had not qualified as a Chartered Accountant, he would have reasonably earned at least ₹5,000 per month as an Accountant in 2001.
While applying the principles laid down in National Insurance Co. Ltd. v. Pranay Sethi (2017), the Court added 40% towards prospects, arriving at a loss of income of ₹15,12,000.
The Bench combined the loss of income with ₹14 lakhs awarded by the High Court under conventional heads and medical expenses of ₹11,22,356, bringing the total compensation to ₹40,34,356. Interest at 9% per annum was directed from the date of filing of the claim petition until realisation.
Additionally, the Insurance Company was directed to pay ₹20 lakhs towards future medical expenses incurred by the parents, which would not carry interest if paid within four months, but would attract 9% interest thereafter.
Conclusion
Accordingly, the Civil Appeal was allowed with modifications, and pending applications were disposed of.
Cause Title: Sharad Singh (Dead) Through LR v. HD Narang and New India Insurance Co. Ltd. (Neutral Citation: 2025 INSC 1164)
Appearances
Petitioner: Senior Advocate Vinay Kumar Garg, with Advocates Sagar Saxena, Gunjan Kumar, AOR
Respondents: Advocates J.P.N. Shahi, Shikhar Prakash, Rameshwar Prasad Goyal, AOR