MACC Legal Position regarding assessment of Compensation in case of death Case of House wife having no income u/s 163-A or 166 of The Motor Vehicles Act

Legal Assistance

LEGAL POSITION REGARDING ASSESSMENT OF COMPENSATION IN CASE OF DEATH OF HOUSEWIFE HAVING NO INCOME IN A MOTOR ACCIDENT CLAIM u/s 163-A OR 166 OF THE MOTOR VEHICLES ACT, 1988

INTRODUCTION :

        The word compensation according to the dictionary, means ‘compensating or being compensated, thing given in recompense’. It may constitute actual loss or expected loss in a legal sense and may extend to physical, mental, or even emotional suffering, injury, or loss.  

        No amount of money can console the children whose mother has been snatched away by the wheels of a vehicle. However, the courts can make up for the tragic loss to some extent by awarding just, fair and reasonable compensation so that the loss of life becomes less painful.

        So that there may be a reasonable expectation of pecuniary benefit, it is not necessary that the legal representatives should have been supported by the deceased wife/mother or should have a legal claim to be supported by the deceased. It is not necessary that the deceased should have been earning anything. Further, there is no retirement age for a housewife, she works in the house as long as she is physically capable of doing so.  A wife’s or mother’s loss cannot be evaluated by so much of the amount alone as paid to the servants, and so relegate her to the position of mere housekeeper.

        Judicial notice can certainly be taken of the services being rendered by the housewife to the family. In a system where a judicial decision is ordinarily based on statute law or case law, it may be unusual to refer to an e-mail foreword, but one quoted hereinafter is so compellingly appropriate in the context of the present discussion that we cannot help quoting it in its entirety.

        Mum and Dad were watching TV when Mum said, I’m tired, and it’s getting late. I think I’ll go to bed.” She went to the kitchen to make sandwiches for the next day’s lunches. Rinsed out the popcorn bowls, took the meat out of the freezer for supper the following evening, checked the cereal box levels, filled the sugar container, put spoons and bowls on the table, and started the coffee pot for brewing the next morning. She then put some wet clothes in the dryer, put a load of clothes into the washer, ironed a shirt, and secured a loose button. She picked up the game pieces left on the table, put the phone back on the charges, and put the telephone book in the drawer. She watered the plants, emptied a water basket, and hung up a towel to dry. She yawned and stretched and headed for the bedroom. She stopped by the desk and wrote a note to the teacher, counted out some cash for the excursion, and pulled a textbook out from hiding under the chair. She signed a birthday card for a friend, addressed and stamped the envelope, and wrote a quick note for the grocery store. She put both near her bag. Mum then washed her face with 3 in 1 cleanser, put on her Night Solution and age-fighting moisturizer, brushed and flossed her teeth, and filed her nails. Dad called out, ‘I thought you were going to bed.’ ‘I’m on my way,’ she said. She put some water into the dog’s dish and put the case outside, then made sure the doors were locked and the patio light was on. She looked in on each of the kids and turned out their bedside lamps and radios, hung up a shirt, threw some dirty socks into the hamper, and had a brief conversation with the one up still doing homework. In her own room, she set the alarm, laid out clothing for the next day, straightened up the shoe rack. She added three things to her 6 most important things-to-do list. She said her prayers, and visualized the accomplishment of her goals.

        About that time, Dad turned off the TV and announced to no one in particular. I’m going to bed. And he did..... without another thought.

        The above quote is only about the services rendered by the lady as mother/wife for half an hour to one hour after dinner.

B.  GENERAL PRINCIPLES ON COMPENSATION IN CASES ARISING OUT OF USE OF MOTOR VEHICLES

    Section 168 of the Act enjoins the Tribunal to make an award determining “the amount of compensation which appears to be just.” However, the objective factors, which may constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, the expression “which appears to be just” vests wide discretion in the Tribunal in the matter of determination of compensation. Nevertheless, the wide amplitude of such power does not empower the Tribunal to determine the compensation arbitrarily or to ignore settled principles relating to the determination of compensation. Similarly, although the Act is beneficial legislation, it can neither be allowed to be used as a source of profit nor as a windfall to the persons affected nor should it be punitive to the person (s) liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependents of the deceased and the compensation to be awarded to them. In a nutshell, the amount of compensation determined to be payable to the claimant(s) has to be fair and reasonable by accepted legal standards.  [See Syed Basheer Ahamed v. Mohd. Jameel, AIR 2009 SC 1219]

    Undoubtedly, the compensation in law is paid to restore the person,  who has suffered damage or loss in the same position, if the tortious act had not been committed.  The law in all such matters requires payment of adequate, reasonable, and just monetary compensation.

