1 2025:CGHC:25657 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1084 of 2019 1. The New India Assurance Company Limited Through Its Branch Manager, Branch Office-Transport Nagar Korba, Tahsil And District- Korba, Chhattisgarh............(Non-Applicant No.5), District : Korba, Chhattisgarh ... Appellant/Non-applicant No.5 Versus 1. Smt. Pushpa Sagar W/o Amritlal Sagar Aged About 40 Years 2. Amritlal Sagar S/o Late Mangal Ram Sagar Aged About 41 Years 3. Arun Kumar Sagar S/o Amritlal Sagar Aged About 16 Years 4. Aditya Kumar-Sagar S/o Amritlal Sagar Aged About 10 Years Respondent No.3 & 4 are minor through their Father-Amritlal Sagar, All are Sarthi by caste, R/o Village Chhuri, Tahsil Katghora, District- Korba, Chhattisgah.......… 5. Narendra Kumar S/o Late Shri Gopal Prasad Tiwari Aged About 40 Years R/o Melnadih, P.S.- Ratanpur, District- Bilaspur, Chhattisgarh.............(Non-Applicant No.1), 6. Chittgovind S/o Hulasram Dubey R/o Police Line Korba, District- Korba, Chhattisgarh............(Non-Applicant No.2), 7. Rakesh Kumar S/o Shankar Dayal Shrivash R/o Vijay Nagar Chakabuda, Tahsil Katghora, District- Korba, Chhattisgarh............(Non-Applicant No.3), 2 8. M/s R. K. Transport & Company Limited Korba, Address-Plot No. 65a Transport Nagar, Korba, District- Korba, Chhattisgarh., District : Korba, Chhattisgarh ... Respondent(s) For Appellant : Mr. Dashrath Gupta, Advocate For Respondent No.1 to 3 : Mr. Praveen Dhurundhar, Advocate For Respondents 4 to 8 : None Hon'ble Shri Justice Parth Prateem Sahu Judgment On Board 11/06/2025 1. Appellant-Insurance Company has preferred this appeal challenging the award dated 15.3.2019 passed by the learned Additional Motor Accident Claims Tribunal, Katghora District Korba (for short ‘the Claims Tribunal’) on the ground that the Claims Tribunal has awarded exorbitant compensation under the head of loss of dependency to the claimants, who are parents and siblings of deceased child. 2. Facts of the case in brief are that on 22.5.2017 the Scooty Moped in which Alok Kumar (deceased) was traveling as a pillion was dashed by Indica Vista car bearing registration mark CG12-D-9062 as a result Alok Kumar fell on road from Scooty, came under the wheel of truck coming from behind and got crushed as a result he sustained fatal injuries and died on the spot. An application under Section 166 of the Motor Vehicles Act, 1988 (for short ‘the Act of 1988’) seeking compensation to the tune of Rs.90,00,000/- with interest was filed by the claimants, who are parents and siblings of the 3 deceased child. 3. Considering the age of the deceased, the Tribunal adopting the minimum wage of a labour considered a sum of Rs.8,190/- per month as the notional monthly income of deceased for calculating loss of dependency, added 40% towards future prospects; applied 50% deduction towards personal expenses and multiplier of 15 and awarded a total compensation of Rs.10,31,940/-. A sum of Rs.15,000/- for funeral expense, Rs.20,000/- for pains and suffering etc. and Rs.15,000/- for loss of estate was also added, leading to total compensation of Rs.10,81,940 with interest @ 7% p.a. 4. Learned counsel for appellant vehemently contended that award of Rs.10,81,940/- as compensation for the death of a 14 years old child is highly exorbitant, excessive and against the principles laid down by Hon’ble Supreme Court regarding payment of compensation for the death of minor child. He submits that at any rate, award of compensation of Rs.5,00,000/- would have been the maximum amount awardable in this case. He submits that the Claims Tribunal has fallen in serious error by assuming income of Rs.8,190/- in respect of the child on basis of prevalent minimum wage rate in the State. As the deceased was only a 14 years old child, therefore, the loss of dependency ought to have been determined on notional basis and not by applying the 4 minimum wages as notified by the State of Chhattisgarh. He next contended that the deceased was a minor who had no income and therefore, the question for grant of future prospects with regard to him does not arise. Thus, the method adopted by Claims Tribunal in calculating the compensation in case of death of a child in a motor vehicular accident is not correct and liable to be interfered with. In support of his contentions, he relied upon decisions of Hon’ble Supreme Court in case of Lata Wadhwa v. State of Bihar reported in (2001) 8 SCC 197 and Kishan Gopal and another vs. Lala and others, reported in (2014) 1 SCC 244. 5. Learned counsel appearing on behalf of claimants/respondents No.1 to 5 opposing submissions of learned counsel for appellant, would submit that calculation of compensation done by the Claims Tribunal is correct and does not call for any inference. 