Notional Income of Homemakers must be calculated based on the principles of fairness, equality and good conscience: Supreme Court of India

These civil appeals which have been heard through video Motor Accident Claims Tribunal Rohini on 24.12.2016 under Section 168 of the Motor Vehicle Act 1988 was reduced to Rs 22 lakhs The deceased couple Vinod and Poonam while commuting on a motorcycle in Delhi at around 7AM on 12.04.2014 were hit at an impact immediately incapacitated both the deceased and they soon passed away from cranio­cerebral damage and haemorrhagic shock Penal Code 1860 against the driver and the of the MV Act by the two toddler­daughters and septuagenarian­ claiming that the deceased were themselves driving negligently and were examined by the appellant­claimants and none by the respondents. The insurance company offered as Relying on the strong testimony of the independent witness it was concluded that the car­driver was indeed driving rashly and thus quantum of compensation the Tribunal began by determining the ages of Poonam and Vinod as being 26 and 29 years respectively Consequently an age­multiplier of 17 was adopted. Although the unable to substantiate his claim with any documentary evidence dependency. An additional 25% income was accounted for future prospects of Poonam and 1 3rd of Vinod’s salary was deducted as compensation for loss of love and affection estate and funeral This computation was challenged by the respondent­insurer given their established residence in Haryana the minimum wage non­deduction of personal expenses for Poonam was prayed to be of contributory negligence. A categorical submission was made prospects’ to non­permanent employees pending resolution of which The High Court concurred with these contentions and consequently reduced the notional income for both deceased by Haryana instead of Delhi. Similarly 1 3rd of Poonam’s income was to both deceased. However given the totality of circumstances and Poonam’s contribution to her household 25% additional gratuitous increase of income between Vinod and Poonam and the usage of Learned Counsel for the respondent­insurer on the other hand the ground of future prospects. It is claimed that the High Court’s had conceded to a lower computation under the head of loss of 10. We have thoughtfully considered the rival submissions. It the deceased’s dependent mother ought not to be a reason for ought not to ordinarily affect pending proceedings. Just like how appellant­claimants cannot rely upon subsequent increases in minimum wages the respondent­insurer too cannot seek benefit of the subsequent death of a dependent during the pendency of legal 11. Any compensation awarded by a Court ought to be just reasonable and consequently must undoubtedly be guided by principles of fairness equity and good conscience.3 Not only did the family of the deceased consist of septuagenarian parents but there were also two toddler­girls aged merely 3 and 4 years each of whom self­dependency. Tragically in addition to the married couple the and Poonam ought to be 1 4th only and not 1 3rd as applied by the Tribunal and the High Court more so when there were four family 2 Director of Elementary Education v. Pramod Kumar Sahoo 10 SCC 674 ¶ 11 3 See Helen C Rebello v. Maharashtra State Road Transport Corp 1 SCC 90 ¶ 28. 12. Second although it is correct that the claimants have been adoption of the lowest­tier of minimum wage while computing his he maintained a reasonable standard of living for his family as existing standard of living of a deceased’s family is a fundamental endeavour of motor accident compensation law.4 Thus at the very Third and most importantly it is unfair on part of the respondent­insurer to contest grant of future prospects considering not to be paid pending outcome of the Pranay Sethi 14 SCC 1 ¶ 9 reference. Nevertheless the law on this point is no longer res integra and stands crystalised as is clear from the following extract of the necessary method of computation. The established income Given how both deceased were below 40 years and how they have not been established to be permanent employees future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional income is both incorrect in law6 and without merit considering the quote the observations of this Court in Hem Raj v. Oriental there is positive evidence of income and where minimum 5 National Insurance Co Ltd v. Pranay Sethi 16 SCC 680 ¶ 59.4 7 15 SCC 654 income is determined on guesswork in the facts and circumstances of a case. Both the situations stand at the same footing. Accordingly in the present case addition of 15. Finally given the lack of arguments on the other heads of funeral charges loss of estate love and affection there arises no adoption of 17 as the age­multiplier award of 9% interest calculation 16. For the reasons afore­stated the appeals are allowed in­part to reach a new total of Rs 33.20 lakhs. The enhanced amount of 9% p.a. from the date of filing of the Detailed Accident Report i.e by my learned brother Surya Kant J. and am in complete agreement with him. However I thought to supplement the reasoning in his judgment with respect to the question of notional income of a housewife and whether future prospects category of cases relates to those wherein the victim was employed but the claimants are not able to prove her actual income before the Court. In such a situation the Court record like the quality of life being led by the victim and her family the general earning of an individual employed in that field The second category of cases relates to those situations non­earning victim such as a child a student or a homemaker instance for students the Court often considers the course that they are studying their academic proficiency the family background