The Chhattisgarh High Court has clarified that the notional income of a minor deceased, even if a student with no formal employment, must be assessed at Rs. 5,000 per month without deduction for personal expenses. This ruling reinforces the Supreme Court’s consistent approach to ensuring equitable compensation in motor accident claims involving children, and sets a binding precedent for Claims Tribunals across the state.
Background & Facts
The Dispute
The claimants, family members of Neelkanth Dhruv, an 11-year-old student, sought compensation after he was fatally struck by a motorcycle driven by Kamal Patil on 2 October 2014 near Bhendri village. The deceased was returning from a Navratri event with friends when the offending vehicle, registered as CG-06-GB-2260 and insured with ICICI Motor Insurance Company Limited, hit them from behind at high speed. Neelkanth died instantly; others sustained grievous injuries.
Procedural History
- 2 October 2014: Fatal accident occurred.
- 2015: Claim petition filed under Section 166 of the Motor Vehicles Act seeking Rs. 27 lakh compensation.
- 7 October 2015: Motor Accident Claims Tribunal awarded Rs. 3,95,000, assessing the deceased’s notional income at Rs. 3,000 per month.
- 2016: Appeal filed before the Chhattisgarh High Court challenging the income assessment and compensation amount.
Relief Sought
The appellants sought enhancement of compensation, arguing that the Tribunal erred in fixing the deceased’s monthly income at Rs. 3,000 and under-awarding conventional heads such as loss of consortium and funeral expenses.
The Legal Issue
The central question was whether the notional income of an 11-year-old school-going child, who had no formal employment, should be assessed at Rs. 3,000 or Rs. 5,000 per month under Section 166 of the Motor Vehicles Act, and whether deductions for personal expenses are permissible in such cases.
Arguments Presented
For the Appellant
Learned counsel relied on Thangavel v. Managing Director, Tamil Nadu State Transport Corporation (2025 SCC Online SC 1649), where the Supreme Court fixed the notional income of a minor at Rs. 5,000 per month without any deduction for personal expenses. He also cited National Insurance Co. Ltd. v. Pranay Sethi and Magma General Insurance v. Nanu Ram, emphasizing that consistent judicial policy mandates a uniform benchmark for minors to ensure fair compensation. The argument was that Rs. 3,000 was arbitrary and inconsistent with evolving standards of living.
For the Respondent
Respondents did not contest the appeal but supported the Tribunal’s award, offering no substantive legal rebuttal. Their counsel conceded that no separate appeal had been filed, effectively acquiescing to the claimants’ prayer for enhancement.
The Court's Analysis
The Court examined the principles laid down by the Supreme Court in Thangavel and noted that the Tribunal had failed to apply binding precedent. It observed that the assessment of Rs. 3,000 per month was speculative and lacked any evidentiary or doctrinal basis. The Court emphasized that notional income for minors is not derived from actual earnings but from the potential future earnings they would have generated had they lived, and must reflect a reasonable standard of living.
"The Hon’ble Supreme Court in Thangavel (supra) has laid down a clear and uniform benchmark for notional income of minor deceased, which must be followed by all Claims Tribunals and High Courts. Any deviation undermines the uniformity and fairness mandated by the law."
The Court further held that deductions for personal expenses, which are permissible for adult earners, are not applicable to minors, as they do not maintain independent households or incur such expenses. The multiplier of 15 was correctly applied under the Pranay Sethi framework for children under 15. The Court also upheld the Tribunal’s award of Rs. 40,000 each to the claimants for loss of consortium, recognizing the emotional and economic loss to parents and siblings.
The Verdict
The appellants succeeded in part. The Chhattisgarh High Court held that the notional income of an 11-year-old deceased student must be fixed at Rs. 5,000 per month without deduction for personal expenses. The total compensation was enhanced to Rs. 10,90,000, with an additional Rs. 6,95,000 awarded, carrying interest at 6% per annum from the date of application.
What This Means For Similar Cases
Notional Income for Minors Is Fixed at Rs. 5,000/month
- Practitioners must now argue that any Tribunal awarding less than Rs. 5,000/month for a minor deceased is legally untenable.
- No evidence of employment or income is required; the benchmark is automatic under Section 166.
- Opposing counsel cannot rely on outdated or arbitrary figures like Rs. 2,000 - 3,000 without facing reversal.
Loss of Consortium Must Be Awarded Separately
- Each immediate family member (parents, siblings) is entitled to Rs. 40,000 as a fixed head under Pranay Sethi.
- This is not discretionary; it must be included even if the claimant does not specifically itemize it.
- Tribunals must now explicitly state their reasoning if they deviate from this norm.
Deductions for Personal Expenses Are Prohibited for Minors
- Unlike adult claimants, minors’ notional income cannot be reduced by 30 - 40% for personal upkeep.
- This principle applies to all children under 18, regardless of whether they were studying, working informally, or unemployed.
- Advocates should cite Thangavel and this judgment to block such deductions in all pending cases.
