Assessing the value of homemakers and house holders work- SC

Judgment
REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5843 OF 2010 (Arising out of SLP(C) No.19655 of 2004)


Arun Kumar Agrawal and another ......Appellants

Versus

National Insurance Company and others ......Respondents


JUDGMENT


G.S. Singhvi, J.



1. Leave granted.



2. What should be the criteria for determination of the compensation

payable to the dependents of a woman who dies in a road accident and who

does not have regular source of income is the question which arises for

determination in this appeal filed against the judgment of the Division

Bench of Allahabad High Court which declined to enhance the

compensation awarded to the appellants by Motor Accident Claims

Tribunal, Shahjahanpur (for short, `the Tribunal').





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3. Smt. Renu Agrawal (wife of appellant No.1 - Arun Kumar Agrawal

and mother of appellant No.2 - Suwarna Agrawal) died in a road accident

when the car driven by appellant No.1 was hit by truck bearing No.UGK-

489 in village Pachkora, District Hardoi, U.P. The appellants filed a petition

under Section 166 of the Motor Vehicles Act, 1988 (for short, `the Act') for

award of compensation of Rs.19,20,000/- by asserting that the accident was

caused due to rash and negligent driving of the truck which was owned by

respondent No.2, Mohd. Farooq and was insured with respondent No.1.

They pleaded that the deceased was 39 years of age at the time of accident

and due to her death, life of appellant No.1 had become miserable inasmuch

as being a government servant he was unable to look after his minor child.

They further pleaded that the deceased used to look after domestic affairs of

the family and both the appellants have been deprived of the care, love and

affection of the deceased and the comfort of her company.



4. The owner of the truck (respondent No.2), its driver (respondent

No.4) and the insurance company (respondent No.1) contested the claim.

All of them denied that the accident was caused due to rash and negligent

driving of the truck by respondent No.4. According to them, appellant No.1

was responsible for the accident. They disputed the dependency of the

appellants and the quantum specified in the claim petition. Respondent No.1
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further pleaded that it was not liable to pay compensation because driving

licence of respondent No.4 was not valid; that the owner had not complied

with Section 64 VB of the Insurance Act and that the owner and the insurer

of Tata Sumo UP-65/4559, which was also involved in the accident were not

made parties.



5. After considering the pleadings and evidence of the parties, the

Tribunal held that the accident was caused due to rash and negligent driving

of the truck by respondent No.4 and being legal heirs of the deceased, the

appellants are entitled to compensation. While dealing with the issue

relating to the quantum of compensation, the Tribunal extensively referred to

the statement of appellant No.1, who stated that the deceased was earning

Rs.50,000/- by engaging herself in paintings and handicrafts. The Tribunal

held that the deceased was deeply involved in the family affairs and after her

death, the entire family was broken and as a result of that, working capacity

of appellant No.1 was decreased. The Tribunal noted that at the time of

accident monthly income of appellant No.1 was Rs.15,416/- and held that in

view of clause 6 of Second Schedule of the Act, the income of the deceased

could be assessed at Rs.5,000/- per month (Rs.60,000/- per annum) and

after making deduction of Rs.20,000/- towards personal expenses of the

deceased and applying the multiplier of 15, the total loss of dependency
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comes to Rs.6 lacs. However, instead of awarding that amount as

compensation, the Tribunal reduced the same to Rs.2,50,000/- by making the

following observations:

"The claimants are entitled to this amount of compensation but
keeping in mind that the deceased was actually not an earning
member and this is only based on notional income. The amount
of compensation is too much and as such a lesser multiplier
could be adopted in the present case. In the circumstances of
this case, the claimants are entitled to Rs.2,50,000/- as
compensation from the insurance company. This issue is
accordingly decided with the above observation."


6. The High Court dismissed the appeal preferred by the appellants by

making the following observations:

"At the time of accident claimant No.1 Arun Kumar Agrawal
was getting monthly salary of Rs.15,416/- and at time of filing
the appeal Rs.24,042/- per month. Claimant Arun Kumar
Agarwal and his son aged about seven years are the only legal
representatives of the deceased. Neither of the claimants were
dependents upon the deceased. The services rendered by Renu
Agrawal, the deceased as house wife may be estimated at
Rs.1250.00 per month and thus the annual contribution by
rendering services comes to Rs.15,000/- and applying the
multiplier of 15 it comes to Rs.2,25,000/- and adding the
amount of Rs.3000.00 as funeral expenses, Rs.7,000.00 due to
loss of love and affection to the son and Rs.15,000.00 due to
loss of comfort consortium, the compensation comes to
Rs.2,50,000.00. Thus, considering all the facts and
circumstances, the compensation awarded is just and fair."


7. Shri Sanjay Singh, learned counsel for the appellant relied upon the

judgment of this Court in Lata Wadha and others v. State of Bihar and
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others (2001) 8 SCC 197 and argued that the Tribunal and the High Court

committed serious error by not awarding just and fair compensation to the

appellants ignoring that the family was not only deprived of the money

which the deceased used to earn from paintings and handicrafts but also of

her services as housewife/mother apart from the care, love, affection and

comfort of her company. Learned counsel submitted that the award of the

Tribunal is liable to be modified because it did not assign any reason for

reducing the amount of compensation payable to the appellants in terms of

the loss of dependency i.e. Rs.6 lacs. Learned counsel then argued that both

the Tribunal and the High Court erred in refusing to recognize the immense

importance of the invaluable services rendered by a housewife/mother to the

family throughout her life. Learned counsel finally submitted that even if a

housewife/mother does not earn a single penny in material terms, the criteria

laid down by the legislature in clause 6 of the Second Schedule appended to

the Act should be applied for awarding compensation in petitions filed under

Section 166 of the Act.



8. Learned counsel appearing for the respondents supported the award of

the Tribunal and the judgment of the High Court and argued that criteria laid

down in Section 163A of the Act cannot be invoked for awarding higher

compensation to the appellants because they had filed petition under Section
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166 of the Act. Learned counsel then submitted that no tangible evidence

was produced before the Tribunal to show that the deceased used to earn

Rs.50,000/- per annum from paintings and handicrafts and argued that the

said amount was rightly not taken into consideration for the purpose of

determination of the compensation payable to the appellants.