etc. to determine and fix what they could earn in 5. One category of non­earning victims that Courts are often The granting of compensation for homemakers on a pecuniary basis as in the present case has been considered by this Court earlier on numerous occasions. A three­Judge Bench of this Court in Lata Wadhwa v. State of Bihar 8 SCC 197 services rendered by them in the house and their age. This Court in that case held as follows “10. So far as the deceased housewives are attempt has been made to determine the compensation on the basis of services the age group of the housewives appropriate housewives which has been arrived at Rs 12 000 in any manner by providing the data for housewives. But even in the absence of such data and taking into consideration the multifarious services rendered by the housewives for managing the entire family even on a modest estimation should be Rs 2010) 9 SCC 218 this Court while dealing with the grant of the contribution made by the wife to the in terms of money. The gratuitous services rendered by the wife with true love and managing the household affairs cannot be in the constant attendance of the family throughout the day and night unless she is employed and is required to attend the children including cooking of food washing of clothes etc. She teaches small children and provides invaluable guidance to them for their the household work such as cooking food clean etc. but she can never be a substitute for in lieu of the services rendered by the wife mother to the family i.e. the husband However for the purpose of and children award of compensation to the dependants some pecuniary estimate has to be made of context the term “services” is required to be attention given by the deceased to her children the loss of gratuitous services rendered by the Ltd. 2020 SCC OnLine SC 521 wherein the notional income of Before discussing this topic further it is necessary to Census nearly 159.85 million women stated that “household work” was their main occupation as compared to only 5.79 In fact the recently released Report of the National Statistical Office of the Ministry of Statistics & Programme Implementation Government of India called “Time Use in India­ 2019” which is the first Time Use Survey in the country and collates information from 1 38 799 households for the period January 2019 to December 2019 reflects the same gender disparity.1 The key findings of the survey suggest that on an average women spend nearly 299 minutes a day on unpaid domestic services for household members versus 97 minutes spent by men on average.2 Similarly in a day women on average members as compared to the 76 minutes spent by men on the picture in India even more clear­ women on average spent 16.9 and 2.6 percent of their day on unpaid domestic services and unpaid caregiving services for household members It is curious to note that this is not just a phenomenon by a Commission set up by the French Government analyzing data from six countries viz. Germany Italy United Kingdom France Finland and the United States of America highlighted “117. Gender differences in time use are significant. In each of the countries under consideration men spend more time in paid unpaid work. Men also spend more time on leisure than women. The implication is that 1 National Statistical Office Time Use in India­ 2019has highlighted this bias those who are doing household duties like cooking cleaning of utensils looking after children fetching water collecting firewood have been categorised as non­workers and equated with beggars prostitutes and prisoners who according to the census are not engaged in economically productive work. As a result of women in India have been classified in the Census of India 2001 as non­workers and prisoners. This entire exercise of census of housework has been a problem which was identified as far wages whether in the factory or in the home but mothers and wives gratuitously to their own or his cook the national dividend is This issue was further focused on by those in the field of traditional labour statistics which did not consider unpaid 6 Cecil Pigou The Economics of Welfare 44case. However rationale 18. Apart from the above scholarship around this issue could provide some guidance as to other methods to determine the of the income of the earning surviving spouse the value of a homemaker s unpaid labour by at home viz. the opportunity lost. The second is the partnership method which partnership and in this method the homemaker s salary is valued at half her husband s salary. Yet another method is to evaluate homemaking by determining how 8 See Ann Chadeau What is Households’ Non­Market Production Worth OECD ECONOMIC STUDIES NO. 18Also see United Nations Economic Commission for Europe supra note 7. with paid workers. This is called the 19. However it must be remembered that all the above methods are merely suggestions. There can be no exact calculation or towards determining in the best manner possible the truest approximation of the value added by a homemaker for the conservatively nor so liberally as to make it a bounty to claimants 16 SCC 680 Kajal v. Jagdish Chand 4 21. Once notional income has been determined the question granted with regard to it. Initially the awarding of future by the victim (1994) 2 SCC 176 Sarla Dixitv. Balwant Yadav victim while awarding future prospects was continued in the judgment of this Court in Sarla Verma v. Delhi Transport Corporation 6 SCC 121 wherein the Court “24. In Susamma Thomas2 SCC 176 increased only by 50% and Bezbaruah3 SCC 148] the income was increased by a mere 7%. In view of the imponderables and uncertainties we are in favour of adopting as a rule of thumb an prospects where the deceased had a the annual income is in the taxable range the salary