REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION   

CIVIL APPEAL NO.5843    OF 2010 (Arising out of SLP(C) No.19655 of 2004)

 Arun Kumar Agrawal and another ……Appellants

Versus

National Insurance Company and others ……Respondents

J U D G M E N T

G.S. Singhvi, J.

1. Leave granted.

2. What  should be  the  criteria  for  determination  of  the  compensation  

payable to the dependents of a woman who dies in a road accident and who  

does  not  have regular  source of  income is  the  question which arises  for  

determination  in  this  appeal  filed  against  the  judgment  of  the  Division  

Bench  of  Allahabad  High  Court  which  declined  to  enhance  the  

compensation  awarded  to  the  appellants  by  Motor  Accident  Claims  

Tribunal, Shahjahanpur (for short, ‘the Tribunal’).

3. Smt. Renu Agrawal (wife of appellant No.1 – Arun Kumar Agrawal  

and mother of appellant No.2 – Suwarna Agrawal) died in a road accident  

when the car driven by appellant No.1 was hit by truck bearing No.UGK-

489 in village Pachkora, District Hardoi, U.P.  The appellants filed a petition  

under Section 166 of the Motor Vehicles Act, 1988 (for short, ‘the Act’) for  

award of compensation of Rs.19,20,000/- by asserting that the accident was  

caused due to rash and negligent driving of the truck which was owned by  

respondent  No.2,  Mohd.  Farooq  and  was  insured  with  respondent  No.1.  

They pleaded that the deceased was 39 years of age at the time of accident  

and due to her death, life of appellant No.1 had become miserable inasmuch  

as being a government servant he was unable to look after his minor child.  

They further pleaded that the deceased used to look after domestic affairs of  

the family and both the appellants have been deprived of the care, love and  

affection of the deceased and the comfort of her company.   

4. The  owner  of  the  truck  (respondent  No.2),  its  driver  (respondent  

No.4) and the insurance company (respondent  No.1) contested the claim.  

All of them denied that the accident was caused due to rash and negligent  

driving of the truck by respondent No.4.  According to them, appellant No.1  

was  responsible  for  the  accident.   They  disputed  the  dependency  of  the  

appellants and the quantum specified in the claim petition.  Respondent No.1  

2

further pleaded that it was not liable to pay compensation because driving  

licence of respondent No.4 was not valid; that the owner had not complied  

with Section 64 VB of the Insurance Act and that the owner and the insurer  

of Tata Sumo UP-65/4559, which was also involved in the accident were not  

made parties.     

5. After  considering  the  pleadings  and  evidence  of  the  parties,  the  

Tribunal held that the accident was caused due to rash and negligent driving  

of the truck by respondent No.4 and being legal heirs of the deceased, the  

appellants  are  entitled  to  compensation.   While  dealing  with  the  issue  

relating to the quantum of compensation, the Tribunal extensively referred to  

the statement of appellant No.1, who stated that the deceased was earning  

Rs.50,000/- by engaging herself in paintings and handicrafts.  The Tribunal  

held that the deceased was deeply involved in the family affairs and after her  

death, the entire family was broken and as a result of that, working capacity  

of appellant No.1 was decreased.  The Tribunal noted that at the time of  

accident monthly income of appellant No.1 was Rs.15,416/- and held that in  

view of clause 6 of Second Schedule of the Act, the income of the deceased  

could  be  assessed  at  Rs.5,000/-  per  month  (Rs.60,000/-  per  annum)  and  

after  making  deduction  of  Rs.20,000/-  towards  personal  expenses  of  the  

deceased and applying the multiplier  of  15,  the total  loss of  dependency  

3

comes  to  Rs.6  lacs.   However,  instead  of  awarding  that  amount  as  

compensation, the Tribunal reduced the same to Rs.2,50,000/- by making the  

following observations:

“The claimants are entitled to this amount of compensation but  keeping in mind that the deceased was actually not an earning  member and this is only based on notional income.  The amount  of  compensation  is  too much and as such a lesser  multiplier  could be adopted in the present case.  In the circumstances of  this  case,  the  claimants  are  entitled  to  Rs.2,50,000/-  as  compensation  from  the  insurance  company.   This  issue  is  accordingly decided with the above observation.”

6. The High Court dismissed the appeal preferred by the appellants by  

making the following observations:

“At the time of accident claimant No.1 Arun Kumar Agrawal  was getting monthly salary of Rs.15,416/- and at time of filing  the  appeal  Rs.24,042/-  per  month.   Claimant  Arun  Kumar  Agarwal and his son aged about seven years are the only legal  representatives of the deceased.  Neither of the claimants were  dependents upon the deceased.  The services rendered by Renu  Agrawal,  the  deceased  as  house  wife  may  be  estimated  at  Rs.1250.00  per  month  and  thus  the  annual  contribution  by  rendering  services  comes  to  Rs.15,000/-  and  applying  the  multiplier  of  15  it  comes  to  Rs.2,25,000/-  and  adding  the  amount of Rs.3000.00 as funeral expenses, Rs.7,000.00 due to  loss of love and affection to the son and Rs.15,000.00 due to  loss  of  comfort  consortium,  the  compensation  comes  to  Rs.2,50,000.00.  Thus,  considering  all  the  facts  and  circumstances, the compensation awarded is just and fair.”

7. Shri Sanjay Singh, learned counsel for the appellant relied upon the  

judgment of this Court in  Lata Wadha and others v. State of Bihar and  

4

others (2001) 8 SCC 197 and argued that the Tribunal and the High Court  

committed serious error by not awarding just and fair compensation to the  

appellants  ignoring  that  the  family  was  not  only  deprived  of  the  money  

which the deceased used to earn from paintings and handicrafts but also of  

her services as housewife/mother  apart from the care,  love, affection and  

comfort of her company.  Learned counsel submitted that the award of the  

Tribunal is liable to be modified because it did not assign any reason for  

reducing the amount of compensation payable to the appellants in terms of  

the loss of dependency i.e. Rs.6 lacs.  Learned counsel then argued that both  

the Tribunal and the High Court erred in refusing to recognize the immense  

importance of the invaluable services rendered by a housewife/mother to the  

family throughout her life.  Learned counsel finally submitted that even if a  

housewife/mother does not earn a single penny in material terms, the criteria  

laid down by the legislature in clause 6 of the Second Schedule appended to  

the Act should be applied for awarding compensation in petitions filed under  

Section 166 of the Act.   

8. Learned counsel appearing for the respondents supported the award of  

the Tribunal and the judgment of the High Court and argued that criteria laid  

down in Section 163A of the Act cannot be invoked for awarding higher  

compensation to the appellants because they had filed petition under Section  

5

166 of the Act.  Learned counsel then submitted that no tangible evidence  

was produced before the Tribunal to show that the deceased used to earn  

Rs.50,000/- per annum from paintings and handicrafts and argued that the  

said  amount  was  rightly  not  taken  into  consideration  for  the  purpose  of  

determination of the compensation payable to the appellants.   

9. We have considered the respective submissions.   At the outset,  we  

may notice some of the precedents in which guiding principles have been  

laid down for determination of the compensation payable to the victim(s) of  

the accident or their legal representatives.

10. In General Manager Kerala State Road Transport Corporation v.  

Susamma  Thomas  (Mrs.)  and  others (1994)  2  SCC  176,  this  Court  

considered the legitimacy of multiplier method evolved and applied by the  

British  Courts  and  approved  the  same.   The  relevant  paragraphs  of  that  

judgment are extracted below:

“9. The  assessment  of  damages  to  compensate  the  dependants is beset with difficulties because from the nature of  things, it has to take into account many imponderables, e.g., the  life expectancy of the deceased and the dependants, the amount  that the deceased would have earned during the remainder of  his  life,  the  amount  that  he  would  have  contributed  to  the  dependants  during that  period,  the  chances  that  the  deceased  may not have lived or the dependants may not live up to the  estimated remaining period of their life expectancy, the chances  

6

that the deceased might have got better employment or income  or might have lost his employment or income altogether.

