REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.19­20 of 2021

[Arising out of Special Leave Petition(C) Nos.18728­29 of 2018]

Kirti & Anr. Etc. ..... Appellant(s)

                                       VERSUS

Oriental Insurance Company Ltd. ..... Respondent(s)

JUDGMENT

Surya Kant, J:

Leave Granted. 

2.These   civil   appeals,   which   have   been   heard   through   video

conferencing, have been filed by three surviving dependents (who are

two minor daughters and father) of the two deceased, impugning the

judgment dated 17.07.2017 of the High Court of Delhi through which

the motor accident compensation of Rs 40.71 lakhs awarded by the

Motor Accident Claims Tribunal, Rohini (hereinafter, “Tribunal”) on

24.12.2016 under Section 168 of the Motor Vehicle Act, 1988 (“MV

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Act”), was reduced to Rs 22 lakhs.

FACTUAL MATRIX

3.The deceased couple, Vinod and Poonam, while commuting on a

motorcycle in Delhi at around 7AM on 12.04.2014 were hit at an

intersection by a Santro Car bearing registration ‘DL 7CA 1053’. The

impact immediately incapacitated both the deceased and they soon

passed away from cranio­cerebral damage and haemorrhagic shock

caused by the accident’s blunt­force trauma.  

4.An FIR was registered under Sections 279 and 304 of the Indian

Penal   Code,   1860   (hereinafter,   “IPC”)   against   the   driver,   and   the

statement of an independent eyewitness (Constable Vishnu Dutt) was

recorded, which evidenced rash driving and negligence on part of the

car­driver. Subsequently, a claim petition was filed under Section 166

of   the   MV   Act   by   the   two   toddler­daughters   and   septuagenarian­

parents of the deceased. This was contested by the driver and owner

claiming that the deceased were themselves driving negligently and

the accident was as a result of their very own actions. Two witnesses

were   examined   by   the   appellant­claimants   and   none   by   the

respondents. The insurance company (Respondent No. 1) offered as

settlement a compensation of Rs 6.47 lakhs for the death of Poonam

and Rs 10.71 lakhs for Vinod.

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5.The Tribunal took note of the chargesheet filed against the driver

in the criminal case and also his failure to step­into the witness box.

Relying on the strong testimony of the independent witness, it was

concluded that the car­driver was indeed  driving rashly and thus

liability ought to be fastened on the respondent­insurer. Regarding the

quantum of compensation, the Tribunal began by determining the

ages of Poonam and Vinod as being 26 and 29 years respectively.

Consequently,   an   age­multiplier   of   17   was   adopted.   Although   the

deceased’s father took a plea that Vinod was earning Rs 14,000 every

month as a teacher at the Pratap Public School in Delhi, but he was

unable   to   substantiate   his   claim   with   any   documentary   evidence.

Thus, minimum wage in Delhi was adopted for computation of loss of

dependency.   An   additional   25%   income   was   accounted   for   future

prospects   of   Poonam,   and   1/3

rd

  of   Vinod’s   salary   was   deducted

towards personal expenses. Rs 2.50 lakhs was given for each deceased

as compensation for loss of love and affection, estate, and funeral

charges. Thus, the Tribunal awarded a total sum of Rs 40.71 lakhs for

both deceased to the claimants.

6.This   computation   was   challenged   by   the   respondent­insurer

before the High Court, on grounds that the Tribunal had erroneously

relied upon the minimum wage as notified by Government of Delhi as

there was no proof that the deceased were employed in Delhi. Instead,

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given   their   established   residence   in   Haryana,   the   minimum   wage

notified for that State ought to be the basis for calculation of loss of

dependency. Simultaneously, addition of future prospects as well as

non­deduction of personal expenses for Poonam was prayed to be

reversed. Further, compensation was sought to be halved on grounds

of   contributory   negligence.   A   categorical   submission   was   made

highlighting the then divergent law on the issue of payment of ‘future

prospects’ to non­permanent employees, pending resolution of which,

it was prayed that no such addition be granted to the claimants.

7.The   High   Court   concurred   with   these   contentions   and

consequently   reduced   the   notional   income   for   both   deceased   by

adopting the lowest minimum wage applicable for unskilled workers in

Haryana, instead of Delhi. Similarly, 1/3

rd

  of Poonam’s income was

deducted towards personal expenses and future prospects were denied

to both deceased. However, given the totality of circumstances and

Poonam’s contribution to her household, 25% additional gratuitous

income was added to her salary. The High Court thus brought down

the total compensation payable to the claimants to Rs 22 lakhs.

