Motor Vehicles Act | Tribunal Must Assess Minimum Wages For Victims Based On Skilled Workman Standards To Ensure 'Just Compensation': Punjab & Haryana High Court

"The award of compensation under non-pecuniary heads must be reasonable and commensurate with gravity of the injuries suffered; the extent of disability; the duration of hospitalization, and the mental and physical agony endured by the claimant." Punjab and Haryana High Court, in a significant ruling dated 22 September 2026, held that motor accident tribunals must adopt a realistic approach when calculating compensation, specifically by taking into account the minimum wages of a skilled workman rather than relying on notional income.

Dealing with an appeal for enhancement of compensation, a bench of Justice Harkesh Manuja emphasized that the assessment of "just compensation" under Section 166 of the Motor Vehicles Act, 1988, requires a holistic view of the victim's suffering and potential future losses, noting that "taking notional income is not the correct approach."

The appellant, who was 16 years old at the time of a 2008 accident, suffered grievous injuries, including a fracture of the left arm, chest trauma, and kidney damage. Despite proving medical expenses exceeding Rs. 4.44 lakh, the Motor Accident Claims Tribunal had awarded a total of Rs. 4.70 lakh. The appellant sought an enhancement, arguing that the award failed to account for prolonged hospitalization and the gravity of the trauma, while the respondents contended that the lack of a permanent disability certificate precluded claims for future loss of earning.

Court Explains Basis For Income Assessment

The primary legal issue before the court was the determination of just compensation for a minor claimant, specifically whether notional income is appropriate and how non-pecuniary damages should be calculated in the absence of a disability certificate. The court observed that the lower tribunal erred by failing to fix a monthly income, relying instead on archaic notions of notional earnings.

Minimum Wages As The Yardstick

Drawing on the Supreme Court’s decision in Kajal vs. Jagdish Chand and Ors., the court held that tribunals must reference minimum wages payable to a skilled workman in the respective State to determine a claimant's income. By applying the skilled worker rate for the year 2010, the court assessed the appellant's monthly income at Rs. 5,400. This methodology ensures that victims are not unfairly penalized by their age or lack of formal employment history at the time of the accident.

Reasonableness In Non-Pecuniary Damages

Addressing the head of "pain and suffering," the court invoked K. Murlidhar vs. R. Subbulakshmi & Anr. to hold that damages under non-pecuniary heads must be commensurate with the gravity of the injuries and the duration of trauma. Given the claimant's prolonged hospitalization and extensive physical damage, the High Court significantly enhanced the award under this head, reinforcing the principle that compensation must reflect the reality of the victim's physical and mental agony.

Court Adopts Prudent View On Medical Expenses

The bench also observed that victims often struggle to maintain exhaustive records of every minor expense during periods of extreme trauma. Consequently, the court exercised its discretion to award a consolidated sum for medical and rehabilitation expenses beyond the strictly proved bills, acknowledging the hidden costs of recovery. The court underscored that the lack of a disability certificate does not absolve the tribunal of its duty to award a "just, fair and reasonable" amount.

"Due to shock and mental agony on account of accident, a person cannot be presumed to be vigilant enough to collect all the bills for claim/reimbursement purposes."

The final order enhanced the total compensation from Rs. 4,70,000 to Rs. 13,40,140, granting the appellant an additional Rs. 8,70,140. The court directed the respondents to pay interest at 9% per annum from the date of the claim petition, with a penal provision of 12% interest should the payment be delayed beyond two months. This ruling serves as a vital precedent for advocates to seek compensation based on current economic benchmarks for skilled labor rather than outdated notional standards.

Date of Decision: 22 September 2026