Minimum Wages Must Guide Income Assessment When Proof Is Absent: Punjab & Haryana High Court Recalculates Compensation in Fatal Accident Case

“Tribunals Cannot Blindly Assume Higher Income Without Evidence — Minimum Wages Are the Primary Yardstick in Absence of Proof,”  In a detailed and reasoned judgment Punjab and Haryana High Court (Justice Harpreet Kaur Jeewan) significantly recalibrated the compensation awarded by the Motor Accident Claims Tribunal (MACT) in a set of appeals arising from a fatal road accident involving a TATA Ace mini truck and a Maruti Swift on 24 September 2021 near Abohar, Punjab.

The Court, deciding six first appeals (FAO Nos. 593, 733, 644, 2791, 2794, and 2797 of 2025), addressed the core legal issue of how to assess income for compensation purposes in the absence of documentary proof, particularly under Sections 166 and 173 of the Motor Vehicles Act, 1988, and relevant notifications under the Minimum Wages Act, 1948.

The High Court categorically held that: “In cases where no evidence is brought on record by the claimants to prove the income of the deceased, the minimum wages as fixed under the Minimum Wages Act must be taken as the primary guiding factor for assessing monthly income,”

thus overturning the MACT’s assumption of ₹15,000 per month as income for all three deceased victims in the case.

Common Judgment Delivered in Six Appeals Arising from the Same Accident

The accident in question led to the deaths of Kuldeep Kaur (age 60), Surinder Singh (age 40), and Chhinder Kaur (age 60). Their respective dependents filed separate claim petitions before the Tribunal in Sri Muktsar Sahib. While the Tribunal awarded compensation on the basis of presumed income, all awards were challenged—three by the insurance company seeking reduction, and three by claimants seeking enhancement.

Disposing all appeals by a common order, Justice Jeewan recalculated compensation across all three cases, strictly applying the law laid down by the Supreme Court in National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680, Chandra v. Mukesh Kumar Yadav (2022) 1 SCC 198, Manusha Sreekumar v. United India Insurance Co. and other leading precedents.

Income Must Reflect Statutory Minimum, Not Assumptions

The Tribunal had presumed the deceased persons were earning ₹15,000 per month based on vague oral claims. The High Court rejected this approach:

“The Tribunal has treated the deceased as daily wage workers earning ₹500 per day without any documentary evidence. In such circumstances, the yardstick must be the notified minimum wage.”

Referring to the notification dated 11.10.2022 issued by the Labour Commissioner, Punjab, the Court held that ₹9,400 per month was the applicable wage for unskilled workers as on 01.09.2021, and reassessed the income of all three deceased accordingly.

In doing so, the Court reinforced the legal proposition that: “While minimum wage is not absolute in all cases, when no evidence exists, any guesswork for assessing income must not be detached from reality.”

This follows the Supreme Court’s ruling in Chandra v. Mukesh Kumar Yadav, where it was held that even oral evidence of the spouse should not be lightly discarded, but must still be balanced with legal benchmarks.

Future Prospects Are Mandatory Even for Self-Employed & Fixed Salary Earners

In a clear application of Pranay Sethi, the High Court rectified the Tribunal’s error in not awarding any future prospects, particularly in the case of deceased persons above 50 years of age.

“The Tribunal erred in denying future prospects. Pranay Sethi makes it clear — even for self-employed or fixed salary individuals, future prospects must be added: 10% between ages 50–60, and 25% between ages 40–50.”

Accordingly, 10% future prospects were added in the cases of Kuldeep Kaur and Chhinder Kaur (both aged 60), and 25% in the case of Surinder Singh (aged 40), enhancing the accuracy and fairness of the computation.

Revised Compensation Awards Reflect Judicial Precision

The recalculated compensation amounts, inclusive of all conventional heads (consortium, funeral expenses, loss of estate), were as follows:

• Kuldeep Kaur: Reduced from ₹8.90 lakh to ₹6.42 lakh

• Surinder Singh: Reduced from ₹21.05 lakh to ₹18.14 lakh

• Chhinder Kaur: Reduced from ₹11.60 lakh to ₹9.24 lakh

Each award now includes compensation under conventional heads as per Pranay Sethi, Magma General Insurance v. Nanu Ram and N. Jayasree v. Cholamandalam MS:

• Loss of consortium: ₹48,000 per dependent

• Funeral expenses: ₹18,000

• Loss of estate: ₹18,000

This standardisation ensures judicial uniformity and eliminates arbitrariness in award of non-pecuniary damages.

Appeals by Insurance Company Partly Allowed, Claimants' Appeals Dismissed

After recalculating all awards, the Court partly allowed the three appeals filed by United India Insurance Company (FAO Nos. 2791, 2794, and 2797 of 2025), and dismissed the claimants’ enhancement appeals (FAO Nos. 593, 733, and 644 of 2025).

The judgment carefully balances legal entitlement with evidentiary standards, reinforcing that in motor accident cases, compensation must be just—not excessive, nor illusory.

Date of Decision: 23 December 2025