   In cases of motor accidents, the endeavor is to put the dependents/claimants in the pre-accidental position. Compensation in cases of motor accidents, as in other matters, is paid for the reparation of damages. The damages so awarded should be an adequate sum of money that would put the party, who has suffered, in the same position if he had not suffered on account of the wrong. Compensation is therefore required to be paid for prospective pecuniary loss i.e. future loss of income/dependency suffered on account of the wrongful act.

       However, no amount of compensation can restore the experience of pain and suffering due to loss of life. Loss of life can never be eliminated or ameliorated completely. To put it simply–pecuniary damages cannot replace a human life. Therefore, in addition to the pecuniary losses, the law recognizes that payment should also be made for non-pecuniary losses on account of loss of happiness, pain, suffering and expectancy of life, etc. (See R.K. Malik v. Kiran Pal, AIR 2009 SC 2506)

C. DEVELOPMENT OF LAW IN ENGLAND AS REFLECTED FROM LEGAL PRONOUNCEMENTS

        In Berry v. Humm and Co., (1915) 1 KB 627, the plaintiff’s wife was knocked down by a motor-taxi cab and instantly killed. The wife had performed the ordinary household duties of a woman in her position, and in consequence of her death, the plaintiff had to employ a housekeeper and to incur extra expenses of management by the housekeeper instead of by his deceased wife. It was held that under the Fatal Accidents Act, the damages recoverable in such an action are not limited to the value of money lost, or the money value of things lost, but includes the monetary loss incurred by replacing the services rendered gratuitously by the deceased where there was a reasonable prospect of their being rendered freely in future but for the death.

    In Kemp and Kemp on Quantum of Damages, (Special Edn. 1986), the authors have identified various heads under which the husband can claim compensation for 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 housekeeper 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 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.

     In Regan v. Williamson, (1976) 2 All ER 241, Watkins J. observed that the word ‘services’ has 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 and possibly, with such things as their homework. This sort of attention seems to be as much of a service, and probably more valuable to them than the other kinds of service conveniently so regarded.

    In Mehmet v. Perry, (1977) 2 All ER 529(DC), 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 care and attention, which the husband had suffered, in addition to the loss of her housekeeping services.

D.   DEVELOPMENT OF LAW IN INDIA AS REFLECTED FROM LEGAL PRONOUNCEMENTS:

        In Sunny Chugh v. Darshan Lal, AIR 1985 P & H 343 the compensation was payable amongst others, calculated based on the money value of the household work which the deceased woman did as wife or mother, though she had been doing this gratuitously, and that the loss suffered by the husband or children on the death of wife would also include the additional expenses incurred or likely to be incurred by having the household run by a house-keeper or servant, instead of the wife.

        Again in Gurdeep Singh Narula v. Mali Singh, 1990 ACJ 116, it has been held that the principle is now well established that even on the death of a housewife, who was not an earning hand, the compensation on the principle of taking the value of domestic services rendered by a household lady is to be taken into consideration while assessing compensation.

        The Andhra Pradesh High Court in C. Venkatesham v. G.M., A.P.S.R.T.C., 1977 ACJ 536 (AP), considered the case of the death of a housewife aged 21 years. The claimants were the husband and two minor children. After deducting the savings for the husband consequent upon the death of his wife, from the value of the loss of services, the net loss was assessed at ` 1,200/- per annum and applying a multiplier of 15, a sum of ` 18,000/- was awarded. Sheth and Jeevan Reddy, observed :

        “Therefore, we have to evaluate her services rendered to her family and her household. The first head under which compensation should be awarded to the claimant is the loss of domestic services. This would include the service which she rendered by cooking the food for the family, by maintaining the household, and by bringing up the children.

.    .. .... Out of this amount we have to deduct what the claimant used to spend on the deceased and what he has been saving now and while assessing for pain and suffering and loss of consortium the court awarded a further sum of 6,000/-, stating that the said sum includes ‘the loss of love and affection’ to the young children who, during their infancy had been deprived of the ‘motherly affection’.”

        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 the 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 a reasonable prospect of such services being rendered freely in 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.”

            The Jammu and Kashmir High Court in Oriental Insurance Co. Ltd. v. Shamsher Singh and others, 2003 ACJ 742 considered this question and held :

        “To say that a lady who is working as a housewife is not making any monthly contribution to the family is an argument which cannot be accepted. The value of the domestic services which are rendered by a maidservant engaged for the entire day, if taken into consideration, then what has been allowed by the Tribunal cannot be said to be on the higher side. If a maidservant is to be engaged, then she would be charging at least ` 1,000 p.m. If she is working for the entire day then she is supposed to be provided meals and some other facilities would also be provided.

