Supreme Court: In a case where the 3-judge bench of NV Ramana*, SA Nazeer and Surya Kant*, JJ increased the total motor accident compensation of Rs 22 lakhs awarded by the Delhi High Court to Rs 33.20 lakhs after a motor vehicle accident claimed the lives of a man and his pregnant wife, leaving behind his parents and 2 children aged merely 3 and 4, Justice NV Ramana took the liberty to write a concurring opinion with respect to the issue of calculation of notional income for homemakers and the grant of future prospect with respect to them, for the purposes of grant of compensation.

Below are certain facts and figures highlighted by Justice Ramana in his judgment:

 In India, according to the 2011 Census, nearly 159.85 million women stated that “household work” was their main occupation, as compared to only 5.79 million men.

As per 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, on an average, women spend nearly 299 minutes a day on unpaid domestic services for household members versus 97 minutes spent by men on average.

In a day, women on average spend 134 minutes on unpaid caregiving services for household members as compared to the 76 minutes spent by men on average.

The total time spent on these activities per day makes the picture in India even more clear-

“ 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.”

Need for fixing notional income for a homemaker

Ramana, J noticed that the sheer amount of time and effort that is dedicated to household work by individuals, who are more likely to be women than men, is not surprising when one considers the plethora of activities a housemaker undertakes. However, the conception 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 issue of fixing notional income for a homemaker, therefore, serves extremely important functions.

“It 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.”

Rationale behind the awarding of future prospects

It was noticed by Ramana, J that the rationale behind the awarding of future prospects is no longer merely about the type of profession, whether permanent or otherwise, although the percentage awarded is still dependent on the same. The awarding of future prospects is now a part of the duty of the Court to grant just compensation, taking into account the realities of life, particularly of inflation, the quest of individuals to better their circumstances and those of their loved ones, rising wage rates and the impact of experience on the quality of work.

Notional income for earning victims i.e. where the victim is proved to be employed but claimants are unable to prove the income before the Court

Once the victim has been proved to be employed at some venture, the necessary corollary is that they would be earning an income. No rational distinction can be drawn with respect to the granting of future prospects merely on the basis that their income was not proved, particularly when the Court has determined their notional income.

Notional income for non-earning victims

The principle of awarding of future prospects must apply with equal vigor, particularly with respect to homemakers. Once notional income is determined, the effects of inflation would equally apply.

“No one would ever say that the improvements in skills that come with experience do not take place in the domain of work within the household.”

Summary of observations

  1. Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.
  2. 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.
  3. 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.
  4. 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.
  5. The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.

[Kirti v. Oriental Insurance Company Ltd., 2021 SCC OnLine SC 3, decided on 05.01.2020]

** Justice Surya Kant has penned the judgment

*Justice NV Ramana has penned a concurrent opinion.

Know Thy Judge| Justice N.V. Ramana


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