CONTENTIONS OF PARTIES

8.This reduction has been assailed before us by learned counsel

for the claimants. Re­computation is sought of compensation for loss

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of dependency consequent to the decision of the Constitutional Bench

of this Court in National Insurance Co Ltd v. Pranay Sethi

1

, which

authoritatively settles the law on future prospects for non­permanent

employees as well. Furthermore, the anomaly between the gratuitous

increase of income between Vinod and Poonam, and the usage of

unskilled minimum wage for Vinod have been brought to our notice. 

9.Learned Counsel for the respondent­insurer, on the other hand,

has sought to forestall any increase in compensation, including under

the ground of future prospects. It is claimed that the High Court’s

decision was a consent order, and that the counsel for the appellants

had   conceded   to   a   lower   computation   under   the   head   of   loss   of

dependency, which thus cannot be challenged before this Court.

ANALYSIS

I.Deduction for Personal Expenses

10.We   have   thoughtfully   considered   the   rival   submissions.     It

cannot be disputed that at the time of death, there in fact were four

dependents of the deceased and not three. The subsequent death of

the   deceased’s   dependent   mother   ought   not   to   be   a   reason   for

reduction of motor accident compensation. Claims and legal liabilities

crystallise at the time of the accident itself, and changes post thereto

1 

 (2017) 16 SCC 680.

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ought   not   to   ordinarily   affect   pending   proceedings.   Just   like   how

appellant­claimants   cannot   rely   upon   subsequent   increases   in

minimum wages, the respondent­insurer too cannot seek benefit of

the subsequent death of a dependent during the pendency of legal

proceedings. Similarly, any concession in law made in this regard by

either counsel would not bind the parties, as it is legally settled that

advocates cannot throw­away legal rights or enter into arrangements

contrary to law.

2

11.Any   compensation   awarded   by   a   Court   ought   to   be   just,

reasonable   and   consequently   must   undoubtedly   be   guided   by

principles of fairness, equity, and good conscience.

3

 Not only did the

family of the deceased consist of septuagenarian parents, but there

were also two toddler­girls, aged merely 3 and 4 years; each of whom

requires exceptional care and expenditure till they reach the stage of

self­dependency. Tragically,  in addition to the  married couple, the

negligence of the driver also extinguished the life of the family’s third

child who was a foetus in Poonam’s womb at the time of the accident.

Thus, the appropriate deduction for personal expenses for both Vinod

and Poonam ought to be 1/4

th

 only, and not 1/3

rd

 as applied by the

Tribunal and the High Court, more so when there were four family

members dependent on the deceased.

2  

Director of Elementary Education v. Pramod Kumar Sahoo, (2019) 10 SCC 674, ¶ 11.

3  

See, Helen C Rebello v. Maharashtra State Road Transport Corp, (1999) 1 SCC 90, ¶ 28.

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II.Assessment of monthly income

12.Second,   although   it   is   correct   that   the   claimants   have   been

unable to produce any document evidencing Vinod’s income, nor have

they established his employment as a teacher; but that doesn’t justify

adoption of the lowest­tier of minimum wage while computing his

income. From the statement of witnesses, documentary evidence­on­

record and circumstances of the accident, it is apparent that Vinod

was comparatively more educationally qualified and skilled. Further,

he   maintained   a   reasonable   standard   of   living   for   his   family   as

evidenced by his use of a motorcycle for commuting. Preserving the

existing standard of living of a deceased’s family is a fundamental

endeavour of motor accident compensation law.

4

  Thus, at the very

least, the minimum wage of Rs 6197 as applicable to skilled workers

during April 2014 in the State of Haryana ought to be applied in his

case. 

III.Addition of Future Prospects

13.Third  and   most   importantly,   it   is   unfair   on   part   of   the

respondent­insurer to contest grant of future prospects considering

their submission before the High Court that such compensation ought

not   to   be   paid   pending   outcome   of   the  Pranay   Sethi   (supra)

4 

 See, RK Malik v. Kiran Pal, (2019) 14 SCC 1, ¶ 9.