10. The manner of arriving at the damages is to ascertain the  net income of the deceased available for the support of himself  and his dependants, and to deduct therefrom such part of his  income as the deceased was accustomed to spend upon himself,  as regards both self-maintenance and pleasure, and to ascertain  what part  of his net income the deceased was accustomed to  spend for the benefit  of the dependants.  Then that should be  capitalised by multiplying it by a figure representing the proper  number of year’s purchase.

13. The multiplier method involves the ascertainment of the  loss  of  dependency  or  the  multiplicand  having  regard  to  the  circumstances of the case and capitalizing the multiplicand by  an  appropriate  multiplier.  The  choice  of  the  multiplier  is  determined by the age of the deceased (or that of the claimants  whichever is higher) and by the calculation as to what capital  sum,  if  invested  at  a  rate  of  interest  appropriate  to  a  stable  economy,  would  yield  the  multiplicand  by  way  of  annual  interest. In ascertaining this, regard should also be had to the  fact that ultimately the capital sum should also be consumed-up  over the period for which the dependency is expected to last.

16. It is necessary to reiterate that the multiplier method is  logically  sound and legally  well-established.  There  are  some  cases which have proceeded to determine the compensation on  the basis of aggregating the entire future earnings for over the  period  the  life  expectancy  was  lost,  deducted  a  percentage  therefrom towards  uncertainties  of  future  life  and  award  the  resulting sum as compensation. This is clearly unscientific. For  instance, if the deceased was, say 25 years of age at the time of  death and the life expectancy is 70 years, this method would  multiply  the  loss  of  dependency  for  45  years  —  virtually  adopting a multiplier  of 45 — and even if  one-third or  one- fourth is deducted therefrom towards the uncertainties of future  life  and  for  immediate  lump  sum  payment,  the  effective  multiplier  would  be  between  30  and  34.  This  is  wholly  impermissible. We are, aware that some decisions of the High  

7

Courts and of this Court as well have arrived at compensation  on some such basis. These decisions cannot be said to have laid  down  a  settled  principle.  They  are  merely  instances  of  particular  awards  in  individual  cases.  The  proper  method  of  computation is the multiplier-method. Any departure, except in  exceptional  and  extraordinary  cases,  would  introduce  inconsistency of principle, lack of uniformity and an element of  unpredictability  for  the  assessment  of  compensation.  Some  judgments of the High Courts have justified a departure from  the multiplier method on the ground that Section 110-B of the  Motor  Vehicles  Act,  1939  insofar  as  it  envisages  the  compensation to be ‘just’, the statutory determination of a ‘just’  compensation  would  unshackle  the  exercise  from  any  rigid  formula. It must be borne in mind that the multiplier method is  the accepted method of ensuring a ‘just’ compensation which  will  make  for  uniformity  and  certainty  of  the  awards.  We  disapprove these decisions of the High Courts which have taken  a contrary view. We indicate that the multiplier method is the  appropriate  method,  a  departure  from  which  can  only  be  justified  in  rare  and  extraordinary  circumstances  and  very  exceptional cases.”

(emphasis supplied)

11. In  U.P.  S.R.T.C. v.  Trilok Chandra (1996)  4  SCC 362,  a  three-

Judge Bench referred to the principles evolved by British Courts for award  

of  damages  and  reiterated  the  multiplier  method  spelt  out  in  General  

Manager  Kerala  State  Road  Transport  Corporation  v.  Susamma  

Thomas (supra).  The Court then took note of the stark inconsistencies in  

the approach adopted by the motor accident claims tribunals and courts in  

awarding compensation, referred to the amendment made in the Act in 1994,  

pointed out the defects in the Second Schedule and observed:

8

“15. We  thought  it  necessary  to  reiterate  the  method  of  working  out  ‘just’  compensation  because,  of  late,  we  have  noticed from the awards made by tribunals and courts that the  principle  on which the  multiplier  method was developed has  been lost sight of and once again a hybrid method based on the  subjectivity  of  the  Tribunal/Court  has  surfaced,  introducing  uncertainty and lack of reasonable uniformity in the matter of  determination  of  compensation.  It  must  be  realised  that  the  Tribunal/Court has to determine a fair amount of compensation  awardable  to  the  victim  of  an  accident  which  must  be  proportionate to the injury caused. The two English decisions to  which  we  have  referred  earlier  provide  the  guidelines  for  assessing the loss occasioned to the victims. Under the formula  advocated  by  Lord  Wright  in    Davies  ,  the  loss  has  to  be    ascertained  by  first  determining  the  monthly  income  of  the  deceased,  then  deducting therefrom the amount  spent  on the  deceased, and thus assessing the loss to the dependants of the  deceased.  The annual  dependency assessed in  this  manner  is  then to be multiplied by the use of an appropriate multiplier.  Let  us  illustrate:  X,  male,  aged  about  35  years,  dies  in  an  accident. He leaves behind his widow and 3 minor children. His  monthly income was Rs.3500. First, deduct the amount spent  on  X  every  month.  The  rough  and  ready  method  hitherto  adopted where no definite evidence was forthcoming, was to  break up the family into units, taking two units for an adult and  one unit for a minor. Thus X and his wife make 2+2=4 units  and each minor one unit i.e. 3 units in all, totalling 7 units. Thus  the share per unit works out to Rs.3500¸7= Rs.500 per month. It  can thus be assumed that Rs.1000 was spent on X. Since he was  a working member some provision for his transport and out-of- pocket  expenses  has to  be estimated.  In  the present  case we  estimate the out-of-pocket expense at Rs.250. Thus the amount  spent  on  the  deceased  X  works  out  to  Rs.1250  per  month  leaving a  balance of  Rs.3500-1250=Rs.2250 per  month.  This  amount can be taken as the monthly loss to X’s dependants.  The annual dependency comes to Rs.2250x12=Rs.27,000. This  annual  dependency  has  to  be  multiplied  by  the  use  of  an  appropriate  multiplier  to  assess  the  compensation  under  the  head of loss to the dependants. Take the appropriate multiplier  to  be  15.  The  compensation  comes  to  Rs.27,000x15=Rs.4,05,000.  To  this  may  be  added  a  

9

conventional  amount  by  way  of  loss  of  expectation  of  life.  Earlier this conventional amount was pegged down to Rs.3000  but now having regard to the fall in the value of the rupee, it  can be raised to a figure of not more than Rs.10,000. Thus the  total comes to Rs.4,05,000+10,000= Rs.4,15,000.  

17. The  situation  has  now  undergone  a  change  with  the  enactment  of  the  Motor  Vehicles  Act,  1988,  as  amended by  Amendment  Act  54  of  1994.  The  most  important  change  introduced  by  the  amendment  insofar  as  it  relates  to  determination of compensation is the insertion of Sections 163- A  and  163-B  in  Chapter  XI  entitled  “Insurance  of  Motor  Vehicles against Third Party Risks”. Section 165-A begins with  a  non  obstante  clause  and  provides  for  payment  of  compensation, as indicated in the Second Schedule, to the legal  representatives of the deceased or injured, as the case may be.  Now if we turn to the Second Schedule, we find a table fixing  the  mode  of  calculation  of  compensation  for  third  party  accident injury claims arising out of fatal accidents. The first  column  gives  the  age  group  of  the  victims  of  accident,  the  second  column  indicates  the  multiplier  and  the  subsequent  horizontal  figures  indicate  the  quantum  of  compensation  in  thousand payable to the heirs of the deceased victim. According  to this table the multiplier varies from 5 to 18 depending on the  age  group  to  which  the  victim  belonged.  Thus,  under  this  Schedule the maximum multiplier can be up to 18 and not 16 as  was held in Susamma Thomas case.

