What Should the Intellectual Income of a 5-Year-Old Child Be in Motor Accident Claims? Kerala High Court Replies

The Insurance Company challenged the Court’s decision to fix the notional income at Rs 8,000 per month.

Judge Easwaran S. mentioned Master Ayush / Branch Manager, Reliance General Insurance Co. Ltd and Others (2022) where the Apex Court awarded over 50 lakh rupees as compensation to a 5-year-old victim who was left paralyzed for life in an accident. Based on this, the Supreme Court observed that the Courts should adopt a progressive consideration and not apply a restrictive consideration while determining the notional income of a minor child.

“In case of the State of Kerala, the Government has fixed the minimum rates at which wages must be paid. In GO(P).No.56/2017/Fin dated 28.04.2017, Government of Kerala revised the minimum wage for skilled workers on 01.04.2016 and the same was fixed at ₹17,325/- per month. Therefore, the Court is of the view that the notional income of the plaintiff can be determined at ₹17,325/-. By formulating the above suggestion, this Court hopes that the same will provide relief to the petitioners in cases where determination of the notional income of the minor child is involved.”

Background Facts

In this incident, a 5-year-old child studying at UKG was hit by a car that was driven carelessly and negligently in 2016. The child has been in a vegetative state for 8 years and has lost his childhood. The Medical Board evaluated the child as 77 percent disabled.

The court fixed the estimated income of the minor at 8,000 rupees per month and awarded compensation of 44,94,223 rupees. Both the plaintiff and the insurance company chose to object to the compensation awarded by the Court.

The Insurance Company submitted that the notional income of Rs 8,000 fixed by the Court was high. It was also argued that the Court erred in awarding interest on compensation for future medical treatments. It was also stated that it is not permissible to give compensation for loss of earning capacity, as well as disability compensation.

On the other hand, the plaintiffs argued that because the minor was in a vegetative state, the functional disability should be fixed at 100 percent instead of 77 percent. The compensations given under various headings were also objected to, on the grounds that they were insufficient.

Observations

The Court found that the Tribunal did not provide any justification before determining Rs 8,000 as fictitious income. It was stated that there was no precedent before the Court regarding the determination of the fictitious income of a minor boy who lost his childhood in a vegetative state.

The court stated that Tribunals and Tribunals must grant just and equitable compensation in accordance with the principles contained in the Motor Vehicles Act.

Based on the Apex Court decision in the case of Mater Ayush (supra) and the provisions of the Minimum Wages Act, the Court fixed the notional income at Rs 17,325 per month. He further clarified: “By referring to the provisions of the Minimum Wages Act, 1948 for the purpose of notional income of a minor, this Court is conscious that it has never ignored or closed its eyes on the future of a blossoming young mind. The boy’s bright future and the hopes he could have secured if this fatal accident had not happened. The above exercise is intended only to serve as a guide for the purpose of calculating notional income without which claimants would be plunged into insolvency.”

He further stated that the Insurance Company cannot fix an insufficient amount of Rs 5000 as companion expense as there is no objection to recovery for a minor injury. The Court cautioned that Insurance Companies have corporate social responsibility and noted that the Apex Court in Kajal v. Based on its decision in the case of Jagdish Chand and Others (2020), it stated that the multiplier system should be applied in calculating companion fees/audience expenses.

“Therefore, this Court is of the view that there is no absolute rule that only Rs.5,000/- can be awarded while determining the accompanying expenses. “The court cannot close its eyes to the realities of life and believe that attendant services will be available for Rs 5,000 to provide care to a child in a state of paraparesis,” The court added.

The court clarified that the relevant fees must be fair and reasonable and emphasized that they need not be calculated solely on the basis of the Minimum Wage Act. The Court believes that relying solely on the Law, abnormal situation Since minimum wages in Kerala are among the highest in the country, the compensation awarded will be disproportionate.

The court determined 10,500 rupees as the monthly income to calculate the companion expenses and stated that it was appropriate to determine the companion fee for two people for the care of the paralyzed child.

Based on various case law, the Court stated that the child should be considered 100 percent functionally disabled and therefore changed the amount of compensation awarded by the Court.

Further, the Court referred to the cases of Kothandapani Vs Tamil Nadu Road Transport Corporation Limited (2011), S.Manickam Vs Metropolitan Transport Corporation Limited (2013), Minor Basid VS KCSanu and Another (2018) to state that there is a claim for compensation for loss of earnings. It was sustainable as well as permanent injuries. He stated that the Motor Vehicles Law should be interpreted beneficially instead of restrictive interpretation based on old principles.

The court stated: “It cannot be ignored that permanent disability leads to the loss of enjoyment of life’s opportunities and comforts. Although a person suffering from a permanent disability is entitled to claim compensation, the Court cannot condone debilitating physical disability where the nature of the permanent disability is such that it prevents the person from earning a living. the condition of the child…. Apart from the fact that permanent disability affects the person’s earning capacity, the person undoubtedly has to give up other personal comforts and even have to depend on others for normal activities.”

The court went on to fix Rs 15 lakh for pain and suffering based on the Apex Court decision in the Kajal case (supra). It was also stated that the child in case of paraparesis will have special nutritional requirements and Rs 3 lakh will be fixed for dietary expenses and Rs 3 lakh for future treatment. It was also noted that the multiplier should be fixed at 15 based on various precedents.

The court ruled that 7 percent interest should be paid from the date of application until its realization. The Supreme Court increased the interest rate from 7 percent to 9 percent.

Accordingly, the Court rejected the objection of the Insurance Company and partially allowed the objection of the plaintiff by increasing the compensation from approximately 45 lakhs to 85 lakhs.

“Accordingly, the appellant/plaintiff is awarded additional compensation of Rs 84,87,100 (Rupees eighty-four lakh eighty-seven thousand one hundred only) over and above the compensation awarded by the Tribunal with interest at 9% per annum from the date of petition till realization along with commensurate costs.

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Quote: 2024 LiveLaw (Ker) 753

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