9. We have considered the respective submissions. At the outset, we

may notice some of the precedents in which guiding principles have been

laid down for determination of the compensation payable to the victim(s) of

the accident or their legal representatives.



10. In General Manager Kerala State Road Transport Corporation v.

Susamma Thomas (Mrs.) and others (1994) 2 SCC 176, this Court

considered the legitimacy of multiplier method evolved and applied by the

British Courts and approved the same. The relevant paragraphs of that

judgment are extracted below:

"9. The assessment of damages to compensate the
dependants is beset with difficulties because from the nature of
things, it has to take into account many imponderables, e.g., the
life expectancy of the deceased and the dependants, the amount
that the deceased would have earned during the remainder of
his life, the amount that he would have contributed to the
dependants during that period, the chances that the deceased
may not have lived or the dependants may not live up to the
estimated remaining period of their life expectancy, the chances
7


that the deceased might have got better employment or income
or might have lost his employment or income altogether.

10. The manner of arriving at the damages is to ascertain the
net income of the deceased available for the support of himself
and his dependants, and to deduct therefrom such part of his
income as the deceased was accustomed to spend upon himself,
as regards both self-maintenance and pleasure, and to ascertain
what part of his net income the deceased was accustomed to
spend for the benefit of the dependants. Then that should be
capitalised by multiplying it by a figure representing the proper
number of year's purchase.

13. The multiplier method involves the ascertainment of the
loss of dependency or the multiplicand having regard to the
circumstances of the case and capitalizing the multiplicand by
an appropriate multiplier. The choice of the multiplier is
determined by the age of the deceased (or that of the claimants
whichever is higher) and by the calculation as to what capital
sum, if invested at a rate of interest appropriate to a stable
economy, would yield the multiplicand by way of annual
interest. In ascertaining this, regard should also be had to the
fact that ultimately the capital sum should also be consumed-up
over the period for which the dependency is expected to last.


16. It is necessary to reiterate that the multiplier method is
logically sound and legally well-established. There are some
cases which have proceeded to determine the compensation on
the basis of aggregating the entire future earnings for over the
period the life expectancy was lost, deducted a percentage
therefrom towards uncertainties of future life and award the
resulting sum as compensation. This is clearly unscientific. For
instance, if the deceased was, say 25 years of age at the time of
death and the life expectancy is 70 years, this method would
multiply the loss of dependency for 45 years -- virtually
adopting a multiplier of 45 -- and even if one-third or one-
fourth is deducted therefrom towards the uncertainties of future
life and for immediate lump sum payment, the effective
multiplier would be between 30 and 34. This is wholly
impermissible. We are, aware that some decisions of the High
8


Courts and of this Court as well have arrived at compensation
on some such basis. These decisions cannot be said to have laid
down a settled principle. They are merely instances of
particular awards in individual cases. The proper method of
computation is the multiplier-method. Any departure, except in
exceptional and extraordinary cases, would introduce
inconsistency of principle, lack of uniformity and an element of
unpredictability for the assessment of compensation. Some
judgments of the High Courts have justified a departure from
the multiplier method on the ground that Section 110-B of the
Motor Vehicles Act, 1939 insofar as it envisages the
compensation to be `just', the statutory determination of a `just'
compensation would unshackle the exercise from any rigid
formula. It must be borne in mind that the multiplier method is
the accepted method of ensuring a `just' compensation which
will make for uniformity and certainty of the awards. We
disapprove these decisions of the High Courts which have taken
a contrary view. We indicate that the multiplier method is the
appropriate method, a departure from which can only be
justified in rare and extraordinary circumstances and very
exceptional cases."
(emphasis supplied)



11. In U.P. S.R.T.C. v. Trilok Chandra (1996) 4 SCC 362, a three-

Judge Bench referred to the principles evolved by British Courts for award

of damages and reiterated the multiplier method spelt out in General

Manager Kerala State Road Transport Corporation v. Susamma

Thomas (supra). The Court then took note of the stark inconsistencies in

the approach adopted by the motor accident claims tribunals and courts in

awarding compensation, referred to the amendment made in the Act in 1994,

pointed out the defects in the Second Schedule and observed:
9


"15. We thought it necessary to reiterate the method of
working out `just' compensation because, of late, we have
noticed from the awards made by tribunals and courts that the
principle on which the multiplier method was developed has
been lost sight of and once again a hybrid method based on the
subjectivity of the Tribunal/Court has surfaced, introducing
uncertainty and lack of reasonable uniformity in the matter of
determination of compensation. It must be realised that the
Tribunal/Court has to determine a fair amount of compensation
awardable to the victim of an accident which must be
proportionate to the injury caused. The two English decisions to
which we have referred earlier provide the guidelines for
assessing the loss occasioned to the victims. Under the formula
advocated by Lord Wright in Davies, the loss has to be
ascertained by first determining the monthly income of the
deceased, then deducting therefrom the amount spent on the
deceased, and thus assessing the loss to the dependants of the
deceased. The annual dependency assessed in this manner is
then to be multiplied by the use of an appropriate multiplier.
Let us illustrate: X, male, aged about 35 years, dies in an
accident. He leaves behind his widow and 3 minor children. His
monthly income was Rs.3500. First, deduct the amount spent
on X every month. The rough and ready method hitherto
adopted where no definite evidence was forthcoming, was to
break up the family into units, taking two units for an adult and
one unit for a minor. Thus X and his wife make 2+2=4 units
and each minor one unit i.e. 3 units in all, totalling 7 units. Thus
the share per unit works out to Rs.350087= Rs.500 per month. It
can thus be assumed that Rs.1000 was spent on X. Since he was
a working member some provision for his transport and out-of-
pocket expenses has to be estimated. In the present case we
estimate the out-of-pocket expense at Rs.250. Thus the amount
spent on the deceased X works out to Rs.1250 per month
leaving a balance of Rs.3500-1250=Rs.2250 per month. This
amount can be taken as the monthly loss to X's dependants.
The annual dependency comes to Rs.2250x12=Rs.27,000. This
annual dependency has to be multiplied by the use of an
appropriate multiplier to assess the compensation under the
head of loss to the dependants. Take the appropriate multiplier
to be 15. The compensation comes to
Rs.27,000x15=Rs.4,05,000. To this may be added a
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conventional amount by way of loss of expectation of life.
Earlier this conventional amount was pegged down to Rs.3000
but now having regard to the fall in the value of the rupee, it
can be raised to a figure of not more than Rs.10,000. Thus the
total comes to Rs.4,05,000+10,000= Rs.4,15,000.