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reference. Nevertheless, the law on this point is no longer res integra,

and stands crystalised,  as is clear from the following extract of the

afore­cited Constitutional Bench judgment

5

:

“59.4. In case the deceased was self­employed or on a fixed

salary, an addition of 40% of the established income should

be the warrant where the deceased was below the age of 40

years. An addition of 25% where the deceased was between

the age of 40 to 50 years and 10% where the deceased was

between the age of 50 to 60 years should be regarded as the

necessary   method   of   computation.   The   established   income

means the income minus the tax component.”

[Emphasis supplied]

14.  Given how both deceased were below 40 years and how they

have   not   been   established   to   be   permanent   employees,   future

prospects to the tune of 40% must be paid. The argument that no

such future prospects ought to be allowed for those with notional

income, is both incorrect in law

6

  and without merit considering the

constant inflation­induced increase in wages. It would be sufficient to

quote   the   observations   of   this   Court   in  Hem   Raj   v.   Oriental

Insurance Co. Ltd.

7

, as it puts at rest any argument concerning non­

payment of future prospects to the deceased in the present case: 

“7. We are of the view that there cannot be distinction where

there   is   positive   evidence   of   income   and   where   minimum

5 

 National Insurance Co Ltd v. Pranay Sethi, (2017) 16 SCC 680, ¶ 59.4.

6  

Sunita Tokas v. New India Insurance Co Ltd, 2019 SCC OnLine SC 1045.

7

(2018) 15 SCC 654.

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income   is   determined   on   guesswork   in   the   facts   and

circumstances of a case. Both the situations stand at the

same footing. Accordingly, in the present case, addition of

40% to the income assessed by the Tribunal is required to be

made..”

[Emphasis supplied]

IV.Other heads and division of compensation

15.Finally,   given   the   lack   of   arguments   on   the   other   heads   of

funeral charges, loss of estate, love, and affection; there arises no

cause of alteration. We similarly see no infirmity with the High Court’s

adoption of 17 as the age­multiplier, award of 9% interest, calculation

of Poonam’s notional income or the division of total compensation in

the ratio of 1:2:2 between the grandfather and the two girls. For ready

reference, a comparative table of revised compensation after suitable

increases would thus be as follows:

TRIBUNAL HIGH COURT SUPREME COURT

Head Vinod Poonam Vinod Poonam Vinod Poonam

AMonthly Income 8554 9438 5547.1 5547.1 6197.1 5547.1

B

Deduction 

towards Personal 

Expenses

33% None 33% 33% 25% 25%

CAge Multiplier 17 17 17 17 17 17

D

Adjustment for 

Future Prospects

None 25% None None 40% 40%

E

Increase for 

Special 

Circumstances

None None None 25% None 25%

F

Funeral Charges 

& Loss of Estate

250000 250000 250000 250000 250000 250000

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G

Total per 

deceased

1413344 2656690 1004406 1193007 1577419 1735236

(rounded off) 1414000 2657000 1005000 1195000 1580000 1740000

Total 

compensation

4071000 2200000 3320000

CONCLUSION

16.For the reasons afore­stated, the appeals are allowed in­part.

The total motor accident compensation of Rs 22 lakhs awarded by the

High Court to the claimant­appellants is increased by Rs 11.20 lakhs

to reach a new total of Rs 33.20 lakhs. The enhanced amount of

compensation shall be paid within two months along with interest @

9% p.a. from the date of filing of the Detailed Accident Report i.e.

23.05.2014, and shall be apportioned per the terms laid down by the

Tribunal.

…………………………….. J.

(N.V. RAMANA)

…………………………… J.

(S. ABDUL NAZEER)

…………………………...J.

(SURYA KANT)

NEW DELHI

DATED : 05.01.2021

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 19­20 O F 2021   

(ARISING OUT OF SLP (C) NOS. 18728­18729 OF 2018)

KIRTI & ANR. ETC.             …APPELLANT(S)

VERSUS

ORIENTAL INSURANCE CO. LTD.                       …RESPONDENT

JUDGMENT   

N.V. RAMANA, J.   

1.I have had the advantage of perusing the judgment prepared

by my learned brother, Surya Kant, J., and am in complete

agreement   with   him.   However,   I   thought   to   supplement   the

reasoning   in   his   judgment,   with   respect   to   the   question   of

notional income of a housewife and whether future prospects

should apply to the same or not. 