        Recently in Mushtaq Ahmed and others v. State of Jammu & Kashmir and others, 2010 ACJ 1211, the Jammu & Kashmir High Court based on the law laid down by the Hon’ble Supreme Court in Lata Wadhwa v. the State of Bihar, (2001) 8 SCC 197, has assessed the annual dependency loss in case of a housewife at ` 36,000 per annum for determination of compensation.

        The Delhi High Court in the case of Chandra Singh & Ors. v. Gurmej Singh & Ors., 2003 VII AD (Delhi) 222 did not accept the view expressed in Lata Wadhwa’s case (supra), instead, it relied on the Minimum Rates of Wages in Delhi which was prevalent at that time, and the formula laid down in Sarla Dixit v. Balwant Yadav, (1996) 3 SCC 179 was applied. On this calculation, the Court awarded an amount of ` 2,55,000.

        But recently in Partap Singh and others v. Banwari  Lal and others, 2010 ACJ 1498, the Delhi High Court has followed the law laid down in Lata Wadhwa’s case (supra) for determination of compensation.

        In National Insurance Company Ltd. v. Mahadevan and others, 2009 ACJ 1373, the High Court of Madras (Madurai Bench) has culled the principle of assessment in case of death of housewife having no visible income by referring to almost all the cases referred above in this article and finally observed thus:

        “Courts in India have recognized the invaluable contribution of the housewife to the house which is more than the pecuniary value.  Gratuitous services rendered by the 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 housekeeper or a maidservant can do the household work, such as cooking food, washing clothes and utensils, keeping the house clean, etc., but she can never be a substitute for a wife who would render selfless service to her husband and children.  However, the loss of service to the household is estimated on the expenses incurred for the above said multifarious services rendered by the wife.  The claimants who have lost the gratuitous service rendered by the deceased are entitled to adequate compensation.   

       The notional income for non-earning members was fixed in the year 1994.  Quantifying the pecuniary loss at the same rate or amount even after 13 years after the amendment, ignoring the escalation in the cost of living and the inflation, may not be justifiable.  Considering the importance of loss of services and the age of the minors, it would be reasonable to fix the annual contribution of the deceased at ` 20,000/- and compute the dependency compensation.”

        The Madhya Pradesh High Court in Manohar Lal Sobha Ram Gupta v. M.P. Electricity Board, 1975 ACJ 494 (M.P.) considered the case of the death of a housewife aged 32 years and in the claim by the husband and two minor sons estimated the value of the services at  ` 500 per annum and applying a multiplier of 16, awarded ` 8,000.

        In Dilip and others v. Sukhbeer Kaur and others, 2006 (II) MPWN 125 in the case of housewife the notional income was assessed @ ` 2,000/- p.m. i.e. ` 24,000 per annum and based on this, the loss of dependency was assessed at ` 16,000 per annum for determination of compensation.

        Again in Jamunabai (Mahila) v. Sardut Singh and others, 2007 (1) MPWN 3 in a case of housewife aged 35 years, the notional income of ` 15,000/- per annum was considered, and accordingly, dependency loss was assessed at ` 10,000/- for determination of compensation.

        In Lata Wadhwa’s case (supra), the Apex Court considered various issues raised in the writ petitions filed by the petitioners including the one relating to the payment of compensation to the victims of the 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 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 an 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: (SCC pp. 209-10, para 10)

        “10. So far as the deceased housewives are concerned, in the absence of any data and as the housewives were not earning any income, an attempt has been made to determine the compensation based on services rendered by them to the house. Based on the age group of the housewives, an 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 ` 12,000 per annum in cases of some and ` 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 ` 3000 per month and ` 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 ` 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 ` 50,000 instead of ` 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 ` 10,000 per annum, and the multiplier applied is eight. Though the multiplier applied is correct, but the values of services rendered at ` 10,000 per annum, cannot be held to be just and, therefore, enhance the same to ` 20,000 per annum. In their case, therefore, the total amount of compensation should be re-determined, taking the value of services rendered at ` 20,000 per annum and then after applying the multiplier, as already applied and thereafter, adding ` 50,000 towards the conventional figure.”

