Observing that the courts and the tribunals will have to be alive to changing situations in awarding compensation in road accident cases, the High Court of Karnataka has said that it would result in grave injustice if notional income is calculated based on the parameters existed in 1992 to award compensation for the death occurred in 2013.
Justice Anant Ramanath Hegde made these observation while enhancing compensation amount to ₹11 lakh as against the ₹5.4 lakh awarded by the tribunal in favour of parents of a 17-year-old boy, who died in 2013 in a road accident involving a bus belonging to State transport corporation.
Cost of living, inflation
Disagreeing with computation of loss of dependency and future income based on notional income considered by the apex court while awarding compensation way back in 1992, Justice Hegde pointed out that the cost of living, inflation and erosion in the value of the rupee and consequent revision in wages post 1992 and the present scenario will have to be considered while determining the compensation.
“The value of the rupee in 1992 was far more than its value in 2013. Since then there is a steady erosion in the value of the rupee, the cost of living has gone up. Wages have also witnessed upward revision. None can deny these facts. The logical corollary is that the ‘notional income’ to be determined to assess the compensation for the death that occurred in the year 2013, should also be more than the notional income fixed in 1992,” the High Court observed.
“Even if notional income is to be considered for determining compensation, the notional income to be arrived at should be rational and sensible. If not, the very object of awarding compensation gets defeated. Compensation awarded by taking grossly inadequate notional income cannot be termed as compensation in its truest sense of the word,” the High Court said.
The High Court has calculated the notional income as ₹1.1 lakh per annum by taking into various parameters for the purpose of awarding compensation. The tribunal had in 2015 considered notional income as ₹30,000 per annum as notional income as was taken by the apex court in 1992 in an accident case.