6. Heard learned counsel for the respective parties and perused the impugned award and documents available in record of the Claims Tribunal. 7. Point for determination in this appeal is whether the method adopted by the Claims Tribunal for calculation of income in order to determine the compensation in case of death of a child below 15 years was appropriate or not. 8. To determine the compensation for the death of a child, the 5 initial trend was to award a lump sum money depending on the age of the child. However, in case of Lata Wadhwa (supra), Hon’ble Supreme Court divided children into two categories, one comprised children in between the age group of 5 to 10 years and second between 10 to 15 years. For the first category, flat compensation was fixed whereas for second category the Hon’ble Supreme Court fixed the notional income as well as multiplier. Later on, the method of awarding lump sum money for the death of children below the age of 10 years was discarded and the multiplier method came be to adopted as the single standard method for determining the compensation payable in cases of death of children of any age. Initially, in the case of death of a child upto 15 years, notional income of Rs.15,000/- in terms of Second Schedule to Section 163A of the Act of 1988, was being adopted which was from time to time corrected/enhanced by taking into consideration the cost inflation index etc. 9. In case of Kishan Goptal (supra) Hon’ble Supreme Court, while assessing the notional Income of 10 years old deceased child who died in a road accident on 19.7.1992, declined to fix the income as Rs.15,000 p.a. (the amount specified in the Second Schedule for a non-earning member) by observing that value of Rupee has come down drastically since 1994 and the amount mentioned in the Second Schedule would be inadequate. Therefore, Hon’ble Supreme Court determined 6 notional income at Rs.30,000/- p.a., by taking into consideration the Cost Inflation Index etc. The Second Schedule however, stands deleted w.e.f. 01.09.2019 and the trend thereafter, has been to calculate the dependency of a child on the basis of minimum wages prescribed by the competent authority in the State. 10. In the case of Kajal vs. Jagdish Chand & ors, reported in (2020) 4 SCC 413, while computing loss of earning for calculating compensation to be granted to a 12 years old girl child who suffered permanent disability in a road accident dated 18.10.2007, Hon’ble Supreme Court observed that the Courts have erred in taking notional income of Rs.15,000 p.a. as the girl was a young child of 12 years and held that this was not a proper way of assessing the future loss of income because after completing studies the child could have worked and would have earned much more than Rs 15,000 p.a. Hence, the Supreme Court applied the Minimum Wages payable to a skilled workman and opined that the same would be reflective of the minimum amount which she would have earned on becoming major. 11. Subsequently, in case of Master Ayush v. Branch Manager, Reliance General Insurance Co. Ltd. & another, reported in (2022) 7 SCC 738, Hon’ble Supreme Court while considering the grant of compensation to the parents on account of injuries suffered by a five-year-old child in accident dated 21.9.2010, relying upon its decision in case of Kajal (Supra), observed that 7 the notional income should be calculated on the basis of minimum wages payable to a skilled worker. It has also been observed that in addition to the Minimum Wages for skilled worker, the Claimants would also be entitled to 40% for future prospects in view of the judgment of National Insurance Company Limited vs. Pranay Sethi & ors, reported in (2017) 16 SCC 680. 12. In case of Master Jyothis Raj Krishna represented by his next friend and father Rajesh Kumar vs. Sunny George, reported in 2024 SCC Online Ker 6875, the High Court of Kerala has observed that "This Court is conscious of the fact that by referring to the provisions of the Minimum Wages Act, 1948, for the purpose the notional income of a minor child, this Court has never ignored the future of a blooming young mind nor has closed its eyes over the bright future of the child and the prospects which he may have secured but for this fatal accident." 13. In case of Royal Sundaram General Insurance Co. Ltd. vs. Zeenat Khan & ors, reported in 2024 SCC Online Del 6941 the Delhi High Court while dealing with an appeal by Insurance Company challenging the compensation awarded by the Tribunal by presuming income of deceased child as per minimum wages of a unskilled labourer in Himachal Pradesh and adding future prospects @ 40%, has held that the Claims Tribunal has rightly calculated the notional income of the child 8 @ Rs.8,250/-. The Court has observed thus:- 16. In light of the aforementioned rulings by the Supreme Court and this Court, the most reasonable approach to assess loss of dependency, even for a minor, would be to refer to the minimum wages established by the State Government in the location where the minor lived at the time of the accident. 