2.There are two distinct categories of situations wherein the

Court usually determines notional income of a victim. The first

category   of   cases   relates   to   those   wherein   the   victim   was

employed, but the claimants are not able to prove her actual

income,   before   the   Court.   In   such   a   situation,   the   Court

1

Reportable

“guesses” the income of the victim on the basis of the evidence on

record, like the quality of life being led by the victim and her

family, the general earning of an individual employed in that field,

the qualifications of the victim, and other considerations.

3.The second category of cases relates to those situations

wherein the Court is called upon to determine the income of a

non­earning victim, such as a child, a student or a homemaker.

Needless to say, compensation in such cases is extremely difficult

to quantify.

4.The Court often follows different principles for determining

the compensation towards a non­earning victim in order to arrive

at an amount which would be just in the facts and circumstances

of the case. Some of these involve the determination of notional

income. Whenever notional income is determined in such cases,

different considerations and factors are taken into account. For

instance, for students, the Court often considers the course that

they   are   studying,   their   academic   proficiency,   the   family

background, etc., to determine and fix what they could earn in

the future. [See M. R. Krishna Murthi v. New India Assurance

Co. Ltd., 2019 SCC OnLine SC 315] 

5.One category of non­earning victims that Courts are often

2

called upon to calculate the compensation for are homemakers.

The granting of compensation for homemakers on a pecuniary

basis, as in the present case, has been considered by this Court

earlier   on   numerous   occasions.   A   three­Judge   Bench   of   this

Court in Lata Wadhwa v. State of Bihar , (2001) 8 SCC 197,

while dealing with compensation for the victims of a fire during a

function, granted compensation to housewives on the basis of the

services rendered by them in the house, and their age. This

Court, in that case, held as follows:

“10. So   far   as   the  deceased   housewives   are

concerned, in the absence of any data and as

the housewives were not earning any income,

attempt   has   been   made   to   determine   the

compensation   on   the   basis   of   services

rendered by them to the house. On the basis of

the   age   group   of   the   housewives,   appropriate

multiplier has been applied, but the estimation of

the value of services rendered to the house by the

housewives, which has been arrived at Rs 12,000

per annum in cases of some and Rs 10,000 for

others, appears to us to be grossly low. It is true

that the claimants, who ought to have given data

for determination of compensation, did not assist

in   any   manner   by   providing   the   data   for

estimating the value of services rendered by such

housewives. But even in the absence  of  such

data   and  taking   into   consideration   the

multifarious   services   rendered   by   the

housewives  for managing  the  entire family,

even on a modest estimation, should be Rs

3000 per month and Rs 36,000 per annum…”

(emphasis supplied)

3

6.In Arun Kumar Agrawal v. National Insurance Co. Ltd. ,

(2010) 9 SCC 218, this Court, while dealing with the grant of

compensation for the death of a housewife due to a motor vehicle

accident, held as follows:

“26. In India the courts have recognised that

the   contribution   made   by   the   wife   to   the

house is invaluable and cannot be computed

in terms of money. The gratuitous services

rendered   by   the   wife   with   true   love   and

affection to the children and her husband and

managing   the   household   affairs   cannot   be

equated with the services rendered by others.

A wife/mother does not work by the clock. She is

in   the   constant   attendance   of   the   family

throughout   the   day   and   night   unless   she   is

employed   and   is   required   to   attend   the

employer's work for particular hours. She takes

care of all the requirements of the husband and

children including cooking of food, washing of

clothes,   etc.   She   teaches   small   children   and

provides invaluable guidance to them for their

future life. A housekeeper or maidservant can do

the   household   work,   such   as   cooking   food,

washing clothes and utensils, keeping the house

clean, etc., but she can never be a substitute for

a wife/mother who renders selfless service to her

husband and children.

27. It is not possible to quantify any amount

in   lieu   of   the   services   rendered   by   the

wife/mother to the family i.e. the husband

and   children.       However,   for   the   purpose   of

award   of   compensation   to   the   dependants,

some pecuniary estimate has to be made of

the services of the housewife/mother . In that

context,   the   term   “services”   is   required   to   be

given a broad meaning and must be construed by

taking into account the loss of personal care and

4

attention given by the deceased to her children

as a mother and to her husband as a wife. They

are entitled to adequate compensation in lieu of

the loss of gratuitous services rendered by the

deceased. The amount payable to the dependants

cannot be diminished on the ground that some

close relation like a grandmother may volunteer

to render some of the services to the family which

the deceased was giving earlier.”