17. The situation has now undergone a change with the
enactment of the Motor Vehicles Act, 1988, as amended by
Amendment Act 54 of 1994. The most important change
introduced by the amendment insofar as it relates to
determination of compensation is the insertion of Sections 163-
A and 163-B in Chapter XI entitled "Insurance of Motor
Vehicles against Third Party Risks". Section 165-A begins with
a non obstante clause and provides for payment of
compensation, as indicated in the Second Schedule, to the legal
representatives of the deceased or injured, as the case may be.
Now if we turn to the Second Schedule, we find a table fixing
the mode of calculation of compensation for third party
accident injury claims arising out of fatal accidents. The first
column gives the age group of the victims of accident, the
second column indicates the multiplier and the subsequent
horizontal figures indicate the quantum of compensation in
thousand payable to the heirs of the deceased victim. According
to this table the multiplier varies from 5 to 18 depending on the
age group to which the victim belonged. Thus, under this
Schedule the maximum multiplier can be up to 18 and not 16 as
was held in Susamma Thomas case.


18. We must at once point out that the calculation of
compensation and the amount worked out in the Schedule
suffer from several defects. For example, in Item 1 for a victim
aged 15 years, the multiplier is shown to be 15 years and the
multiplicand is shown to be Rs.3000. The total should be
3000x15=45,000 but the same is worked out at Rs.60,000.
Similarly, in the second item the multiplier is 16 and the annual
income is Rs.9000; the total should have been Rs.1,44,000 but
is shown to be Rs.1,71,000. To put it briefly, the table abounds
in such mistakes. Neither the tribunals nor the courts can go by
the ready reckoner. It can only be used as a guide. Besides, the
selection of multiplier cannot in all cases be solely dependant
1


on the age of the deceased. For example, if the deceased, a
bachelor, dies at the age of 45 and his dependants are his
parents, age of the parents would also be relevant in the choice
of the multiplier. But these mistakes are limited to actual
calculations only and not in respect of other items. What we
propose to emphasise is that the multiplier cannot exceed 18
years' purchase factor. This is the improvement over the earlier
position that ordinarily it should not exceed 16. We thought it
necessary to state the correct legal position as courts and
tribunals are using higher multiplier as in the present case
where the Tribunal used the multiplier of 24 which the High
Court raised to 34, thereby showing lack of awareness of the
background of the multiplier system in Davies case."
(emphasis supplied)


12. In Sarla Verma (Smt.) and others v. Delhi Transport Corporation

and another (2009) 6 SCC 121, a two-Judge Bench made threadbare

analysis of various issues arising before the tribunals and the courts in cases

involving claim for award of compensation under the Act, reiterated the

principles laid down in General Manager Kerala State Road Transport

Corporation v. Susamma Thomas (supra), referred to the subsequent

judgment in U.P. S.R.T.C. v. Trilok Chandra (supra) and then observed:

"16. Compensation awarded does not become "just
compensation" merely because the Tribunal considers it to be
just. For example, if on the same or similar facts (say the
deceased aged 40 years having annual income of Rs.45,000
leaving his surviving wife and child), one Tribunal awards
Rs.10,00,000 another awards Rs.5,00,000, and yet another
awards Rs.1,00,000, all believing that the amount is just, it
cannot be said that what is awarded in the first case and the last
case is just compensation. "Just compensation" is adequate
compensation which is fair and equitable, on the facts and
circumstances of the case, to make good the loss suffered as a
1


result of the wrong, as far as money can do so, by applying the
well-settled principles relating to award of compensation. It is
not intended to be a bonanza, largesse or source of profit.

17. Assessment of compensation though involving certain
hypothetical considerations, should nevertheless be objective.
Justice and justness emanate from equality in treatment,
consistency and thoroughness in adjudication, and fairness and
uniformity in the decision-making process and the decisions.
While it may not be possible to have mathematical precision or
identical awards in assessing compensation, same or similar
facts should lead to awards in the same range. When the
factors/inputs are the same, and the formula/legal principles are
the same, consistency and uniformity, and not divergence and
freakiness, should be the result of adjudication to arrive at just
compensation. In Susamma Thomas, this Court stated: (SCC
p.185, para 16)
"16. ... The proper method of computation is the
multiplier method. Any departure, except in exceptional
and extraordinary cases, would introduce inconsistency
of principle, lack of uniformity and an element of
unpredictability, for the assessment of compensation."

18. Basically only three facts need to be established by the
claimants for assessing compensation in the case of death:
(a) age of the deceased;
(b) income of the deceased; and
(c) the number of dependants.
The issues to be determined by the Tribunal to arrive at the loss
of dependency are:
(i) additions/deductions to be made for arriving at the income;

(ii) the deduction to be made towards the personal living
expenses of the deceased; and
(iii) the multiplier to be applied with reference to the age of the
deceased.
If these determinants are standardised, there will be uniformity
and consistency in the decisions. There will be lesser need for
detailed evidence. It will also be easier for the insurance
companies to settle accident claims without delay."
(emphasis supplied)
1




In paragraphs 20 to 24, the Court considered the issue of addition to

income for future prospects and observed:

"24. In Susamma Thomas this Court increased the income by
nearly 100%, in Sarla Dixit the income was increased only by
50% and in Abati Bezbaruah the income was increased by a
mere 7%. In view of the imponderables and uncertainties, we
are in favour of adopting as a rule of thumb, an addition of 50%
of actual salary to the actual salary income of the deceased
towards future prospects, where the deceased had a permanent
job and was below 40 years. (Where the annual income is in the
taxable range, the words "actual salary" should be read as
"actual salary less tax"). The addition should be only 30% if the
age of the deceased was 40 to 50 years. There should be no
addition, where the age of the deceased is more than 50 years.
Though the evidence may indicate a different percentage of
increase, it is necessary to standardise the addition to avoid
different yardsticks being applied or different methods of
calculation being adopted. Where the deceased was self-
employed or was on a fixed salary (without provision for
annual increments, etc.), the courts will usually take only the
actual income at the time of death. A departure therefrom
should be made only in rare and exceptional cases involving
special circumstances."