17. As the notional income is being determined on basis of the minimum wages, future prospects would also be calculated on the basis of this income at the rate of 40% by applying the principle laid in National Insurance Company Limited vs Pranay Sethi & others, (2017) 16 SCC 680. 18. Therefore, the Tribunal has rightly calculated the notional income of the child @ Rs.8,250/-, which was the minimum wages for unskilled worker in Himachal Pradesh. The Annual income has thus been rightly calculated as Rs.99,000/- p.a. 40% of this Income, amounting to Rs.39,600/- has been further added to this amount towards future prospects in terms of Pranay Sethi (Supra). The notional income thus, calculated as Rs.1,38,600/- is in accordance with the observations made by the Apex Court, as discussed above.” 14. In C.M.A. No.1767/2022, parties being Sheelarani vs Sasirekha, wherein a nine year old child died in a road accident occurred on 20.11.2017, the Madras High Court has fixed notional income of deceased at Rs.60,000/- p.a. and applied multiplier of 15 to assess the loss of dependency. 9 The Court has observed thus:- 5.2 Stricto sensu, none can price a life. Still, a life, whenever is lost in a tortious act, law imposes an obligation on the tortfeasor to compensate the loss with damages, and hence valuing life in monetary terms becomes indispensable. The difficulty is in valuing it fairly. And often the key factor that guides the court is either the actual earning through a lawful avocation, or an ability to earn assessable income on the basis of a victim's proven skills or education qualification. Sadly a child does not fall in either of these categories. Till not long ago, law has very insensitively dealt with a child's life as one without any income and valued a child's life at insulting rate. Law has not realised that Sania and Sachin became what they are because they as children were allowed to blossom. Indeed, every child can achieve greatness that its ability to grow and to utilise the opportunity may grant it. To devalue a child's life for no fault of it, might not be the right approach. But law did it. 9.Turning to the facts of this case, the tragic accident had taken place on 20.11.2017. This Court considers that Rs. 60,000/- p.a., after considering the inflation and cost of living at 2017 as determined by this Court in Sakunthala and Govindaraj cases, is appropriate notional income, and chooses to apply 15 as the multiplier without any deduction.” 15. Thus, the position which emerges from the reading of above judgments is that in the past the income of a child died in a motor vehicular accident used to be assumed and notional 10 income used to be fixed on the basis of 2nd Schedule to the Act of 1988, which has been increased from time to time by taking into account the inflation, devaluation of the rupee and cost of living. The Second Schedule to the Act of 1988 stands deleted w.e.f. 01.09.2019, and the trend thereafter, has been to calculate the dependency of child victim on the basis of minimum wage fixed by the State Government for the location where such child lived at the time of the accident. 16. In view of above, this Court is of the view that the Claims Tribunal has rightly worked out the loss of dependency taking income of deceased child on the basis of minimum wages as notified by the competent authority in the State of Chhattisgarh. 17. The claimants have pleaded and stated in the evidence that the deceased child was studying in Class 8th and was a bright student. Occupation of the mother of the child is mentioned to be ‘teacher’ in the deposition sheet of the Claims Tribunal. It has been reiterated time and again by the Tribunals / Courts that if the deceased child had lived up to his normal age, after becoming major, the minor would start earning and must be spending some amount upon their parents; and with the increase in income, the dependency of the parents on the income of the minor would also increase. Therefore, the future prospect theory would be applicable in case of 11 determination of compensation for the death of minor child in order to compensate the parents. Thus, in the considered opinion of this Court, the Claims Tribunal has not committed any mistake in adding 40% of income towards future prospects while computing loss of dependency. 18. For the foregoing, there is no substance in the appeal filed on behalf of appellant, the same is liable to be and is accordingly dismissed. Sd/- (Parth Prateem Sahu) Judge roshan/- SYED ROSHAN ZAMIR ALI Digitally signed by SYED ROSHAN ZAMIR ALI