Nov 8, 2021 18:34 UTC
Nov 8, 2021 at 18:34 UTC
Case Study: Kirti v. Oriental Insurance Company Ltd.
“Recognition of Notional Income for women working as Home-makers”
CIVIL APPEAL NOS. 1920 of 2021
Date of Judgment: 5 January, 2021
BENCH: Justice N.V. Ramana, Justice S. Abdul Nazeer, Justice Surya Kant
Author of Majority Opinion: Justice Surya Kant
Author of Concurring Opinion: Justice N.V Ramana
This case settled by the Honorable Supreme Court deals with a motor vehicle accident that claimed the lives of a man and his pregnant wife. Civil appeals were filed in the Supreme Court by the three surviving dependants, two minor daughters and father, of the deceased couple, challenging the judgment of the Delhi High Court that reduced the motor accident compensation of Rs. 40.71 Lakhs awarded by the Motor Accident Claims Tribunal to Rs. 22 Lakhs.
Compensation to the tune of Rs. 40.71 Lakhs was fixed by the Tribunal after taking into account various factors such as rash driving of the driver, minimum wage in Delhi, future prospects of the deceased wife, loss of love, and deduction of 1/3rd of deceased man’s salary towards personal expenses.
Whereas, the Delhi High Court reduced the amount of compensation to Rs. 22 Lakhs on the grounds of contributory negligence of the deceased couple, lack of proof of deceased man’s employment in Delhi (hence, minimum wage of Haryana which was the permanent residence of the deceased was considered instead of that of Delhi) and denial of future prospects to both the deceased.
Hence, the dependants of the deceased filed an appeal in the Supreme Court against the decision of the High Court.
The Supreme Court overruled the findings of the High Court and increased the compensation from Rs. 22 Lakhs to Rs. 33.20 Lakhs. The Court held that claims and legal liabilities crystallize at the time of the accident itself, and changes post thereto ought not to ordinarily affect pending proceedings. At the time of the accident there were actually four dependants of the deceased couple (deceased’s dependent mother died subsequently) and so compensation has to be granted for four members instead of three.
The court also reiterated that the compensation ought to be just, reasonable and consequently must undoubtedly be guided by the principles of fairness, equity and good conscience and therefore certain factors must be considered such as age of the children, who were 3 and 4 years old, at the time of the accident (a good amount of expenditure is required at this age till they become self-dependent); termination of deceased mother pregnancy due to rash and negligent driving of the driver (therefore, deduction of the deceased couple’s personal expenses was held to be 1/4th instead of 1/3rd); educational qualification of the deceased (the evidences pointed out his decent educational qualification and skills and ability to maintain a reasonable standard of living for his family hence, the minimum wage of skilled worker of Haryana was applied instead of that of unskilled worker); young age of the deceased couple (since both the deceased were below 40 years, future prospects to the tune of 40% was ordered to be paid).
- Notional income
The Notional income of a victim is determined by the Court in two types of circumstances:
- The first category of situation relates to victim who was employed somewhere but the claimants are unable to prove his/her actual income. Therefore, the court has to “guess” the same by taking into account certain considerations (e.g. the quality of life led by him/her and his family, his/her qualifications, general earning in that field, etc.).
- The second category is regarding determining income of non-earning victims (such as a child, student, and homemaker) where different methods and principles, based on facts and circumstances of each case, are followed by the court to award just compensation keeping in mind that such assessment is neither conservative nor so liberal so as to make it a bounty to claimants.
- Future Prospects
Justice NV Ramana stated that the rationale behind awarding future prospects is a part of the duty of the Court to grant just compensation, taking into consideration the realities of life, particularly of inflation, the quest of individuals to better their circumstances and those of their loved ones, easing wage rates and the impact of experience on the quality of work.
This principle of granting future prospects is to be applied in both the cases– where the court calculates the notional income of the ‘employed victim’ whose income could not be proved by claimants, and the ‘non-earning victim’, particularly with respect to homemakers. The court emphasized that the effects of inflation would apply in the latter category also. “Further, no one would ever say that the improvement in skills that come with experience do not take place in the domain work within the household.”
- Notional Income and Future Prospects in relation to Homemakers for the purposes of granting compensation
The court summarized the whole judgment regarding the issue of notional income and grant of future prospects with respect to homemakers for the grant of compensation as follows:
- “Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.
- Taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in the same as compared to men, the fixing of notional income of a homemaker attains special significance. It becomes a recognition of the work, labour and sacrifices of homemakers and a reflection of changing attitudes. It is also in furtherance of our nation’s international law obligations and our constitutional vision of social equality and ensuring dignity to all.
- Various methods can be employed by the Court to fix the notional income of a homemaker, depending on the facts and circumstances of the case.
- The Court should ensure while choosing the method, and fixing the notional income, that the same is just in the facts and circumstances of the particular case, neither assessing the compensation too conservatively, nor too liberally.
- The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.”
- Remarks on Homemakers:
Justice Ramana took the liberty to give a concurring judgment on the matter of assessing notional income and granting future prospects to homemakers for the purposes of compensation. He highlighted 2011 Census which states that 159.85 million women in India considered “household work” as their main occupation, as compared to only 5.79 million men.
Further, the Report of the National Statistical Office of the Ministry of Statistics & Programme Implementation, Government of India called “Time Use in India 2019” reflects that, “women on average spent 16.9 and 2.6 percent of their day on unpaid domestic services and unpaid caregiving services for household members respectively, while men spent 1.7 and 0.8 percent.”
The court also took into consideration the international law, namely, General Recommendation No. 17 on the “Measurement and quantification of the unremunerated domestic activities of women and their recognition in the gross national product” adopted by the United Nations Committee on the Elimination of Discrimination against Women in 1991 which affirms that “the measurement and quantification of the unremunerated domestic activities of women, which contribute to development in each country, will help to reveal the de facto economic role of women”. Further, Article 11 of the Convention of the Elimination of All Forms of Discrimination against Women (ratified by India) was also referred to by the Court which relates to ending discrimination against women in the field of employment.
The Honorable Court stressed upon the fact that a housemaker, which is more likely to be a woman than a man, undertakes plethora of activities and dedicates sheer amount of time and effort towards household chores. Despite undertaking all these tasks the notion that housemakers do not “work” or that they do not add economic value to the household is a problematic idea that has persisted for many years and must be overcome.
Therefore, the Court held that fixing notional income for a homemaker is a recognition of the multitude of women who are engaged in this activity, whether by choice or as a result of social/cultural norms.
“It signals to society at large that the law and the Courts of the land believe in the value of the labour, services and sacrifices of homemakers. It is an acceptance of the idea that these activities contribute in a very real way to the economic condition of the family, and the economy of the nation, regardless of the fact that it may have been traditionally excluded from economic analyses. It is a reflection of changing attitudes and mindsets and of our international law obligations. And, most importantly, it is a step towards the constitutional vision of social equality and ensuring dignity of life to all individuals.”
 Para 25.
 Para 26.
 Para 7.
 Para 8, see also, National Statistical Office, Time Use in India2019 (September, 2020).
 Para 26.