18. We  must  at  once  point  out  that  the  calculation  of  compensation  and  the  amount  worked  out  in  the  Schedule  suffer from several defects. For example, in Item 1 for a victim  aged 15 years, the multiplier is shown to be 15 years and the  multiplicand  is  shown  to  be  Rs.3000.  The  total  should  be  3000x15=45,000  but  the  same  is  worked  out  at  Rs.60,000.  Similarly, in the second item the multiplier is 16 and the annual  income is Rs.9000; the total should have been Rs.1,44,000 but  is shown to be Rs.1,71,000. To put it briefly, the table abounds  in such mistakes. Neither the tribunals nor the courts can go by  the ready reckoner. It can only be used as a guide. Besides, the  selection of multiplier cannot in all cases be solely dependant  

1

on the  age  of  the  deceased.  For  example,  if  the  deceased,  a  bachelor,  dies  at  the  age  of  45  and  his  dependants  are  his  parents, age of the parents would also be relevant in the choice  of  the  multiplier.  But  these  mistakes  are  limited  to  actual  calculations only and not in respect of other items. What we  propose to emphasise is  that the multiplier  cannot exceed 18  years’ purchase factor. This is the improvement over the earlier  position that ordinarily it should not exceed 16. We thought it  necessary  to  state  the  correct  legal  position  as  courts  and  tribunals  are  using  higher  multiplier  as  in  the  present  case  where the Tribunal used the multiplier of 24 which the High  Court raised to 34, thereby showing lack of awareness of the  background of the multiplier system in Davies case.”

(emphasis supplied)

12. In Sarla Verma (Smt.) and others v. Delhi Transport Corporation  

and  another (2009)  6  SCC  121,  a  two-Judge  Bench  made  threadbare  

analysis of various issues arising before the tribunals and the courts in cases  

involving  claim for  award of  compensation  under  the  Act,  reiterated  the  

principles laid down in  General Manager Kerala State Road Transport  

Corporation  v.  Susamma  Thomas (supra),  referred  to  the  subsequent  

judgment in U.P. S.R.T.C. v. Trilok Chandra (supra) and then observed:  

“16. Compensation  awarded  does  not  become  “just  compensation” merely because the Tribunal considers it to be  just.  For  example,  if  on  the  same  or  similar  facts  (say  the  deceased  aged  40  years  having  annual  income  of  Rs.45,000  leaving  his  surviving  wife  and  child),  one  Tribunal  awards  Rs.10,00,000  another  awards  Rs.5,00,000,  and  yet  another  awards  Rs.1,00,000,  all  believing  that  the  amount  is  just,  it  cannot be said that what is awarded in the first case and the last  case  is  just  compensation.  “Just  compensation”  is  adequate  compensation  which  is  fair  and  equitable,  on  the  facts  and  circumstances of the case, to make good the loss suffered as a  

1

result of the wrong, as far as money can do so, by applying the  well-settled principles relating to award of compensation. It is  not intended to be a bonanza, largesse or source of profit.

17. Assessment  of  compensation  though  involving  certain  hypothetical  considerations,  should  nevertheless  be objective.  Justice  and  justness  emanate  from  equality  in  treatment,  consistency and thoroughness in adjudication, and fairness and  uniformity in the  decision-making process  and the decisions.  While it may not be possible to have mathematical precision or  identical  awards  in  assessing  compensation,  same  or  similar  facts  should  lead  to  awards  in  the  same  range.  When  the  factors/inputs are the same, and the formula/legal principles are  the same, consistency and uniformity, and not divergence and  freakiness, should be the result of adjudication to arrive at just  compensation.  In  Susamma Thomas,  this  Court  stated:  (SCC  p.185, para 16)

“16. …  The  proper  method  of  computation  is  the  multiplier method. Any departure, except in exceptional  and extraordinary  cases,  would introduce inconsistency  of  principle,  lack  of  uniformity  and  an  element  of  unpredictability, for the assessment of compensation.”

18. Basically only three facts need to be established by the  claimants for assessing compensation in the case of death:

(a) age of the deceased;  (b) income of the deceased; and  (c) the number of dependants.  

The issues to be determined by the Tribunal to arrive at the loss  of dependency are:

(i)   additions/deductions to be made for arriving at the income;  

(ii)  the  deduction  to  be  made  towards  the  personal  living  expenses of the deceased; and  

(iii)  the multiplier to be applied with reference to the age of the  deceased.  

If these determinants are standardised, there will be uniformity  and consistency in the decisions. There will be lesser need for  detailed  evidence.  It  will  also  be  easier  for  the  insurance  companies to settle accident claims without delay.”

(emphasis supplied)

1

In paragraphs 20 to 24, the Court considered the issue of addition to  

income for future prospects and observed:

“24. In Susamma Thomas this Court increased the income by  nearly 100%, in Sarla Dixit the income was increased only by  50% and in  Abati  Bezbaruah 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 addition of 50%  of  actual  salary  to  the  actual  salary  income of  the  deceased  towards future prospects, where the deceased had a permanent  job and was below 40 years. (Where the annual income is in the  taxable  range,  the  words  “actual  salary”  should  be  read  as  “actual 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  yardsticks  being  applied  or  different  methods  of  calculation  being  adopted.  Where  the  deceased  was  self- employed  or  was  on  a  fixed  salary  (without  provision  for  annual increments, etc.), 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 circumstances.”

The  Court  then  considered  the  nature  and  extent  of  deduction  for  

personal and living expenses and laid down the following principles:

“30. Though in some cases the deduction to be made towards  personal and living expenses is calculated on the basis of units  indicated in  Trilok Chandra,  the general  practice  is  to  apply  standardised deductions. Having considered several subsequent  decisions  of  this  Court,  we  are  of  the  view  that  where  the  deceased  was  married,  the  deduction  towards  personal  and  living  expenses  of  the  deceased,  should  be  one-third  (1/3rd)  where the number of dependent family members is 2 to 3, one- fourth (1/4th) where the number of dependent family members  is 4 to 6, and one-fifth (1/5th) where the number of dependent  family members exceeds six.

31. Where the deceased was a bachelor and the claimants are  the  parents,  the  deduction  follows  a  different  principle.  In  

1

regard to bachelors, normally, 50% is deducted as personal and  living expenses,  because it  is assumed that a bachelor would  tend to spend more on himself. Even otherwise, there is also the  possibility of his getting married in a short time, in which event  the contribution to the parent(s) and siblings is likely to be cut  drastically.  Further,  subject  to  evidence  to  the  contrary,  the  father  is  likely  to  have  his  own  income  and  will  not  be  considered  as  a  dependant  and  the  mother  alone  will  be  considered as a dependant.  In the absence of evidence to the  contrary,  brothers  and  sisters  will  not  be  considered  as  dependants,  because  they  will  either  be  independent  and  earning, or married, or be dependent on the father.  

32. Thus  even  if  the  deceased  is  survived  by  parents  and  siblings,  only  the  mother  would  be  considered  to  be  a  dependant, and 50% would be treated as the personal and living  expenses  of the bachelor  and 50% as the contribution to the  family. However, where the family of the bachelor is large and  dependent on the income of the deceased, as in a case where he  has  a  widowed  mother  and  large  number  of  younger  non- earning  sisters  or  brothers,  his  personal  and  living  expenses  may be restricted to one-third  and contribution to the family  will be taken as two-third.”

13. At  this  stage,  it  will  be  useful  to  notice  Section  163A which  was  

inserted by Amendment Act No.54 of 1994.  That section and clause (6) of  

the Second Schedule read as under:-

“163A.  Special provisions as to payment of compensation  on structured formula basis.–  (1) Notwithstanding anything  contained in this Act or in any other law for the time being in  force or instrument having the force of law, the owner of the  motor vehicle of the authorised insurer shall be liable to pay in  the  case  of  death  or  permanent  disablement  due  to  accident  arising  out  of  the  use  of  motor  vehicle,  compensation,  as  indicated  in  the  Second  Schedule,  to  the  legal  heirs  or  the  victim, as the case may be.

Explanation.– For the purposes of this sub-section, "permanent  disability"  shall  have the same meaning  and extent  as  in the  Workmen's Compensation Act, 1923 (8 of 1923).  