(emphasis supplied)

The above pronouncement has been followed by this Court in its

recent judgment in Rajendra Singh v. National Insurance Co.

Ltd., 2020 SCC OnLine SC 521,  wherein the notional income of

a deceased housewife was calculated for the purposes of granting

compensation in a motor accident case.

7.Before   discussing   this   topic   further,   it   is   necessary   to

comment on its gendered nature. In India, according to the 2011

Census, nearly 159.85 million women stated that “household

work”  was  their main occupation,  as  compared  to  only  5.79

million men. 

8.In   fact,   the   recently   released   Report   of   the   National

Statistical   Office   of   the   Ministry   of   Statistics   &   Programme

Implementation, Government of India called “Time Use in India­

2019”, which is the first Time Use Survey in the country and

collates   information   from   1,38,799  households  for   the  period

January,   2019   to   December,   2019,   reflects   the   same   gender

5

disparity.

1

  The key findings of the survey suggest that, on an

average, women spend nearly 299 minutes a day on unpaid

domestic   services   for   household  members   versus  97  minutes

spent by men on average.

2

 Similarly, in a day, women on average

spend 134 minutes on unpaid caregiving services for household

members   as   compared   to   the   76   minutes   spent   by   men   on

average.

3

 The total time spent on these activities per day makes

the picture in India even more clear­ women on average spent

16.9 and 2.6 percent of their day on unpaid domestic services

and   unpaid   caregiving   services   for   household   members

respectively, while men spent 1.7 and 0.8 percent.

4

9.It is curious to note that this is not just a phenomenon

unique to India, but is prevalent all over the world. A 2009 Report

by a Commission set up by the French Government, analyzing

data from six countries,  viz. Germany, Italy, United Kingdom,

France, Finland and the United States of America, highlighted

similar findings:

“117.   Gender   differences   in   time   use   are

significant.   In   each   of   the   countries   under

consideration,  men spend more time in paid

work than women and the converse is true for

unpaid   work.   Men   also   spend   more   time   on

leisure than women.  The implication is that

1 National Statistical Office, Time Use in India­ 2019 (September, 2020).

2 Id, at 56.

3 Id, at 54.

4 Id, at x.

6

women provide household services but other

members of the household benefit… ”

5

(emphasis supplied)

10.The sheer amount of time and effort that is dedicated to

household work by individuals, who are more likely to be women

than men, is not surprising when one considers the plethora of

activities   a   housemaker   undertakes.   A   housemaker   often

prepares food for the entire family, manages the procurement of

groceries   and   other   household   shopping   needs,   cleans   and

manages the house and its surroundings, undertakes decoration,

repairs   and   maintenance   work,   looks   after   the   needs   of   the

children   and   any   aged   member   of   the   household,   manages

budgets and so much more. In rural households, they often also

assist in the sowing, harvesting and transplanting activities in

the field, apart from tending cattle [See Arun Kumar Agrawal

(supra); National Insurance Co. Ltd. v. Minor Deepika rep. by

her   guardian   and   next   friend,   Ranganathan,   2009   SCC

OnLine Mad 828]. However, despite all the above, the conception

that   housemakers   do   not   “work”   or   that   they   do   not   add

economic value to the household is a problematic idea that has

persisted for many years and must be overcome.   

11.The   concurring   opinion   in   the  Arun   Kumar   Agrawal

5 Stiglitz et al., Report of the Commission on the Measurement of Economic Performance and 

Social Progress, 117 (2009).

7

judgment (supra), has highlighted this bias:

“44. This bias is shockingly prevalent in the work

of census. In the Census of 2001 it appears that

those   who   are   doing   household   duties   like

cooking,   cleaning   of   utensils,   looking   after

children, fetching water, collecting firewood have

been   categorised   as   non­workers   and   equated

with   beggars,   prostitutes   and   prisoners   who,

according   to   the   census,   are   not   engaged   in

economically   productive   work.   As   a   result   of

such categorisation about 36 crores (367 million)

women   in   India   have   been   classified   in   the

Census   of   India,   2001   as   non­workers   and

placed in the category of beggars, prostitutes and

prisoners.   This   entire   exercise   of   census

operations is done under an Act of Parliament.”