The Court then considered the nature and extent of deduction for

personal and living expenses and laid down the following principles:

"30. Though in some cases the deduction to be made towards
personal and living expenses is calculated on the basis of units
indicated in Trilok Chandra, the general practice is to apply
standardised deductions. Having considered several subsequent
decisions of this Court, we are of the view that where the
deceased was married, the deduction towards personal and
living expenses of the deceased, should be one-third (1/3rd)
where the number of dependent family members is 2 to 3, one-
fourth (1/4th) where the number of dependent family members
is 4 to 6, and one-fifth (1/5th) where the number of dependent
family members exceeds six.

31. Where the deceased was a bachelor and the claimants are
the parents, the deduction follows a different principle. In
1

regard to bachelors, normally, 50% is deducted as personal and
living expenses, because it is assumed that a bachelor would
tend to spend more on himself. Even otherwise, there is also the
possibility of his getting married in a short time, in which event
the contribution to the parent(s) and siblings is likely to be cut
drastically. Further, subject to evidence to the contrary, the
father is likely to have his own income and will not be
considered as a dependant and the mother alone will be
considered as a dependant. In the absence of evidence to the
contrary, brothers and sisters will not be considered as
dependants, because they will either be independent and
earning, or married, or be dependent on the father.

32. Thus even if the deceased is survived by parents and
siblings, only the mother would be considered to be a
dependant, and 50% would be treated as the personal and living
expenses of the bachelor and 50% as the contribution to the
family. However, where the family of the bachelor is large and
dependent on the income of the deceased, as in a case where he
has a widowed mother and large number of younger non-
earning sisters or brothers, his personal and living expenses
may be restricted to one-third and contribution to the family
will be taken as two-third."


13. At this stage, it will be useful to notice Section 163A which was

inserted by Amendment Act No.54 of 1994. That section and clause (6) of

the Second Schedule read as under:-

"163A. Special provisions as to payment of compensation
on structured formula basis.- (1) Notwithstanding anything
contained in this Act or in any other law for the time being in
force or instrument having the force of law, the owner of the
motor vehicle of the authorised insurer shall be liable to pay in
the case of death or permanent disablement due to accident
arising out of the use of motor vehicle, compensation, as
indicated in the Second Schedule, to the legal heirs or the
victim, as the case may be.

Explanation.- For the purposes of this sub-section, "permanent
disability" shall have the same meaning and extent as in the
Workmen's Compensation Act, 1923 (8 of 1923).
1


(2) In any claim for compensation under sub-section (1), the
claimant shall not be required to plead or establish that the
death or permanent disablement in respect of which the claim
has been made was due to any wrongful act or neglect or
default of the owner of the vehicle or vehicles concerned or of
any other person.

(3) The Central Government may, keeping in view the cost of
living by notification in the Official Gazette, from time to time
amend the Second Schedule.

Clause 6 of the Second Schedule

6. Notional income for compensation to those who had no
income prior to accident:- Fatal and disability in non-fatal
accidents:

(a) Non-earning persons - Rs.15,000/- p.a.

(b) Spouse - Rs.1/3rd of income of the
Earning/surviving spouse

In case of other injuries only "general damage" as applicable."



14. Section 163A contains a special provision for payment of

compensation on the basis of a structured formula as indicated in the Second

Schedule, which contains a table prescribing the compensation to be

awarded with reference to the age and income of the deceased. The note

appended to column (1) of the Second Schedule makes it clear that from the

total amount of compensation, 1/3rd is to be deducted in consideration of the

expenses which the victim would have incurred towards maintaining himself

had he been alive. Clause (6) of the Second Schedule lays down that in
1


cases of fatal and disability in non fatal accidents, income of non-earning

person should be taken as Rs.15,000/- per annum and that of spouse shall be

taken as 1/3rd of the income of the earning/surviving spouse.



15. In Deepal Girishbhai Soni v. United India Insurance Co. Ltd.

(2004) 5 SCC 385, a three-Judge Bench interpreted various provisions of the

Act including Section 163A and held:-

"46. Section 163-A which has an overriding effect provides
for special provisions as to payment of compensation on
structured-formula basis. Sub-section (1) of Section 163-A
contains non obstante clause in terms whereof the owner of the
motor vehicle or the authorised insurer is liable to pay in the
case of death or permanent disablement due to accident arising
out of the use of motor vehicle, compensation, as indicated in
the Second Schedule, to the legal heirs or the victim, as the case
may be. Sub-section (2) of Section 163-A is in pari materia
with sub-section (3) of Section 140 of the Act.
47. Section 163-A does not contain any provision identical to
sub-section (5) of Section 140 which is also indicative of the
fact that whereas in terms of the latter, the liability of the owner
of the vehicle to give compensation or relief under any other
law for the time being in force continues subject of course to
the effect that the amount paid thereunder shall be reduced from
the amount of compensation payable under the said section or
Section 163-A.
48. By reason of Section 163-A, therefore, the compensation
is required to be determined on the basis of a structured formula
whereas in terms of Section 140 only a fixed amount is to be
given. A provision of law providing for compensation is
presumed to be final in nature unless a contra-indication
therefor is found to be in the statute either expressly or by
necessary implication. While granting compensation, the
Tribunal is required to adjudicate upon the disputed question as
regards age and income of the deceased or the victim, as the
case may be. Unlike Section 140 of the Act, adjudication on
several issues arising between the parties is necessary in a
proceeding under Section 163-A of the Act.
51. The scheme envisaged under Section 163-A, in our
opinion, leaves no manner of doubt that by reason thereof the
rights and obligations of the parties are to be determined finally.
The amount of compensation payable under the aforementioned
1

provisions is not to be altered or varied in any other
proceedings. It does not contain any provision providing for
set-off against a higher compensation unlike Section 140. In
terms of the said provision, a distinct and specified class of
citizens, namely, persons whose income per annum is
Rs.40,000 or less is covered thereunder whereas Sections 140
and 166 cater to all sections of society."