1

(2)   In any claim for compensation under sub-section (1), the  claimant  shall  not  be  required  to  plead  or  establish  that  the  death or permanent disablement in respect of which the claim  has  been  made  was  due  to  any  wrongful  act  or  neglect  or  default of the owner of the vehicle or vehicles concerned or of  any other person.

(3)   The Central Government may, keeping in view the cost of  living by notification in the Official Gazette, from time to time  amend the Second Schedule.

Clause 6 of the Second Schedule

6.  Notional income for compensation to those who had no  income prior to accident:-   Fatal  and disability  in non-fatal  accidents:

(a) Non-earning persons - Rs.15,000/- p.a.   (b) Spouse - Rs.1/3rd of income of the

Earning/surviving spouse

In case of other injuries only “general damage” as applicable.”

14. Section  163A  contains  a  special  provision  for  payment  of  

compensation on the basis of a structured formula as indicated in the Second  

Schedule,  which  contains  a  table  prescribing  the  compensation  to  be  

awarded with reference to the age and income of the deceased.  The note  

appended to column (1) of the Second Schedule makes it clear that from the  

total amount of compensation, 1/3rd is to be deducted in consideration of the  

expenses which the victim would have incurred towards maintaining himself  

had he been alive.  Clause (6) of the Second Schedule lays down that in  

1

cases of fatal and disability in non fatal accidents, income of non-earning  

person should be taken as Rs.15,000/- per annum and that of spouse shall be  

taken as 1/3rd of the income of the earning/surviving spouse.  

15. In  Deepal  Girishbhai  Soni  v.  United  India  Insurance  Co.  Ltd.  

(2004) 5 SCC 385, a three-Judge Bench interpreted various provisions of the  

Act including Section 163A and held:-

“46. Section 163-A which has an overriding effect  provides  for  special  provisions  as  to  payment  of  compensation  on  structured-formula  basis.  Sub-section  (1)  of  Section  163-A  contains non obstante clause in terms whereof the owner of the  motor vehicle or the authorised insurer is liable to pay in the  case of death or permanent disablement due to accident arising  out of the use of motor vehicle, compensation, as indicated in  the Second Schedule, to the legal heirs or the victim, as the case  may be.  Sub-section  (2)  of  Section 163-A is  in  pari  materia  with sub-section (3) of Section 140 of the Act.

47. Section 163-A does not contain any provision identical to  sub-section (5) of Section 140 which is also indicative of the  fact that whereas in terms of the latter, the liability of the owner  of the vehicle to give compensation or relief under any other  law for the time being in force continues subject of course to  the effect that the amount paid thereunder shall be reduced from  the amount of compensation payable under the said section or  Section 163-A.

48. By reason of Section 163-A, therefore, the compensation  is required to be determined on the basis of a structured formula  whereas in terms of Section 140 only a fixed amount is to be  given.  A  provision  of  law  providing  for  compensation  is  presumed  to  be  final  in  nature  unless  a  contra-indication  therefor  is  found to  be  in  the  statute  either  expressly  or  by  necessary  implication.  While  granting  compensation,  the  Tribunal is required to adjudicate upon the disputed question as  regards age and income of the deceased or the victim, as the  case may be. Unlike Section 140 of the Act,  adjudication on  several  issues  arising  between  the  parties  is  necessary  in  a  proceeding under Section 163-A of the Act.

51. The  scheme  envisaged  under  Section  163-A,  in  our  opinion, leaves no manner of doubt that by reason thereof the  rights and obligations of the parties are to be determined finally.  The amount of compensation payable under the aforementioned  

1

provisions  is  not  to  be  altered  or  varied  in  any  other  proceedings.  It  does  not  contain  any provision  providing  for  set-off  against  a  higher  compensation  unlike  Section 140.  In  terms  of  the  said  provision,  a  distinct  and specified  class  of  citizens,  namely,  persons  whose  income  per  annum  is  Rs.40,000 or less is covered thereunder whereas Sections 140  and 166 cater to all sections of society.”

16. In  Oriental  Insurance Co. Ltd.  v.  Meena Variyal (2007) 5 SCC  

428,  a  two-Judge  Bench  referred  to  an  apparent  inconsistency  in  the  

judgments  of  three-Judge  Bench  in  Minu  B.  Mehta  v.  Balkrishna  

Ramchandra Nayan (1977) 2 SCC 441 and two-Judge Bench in  Gujarat  

SRTC v. Ramanbhai Prabhatbhai (1987) 3 SCC 234 and observed:-

“We  think  that  the  law  laid  down  in  Minu  B.  Mehta v.  Balkrishna Ramchandra Nayan was accepted by the legislature  while  enacting the Motor  Vehicles  Act,  1988 by introducing  Section  163-A  of  the  Act  providing  for  payment  of  compensation notwithstanding anything contained in the Act or  in any other law for the time being in force that the owner of a  motor vehicle or the authorised insurer shall be liable to pay in  the  case  of  death  or  permanent  disablement  due  to  accident  arising out of the use of the motor vehicle, compensation, as  indicated  in  the  Second  Schedule,  to  the  legal  heirs  or  the  victim, as the case may be,  and in a claim made under sub- section (1) of Section 163-A of the Act, the claimant shall not  be required to plead or establish that the death or permanent  disablement in respect of which the claim has been made was  due to any wrongful act or neglect or default of the owner of the  vehicle concerned. Therefore, the victim of an accident or his  dependants have an option either to proceed under Section 166  of  the  Act  or  under  Section  163-A  of  the  Act.  Once  they  approach the Tribunal under Section 166 of the Act, they have  necessarily to take upon themselves the burden of establishing  the negligence of the driver or owner of the vehicle concerned.  But  if  they  proceed  under  Section  163-A  of  the  Act,  the  compensation will be awarded in terms of the Schedule without  

1

calling  upon  the  victim  or  his  dependants  to  establish  any  negligence or default on the part of the owner of the vehicle or  the driver of the vehicle.”

17. In  Sarla  Verma’s case  also  the  Court  noticed  Section  163A  and  

observed:

“The  principles  relating  to  determination  of  liability  and  quantum of compensation are different for claims made under  Section 163-A of the MV Act and claims under Section 166 of  the  MV  Act.  (See  Oriental  Insurance  Co.  Ltd. v.  Meena  Variyal) Section 163-A and the Second Schedule in terms do  not  apply  to  determination  of  compensation  in  applications  under  Section  166.  In    Trilok  Chandra   this  Court,  after    reiterating the principles stated in   Susamma Thomas  , however,    held  that  the  operative  (maximum)  multiplier,  should  be  increased as 18 (instead of 16 indicated in   Susamma Thomas  ),    even in cases under Section 166 of the MV Act, by borrowing  the  principle  underlying  Section  163-A  and  the  Second  Schedule.”  

18. In  Raj Rani and others v. Oriental Insurance Company Limited  

and others (2009) 13 SCC 654, this Court disapproved the practice adopted  

by  the  tribunals  to  deduct  lumpsum  payments  from  the  compensation  

awarded in the motor accident claim’s cases and observed that even though  

the multiplier specified in the Second Schedule appended to the Act is not  

applicable in strict sense in a case under Section 166, whenever the Court  

has to apply the appropriate multiplier several factors including the income  

of  the  deceased,  his  family  background  will  have  to  be  taken  into  

consideration (paragraph 15).  The same view was reiterated in Ningamma  

1

and another v. United Insurance Company Limited (2009) 13 SCC 710  

(paragraph 32).

19. We  may  now  deal  with  the  question  formulated  in  the  opening  

paragraph of this judgment.  In Kemp and Kemp on Quantum of Damages,  

(Special  Edition – 1986), the authors have identified various heads under  

which the husband can claim compensation on the death of his wife. These  

include loss of the wife's contribution to the household from her earnings,  

the  additional  expenses  incurred  or  likely  to  be  incurred  by  having  the  

household  run  by  a  house-keeper  or  servant,  instead  of  the  wife,  the  

expenses incurred in buying clothes for the children instead of having them  

made by the wife, and similarly having his own clothes mended or stitched  

elsewhere than by his wife, and the loss of that element of security provided  

to the husband where his employment was insecure or his health was bad  

and where the wife could go out and work for a living.

