The Madhya Pradesh High Court has clarified that compensation in motor accident claims involving the death of a minor must include future prospects and consortium damages, rejecting mechanical application of low income benchmarks. This ruling reinforces the principle that statutory compensation must reflect actual loss, not arbitrary figures, and aligns with the Supreme Court’s structured methodology for calculating damages.
Background & Facts
The Dispute
The deceased, Sarita @ Savita, was a 15-year-old unmarried girl who died in a road accident on 23 September 2016 when a truck bearing registration KA-41-A-1072 collided with her from behind. The accident occurred in Madhya Pradesh, and the claimants, her parents, filed a claim petition before the Motor Accident Claims Tribunal seeking compensation for loss of dependency, consortium, and funeral expenses.
Procedural History
- 2017: Claim petition filed before II Additional Member, Motor Accident Claims Tribunal, Sendwa
- 2019: Tribunal awarded Rs. 4,08,000/-, fixing the deceased’s income at Rs. 4,500 per month without evidentiary basis
- 2020: Appeal filed before the High Court challenging the inadequacy of compensation
Relief Sought
The appellants sought enhancement of compensation on three grounds: (1) higher income based on Minimum Wages Act guidelines, (2) inclusion of 40% future prospects as per Pranay Sethi, and (3) award of Rs. 80,000/- for consortium loss to both parents.
The Legal Issue
The central question was whether compensation for the death of a minor must include future prospects and consortium damages, and if so, how these components must be calculated under the settled principles in Smt. Sarla Verma v. Delhi Transport Corporation and National Insurance Company Ltd. v. Pranay Sethi.
Arguments Presented
For the Appellant
The appellants’ counsel argued that the Tribunal erred in fixing income at Rs. 4,500/- without any documentary or testimonial support. They relied on the Labour Department’s circular under the Minimum Wages Act, which fixes the wage for unskilled labour at Rs. 6,850/-, and cited Pranay Sethi to assert that 40% future prospects must be added to the income of a minor. They further contended that Sarla Verma mandates inclusion of consortium damages for both parents of a minor deceased, as the loss of emotional and domestic support is quantifiable.
For the Respondent
The Insurance Company’s counsel defended the Tribunal’s award, asserting that the income figure was reasonable given the lack of formal employment records. They argued that future prospects are not applicable to minors and that consortium damages are discretionary, not mandatory. They contended that the award was within the Tribunal’s discretion and should not be disturbed absent manifest error.
The Court's Analysis
The Court undertook a structured review of the precedents governing compensation in fatal motor accident claims. It emphasized that the death of a minor does not exempt the tribunal from applying the principles of loss of dependency and consortium. The Court noted that while minors lack formal income, their potential earnings must be estimated based on prevailing wage norms.
"The fact that the deceased was a minor does not mean that her future earning capacity is to be ignored. The law recognizes the loss of future prospects even in cases of minors, as the potential for economic contribution is inherent in human life."
The Court held that the Tribunal’s reliance on Rs. 4,500/- was arbitrary and unsupported. It adopted the Minimum Wages Act benchmark of Rs. 6,850/- as the base income, adding 40% future prospects as mandated by Pranay Sethi, resulting in a total monthly income of Rs. 9,590/-. Applying the multiplier of 18 under Sarla Verma for a 15-year-old, and deducting 50% for personal expenses, the Court calculated dependency loss at Rs. 10,35,720/-. It further held that consortium damages of Rs. 80,000/- are mandatory for both parents, as the emotional and domestic loss is distinct from financial dependency. Funeral and estate expenses of Rs. 15,000/- each were also upheld.
The Court rejected the respondent’s argument that consortium is discretionary, citing Sarla Verma’s directive that such damages are an independent head of compensation.
The Verdict
The appellants succeeded. The Court held that future prospects must be included for minor deceased and consortium damages are mandatory for both parents. Compensation was enhanced from Rs. 4,08,000/- to Rs. 11,45,720/-, with net enhancement of Rs. 7,37,720/-. The Tribunal’s award was set aside to the extent of the enhancement.
What This Means For Similar Cases
Future Prospects Are Mandatory for Minors
- Practitioners must now assert 40% future prospects as a non-negotiable component in claims involving deceased minors
- Base income must be derived from Minimum Wages Act circulars or similar official benchmarks, not arbitrary figures
- Tribunals cannot dismiss future prospects on grounds of age alone
Consortium Damages Are an Independent Head of Compensation
- Both parents are entitled to Rs. 80,000/- each as consortium damages, regardless of dependency status
- This head is distinct from loss of dependency and must be calculated separately
- Failure to award consortium damages constitutes a legal error warranting appellate interference
Multiplier Must Reflect Age, Not Default to 14
- For minors under 18, multiplier of 18 applies under Sarla Verma unless exceptional circumstances exist
- Tribunals must justify deviations from the standard multiplier table
- Advocates must submit age-based multiplier calculations as part of claim petitions