16. In Oriental Insurance Co. Ltd. v. Meena Variyal (2007) 5 SCC

428, a two-Judge Bench referred to an apparent inconsistency in the

judgments of three-Judge Bench in Minu B. Mehta v. Balkrishna

Ramchandra Nayan (1977) 2 SCC 441 and two-Judge Bench in Gujarat

SRTC v. Ramanbhai Prabhatbhai (1987) 3 SCC 234 and observed:-

"We think that the law laid down in Minu B. Mehta v.
Balkrishna Ramchandra Nayan was accepted by the legislature
while enacting the Motor Vehicles Act, 1988 by introducing
Section 163-A of the Act providing for payment of
compensation notwithstanding anything contained in the Act or
in any other law for the time being in force that the owner of a
motor vehicle or the authorised insurer shall be liable to pay in
the case of death or permanent disablement due to accident
arising out of the use of the motor vehicle, compensation, as
indicated in the Second Schedule, to the legal heirs or the
victim, as the case may be, and in a claim made under sub-
section (1) of Section 163-A of the Act, the claimant shall not
be required to plead or establish that the death or permanent
disablement in respect of which the claim has been made was
due to any wrongful act or neglect or default of the owner of the
vehicle concerned. Therefore, the victim of an accident or his
dependants have an option either to proceed under Section 166
of the Act or under Section 163-A of the Act. Once they
approach the Tribunal under Section 166 of the Act, they have
necessarily to take upon themselves the burden of establishing
the negligence of the driver or owner of the vehicle concerned.
But if they proceed under Section 163-A of the Act, the
compensation will be awarded in terms of the Schedule without
1


calling upon the victim or his dependants to establish any
negligence or default on the part of the owner of the vehicle or
the driver of the vehicle."
17. In Sarla Verma's case also the Court noticed Section 163A and

observed:

"The principles relating to determination of liability and
quantum of compensation are different for claims made under
Section 163-A of the MV Act and claims under Section 166 of
the MV Act. (See Oriental Insurance Co. Ltd. v. Meena
Variyal) Section 163-A and the Second Schedule in terms do
not apply to determination of compensation in applications
under Section 166. In Trilok Chandra this Court, after
reiterating the principles stated in Susamma Thomas, however,
held that the operative (maximum) multiplier, should be
increased as 18 (instead of 16 indicated in Susamma Thomas),
even in cases under Section 166 of the MV Act, by borrowing
the principle underlying Section 163-A and the Second
Schedule."



18. In Raj Rani and others v. Oriental Insurance Company Limited

and others (2009) 13 SCC 654, this Court disapproved the practice adopted

by the tribunals to deduct lumpsum payments from the compensation

awarded in the motor accident claim's cases and observed that even though

the multiplier specified in the Second Schedule appended to the Act is not

applicable in strict sense in a case under Section 166, whenever the Court

has to apply the appropriate multiplier several factors including the income

of the deceased, his family background will have to be taken into

consideration (paragraph 15). The same view was reiterated in Ningamma
1


and another v. United Insurance Company Limited (2009) 13 SCC 710

(paragraph 32).

19. We may now deal with the question formulated in the opening

paragraph of this judgment. In Kemp and Kemp on Quantum of Damages,

(Special Edition - 1986), the authors have identified various heads under

which the husband can claim compensation on the death of his wife. These

include loss of the wife's contribution to the household from her earnings,

the additional expenses incurred or likely to be incurred by having the

household run by a house-keeper or servant, instead of the wife, the

expenses incurred in buying clothes for the children instead of having them

made by the wife, and similarly having his own clothes mended or stitched

elsewhere than by his wife, and the loss of that element of security provided

to the husband where his employment was insecure or his health was bad

and where the wife could go out and work for a living.



20. In England the courts used to award damages solely on the basis of

pecuniary loss to family due to the demise of the wife. A departure from

this rule came to be made in Berry v. Humm and Co. (1915) 1 K.B. 627

where the plaintiff claimed damages for the death of his wife caused due to

the negligence of the defendant's servants. After taking cognizance of some

precedents, the learned Judge observed:
2


"I can see no reason in principle why such pecuniary loss
should be limited to the value of money lost, or the money
value of things lost, as contributions of food or clothing, and
why I should be bound to exclude the monetary loss incurred by
replacing services rendered gratuitously by a relative, if there
was a reasonable prospect of their being rendered freely in the
future but for the death."


21. In Regan v. Williamson (1976) 1 W.L.R. 305, the Court considered

the issue relating to quantum of compensation payable to the dependents of

the woman who was killed in a road accident. The facts of that case were

that on the date of accident, the plaintiff was aged 43 years and his children

were aged 14 years, 11 years, 8 years and 3 years respectively. The

deceased wife/mother was aged 37 years. The cost of a housekeeper to carry

out services previously rendered by his wife was 22.5 pounds per week, the

saving to him in not having to clothe and feed his wife was 10 pound per

week, leaving a net loss of 12.50 pounds per week or 600 pounds a year.

However, the Court took into account the value of other services previously

rendered by the wife for which no substitute was available and accordingly

increased the dependency to 20 pounds a week. The Court then applied a

multiplier of 11 in reaching a total fatal accidents award of 12,298 pounds.

In his judgment, Watkins, J. noted as under:

"The weekend care of the plaintiff and the boys remains a
problem which has not been satisfactorily solved. The
plaintiff's relatives help him to a certain extent, especially on
Saturday afternoons. But I formed the clear impression that the
2


plaintiff is often, at weekends, sorely tired in trying to be an
effective substitute for the deceased. The problem could, to
some extent, be cured by engaging another woman, possibly to
do duty at the weekend, but finding such person is no simple
matter. I think the plaintiff has not made extensive inquiries in
this regard. Possibly the expense involved in getting more help
is a factor which has deterred him. Whatever be the reason, the
plain fact is that the deceased's services at the weekend have
not been replaced. They are lost to the plaintiff and to the
boys..."


He then proceeded to observe:

"I have been referred to a number of cases in which judges have
felt compelled to look upon the task of assessing damages in
cases involving the death of a wife and mother with strict
disregard to those features of the life of a woman beyond her
so-called services, that is to say, to keep house, to cook the
food, to buy the clothes, to wash them and so forth. In more
than one case, an attempt had been made to calculate the actual
number of hours it would take a woman to perform such
services and to compensate dependants upon that basis at so
much an hour and so relegate the wife or mother, so it seems to
me, to the position of a housekeeper.