20. In England the courts used to award damages solely on the basis of  

pecuniary loss to family due to the demise of the wife.  A departure from  

this rule came to be made in Berry v. Humm and Co. (1915) 1 K.B. 627  

where the plaintiff claimed damages for the death of his wife caused due to  

the negligence of the defendant’s servants.  After taking cognizance of some  

precedents, the learned Judge observed:

1

“I  can  see  no  reason  in  principle  why  such  pecuniary  loss  should  be  limited  to  the  value  of  money  lost,  or  the  money  value of things lost, as contributions of food or clothing, and  why I should be bound to exclude the monetary loss incurred by  replacing services rendered gratuitously by a relative, if there  was a reasonable prospect of their being rendered freely in the  future but for the death.”

21. In Regan v. Williamson (1976) 1 W.L.R. 305, the Court considered  

the issue relating to quantum of compensation payable to the dependents of  

the woman who was killed in a road accident.  The facts of that case were  

that on the date of accident, the plaintiff was aged 43 years and his children  

were  aged  14  years,  11  years,  8  years  and  3  years  respectively.   The  

deceased wife/mother was aged 37 years.  The cost of a housekeeper to carry  

out services previously rendered by his wife was 22.5 pounds per week, the  

saving to him in not having to clothe and feed his wife was 10 pound per  

week, leaving a net loss of 12.50 pounds per week or 600 pounds a year.  

However, the Court took into account the value of other services previously  

rendered by the wife for which no substitute was available and accordingly  

increased the dependency to 20 pounds a week.  The Court then applied a  

multiplier of 11 in reaching a total fatal accidents award of 12,298 pounds.  

In his judgment, Watkins, J. noted as under:

“The  weekend  care  of  the  plaintiff  and  the  boys  remains  a  problem  which  has  not  been  satisfactorily  solved.   The  plaintiff’s relatives help him to a certain extent, especially on  Saturday afternoons.  But I formed the clear impression that the  

2

plaintiff is often, at weekends, sorely tired in trying to be an  effective substitute  for the  deceased.   The problem could,  to  some extent, be cured by engaging another woman, possibly to  do duty at the weekend, but finding such person is no simple  matter.  I think the plaintiff has not made extensive inquiries in  this regard.  Possibly the expense involved in getting more help  is a factor which has deterred him.  Whatever be the reason, the  plain fact is that the deceased’s services at the weekend have  not  been replaced.   They are  lost  to  the  plaintiff  and to  the  boys…”

He then proceeded to observe:

“I have been referred to a number of cases in which judges have  felt compelled to look upon the task of assessing damages in  cases  involving  the  death  of  a  wife  and  mother  with  strict  disregard to those features of the life of a woman beyond her  so-called services,  that  is  to  say,  to keep house,  to  cook the  food, to buy the clothes, to wash them and so forth.  In more  than one case, an attempt had been made to calculate the actual  number  of  hours  it  would  take  a  woman  to  perform  such  services and to compensate  dependants  upon that  basis  at  so  much an hour and so relegate the wife or mother, so it seems to  me, to the position of a housekeeper.

While I think that the law inhibits me from, much as I should  like  to,  going  all  the  way  along  the  path  to  which  Lord  Edmund-Davies  pointed,  I  am,  with  due respect  to  the  other  judges to whom I have been referred, of the view that the word  ‘services’ had been too narrowly construed.  It should, at least,  include an acknowledgment  that a wife and mother does not  work to set  hours and,  still  less,  to rule.   She is  in constant  attendance save for those hours when she is, if that is the fact, at  work.   During  some  of  those  hours  she  may  well  give  the  children  instruction  on  essential  matters  to  do  with  their  upbringing an, possibly, with such things as their homework.  This sort of attention seems to be as much of a service, and  probably more value to them than the other  kinds of service  conventionally so regarded.”

(emphasis supplied)

2

22. In  Mehmet v. Perry (1977) 2 All ER 52, the pecuniary value of a  

wife’s services were assessed and granted under the following heads:-

(a) Loss to the family of the wife's housekeeping services.

(b) Loss suffered by the children of the personal attention of  their mother, apart from housekeeping services rendered by her.

(c) Loss of the wife's personal care and attention, which the  husband  had  suffered,  in  addition  to  the  loss  of  her  housekeeping services.

23. In India the Courts have recognised that the contribution made by the  

wife to the house is invaluable and cannot be computed in terms of money.  

The gratuitous services rendered by wife with true love and affection to the  

children  and her  husband  and managing  the  household  affairs  cannot  be  

equated with the services rendered by others. A wife/mother does not work  

by the clock. She is in the constant attendance of the family throughout the  

day  and  night  unless  she  is  employed  and  is  required  to  attend  the  

employer’s work for particular hours.  She takes care of all the requirements  

of husband and children including cooking of food, washing of clothes, etc.  

She teaches small  children and provides  invaluable guidance to them for  

their future life.  A housekeeper or maidservant can do the household work,  

such as cooking food, washing clothes and utensils, keeping the house clean  

2

etc., but she can never be a substitute for a wife/mother who renders selfless  

service to her husband and children.  

24. It  is  not  possible  to  quantify  any  amount  in  lieu  of  the  services  

rendered  by  the  wife/mother  to  the  family  i.e.  husband  and  children.  

However, for the purpose of award of compensation to the dependents, some  

pecuniary estimate has to be made of the services of housewife/mother.  In  

that context, the term ‘services’ is required to be given a broad meaning and  

must  be  construed  by  taking  into  account  the  loss  of  personal  care  and  

attention  given  by  the  deceased  to  her  children  as  a  mother  and  to  her  

husband as a wife.  They are entitled to adequate compensation in lieu of the  

loss of gratuitous services rendered by the deceased.  The amount payable to  

the dependants cannot be diminished on the ground that some close relation  

like  a  grandmother  may volunteer  to  render  some of  the  services  to  the  

family which the deceased was giving earlier.   

25. In Lata Wadhwa v. State of Bihar (supra), this Court considered the  

various issues raised in the writ petitions filed by the petitioners including  

the one relating to payment of compensation to the victims of fire accident  

which occurred on 3.3.1989 resulting in the death of 60 persons and injuries  

to 113.  By an interim order dated 15.12.1993, this Court requested former  

2

Chief Justice of India, Shri Justice Y.V. Chandrachud to look into various  

issues  including  the  amount  of  compensation  payable  to  the  victims.  

Although,  the  petitioners  filed  objection  to  the  report  submitted  by  Shri  

Justice Y.V. Chandrachud, the Court overruled the same and accepted the  

report.  On the issue of payment of compensation to housewife, the Court  

observed:

“So  far  as  the  deceased  housewives  are  concerned,  in  the  absence of any data and as the housewives were not earning any  income, attempt has been made to determine the compensation  on the basis of services rendered by them to the house. On the  basis of the age group of the housewives, appropriate multiplier  has been applied,  but  the estimation of the  value of services  rendered  to  the  house  by  the  housewives,  which  has  been  arrived at Rs.12,000 per annum in cases of some and Rs.10,000  for others, appears to us to be grossly low. It is true that the  claimants, who ought to have given data for determination of  compensation,  did not assist  in any manner  by providing the  data  for  estimating  the  value  of  services  rendered  by  such  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.3000  per  month  and Rs.36,000 per  annum. This would apply to all those housewives between the  age group of 34 to 59 and as such who were active in life. The  compensation  awarded,  therefore,  should  be  recalculated,  taking  the  value  of  services  rendered  per  annum  to  be  Rs.36,000 and thereafter, applying the multiplier, as has been  applied  already,  and  so  far  as  the  conventional  amount  is  concerned, the same should be Rs.50,000 instead of Rs.25,000  given  under  the  Report.  So  far  as  the  elderly  ladies  are  concerned, in the age group of 62 to 72, the value of services  rendered  has  been  taken  at  Rs.10,000  per  annum  and  the  multiplier  applied  is  eight.  Though,  the  multiplier  applied  is  correct,  but  the values  of  services rendered at  Rs.10,000 per  annum, cannot be held to be just and, we, therefore, enhance the  

2

same to Rs.20,000 per annum. In their case, therefore, the total  amount  of  compensation  should  be  redetermined,  taking  the  value  of  services  rendered at  Rs.20,000 per  annum and then  after applying the multiplier, as already applied and thereafter,  adding Rs.50,000 towards the conventional figure.”

