The Supreme Court has held that in motor accident cases involving injured or deceased minors, loss of income must be calculated on the basis of the minimum wage for skilled workers in the state at the time of the accident. It further directed that if the claimant cannot establish income, insurance companies are obligated to furnish the relevant minimum wage data before the Tribunal.
In this case, the Court enhanced compensation for an 8-year-old boy who suffered 90% permanent disability in a 2012 road accident from ₹8.65 lakh to ₹35,90,489, with 9% annual interest.
Background
On 14 October 2012, Hitesh Nagjibhai Patel, then 8 years old, was standing with his father on a ‘kachcha’ road in Banaskantha, Gujarat, when a vehicle (GJ-8V-3085) driven rashly and negligently struck him. He sustained severe injuries, including brain haemorrhage and the amputation of his left lower limb.
Through his father, Patel filed a claim under Section 166 of the Motor Vehicles Act, 1988, seeking ₹10 lakh in compensation.
In September 2021, the Motor Accident Claims Tribunal (MACT) awarded ₹3,90,000 with 9% interest, based on 30% permanent disability, under heads such as pain and suffering, parents’ loss of earnings, and medical expenses.
On appeal, the Gujarat High Court in August 2024 enhanced the award to ₹8,65,000, assessing the total permanent disability at 90% and granting additional sums for items including an artificial limb.
Supreme Court Proceedings
The appellant challenged the High Court award, arguing that:
- The loss of income was wrongly computed without reference to minimum wages.
- Compensation under various heads was inadequate.
A bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra agreed that both the MACT and the High Court failed to apply established law.
Citing Kajal v. Jagdish Chand (2020) 4 SCC 413 and Baby Sakshi Greola v. Manzoor Ahmad Simon (2024 SCC OnLine SC 3692), the Court reiterated:
“A minor child who suffers death or permanent disability in a motor vehicle accident cannot be placed in the same category as a non-earning individual… the computation of compensation under the head of loss of income ought to be made by adopting, at the very least, the minimum wages payable to a skilled workman in the respective State.”
Assessment of Compensation
For Gujarat in 2012, the minimum wage for skilled workers was ₹227.85 per day, translating to ₹6,836 per month. Applying the Pranay Sethi principle for future prospects (40%) and an 18 multiplier, the Court recalculated loss of future earnings at ₹18,60,489 for 90% disability.
It also awarded amounts for medical expenses, future medical expenses, special diet and transportation, loss of marriage prospects, loss of income during treatment, pain and suffering, loss of amenities, and cost of an artificial limb.
Final Compensation Table:
| Head | Amount |
| Loss of future earnings (90% disability) | ₹18,60,489 |
| Medical expenses | ₹30,000 |
| Future medical expenses | ₹50,000 |
| Special diet & transportation | ₹1,00,000 |
| Loss of marriage prospects | ₹3,00,000 |
| Loss of income during treatment | ₹50,000 |
| Pain and suffering | ₹5,00,000 |
| Loss of amenities | ₹2,00,000 |
| Cost of artificial limb | ₹5,00,000 |
| Total | ₹35,90,489 |
Key Directions
- Mandatory Skilled Worker Wage Basis – MACTs and High Courts must calculate loss of income for minors based on skilled worker minimum wages in the state at the time of the accident.
- Insurer’s Duty – If the claimant fails to prove income, the insurance company must provide the applicable minimum wage data to the Tribunal.
- Circulation of Order – The judgment is to be circulated by High Courts to all MACTs for strict compliance.
The appeal was allowed, with the award modified to ₹35,90,489 plus 9% annual interest from the claim petition date. The amount must be credited directly to the appellant’s bank account by 30 September 2025.