While I think that the law inhibits me from, much as I should
like to, going all the way along the path to which Lord
Edmund-Davies pointed, I am, with due respect to the other
judges to whom I have been referred, of the view that the word
`services' had been too narrowly construed. It should, at least,
include an acknowledgment that a wife and mother does not
work to set hours and, still less, to rule. She is in constant
attendance save for those hours when she is, if that is the fact, at
work. During some of those hours she may well give the
children instruction on essential matters to do with their
upbringing an, possibly, with such things as their homework.
This sort of attention seems to be as much of a service, and
probably more value to them than the other kinds of service
conventionally so regarded."
(emphasis supplied)
2




22. In Mehmet v. Perry (1977) 2 All ER 52, the pecuniary value of a

wife's services were assessed and granted under the following heads:-


(a) Loss to the family of the wife's housekeeping services.

(b) Loss suffered by the children of the personal attention of
their mother, apart from housekeeping services rendered by her.

(c) Loss of the wife's personal care and attention, which the
husband had suffered, in addition to the loss of her
housekeeping services.


23. In India the Courts have recognised that the contribution made by the

wife to the house is invaluable and cannot be computed in terms of money.

The gratuitous services rendered by wife with true love and affection to the

children and her husband and managing the household affairs cannot be

equated with the services rendered by others. A wife/mother does not work

by the clock. She is in the constant attendance of the family throughout the

day and night unless she is employed and is required to attend the

employer's work for particular hours. She takes care of all the requirements

of husband and children including cooking of food, washing of clothes, etc.

She teaches small children and provides invaluable guidance to them for

their future life. A housekeeper or maidservant can do the household work,

such as cooking food, washing clothes and utensils, keeping the house clean
2


etc., but she can never be a substitute for a wife/mother who renders selfless

service to her husband and children.



24. It is not possible to quantify any amount in lieu of the services

rendered by the wife/mother to the family i.e. husband and children.

However, for the purpose of award of compensation to the dependents, some

pecuniary estimate has to be made of the services of housewife/mother. In

that context, the term `services' is required to be given a broad meaning and

must be construed by taking into account the loss of personal care and

attention given by the deceased to her children as a mother and to her

husband as a wife. They are entitled to adequate compensation in lieu of the

loss of gratuitous services rendered by the deceased. The amount payable to

the dependants cannot be diminished on the ground that some close relation

like a grandmother may volunteer to render some of the services to the

family which the deceased was giving earlier.



25. In Lata Wadhwa v. State of Bihar (supra), this Court considered the

various issues raised in the writ petitions filed by the petitioners including

the one relating to payment of compensation to the victims of fire accident

which occurred on 3.3.1989 resulting in the death of 60 persons and injuries

to 113. By an interim order dated 15.12.1993, this Court requested former
2


Chief Justice of India, Shri Justice Y.V. Chandrachud to look into various

issues including the amount of compensation payable to the victims.

Although, the petitioners filed objection to the report submitted by Shri

Justice Y.V. Chandrachud, the Court overruled the same and accepted the

report. On the issue of payment of compensation to housewife, the Court

observed:

"So far as the deceased housewives are concerned, in the
absence of any data and as the housewives were not earning any
income, attempt has been made to determine the compensation
on the basis of services rendered by them to the house. On the
basis of the age group of the housewives, appropriate multiplier
has been applied, but the estimation of the value of services
rendered to the house by the housewives, which has been
arrived at Rs.12,000 per annum in cases of some and Rs.10,000
for others, appears to us to be grossly low. It is true that the
claimants, who ought to have given data for determination of
compensation, did not assist in any manner by providing the
data for estimating the value of services rendered by such
housewives. But even in the absence of such data and taking
into consideration the multifarious services rendered by the
housewives for managing the entire family, even on a modest
estimation, should be Rs.3000 per month and Rs.36,000 per
annum. This would apply to all those housewives between the
age group of 34 to 59 and as such who were active in life. The
compensation awarded, therefore, should be recalculated,
taking the value of services rendered per annum to be
Rs.36,000 and thereafter, applying the multiplier, as has been
applied already, and so far as the conventional amount is
concerned, the same should be Rs.50,000 instead of Rs.25,000
given under the Report. So far as the elderly ladies are
concerned, in the age group of 62 to 72, the value of services
rendered has been taken at Rs.10,000 per annum and the
multiplier applied is eight. Though, the multiplier applied is
correct, but the values of services rendered at Rs.10,000 per
annum, cannot be held to be just and, we, therefore, enhance the
2


same to Rs.20,000 per annum. In their case, therefore, the total
amount of compensation should be redetermined, taking the
value of services rendered at Rs.20,000 per annum and then
after applying the multiplier, as already applied and thereafter,
adding Rs.50,000 towards the conventional figure."
(emphasis supplied)
26. The judgment of Lata Wadhwa's case was referred to with approval

in M.S. Grewal and another v. Deep Chand Sood and others (2001) 8

SCC 151 for confirming the award of compensation of Rs.5 lacs in a case

involving death of school children by drowning due to negligence of

teachers of the school. In Municipal Corporation of Greater Bombay v.

Laxman Iyer and another (2003) 8 SCC 731, a two-Judge Bench while

deciding the issue of award of compensation under Sections 110-A and 110-

B of the Motor Vehicles Act, 1939, referred to the judgments in Lata

Wadhwa's case and M.S. Grewal's case.



27. In A. Rajam v. M. Manikya Reddy 1989 ACJ 542 (Andhra Pradesh

HC), M. Jagannadha Rao, J. (as he then was) advocated giving of a wider

meaning to the word `services' in cases relating to award of compensation to

the dependents of a deceased wife/mother. Some of the observations made

in that judgment are extracted below:


"The loss to the husband and children consequent upon the
death of the housewife or mother has to be computed by
estimating the loss of 'services' to the family, if there was
reasonable prospect of such services being rendered freely in
2


the future, but for the death. It must be remembered that any
substitute to be so employed is not likely to be as economical as
the housewife. Apart from the value of obtaining substituted
services, the expense of giving accommodation or food to the
substitute must also be computed. From this total must be
deducted the expense the family would have otherwise been
spending for the deceased housewife.