(emphasis supplied) 26. The judgment of Lata Wadhwa’s case was referred to with approval  

in  M.S. Grewal and another v. Deep Chand Sood and others (2001) 8  

SCC 151 for confirming the award of compensation of Rs.5 lacs in a case  

involving  death  of  school  children  by  drowning  due  to  negligence  of  

teachers of the school.  In Municipal Corporation of Greater Bombay v.  

Laxman Iyer and another (2003) 8 SCC 731, a two-Judge Bench while  

deciding the issue of award of compensation under Sections 110-A and 110-

B  of  the  Motor  Vehicles  Act,  1939,  referred  to  the  judgments  in  Lata  

Wadhwa’s case and M.S. Grewal’s case.

27. In A. Rajam v. M. Manikya Reddy 1989 ACJ 542 (Andhra Pradesh  

HC), M. Jagannadha Rao, J. (as he then was) advocated giving of a wider  

meaning to the word ‘services’ in cases relating to award of compensation to  

the dependents of a deceased wife/mother.  Some of the observations made  

in that judgment are extracted below:

“The  loss  to  the  husband  and  children  consequent  upon  the  death  of  the  housewife  or  mother  has  to  be  computed  by  estimating  the  loss  of  'services'  to  the  family,  if  there  was  reasonable prospect of such services being rendered freely in  

2

the future, but for the death. It must be remembered that any  substitute to be so employed is not likely to be as economical as  the  housewife.  Apart  from the value of  obtaining substituted  services, the expense of giving accommodation or food to the  substitute  must  also  be  computed.  From  this  total  must  be  deducted  the  expense  the  family  would  have  otherwise  been  spending for the deceased housewife.

While  estimating  the  ‘services’  of  the  housewife,  a  narrow  meaning  should  not  be  given  to  the  meaning  of  the  word  ‘services’ but it should be construed broadly and one has to take  into  account  the  loss  of  ‘personal  care  and attention’  by the  deceased to her children, as a mother and to her husband, as a  wife.  The award is not diminished merely because some close  relation  like  a  grandmother  is  prepared  to  render  voluntary  services.”

28. In Oriental Insurance Co. Ltd., v. Shamsher Singh Manu-JK-0180-

2002, Jammu and Kashmir High Court considered the question relating to  

award of compensation to the family of the deceased housewife, who was  

aged  24  years  at  the  time  of  accident,  referred  to  Kemp  and  Kemp on  

Quantum of Damages, Volume 1 and enhanced the compensation awarded  

by the Tribunal.

29. In  National  Insurance  Company  Ltd.  v.  Mahadevan,  Minor  

Buvanadevi, Minor Venkatesh and Parameswaran (2009) ACJ 1373, the  

learned  Single  Judge  referred  to  the  Second  Schedule  of  the  Act  and  

observed that quantifying the pecuniary loss at the same rate or amount even  

2

after 13 years after the amendment,  ignoring the escalation in the cost of  

living and the inflation, may not be justified.   

30. In Chandra Singh and others v. Gurmeet Singh and others (2003)  

VII AD (Delhi) 222, Krishna Gupta and others v. Madan Lal and others  

96 (2002) DLT 829,  Captan Singh v. Oriental Insurance Co. Ltd. and  

others 112  (2004)  DLT  417  and  Amar  Singh  Thukral  v.  Sandeep  

Chhatwal 112 (2004) DLT 478, the Single and Division Benches of Delhi  

High Court declined to apply the judgment of this Court in Lata Wadhwa’s  

case for the purpose of award of compensation under the Act.  In Krishna  

Gupta  v.  Madan  Lal (supra)  the  Division  Bench  of  the  High  Court  

observed as under:-

“The decision of the Apex Court in Lata Wadhwa (supra), in  our considered opinion, cannot be said to have any application  in the instant case. Motor Vehicles Act, 1939 was the complete  Code by itself.  It  not only provides for the right of a victim  and/or his legal heirs to obtain compensation in case of bodily  injury  or  death  arising  out  of  use  of  motor  vehicle,  but  the  forum  therefore  has  been  provided,  as  also  the  mode  and  manner in which the compensation to be awarded therefor. In  such  a  situation,  it  would  be  inappropriate  to  rely  upon  a  decision  of  the  Apex Court,  which  had been rendered  in  an  absolutely different fact situation and in relation whereto there  did not exist any statutory compensation. Lata Wadhwa (supra)  was  decided  in  a  matter  where  a  fire  occurred  during  a  celebration. The liability of the Tata Iron & Steel Co. Ltd. was  not disputed. Compensation was awarded having regard to the  peculiar feature obtaining in that case which has got nothing to  

2

do  with  the  statutory  compensation  payable  under  the  provisions of the Motor Vehicles Act."

31. In  Amar Singh Thukral v. Sandeep Chhatwal (supra), the learned  

Single Judge of Delhi High Court adopted the yardstick of minimum rates of  

wages for the purpose of award of compensation in the case of death of a  

housewife and then proceeded to observe ‘since there is no scientific method  

of assessing the contribution of a housewife to her household, in cases such  

as the present, resort should be had to the wages of a skilled worker as per  

the  minimum  rates  of  wages  in  Delhi.  Although,  this  may  sound  

uncharitable,  if not demeaning to a housewife, there is hardly any option  

available in the absence of statutory guidelines’.   

32. In our view, it is highly unfair, unjust and inappropriate to compute  

the compensation payable to the dependents of a deceased wife/mother, who  

does  not  have  regular  income,  by  comparing  her  services  with  that  of  a  

housekeeper or a servant or an employee, who works for a fixed period. The  

gratuitous  services  rendered  by  wife/mother  to  the  husband  and children  

cannot be equated with the services of an employee and no evidence or data  

can possibly be produced for estimating the value of such services.  It is  

virtually impossible to measure in terms of money the loss of personal care  

and attention suffered by the husband and children on the demise of  the  

2

housewife.  In its wisdom, the legislature had, as early as in 1994, fixed the  

notional income of a non-earning person at Rs.15,000/- per annum and in  

case  of  a  spouse,  1/3rd income  of  the  earning/surviving  spouse  for  the  

purpose of computing the compensation.  Though, Section 163A does not, in  

terms apply to  the cases  in  which claim for  compensation  is  filed under  

Section  166 of  the  Act,  in  the  absence  of  any  other  definite  criteria  for  

determination of compensation payable to the dependents of a non-earning  

housewife/mother, it would be reasonable to rely upon the criteria specified  

in clause (6) of the Second Schedule and then apply appropriate multiplier  

keeping in view the judgments of this Court in  General Manager Kerala  

State  Road  Transport  Corporation  v.  Susamma  Thomas  (Mrs.)  and  

others (supra),  U.P. S.R.T.C. v.  Trilok Chandra (supra),  Sarla Verma  

(Smt.) and others v. Delhi Transport Corporation and another (supra)  

and also take guidance from the judgment in  Lata Wadhwa’s case.  The  

approach adopted by different Benches of Delhi High Court to compute the  

compensation  by  relying  upon  the  minimum  wages  payable  to  a  skilled  

worker  does not  commend our approval  because it  is  most  unrealistic  to  

compare  the  gratuitous  services  of  the  housewife/mother  with  work of  a  

skilled worker.   

