LI Network
Published on: 2 August 2023 at 14:40 IST
The Delhi High Court recently addressed the complex task of quantifying compensation for the death of a homemaker, emphasizing that monetary compensation cannot truly compensate for the love, care, and warmth provided by the deceased person to her family [National Insurance Co Ltd v. LRs of Sukhbir Singh].
Justice Gaurang Kanth made this observation in response to an argument put forth by an insurance company that in the absence of proof of income and education, it was not possible to compute the notional income of a homemaker based on the Minimum Wages Act.
Highlighting the multifaceted gratuitous services provided by a homemaker to her family, the Court emphasized the need for a wider approach when deciding the compensation for the death of such individuals.
A homemaker plays roles as a wife, mother, daughter, daughter-in-law, and more, which cannot be accurately quantified in monetary terms, the Court stated. While monetary compensation can offer a financial cushion to the bereaved family, it can never truly replace the love, care, and warmth provided by a mother or wife.
The case before the Court involved an appeal filed by an insurance company against an order passed by the Motor Accidents Claims Tribunal (MACT).
The MACT had awarded compensation to the claimants for the loss of their family members in a motor accident, including a deceased homemaker with no income.
The insurance company contested the compensation granted to the deceased homemaker, primarily arguing that the MACT wrongly calculated her notional income based on the Minimum Wages Act.
The company contended that personal expenses were not deducted, and an additional 25% was wrongly added for future income calculation under the ‘loss of dependency’ calculation.
The Court considered the Supreme Court’s judgment in National Insurance Co. Ltd. v. Pranay Sethi and reiterated that compensation must be awarded for the death of a homemaker in a motor vehicle accident.
However, the Court noted that determining the notional income for a homemaker required a wider perspective due to the diverse roles they play in the family.
Given the lack of evidence, the Court stated that courts often have to calculate the notional income of an injured person based on the minimum wages notified under the Minimum Wages Act. In this case, the MACT had made no mistake in computing the notional income.
Referring to the same judgment, the Court decided that an additional 40% of the established income of the deceased should be granted under “Future Prospects” instead of the 25% awarded by the MACT.
After making deductions for personal expenses, the Court determined the final compensation amount to be ₹15.95 lakh and directed that the differential amount be returned to the insurance company.
The judgment highlights the challenges faced in determining compensation for the death of homemakers and underscores the need for a compassionate and broader approach in such cases.
