Notification of Minimum Wages cannot be guiding factor to evaluate monthly income of deceased: Supreme Court

Notification of Minimum Wages cannot be guiding factor to evaluate monthly income of deceased: Supreme Court

The Supreme Court recently held that reliance cannot be placed on a State notification issued under the Minimum Wages Act in a motor accident claim case for the purpose of ascertaining the wage of the deceased when there is already positive evidence regarding the monthly income of the deceased.

The Court was of the view that such notification can be a guiding factor only in a case where there is no clue available to evaluate the monthly income of the deceased.

The Court was hearing an appeal challenging a decision of the Punjab and Haryana High Court which had reduced the compensation awarded by the Motor Accident Claims Tribunal (MACT).

The deceased was a 25-year-old healthy person. He was stated to be working as a contractor and was earning ₹50,000 per month.

While calculating the compensation to be awarded, the tribunal took the income of the deceased to be ₹25,000 month after taking note of the monthly instalment of ₹11,550 per month being paid by him towards a tractor loan from March 10, 2014 onwards. The entire loan liability was discharged by March 24, 2015 with payment being made even after his death.

Keeping in view of the above situations, the MACT assessed the monthly income of the deceased to be ₹25,000 per month.

However, the High Court was of the view that mere fact that the deceased had paid instalments of the loan could not itself be an evidence that the money actually represented his income or can form the basis for assessment of income of the deceased at ₹25,000.

Taking into consideration the notification issued by the State of Haryana, fixing minimum wage at the relevant time, the High Court assessed the income of the deceased at ₹7,000 per month, and on this premise, the compensation granted to the appellants was reduced.

The Supreme Court disapproved of the approach of the High Court, and ruled that the tribunal's decision was correct in law as well as on facts.

"The Tribunal's approach is quite justified in law as well as on facts. In the summary proceedings where the approach of the Tribunal's determination must be in conformity with the object of the welfare legislation, it was rightly held that the monthly income of the deceased could not be less than ₹25,000. The reason assigned by the High Court to reduce the monthly income of the deceased is totally cryptic and has no rationale," the Court said.

It, therefore, set aside the decision of the High Court and restored the compensation awarded by the MACT.