The Punjab & Haryana High Court observed that the rate prescribed under the Minimum Wages Act, 1948 cannot be the only factor to determine Motor Accident compensation.

The Court held thus in an appeal preferred by The New India Assurance Company Limited which was aggrieved by the award passed by the Motor Accident Claims Tribunal, Karnal.

The bench of Justice Alka Sarin observed, “No doubt minimum wages notification is a yardstick which is often used, however, the same cannot be the only factor to determine the compensation payable to the claimants.”

Advocate Deepak Suri appeared for the Appellant and Advocate Praveen Sharma appeared for the Respondent.

Brief Facts-

Ajay was hit by a tractor when he was on a motorcycle with his cousin and succumbed to injuries. The appellant- Insurance Company filed a written statement admitting the fact of issuance of the insurance policy, however, it denied the factum of the accident and took the plea of violation of terms and conditions of the insurance policy on the ground that the driver of the offending vehicle did not have a valid and effective driving licence.

The tribunal after considering various factors awarded compensation of Rs 35 Lakh to the family of the victim. Hence, this appeal.

While rejecting the contention of the appellant that the income of the deceased ought to have been assessed as per the minimum wages and not as per the Deputy Commissioner rate, the Court mentioned the decision in National Insurance Company Limited vs. Meena Devi & Ors. where, as per the Court, the income was assessed on the basis of the DC rates rather than the minimum wages.

The Court further emphasised that the Supreme Court dismissed the SLP challenging the decision in the above-mentioned case.

The Court relied on the decision in Shri Ram General Insurance Company Ltd. & Ors. vs. Beant Kaur & Ors. [2019 (3) SCT 684] and quoted, “Motor Vehicles Act is admittedly a beneficial legislation, therefore to circumscribe the scope of assessment of income of the deceased/injured to the minimum wages as may be notified under the Minimum Wages Act would not be justified. Needless to say, assessment of income in cases where no specific documentary evidence is led in support of the claim, such assessment would be dependent upon the facts and circumstances of each case.”

The Court stated that the Courts must strike a balance between inflated and unreasonable demands of the victim and the equally untenable claim of the opposite party saying that nothing is payable. However, at the same time, the award must be just to ensure that the claimants are adequately restored to their position before the accident.

The Court noted that the victim left behind his wife, who is 23 years old, two minor children and his parents.

The Court further stated that the compensation cannot in any manner compensate them for the loss suffered by them because of the untimely death of the deceased, however, the amount should be adequate to mitigate the financial difficulties the family is likely to face.

The Court stated that there is no mandate of law to only apply the rates as prescribed under the Minimum Wages Act, 1948 and at best it can be only used as a yardstick.

Therefore, keeping in view the peculiar circumstances, the Court refused to interfere with the impugned award.

Consequently, the Court dismissed the appeal.

Cause Title: The New India Assurance Company Limited v. Pinki (Neutral Citation: 2024:PHHC:042505)


Appellant: Adv. Deepak Suri

Respondent: Adv. Praveen Sharma

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