2

33. Reverting to the facts of this case, we find that while in his deposition,  

appellant  No.1  had  categorically  stated  that  the  deceased  was  earning  

Rs.50,000/- per annum by paintings and handicrafts, the respondents did not  

lead  any  evidence  to  controvert  the  same.   Notwithstanding  this,  the  

Tribunal and the High Court altogether ignored the income of the deceased.  

The Tribunal did advert to the Second Schedule of the Act and observed that  

the  income  of  the  deceased  could  be  assessed  at  Rs.5,000/-  per  month  

(Rs.60,000/- per annum) because the income of her spouse was Rs.15,416/-  

per  month  and  then  held  that  after  making  deduction,  the  total  loss  of  

dependency could be Rs.6 lacs.  However without any tangible reason, the  

Tribunal decided to reduce the amount of compensation by observing that  

the  deceased  was  actually  non-earning  member  and  the  amount  of  

compensation would be too much.  The High Court went a step further and  

dismissed the appeal by erroneously presuming that neither of the claimants  

was dependent upon the deceased and the services rendered by her could be  

estimated as Rs.1250/- per month.     

34. In our view, the reasons assigned by the Tribunal for reducing the  

amount of compensation are wholly untenable and the approach adopted by  

the High Court in dealing with the issue of payment of compensation to the  

appellants was ex facie erroneous and unjustified.  

3

35. In the result, the appeal is allowed.  The impugned judgment as also  

the award of the Tribunal are set aside and it is held that the appellants are  

entitled to compensation of Rs.6 lacs.  Respondent No.1 is directed to pay  

the said amount of compensation along with interest at the rate of 6% per  

annum from the date of filing application under Section 166 of the Act till  

the  date  of  payment.   The  needful  shall  be  done  within  the  period  of  3  

months  from the  date  of  receipt/production  of  copy  of  this  order.   The  

appellant shall get cost of Rs.50,000/-.

….………………….…J. [G.S. Singhvi]

New Delhi; July 22, 2010

3

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5843 OF 2010 (Arising out of SLP (Civil) No.19655 of 2004)

Arun Kumar Agarwal and another ..Appellant(s)

Versus  

National Insurance Company & others   ..Respondent(s)

J U D G M E N T

GANGULY, J.

3

1.While agreeing with the judgment delivered by my  

learned brother Singhvi, J., I wish to add my  

perception of the problem which has been raised  

in this case.  

2.Despite  the  clear  constitutional  mandate  to  

eschew  discrimination  on  grounds  of  sex  in  

Article  15(1)  of  the  Constitution,  in  its  

implementation there is a distinct gender bias  

against  women  and  various  social  welfare  

legislations and also in judicial pronouncements.

3. In  the  Motor  Vehicles  Act,  1988  (hereinafter,  

‘the  said  Act’),  Section  163A  provides  for  

special provision for payment of compensation on  

structured formula basis.  The said Section has  

been quoted in the earlier part of the judgment  

by brother Singhvi, J. Therefore, I refrain from  

quoting the same.  The Second Schedule which is  

referred  to  in  the  said  Section  has  several  

clauses.  Clause 6 of the said Schedule provides  

3

for notional income of those who had no income  

prior to accident.  Clause 6 has been divided  

into  two  classes  of  persons,  (a)  non-earning  

persons, and (b) spouse.  Insofar as the spouse  

is concerned, the income of the injured in fatal  

and non-fatal accident has been categorized as  

1/3rd of the income of the earning and surviving  

spouse.  It is, therefore, assumed if the spouse  

who does not earn, which is normally the woman in  

the house and the homemaker, such a person cannot  

have an income more than 1/3rd of the income of  

the person who is earning.  This categorization  

has been made without properly appreciating the  

value of the services rendered by the homemaker.  

To value the income of the home-maker as one-

third of the income of the earning spouse is not  

based on any apparently rational basis.   

4.This bias is shockingly prevalent in the work of  

Census.  In the Census of 2001 it appears that  

those  who  are  doing  household  duties  like  

3

cooking,  cleaning  of  utensils,  looking  after  

children,  fetching  water,  collecting  firewood  

have been categorized as non-workers and equated  

with  beggars,  prostitutes  and  prisoners  who,  

according  to  Census,  are  not  engaged  in  

economically  productive work.   As  a result  of  

such categorization about 36 crores (367 million)  

women in India have been classified in the Census  

of India, 2001 as non-workers and placed in the  

category of beggars, prostitutes and prisoners.  

This entire exercise of Census operation is done  

under an Act of Parliament.   

5.Under  Section  4  of  the  Census  Act,  1948,  the  

Central  Government  may  appoint  a  Census  

Commissioner to supervise the taking of census  

throughout the area where census is intended to  

be taken.

6.The  Central  Government  has  made  Census  Rules,  

1990 under Section 18 of the Census Act, 1948.  

3

Under Rule 5(c), (d) and (e) of the Rules, the  

functions of the Commissioner are listed, which  

include  devising  the  census  schedules  or  

questionnaires, compiling and providing guidance  

in taking and computing results and publishing  

the statistics.

7. The  Census  Commissioner  released  data  on  

classification of population by workers and non-

workers  based  on  provisional  results  of  the  

Census of India 2001 on 30th January, 2002.  Thus,  

the categorization, compilation and computation  

of the data was done under the supervision and  

guidance  of the  Census Commissioner.   This  is  

totally  a  statutory  exercise  by  public  

authorities. Therefore, this approach of equating  

women,  who  are  homemakers,  with  beggars,  

prostitutes  and  prisoners  as  economically  non-

productive  workers  by  statutory  authorities  

betrays  a  totally  insensitive  and  callous  

approach towards the dignity of labour so far as  

3

women  are  concerned  and  is  also  clearly  

indicative of a strong gender bias against women.  

8.It is thus clear that in independent India also  

the  process  of  categorizing  is  dominated  by  

concepts which were prevalent in colonial India  

and no attempt has been made to restructure those  

categories with a gender sensitivity which is the  

hallmark in our Constitution.

9.Work  is  very  vital  to  the  system  of  gender  

reconstruction in societies and in this context  

masculine  and  feminine  work  is  clearly  

demarcated. The question which obviously arises  

is whether Census definition of work reflects the  

underlying process of gender discrimination.

10.Women  are  generally  engaged  in  home  making,  

bringing up children and also in production of  

goods  and  services  which  are  not  sold  in  the  

market but are consumed at the household level.  

3

Thus, the work of women mostly goes unrecognized  

and they are never valued.

11.Therefore, in the categorization by the Census  

what is ignored is the well known fact that women  

make significant contribution at various levels  

including  agricultural  production  by  sowing,  

harvesting,  transplanting  and  also  tending  

cattles and by cooking and delivering the food to  

those persons who are on the field during the  

agriculture season.

12.Though,  Census  operation  does  not  call  for  

consideration in this case but reference to the  

same has been made to show the strong bias shown  

against women and their work.  We hope and trust  

that in the on-going Census operation this will  

be corrected.   

13.The same gender bias has been reflected in the  

judgment of the High Court whereby the High Court  

3

has  accepted  the  tribunal’s  reasoning  of  

assessing the income of the victim at Rs.1,250/-  

per month.  Even if we go by the formula under  

clause 6 of the Second Schedule, income of the  

victim comes to Rs.5,000/- per month.   