While estimating the `services' of the housewife, a narrow
meaning should not be given to the meaning of the word
`services' but it should be construed broadly and one has to take
into account the loss of `personal care and attention' by the
deceased to her children, as a mother and to her husband, as a
wife. The award is not diminished merely because some close
relation like a grandmother is prepared to render voluntary
services."


28. In Oriental Insurance Co. Ltd., v. Shamsher Singh Manu-JK-0180-

2002, Jammu and Kashmir High Court considered the question relating to

award of compensation to the family of the deceased housewife, who was

aged 24 years at the time of accident, referred to Kemp and Kemp on

Quantum of Damages, Volume 1 and enhanced the compensation awarded

by the Tribunal.



29. In National Insurance Company Ltd. v. Mahadevan, Minor

Buvanadevi, Minor Venkatesh and Parameswaran (2009) ACJ 1373, the

learned Single Judge referred to the Second Schedule of the Act and

observed that quantifying the pecuniary loss at the same rate or amount even
2


after 13 years after the amendment, ignoring the escalation in the cost of

living and the inflation, may not be justified.



30. In Chandra Singh and others v. Gurmeet Singh and others (2003)

VII AD (Delhi) 222, Krishna Gupta and others v. Madan Lal and others

96 (2002) DLT 829, Captan Singh v. Oriental Insurance Co. Ltd. and

others 112 (2004) DLT 417 and Amar Singh Thukral v. Sandeep

Chhatwal 112 (2004) DLT 478, the Single and Division Benches of Delhi

High Court declined to apply the judgment of this Court in Lata Wadhwa's

case for the purpose of award of compensation under the Act. In Krishna

Gupta v. Madan Lal (supra) the Division Bench of the High Court

observed as under:-


"The decision of the Apex Court in Lata Wadhwa (supra), in
our considered opinion, cannot be said to have any application
in the instant case. Motor Vehicles Act, 1939 was the complete
Code by itself. It not only provides for the right of a victim
and/or his legal heirs to obtain compensation in case of bodily
injury or death arising out of use of motor vehicle, but the
forum therefore has been provided, as also the mode and
manner in which the compensation to be awarded therefor. In
such a situation, it would be inappropriate to rely upon a
decision of the Apex Court, which had been rendered in an
absolutely different fact situation and in relation whereto there
did not exist any statutory compensation. Lata Wadhwa (supra)
was decided in a matter where a fire occurred during a
celebration. The liability of the Tata Iron & Steel Co. Ltd. was
not disputed. Compensation was awarded having regard to the
peculiar feature obtaining in that case which has got nothing to
2


do with the statutory compensation payable under the
provisions of the Motor Vehicles Act."


31. In Amar Singh Thukral v. Sandeep Chhatwal (supra), the learned

Single Judge of Delhi High Court adopted the yardstick of minimum rates of

wages for the purpose of award of compensation in the case of death of a

housewife and then proceeded to observe `since there is no scientific method

of assessing the contribution of a housewife to her household, in cases such

as the present, resort should be had to the wages of a skilled worker as per

the minimum rates of wages in Delhi. Although, this may sound

uncharitable, if not demeaning to a housewife, there is hardly any option

available in the absence of statutory guidelines'.



32. In our view, it is highly unfair, unjust and inappropriate to compute

the compensation payable to the dependents of a deceased wife/mother, who

does not have regular income, by comparing her services with that of a

housekeeper or a servant or an employee, who works for a fixed period. The

gratuitous services rendered by wife/mother to the husband and children

cannot be equated with the services of an employee and no evidence or data

can possibly be produced for estimating the value of such services. It is

virtually impossible to measure in terms of money the loss of personal care

and attention suffered by the husband and children on the demise of the
2


housewife. In its wisdom, the legislature had, as early as in 1994, fixed the

notional income of a non-earning person at Rs.15,000/- per annum and in

case of a spouse, 1/3rd income of the earning/surviving spouse for the

purpose of computing the compensation. Though, Section 163A does not, in

terms apply to the cases in which claim for compensation is filed under

Section 166 of the Act, in the absence of any other definite criteria for

determination of compensation payable to the dependents of a non-earning

housewife/mother, it would be reasonable to rely upon the criteria specified

in clause (6) of the Second Schedule and then apply appropriate multiplier

keeping in view the judgments of this Court in General Manager Kerala

State Road Transport Corporation v. Susamma Thomas (Mrs.) and

others (supra), U.P. S.R.T.C. v. Trilok Chandra (supra), Sarla Verma

(Smt.) and others v. Delhi Transport Corporation and another (supra)

and also take guidance from the judgment in Lata Wadhwa's case. The

approach adopted by different Benches of Delhi High Court to compute the

compensation by relying upon the minimum wages payable to a skilled

worker does not commend our approval because it is most unrealistic to

compare the gratuitous services of the housewife/mother with work of a

skilled worker.
3


33. Reverting to the facts of this case, we find that while in his deposition,

appellant No.1 had categorically stated that the deceased was earning

Rs.50,000/- per annum by paintings and handicrafts, the respondents did not

lead any evidence to controvert the same. Notwithstanding this, the

Tribunal and the High Court altogether ignored the income of the deceased.

The Tribunal did advert to the Second Schedule of the Act and observed that

the income of the deceased could be assessed at Rs.5,000/- per month

(Rs.60,000/- per annum) because the income of her spouse was Rs.15,416/-

per month and then held that after making deduction, the total loss of

dependency could be Rs.6 lacs. However without any tangible reason, the

Tribunal decided to reduce the amount of compensation by observing that

the deceased was actually non-earning member and the amount of

compensation would be too much. The High Court went a step further and

dismissed the appeal by erroneously presuming that neither of the claimants

was dependent upon the deceased and the services rendered by her could be

estimated as Rs.1250/- per month.



34. In our view, the reasons assigned by the Tribunal for reducing the

amount of compensation are wholly untenable and the approach adopted by

the High Court in dealing with the issue of payment of compensation to the

appellants was ex facie erroneous and unjustified.
3




35. In the result, the appeal is allowed. The impugned judgment as also

the award of the Tribunal are set aside and it is held that the appellants are

entitled to compensation of Rs.6 lacs. Respondent No.1 is directed to pay

the said amount of compensation along with interest at the rate of 6% per

annum from the date of filing application under Section 166 of the Act till

the date of payment. The needful shall be done within the period of 3

months from the date of receipt/production of copy of this order. The

appellant shall get cost of Rs.50,000/-.