        In Laxmi Devi v. Mohammad Tabbar, AIR 2008 SC 1858 the Apex Court while considering the income of the deceased observed as under:

        “The High Court concluded that though the claim of the income of ` 4200 per month was not reliable, the notional income should have been held to be ` 36,000 per annum, i.e., ` 3,000 per month. For this proposition, the High Court held that the notional income of ` 15,000 in the Second Schedule was prescribed in the year 1994 while the accident had taken place in the year 2004. The second reason given by the High Court was that even an unskilled laborer, these days, can easily earn ` 100 per day and ` 3,000 per month and, therefore, the High Court held the income to be ` 36,000 per annum and by deducting 1/3rd of the income of the deceased for his expenses, the claimants’ dependency was assessed at ` 24,000 per annum. It was nobody’s case that the deceased was not working at all. His wife has entered the witness box and had asserted that he earned ` 140 per day. Even if we ignore the exaggeration, the figure arrived at by the High Court at ` 100 per day and ` 3,000 per month appears to be correct.”

        Our own High Court in Vasudev Singh and others v. Raghuraj Singh and others, ILR 2009 MP 1086 has followed the above determination.

E. CLAIM SHOULD BE EITHER u/s 163-A OR 166

        The claim arising out of a motor accident may be filed either under Section 163-A or 166 as determination of compensation under both the provisions are final and independent of each other.

        In Deepal Girishbhai Soni v. United Insurance Co. Ltd., Baroda, AIR 2004 SC 2107, the 3-Judge Bench  of the Apex Court has clarified the legal position in this regard by observing that :

        “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 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 ` 40,000 or less is covered thereunder whereas Sections 140 and 166 cater to all sections of society.”

    It was further observed that :

        “Remedy for payment of compensation both under Sections 163-A and 166 being final and independent of each other as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. One, thus, must opt/elect to go either for a proceeding under Section 163-A or Section 166 of the Act, but not under both.”                                                                                  

        The Apex Court in this case also clarified the upper-income limit for filing claims under Section 163-A as under:

        “We, therefore, believe that Oriental Insurance Co. Ltd. v. Hansrajbhai v. Kodala and others, AIR 2001 SC 1832 has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163-A, the annual income of ` 40,000 per annum shall be treated as a cap. In our opinion, the proceeding under Section 163-A being a social security provision, providing for a distinct scheme, only those whose annual income is up to ` 40,000 can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act.”

        Further in Oriental Insurance Co. Ltd. v. Meena Variyal, AIR 2007 SC 1609, the Supreme Court has again observed that:

        “The victim of an accident or his dependants have an option either to proceed under Section 166 of the Act or under Section 163A 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 163A of the Act, the compensation will be awarded in terms of the Schedule without 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.”

        Recently, again in Oriental Insurance Company Ltd. v. Dhanbai Kanji Gadhvi and others, 2011 ACJ 721, the Apex Court has reiterated the law as enunciated in Deepal Girishbhai (supra) and held that claimants must opt to go either for a proceeding under Section 163-A or under Section 166 but not under both. Where claimants have obtained compensation under Section 163-A, they are precluded from proceeding further with claim application under Section 166 for a similar case.

F. COMPUTATION OF COMPENSATION u/s 163-A IN CASE OF DEATH OF HOUSEWIFE

So far invoking provisions u/s 163-A of Motor Vehicles Act is concerned, a claimant doesn’t need to establish any act of negligence on the part of the driver. It is not necessary even to plead that the death had occurred owing to any wrongful act or neglect or default of the owner of the vehicle.

Quantum of compensation is to be determined in terms of the Second Schedule appended thereto. In terms thereof, apart from the amount of compensation as provided for therein only funeral expenses, loss of consortium (if a beneficiary is a spouse), loss of estate, medical expenses, would be payable.

As we are concerned with the death of a housewife in a motor accident having no income, we have to confine ourselves in the determination of compensation looking to the special provisions appended under Clause 6 of Second Schedule of Motor Vehicles Act, 1988 which reads as under :

6. Notional income for compensation to those who had no income before accident – 

Fatal and disability in non-fatal accidents:

(a)   Non-earning persons ` 15,000 p.a.

(b)   Spouse 1/3rd of income of the earning/surviving spouse.

Section 163-A was inserted by Act No. 54 of 1994 as a special measure to ameliorate the difficulties of the family members of a deceased who died in use of a motor vehicle. It contains a non obstante clause. It makes the owner of a motor vehicle or the authorized insurer liable to pay in the case of death, the amount of compensation as indicated in the Second Schedule to his legal heirs.  The Second Schedule provides for the amount of compensation for third-party Fatal Accident/Injury Cases Claims. It provides for the age of the victim and also provides for the multiplier for arriving at the amount of compensation that became payable to the heirs and legal representatives of the deceased depending upon his annual income. The Second Schedule furthermore provides that in a case of a fatal accident, the amount of claim shall be reduced by 1/3rd in consideration of the expenses which the victim would have incurred upon himself, had he been alive.