12.In fact, this unfortunate silence when it comes to the value

of housework has been a problem which was identified as far

back as in 1920, when the economist Pigou noted the oddity and

contradictions when it came to the calculation of the contribution

of women in the national income, by stating that: 

“…the services rendered by women enter into the

dividend when they are rendered in exchange for

wages, whether in the factory or in the home, but

do not enter into it when they are rendered by

mothers   and   wives   gratuitously   to   their   own

families. Thus, if a man marries his housekeeper

or   his   cook,   the   national   dividend   is

diminished”.

6

This   issue   was   further   focused   on   by   those   in   the   field   of

feminism economics in the 1970s and 1980s, who criticized the

traditional   labour   statistics   which   did   not   consider   unpaid

6 Cecil Pigou, The Economics of Welfare, 44 (1920).

8

domestic work and therefore undervalued women’s role in the

economy.

7

13.On considering the growing awareness around this issue,

the   United   Nations   Committee   on   the   Elimination   of

Discrimination against Women adopted General Recommendation

No.   17   on   the   “Measurement   and   quantification   of   the

unremunerated domestic activities of women and their recognition

in   the   gross   national   product”   in   1991.   The   General

Recommendation   affirmed   that   “the   measurement   and

quantification of the unremunerated domestic activities of women,

which   contribute   to  development   in   each   country,   will   help   to

reveal the de facto economic role of women”.

14.It is worth noting that the above General Recommendation

is passed in furtherance of Article 11 of the Convention on the

Elimination of All Forms of Discrimination against Women which

relates to ending discrimination against women in the field of

employment, a Convention that India has ratified. 

15.The   issue   of   fixing   notional   income   for   a   homemaker,

therefore,   serves   extremely   important   functions.   It   is   a

recognition of the multitude of women who are engaged in this

activity,   whether   by   choice   or   as   a   result   of   social/cultural

7 United Nations Economic Commission for Europe, Guide on Valuing Unpaid Household Service 

Work, 2 (2017).

9

norms. It signals to society at large that the law and the Courts of

the land believe in the value of the labour, services and sacrifices

of   homemakers.   It   is   an   acceptance   of   the   idea   that   these

activities contribute in a very real way to the economic condition

of the family, and the economy of the nation, regardless of the

fact that it may have been traditionally excluded from economic

analyses. It is a reflection of changing attitudes and mindsets and

of our international law obligations. And, most importantly, it is a

step   towards   the   constitutional   vision   of   social   equality   and

ensuring dignity of life to all individuals. 

16.Returning to the question of how such notional income of a

homemaker is to be calculated, there can be no fixed approach. It

is to be understood that in such cases the attempt by the Court

is to fix an approximate economic value for all the work that a

homemaker does, impossible though that task may be. Courts

must keep in mind the idea of awarding just compensation in

such cases, looking to the facts and circumstances [See  R.K.

Malik v. Kiran Pal, (2009) 14 SCC 1]. 

17.One   method   of   computing   the   notional   income   of   a

homemaker   is   by   using   the   formula   provided   in   the   Second

Schedule to the Motor Vehicles Act, 1988, which has now been

omitted by the Motor Vehicle (Amendment) Act, 2019. The Second

10

Schedule   provided   that   the   income   of   a   spouse   could   be

calculated as one­third of the income of the earning surviving

spouse. This was the method ultimately adopted by the Court in

the  Arun   Kumar   Agrawal  (supra)  case.   However,   rationale

behind fixing the ratio as one­third is not very clear. [See Arun

Kumar Agrawal (supra)]

18.Apart from the above, scholarship around this issue could

provide some guidance as to other methods to determine the

notional income for a homemaker.

8

 Some of these methods were

highlighted by a Division Bench of the Madras High Court in the

case of Minor Deepika (supra) which held as follows:

“10. The Second Schedule to the Motor Vehicles

Act gives a value to the compensation payable in

respect of those who had no income prior to the

accident and for a spouse, it says that one­third

of the income of the earning surviving spouse

should be the value. Exploration on the internet

shows that there have been efforts to understand

the value of a homemaker's unpaid labour by

different methods. One is, the opportunity cost

which evaluates her wages by assessing what

she would have earned had she not remained

at   home,   viz.,   the   opportunity   lost.   The

second   is,   the   partnership   method   which

assumes that a marriage is an equal economic

partnership   and   in   this   method,   the

homemaker's   salary   is   valued   at   half   her

husband's salary. Yet another method is to

evaluate   homemaking   by   determining   how

8 See Ann Chadeau, What is Households’ Non­Market Production Worth, OECD ECONOMIC STUDIES 

NO. 18 (1992); Also see United Nations Economic Commission for Europe, supra note 7. 

