SC Pushes Wage Data to Speed Accident Claims

Why in the News?

The Supreme Court of India has directed all States and Union Territories to submit comprehensive minimum wage notifications to address delays and inconsistencies in awarding compensation under the Motor Vehicles Act, citing outdated legal schedules and data gaps.

Supreme Court’s Key Observations and Directions:

• The Supreme Court, while hearing a motor accident compensation appeal, flagged serious difficulties in determining just and fair compensation due to the absence of uniform, accessible minimum wage data.
• A Bench of Justices Sanjay Karol and N. Kotiswar Singh noted that courts frequently struggle to identify the correct minimum wage applicable on the date of accident because states revise wages periodically and upload data inconsistently.
• The Court criticised continued reliance on the Second Schedule of the Motor Vehicles Act, 1988, introduced in 1994, observing that it is disconnected from present economic realities.
• To address this, the Court directed Chief Secretaries of all States and UTs to submit a complete compilation of minimum wage notifications within 12 weeks.
• These documents will be digitised and stored with the Centre for Research and Planning, Supreme Court of India, creating an authoritative central repository accessible to courts, tribunals and litigants.

Case Background and Compensation Reassessment

• The directions arose from a July 2013 accident in which a father and his nine-year-old son died after being hit by a truck due to rash and negligent driving.
• Liability of the insurance company and occurrence of the accident were undisputed.
• The Motor Accident Claims Tribunal (MACT), Gwalior awarded compensation in January 2015, which was partially enhanced by the Madhya Pradesh High Court in May 2024.
• Dissatisfied claimants approached the Supreme Court, arguing flaws in calculating notional income and conventional heads of compensation.
• Reassessing the case, the Court applied minimum wages for skilled labour relevant to the period, fixing the child’s notional income at ₹6,390 per month, and awarded total compensation of ₹11.96 lakh.
• The Court also faulted the High Court for not applying National Insurance Co. Ltd. vs Pranay Sethi (2017) on loss of consortium, funeral expenses and loss of estate.