As the Second Schedule provides for a structured formula, the question of determination of payment of compensation by application of judicial mind which is otherwise necessary for a proceeding arising out of a claim petition filed under Section 166 would not arise. The Tribunals in a proceeding under Section 163-A of the Act are required to determine the amount of compensation as specified in the Second Schedule.             

Though these provisions have been inserted in 1994 and since then much water has flown under the bridge in terms of escalation in the cost of living and inflation. Even where the claim petition is under Section 163-A, the Tribunal has to decide the claim based on the structured formula as laid down in the scheme of the Motor Vehicles Act, 1988 because the general law regarding computation of compensation for claims under Section 166 based on “just compensation” theory does not apply to the claims under Section 163-A. It has also to be kept in mind that the provision of Section 163-A has an overriding effect on other provisions of the Motor Vehicles Act, 1988.

Hence, based on aforesaid observations it is manifestly clear that in case of death of a housewife in a motor accident, for computation of compensation under Section 163-A, the notional income shall be assessed as per sub-clause (a) or (b) of Clause 6 of the Second Schedule of the Motor Vehicles Act, 1988.

G.   COMPUTATION OF COMPENSATION u/s 166 IN CASE OF DEATH OF HOUSEWIFE

In case of a claim under Section 166 for the death of a housewife having no income, while assessing the notional income looking to her services and contribution to household activities, the Tribunals are not restricted to any upper limit of the income as in case of claims under Section 163-A (i.e. up to ` 40,000 per annum) and Tribunals can compute the compensation which is “just” in the facts and circumstances of the case under consideration.

As discussed above the development of law in this regard has recognized the non-earning housewives’ real but camouflaged contribution towards managing domestic services.

Recently in Arun Kumar Agrawal and another v. National Insurance Company Limited and others, (2010) 9 SCC 218, the Apex Court has cleared the position of Indian Courts lucidly and observed as under:

“In India, the Courts have recognized 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 the 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 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, etc., but she can never be a substitute for a wife/mother who renders selfless service to her husband and children.

It is not possible to quantify any amount instead of the services rendered by the wife/mother to the family i.e. husband and children. However, for an 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 her husband as a wife. They are entitled to adequate compensation instead 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.”

The Apex Court further in this case observed that:

“In National Insurance Company Ltd. v. Mahadevan,

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 after 13 years after the amendment, ignoring the escalation in the cost of living and the inflation, may not be justified.

In Amar Singh Thukral v. Sandeep Chhatwal, (2004) 112 DLT 476, the learned Single Judge of Delhi High Court adopted the yardstick of minimum rates of wages for the 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.

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 a 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 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 housewife. In its wisdom, the legislature had, as early as in 1994, fixed the notional income of a non-earning person at ` 15,000 per annum and in case of a spouse, 1/3rd income of the earning/surviving spouse to compute 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 Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176,  U.P. SRTC v. Trilok Chandra, (1996) 4 SCC 362, Sarla Verma v. DTC, (2009) 6 SCC 121 and also take guidance from the judgment in Lata Wadhwa’s case (supra). 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 the work of a skilled worker.”

Finally, the Apex Court in absence of any other definite criteria for determination of compensation payable to the dependents of non-earning housewife/mother has taken aid of Clause 6 of the Second Schedule in a claim under Section 166 of the Motor Vehicles Act, 1988 and held it as “just compensation”

H.   CONCLUSION

With the above discussions and legal position emerged, it is now well-settled that the services that a housewife provides for the household, even though rendered gratuitously do indeed have a monetary value in respect of which compensation is payable, particularly to the beneficiaries of such services which would include the husband and the children. It is also pertinent to bear in mind that there is no retirement age for a housewife. She works in the house for as long as she is physically capable of doing so. 

Hence, while computing compensation under Section 163-A of the Motor Vehicles Act, 1988, in case of death of a housewife having no income, Tribunals have to determine the national income of such a housewife as per sub-clause (a) or (b) of Clause 6 of Second Schedule as the case may be and then apply appropriate multiplier as per Second Schedule. The only restriction is that while determining the notional income under sub-clause (b) of Clause 6 of the Second Schedule, the annual income assessed should not exceed ` 40,000 per annum.

Whereas for such claim under Section 166, in the absence of any other definite criteria so far, the determination of national income would also be as per Clause 6 of the Second Schedule but there is no bar of annual national income and this may exceed to ` 40,000 per annum looking to the income of her spouse and in this case appropriate multiplier would be applied to award “just compensation”.