14. In  a  recent  judgment,  the  Division  Bench  of  

Madras High Court in a case of compensation under  

the said Act has discussed this aspect of the  

matter.   [See  National Insurance  Co. Ltd. vs. Minor  Deepika  rep.  by  her  guardian  and  next  friend, Ranganathan and others reported in (2009)  6 MLJ 1005].  The learned Judge has referred to  

the  general  recommendation  No.  17  of  the  

Convention  on the  Elimination of  All Forms  of  

Discrimination  Against  Women  (CEDAW).  The  said  

general recommendation deals with the measurement  

and quantification of the unremunerated domestic  

activities of women and their recognition in the  

Gross  National  Product.   The  relevant  

recommendations are:-

3

“(a)  Encourage  and  support  research  and  experimental  studies  to  measure  and  value  the  unremunerated  domestic  activities  of  women; for example, by conducting time-use  surveys as part of their national household  survey  programmes  and  by  collecting  statistics disaggregated by gender on time  spent  on  activities  both  in  the  household  and on the labour market;  

(b)  Take  steps,  in  accordance  with  the  provisions  of  the  Convention  on  the  Elimination of All Forms of Discrimination  against  Women  and  the  Nairobi  Forward- looking  Strategies  for  the  Advancement  of  Women,  to  quantify  and  include  the  unremunerated  domestic  activities  of  women  in the gross national product;  

(c) Include in their reports submitted under  article 18 of the Convention information on  the  research  and  experimental  studies  undertaken  to  measure  and  value  unremunerated  domestic  activities,  as  well  as on the progress made in the incorporation  of the unremunerated domestic activities of  women in national accounts.  

15. India is a signatory to the said Convention and  

ratified the CEDAW Convention on 9th July, 1993.  

But even then no law has been made for proper  

evaluation  of  the  household  work  by  women  as  

homemakers.

4

16. The Madras High Court in  Minor Deepika (supra)  has observed very pertinently:

“9. The UNICEF in 2000, noted that "unpaid  care  work  is  the  foundation  of  human  experience". The care work is that which is  done by a woman as a mother and definitely  in India, the woman herself will be the last  person to give this role an economic value,  given the social concept of the role of a  mother. But when we are evaluating the loss  suffered  by  the  child  because  her  mother  died in an accident, we think we must give a  monetary value to the work of a caregiver,  for afterall, the home is the basic unit on  which our civilised society rests...”

17.  The Madras High Court in its very illuminating  

judgment  in  Minor  Deepika (supra)  has  further  referred  to  various  methods  by  which  the  

assessment of work of a homemaker can be made and  

the relevant portion from para 10 of the said  

judgment is extracted below:-

“...that  there  have  been  efforts  to  understand the value of a homemaker's unpaid  labour  by  different  methods.  One  is,  the  opportunity cost which evaluates her wages  by assessing what she would have earned had  she  not  remained  at  home,  viz.,  the  

4

opportunity  lost.  The  second  is,  the  partnership  method  which  assumes  that  a  marriage  is  an  equal  economic  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  much  it  would  cost  to  replace  the  homemaker  with  paid  workers.  This is called the Replacement Method.”

18.Various aspects of the nature of homemaker’s job  

have been described in para 11 which are very  

relevant and are extracted below:-

“11. The role of a housewife includes managing  budgets,  co-ordinating  activities,  balancing  accounts,  helping  children  with  education,  managing help at home, nursing care etc. One  formula that has been arrived at determines the  value of the housewife as, Value of housewife =  husband's income – wife's income + value of  husband's household services, which means the  wife's  value  will  increase  inversely  proportionate to the extent of participation by  the  husband  in  the  household  duties.  The  Australian  Family  Property  Law  provides  that  while  distributing  properties  in  matrimonial  matters, for instance, one has to factor in  "the  contribution  made  by  a  party  to  the  marriage  to  the  welfare  of  the  family  constituted by the parties to the marriage and  any  children  of  the  marriage,  including  any  contribution  made  in  the  capacity  of  a  homemaker or parent."

4

19.In paragraph 13, the Division Bench of the High  

Court has observed and, in my view very rightly,  

that time has come to scientifically assess the  

value of the unpaid homemaker both in accident  

claims and in matters of division of matrimonial  

properties.   

20.It may be of some interest to point out that in  

the Constitution of Cambodia, Article 36 provides  

as under:-

“Article 36 – o Khmer citizens of either sex shall have  

the  right  to  choose  any  employment  according to their ability and to the  needs of the society.

o Khmer  citizen  of  either  sex  shall  receive equal pay for equal work.

o The work by housewives in the home shall    have  the  same  value  as  what  they  can  receive when working outside the home. xxxx xxxx xxxxx”

21.It must be noted that as a result of First World  

Conference on Women held in Nairobi in 1985, the  

4

Statistical  Officers  of  United  Nations  

International Research and Training Institute for  

the Advancement of Women (INSTRAW), took a major  

role  in  promoting  the  revision  of  national  

accounts and other information on women’s work.

22.The  purpose  of  maintaining  such  satellite  

accounts is to assess the unpaid production of  

goods and services by homemakers. In 1934, the  

American  economist  Margaret  Reid  suggested  a  

different approach while arguing that if a third  

person could be paid to do the unpaid activities  

carried out by homemakers such activities should  

be counted as part of production.

23.Admittedly,  it  has  to  be  recognized  that  the  

services produced in the home by the women for  

other members of the household are an important  

and valuable form of production. It is possible  

to put monetary value to these services as for  

instance,  the  monetary  value  of  cooking  for  

4

family members could be assessed in terms of what  

it would cost to hire a cook or to purchase ready  

cooked food or by assessing how much money could  

be earned if the food cooked for the family were  

to be sold in the locality.

24.Jayati  Ghosh  (Uncovering  Women’s  Work)  has  

referred to National Sample Surveys and according  

to her, the survey showed “57% of rural women and  

19%  of  urban  women  were  engaged  in  the  free  

collection  of  fuel  wood  for  household  

consumption.  Activities  related  to  food  

processing, such as husking and grinding grain,  

were engaged in by around 15% of women. Other  

unpaid  activities  such  as  maintaining  kitchen  

gardens and looking after livestock and poultry  

also occupied a majority of women – 60% in rural  

areas  and  24%  in  urban  areas.  These  are  all  

economic activities which in developed societies  

are typically recognized as such because they are  

4

increasingly  delegated  by  women  and  performed  

through paid contracts.”

25.Alternative  to  imputing  money  values  is  to  

measure the time taken to produce these services  

and compare these with the time that is taken to  

produce goods and services which are commercially  

viable. One has to admit that in the long run,  

the services rendered by women in the household  

sustain a supply of labour to the economy and  

keep human societies going by weaving the social  

fabric and keeping it in good repair. If we take  

these services for granted and do not attach any  

value to this, this may escalate the unforeseen  

costs  in terms  of deterioration  of both  human  

capabilities and social fabric.

26.Household  work  performed  by  women  throughout  

India is more than US $ 612.8 billion per year  

(Evangelical  Social  Action  Forum  and  Health  

Bridge, page 17). We often forget that the time  

4

spent  by  women  in  doing  household  work  as  

homemakers is the time which they can devote to  

paid work or to their education. This lack of  

sensitiveness  and  recognition  of  their  work  

mainly  contributes  to  women’s  high  rate  of  

poverty  and  their  consequential  oppression  in  

society, as well as various physical, social and  

psychological problems. The courts and tribunals  

should do well to factor these considerations in  

assessing  compensation  for  housewives  who  are  

victims  of  road  accident  and  quantifying  the  

amount in the name of fixing ‘just compensation’.

27.In this context the Australian Family Property  

Law has adopted a very gender sensitive approach.  

It provides that while distributing properties in  

matrimonial  matters,  for  instance,  one  has  to  

factor in “the contribution made by a party to  

the  marriage  to  the  welfare  of  the  family  

constituted by the parties to the marriage and  

any  children  of  the  marriage,  including  any  

4

contribution made in the capacity of a homemaker  

or parent”.  

28.For the reasons aforesaid, while agreeing with  

the views of brother Singhvi, J., I would humbly  

add, that time has come for the Parliament to  

have  a  rethinking  for  properly  assessing  the  

value  of  homemakers  and  householders  work  and  

suitably  amending  the  provisions  of  Motor  

Vehicles Act and other related laws for giving  

compensation when the victim is a woman and a  

homemaker.  Amendments in matrimonial laws may  

also  be  made  in  order  to  give  effect  to  the  

mandate of Article 15(1) in the Constitution.   

.................J. New Delhi    (ASOK KUMAR GANGULY) July 22, 2010   

4

4