11

much it would cost to replace the homemaker

with   paid   workers.   This   is   called   the

Replacement Method .”

(emphasis supplied)

19.However, it must be remembered that all the above methods

are merely suggestions. There can be no exact calculation or

formula that can magically ascertain the true value provided by

an individual gratuitously for those that they are near and dear

to. The attempt of the Court in such matters should therefore be

towards determining, in the best manner possible, the truest

approximation   of   the   value   added   by   a   homemaker   for   the

purpose of granting monetary compensation. 

20.Whichever method a Court ultimately chooses to value the

activities of a homemaker, would ultimately depend on the facts

and circumstances of the case.  The Court needs to keep in mind

its duty to award just compensation, neither assessing the same

conservatively,   nor   so   liberally   as   to   make   it   a   bounty   to

claimants [National Insurance Company Limited v. Pranay

Sethi, (2017) 16 SCC 680; Kajal v. Jagdish Chand, (2020) 4

SCC 413].

21.Once notional income has been determined, the question

remains as to whether escalation for future prospects should be

granted   with   regard   to   it.   Initially,   the   awarding   of   future

12

prospects by this Court was related to the stability of the job held

by   the   victim   [See  General   Manager,   Kerala   State   Road

Transport   Corporation,   Trivandrum   v.   Susamma   Thomas

(Mrs), (1994) 2 SCC 176; Sarla Dixit (Smt) v. Balwant Yadav,

(1996) 3 SCC 179]. This focus on the stability of the job of the

victim, while awarding future prospects, was continued in the

judgment   of   this   Court   in  Sarla   Verma   (Smt)   v.   Delhi

Transport Corporation, (2009) 6 SCC 121 wherein the Court

held as follows:  

“24. In Susamma   Thomas [(1994)   2   SCC   176]

this Court increased the income by nearly 100%,

in Sarla Dixit [(1996) 3 SCC 179] the income was

increased   only   by   50%   and   in  Abati

Bezbaruah [(2003) 3 SCC 148] the income was

increased   by   a   mere   7%.   In   view   of   the

imponderables   and   uncertainties,   we   are   in

favour   of   adopting   as   a   rule   of   thumb,   an

addition of 50% of actual salary to the actual

salary income of the deceased towards future

prospects,   where   the   deceased   had   a

permanent job and was below 40 years . (Where

the annual income is in the taxable range, the

words “actual salary” should be read as “actual

salary less tax”). The addition should be only

30% if the age of the deceased was 40 to 50

years. There should be no addition, where the

age   of   the   deceased   is   more   than   50   years.

Though   the   evidence   may   indicate   a   different

percentage   of   increase,   it   is   necessary   to

standardise   the   addition   to   avoid   different

yardsticks being applied or different methods of

calculation being adopted. Where the deceased

was self­employed or was on a fixed salary

13

(without   provision   for   annual   increments,

etc.), the  courts  will usually  take  only the

actual   income   at   the   time   of   death.   A

departure therefrom should be made only in

rare and exceptional cases involving special

circumstances.”

(emphasis supplied)

22.However, there was a shift in jurisprudence regarding future

prospects with the five­Judge Bench decision of this Court in

Pranay Sethi (supra). This Court extended the benefit regarding

future prospects to even self­employed persons, or those on a

fixed salary. The Court held as follows:

“57. Having bestowed our anxious consideration,

we are disposed to think when we accept the

principle of standardisation,  there is really no

rationale not to apply the said principle to the

self­employed or a person who is on a fixed

salary.   To   follow   the   doctrine   of   actual

income at the time of death and not to add

any amount with regard to future prospects to

the income for the purpose of determination

of   multiplicand   would   be   unjust.   The

determination   of   income   while   computing

compensation has to include future prospects

so   that   the   method   will   come   within   the

ambit   and   sweep   of   just   compensation   as

postulated under Section 168 of the Act . In

case of a deceased who had held a permanent job

with inbuilt grant of annual increment, there is

an acceptable certainty. But to state that the

legal representatives of a deceased who was on a

fixed salary would not be entitled to the benefit of

future prospects for the purpose of computation

of   compensation   would   be   inapposite.   It   is

because the criterion of distinction between the

14

two in that event would be certainty on the one

hand   and   staticness   on   the   other.   One   may

perceive   that   the   comparative   measure   is

certainty on the one hand and uncertainty on the

other but such a perception is fallacious.  It is

because   the   price   rise   does   affect   a   self­

employed   person;   and   that   apart   there   is

always an incessant effort to enhance one's

income   for   sustenance.   The   purchasing

capacity of a salaried person on permanent

job   when   increases   because   of   grant   of

increments and pay revision or for some other

change in service conditions, there is always a

competing attitude in the private sector to

enhance   the   salary  to  get  better  efficiency

from the employees. Similarly, a person who

is   self­employed   is   bound   to   garner   his

resources and raise his charges/fees so that

he can live with same facilities.…Taking into

consideration the  cumulative factors, namely,

passage   of   time,   the   changing   society,

escalation of price, the change in price index,

the   human   attitude   to   follow   a   particular

pattern of life, etc., an addition of 40% of the

established   income   of   the   deceased   towards

future prospects and where the deceased was

below 40 years an addition of 25% where the

deceased was between the age of 40 to 50 years

would be reasonable.”

(emphasis supplied)

23.The rationale behind the awarding of future prospects is

therefore no longer merely about the type of profession, whether

permanent or otherwise, although the percentage awarded is still

dependent on the same. The awarding of future prospects is now

a part of the duty of the Court to grant just compensation, taking

into account the realities of life, particularly of inflation, the quest

15

of individuals to better their circumstances and those of their

loved ones, rising wage rates and the impact of experience on the

quality of work.   

24.Taking the above rationale into account, the situation is

quite clear with respect to notional income determined by a Court

in the first category of cases outlined earlier, those where the

victim is proved to be employed but claimants are unable to prove

the income before the Court. Once the victim has been proved to

be employed at some venture, the necessary corollary is that they

would   be   earning   an   income.   It   is   clear   that   no   rational

distinction can be drawn with respect to the granting of future

prospects merely on the basis that their income was not proved,

particularly   when   the   Court   has   determined   their   notional

income. 

25.When it comes to the second category of cases, relating to

notional income for non­earning victims, it is my opinion that the

above principle applies with equal vigor, particularly with respect

to homemakers. Once notional income is determined, the effects

of inflation would equally apply. Further, no one would ever say

that the improvements in skills that come with experience do not

take place in the domain of work within the household. It is

worth noting that, although not extensively discussed, this Court

16

has been granting future prospects even in cases pertaining to

notional income, as has been highlighted by my learned brother,

Surya Kant, J., in his opinion [Hem Raj v. Oriental Insurance

Company Limited, (2018) 15 SCC 654; Sunita Tokas v. New

India Insurance Co. Ltd., (2019) 20 SCC 688].

26.Therefore,   on   the   basis   of   the   above,   certain   general

observations can be made regarding the issue of calculation of

notional   income   for   homemakers   and   the   grant   of   future

prospects with respect to them, for the purposes of grant of

compensation which can be summarized as follows:

a.Grant of compensation, on a pecuniary basis, with respect

to a homemaker, is a settled proposition of law. 

b.Taking into account the gendered nature of housework, with

an overwhelming percentage of women being engaged in the

same as compared to men, the fixing of notional income of a

homemaker   attains   special   significance.   It   becomes   a

recognition   of   the   work,   labour   and   sacrifices   of

homemakers and a reflection of changing attitudes. It is also

in furtherance of our nation’s international law obligations

and our constitutional vision of social equality and ensuring

dignity to all.

c.Various methods can be employed by the Court to fix the

notional income of a homemaker, depending on the facts

and circumstances of the case.

d.The Court should ensure while choosing the method, and

fixing the notional income, that the same is just in the facts

and circumstances of the particular case, neither assessing

the compensation too conservatively, nor too liberally. 

17

e.The granting of future prospects, on the notional income

calculated   in   such   cases,   is   a   component   of   just

compensation. 

27.With the above observations, I concur with the opinion of

my learned brother.

    ........................J.

(N.V. RAMANA)

NEW DELHI; 

January 05, 2021.

18