Arun
Kumar Agrawal & ANR. Vs. National Insurance Co. Ltd. & Ors. [2010] INSC
516 (22 July 2010)
Judgment
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
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 3 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 4 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 5
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 6
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 7 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 8 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:
9
"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.350087= 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 1 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:
2 "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.
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.
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)
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:- 4 "(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.
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.
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