Case: Kirti v. Oriental Insurance Company Ltd
According to the Supreme Court, future prospects can be granted even in cases involving hypothetical income.When deciding an appeal stemming from a Motor Accident Compensation Claim filed by the heirs of a deceased couple who perished in an accident, the court made this observation. The Motor Accident Claims Tribunal granted the claimants a total of Rs 40.71 lakhs in this instance for the two deceased. The High Court partially upheld the Insurance Company's appeal but reversed the addition of prospective customers.
In an appeal submitted by claimants, the bench of Justices NV Ramana, S. Abdul Nazeer, and Surya Kant expressed disagreement with this strategy noting, "Given how both deceased were below 40 years and how they have not been established to be permanent employees, future prospects to the tune of 40% must be paid. The argument that no such future prospects ought to be allowed for those with notional income, is both incorrect in law and without merit considering the constant inflation induced increase in wages". Justice Ramana noted in his separate concurring opinion that while the percentage awarded is still based on the same, the reasoning behind the awarding of future prospects is no longer just about the type of profession, whether permanent or not. The judge pointed out that providing future prospects based on hypothetical income is part of just compensation. He noted: "Once the victim has been proved to be employed at some venture, the necessary corollary is that they would be earning an income. It is clear that 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.. When it comes to the second category of cases, relating to notional income for nonearning victims, it is my opinion that the above principle applies with equal vigour, particularly with respect to homemakers. Once the notional income is determined, the effects of inflation would equally apply. Further, 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. It is worth noting that, although not extensively discussed, this Court has been granting future prospects even in cases pertaining to notional income, as has been highlighted by my learned brother." The judge noted that awarding future prospects is now a component of the Court's obligation to provide just compensation, taking into account the realities of life, particularly inflation, the desire of people to improve their own circumstances and those of their loved ones, rising wage rates, and the result of experience on the quality of work.
The court further noted that, rather than the 1/3rd that the Tribunal and the High Court had applied, the proper deduction for personal expenses for both the deceased couple should only be 1/4th. It also noted that using the lowest tier of the minimum wage to determine the deceased's income was not appropriate. In light of its findings, the bench increased the claimants' total motor accident compensation from the High Court's award of Rs 22 lakhs to Rs 33 lakhs, an increase of Rs 11.20 lakhs.