less tax”). The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition where the age of the deceased is more than 50 years Though the evidence may indicate a different percentage of increase it is necessary to standardise the addition to avoid different was self­employed or was on a fixed salary the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special 22. However there was a shift in jurisprudence regarding future prospects with the five­Judge Bench decision of this Court in future prospects to even self­employed persons or those on a we are disposed to think when we accept the principle of standardisation there is really no self­employed or a person who is on a fixed salary. To follow the doctrine of actual of multiplicand would be unjust. The determination of income while computing so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In an acceptable certainty. But to state that the of compensation would be inapposite. It is hand and staticness on the other. One may perceive that the comparative measure is other but such a perception is fallacious. It is because the price rise does affect a self­ employed person and that apart there is always an incessant effort to enhance one s income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of competing attitude in the private sector to enhance the salary to get better efficiency is self­employed is bound to garner his resources and raise his charges fees so that he can live with same facilities.…Taking into consideration the cumulative factors namely passage of time the changing society escalation of price the change in price index the human attitude to follow a particular pattern of life etc. an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the 23. The rationale behind the awarding of future prospects is into account the realities of life particularly of inflation the quest of individuals to better their circumstances and those of their 24. Taking the above rationale into account the situation is in the first category of cases outlined earlier those where the would be earning an income. It is clear that no rational particularly when the Court has determined their notional 25. When it comes to the second category of cases relating to take place in the domain of work within the household. It is worth noting that although not extensively discussed this Court has been granting future prospects even in cases pertaining to notional income as has been highlighted by my learned brother Surya Kant J. in his opinion15 SCC 654 Sunita Tokas v. New 26. Therefore on the basis of the above certain general notional income for homemakers and the grant of future prospects with respect to them for the purposes of grant of a. Grant of compensation on a pecuniary basis with respect b. Taking into account the gendered nature of housework with homemaker attains special significance. It becomes a recognition of the work labour and sacrifices of notional income of a homemaker depending on the facts d. The Court should ensure while choosing the method and e. The granting of future prospects on the notional income calculated in such cases is a component of just 27. With the above observations I concur with the opinion of

Summary: Calculation of Notional Income of Homemakers must be on the basis of their work, labour and sacrifices. The Supreme Court while deciding upon an insurance claim case gave utmost importance to promote gender equality in the country. The bench also observed that, “furtherance of our Nation’s International Law obligations and our Constitutional Vision of Social Equality and ensuring dignity to all.” The Supreme Court presided over by J. N.V. Ramana, J. S.A. Nazeer &amp; J. S. Kant laid down this ratio in the case of Kriti &amp; Anr. Vs. Oriental Insurance Company Limited, [Civil Appeal Nos. 19-20 of 2021]. The Supreme Court was dealing with an Insurance Dispute in this case. In the year 2014 a couple met with an accident and died. The husband was working as a teacher and the wife was a housewife. The couple had three surviving dependents i.e. two minor daughters and father of the deceased. The Court while deciding upon the insurance claim was deciding upon the monthly income of the deceased woman who was a homemaker. The Supreme Court on this particular issue was of the opinion that, “Any compensation awarded by a Court ought to be just, reasonable and consequently must undoubtedly be guided by principles of fairness, equity, and good conscience.” Further, on the deciding how to determine the notional income of homemakers stated that, “On an average, women spend nearly 299 minutes a day on unpaid domestic services for household members versus 97 minutes spent by men on average. Similarly, in a day, women on average spend 134 minutes on unpaid caregiving services for household members as compared to the 76 minutes spent by men on average. The total time spent on these activities per day makes the picture in India even more clear­ women on average spen 16.9 and 2.6 percent of their day on unpaid domestic services and unpaid caregiving services for household members respectively, while men spent 1.7 and 0.8 percent.” The Court further elaborating upon Gender Equality &amp; Analysis stated that, “The sheer amount of time and effort that is dedicated to household work by individuals, who are more likely to be women than men, is not surprising when one considers the plethora of activities a housemaker undertakes. A housemaker often prepares food for the entire family, manages the procurement of groceries and other household shopping needs, cleans and manages the house and its surroundings, undertakes decoration, repairs and maintenance work, looks after the needs of the children and any aged member of the household, manages budgets and so much more.”