.............................J.
[G.S. Singhvi]

New Delhi;
July 22, 2010
3




REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION


CIVIL APPEAL NO.5843 OF 2010
(Arising out of SLP (Civil) No.19655 of 2004)



Arun Kumar Agarwal and another ..Appellant(s)


Versus


National Insurance Company & others ..Respondent(s)



J U D G M E N T


GANGULY, J.
3


1.While agreeing with the judgment delivered by my

learned brother Singhvi, J., I wish to add my

perception of the problem which has been raised

in this case.



2.Despite the clear constitutional mandate to

eschew discrimination on grounds of sex in

Article 15(1) of the Constitution, in its

implementation there is a distinct gender bias

against women and various social welfare

legislations and also in judicial pronouncements.



3. In the Motor Vehicles Act, 1988 (hereinafter,

`the said Act'), Section 163A provides for

special provision for payment of compensation on

structured formula basis. The said Section has

been quoted in the earlier part of the judgment

by brother Singhvi, J. Therefore, I refrain from

quoting the same. The Second Schedule which is

referred to in the said Section has several

clauses. Clause 6 of the said Schedule provides
3


for notional income of those who had no income

prior to accident. Clause 6 has been divided

into two classes of persons, (a) non-earning

persons, and (b) spouse. Insofar as the spouse

is concerned, the income of the injured in fatal

and non-fatal accident has been categorized as

1/3rd of the income of the earning and surviving

spouse. It is, therefore, assumed if the spouse

who does not earn, which is normally the woman in

the house and the homemaker, such a person cannot

have an income more than 1/3rd of the income of

the person who is earning. This categorization

has been made without properly appreciating the

value of the services rendered by the homemaker.

To value the income of the home-maker as one-

third of the income of the earning spouse is not

based on any apparently rational basis.



4.This bias is shockingly prevalent in the work of

Census. In the Census of 2001 it appears that

those who are doing household duties like
3


cooking, cleaning of utensils, looking after

children, fetching water, collecting firewood

have been categorized as non-workers and equated

with beggars, prostitutes and prisoners who,

according to Census, are not engaged in

economically productive work. As a result of

such categorization about 36 crores (367 million)

women in India have been classified in the Census

of India, 2001 as non-workers and placed in the

category of beggars, prostitutes and prisoners.

This entire exercise of Census operation is done

under an Act of Parliament.



5.Under Section 4 of the Census Act, 1948, the

Central Government may appoint a Census

Commissioner to supervise the taking of census

throughout the area where census is intended to

be taken.



6.The Central Government has made Census Rules,

1990 under Section 18 of the Census Act, 1948.
3


Under Rule 5(c), (d) and (e) of the Rules, the

functions of the Commissioner are listed, which

include devising the census schedules or

questionnaires, compiling and providing guidance

in taking and computing results and publishing

the statistics.



7. The Census Commissioner released data on

classification of population by workers and non-

workers based on provisional results of the

Census of India 2001 on 30th January, 2002. Thus,

the categorization, compilation and computation

of the data was done under the supervision and

guidance of the Census Commissioner. This is

totally a statutory exercise by public

authorities. Therefore, this approach of equating

women, who are homemakers, with beggars,

prostitutes and prisoners as economically non-

productive workers by statutory authorities

betrays a totally insensitive and callous

approach towards the dignity of labour so far as
3


women are concerned and is also clearly

indicative of a strong gender bias against women.



8.It is thus clear that in independent India also

the process of categorizing is dominated by

concepts which were prevalent in colonial India

and no attempt has been made to restructure those

categories with a gender sensitivity which is the

hallmark in our Constitution.



9.Work is very vital to the system of gender

reconstruction in societies and in this context

masculine and feminine work is clearly

demarcated. The question which obviously arises

is whether Census definition of work reflects the

underlying process of gender discrimination.



10.Women are generally engaged in home making,

bringing up children and also in production of

goods and services which are not sold in the

market but are consumed at the household level.
3


Thus, the work of women mostly goes unrecognized

and they are never valued.



11.Therefore, in the categorization by the Census

what is ignored is the well known fact that women

make significant contribution at various levels

including agricultural production by sowing,

harvesting, transplanting and also tending

cattles and by cooking and delivering the food to

those persons who are on the field during the

agriculture season.



12.Though, Census operation does not call for

consideration in this case but reference to the

same has been made to show the strong bias shown

against women and their work. We hope and trust

that in the on-going Census operation this will

be corrected.



13.The same gender bias has been reflected in the

judgment of the High Court whereby the High Court
3


has accepted the tribunal's reasoning of

assessing the income of the victim at Rs.1,250/-

per month. Even if we go by the formula under

clause 6 of the Second Schedule, income of the

victim comes to Rs.5,000/- per month.



14. In a recent judgment, the Division Bench of

Madras High Court in a case of compensation under

the said Act has discussed this aspect of the

matter. [See National Insurance Co. Ltd. vs.

Minor Deepika rep. by her guardian and next

friend, Ranganathan and others reported in (2009)

6 MLJ 1005]. The learned Judge has referred to

the general recommendation No. 17 of the

Convention on the Elimination of All Forms of

Discrimination Against Women (CEDAW). The said

general recommendation deals with the measurement

and quantification of the unremunerated domestic

activities of women and their recognition in the

Gross National Product. The relevant

recommendations are:-
4


"(a) Encourage and support research and
experimental studies to measure and value
the unremunerated domestic activities of
women; for example, by conducting time-use
surveys as part of their national household
survey programmes and by collecting
statistics disaggregated by gender on time
spent on activities both in the household
and on the labour market;



(b) Take steps, in accordance with the
provisions of the Convention on the
Elimination of All Forms of Discrimination
against Women and the Nairobi Forward-
looking Strategies for the Advancement of
Women, to quantify and include the
unremunerated domestic activities of women
in the gross national product;

(c) Include in their reports submitted under
article 18 of the Convention information on
the research and experimental studies
undertaken to measure and value
unremunerated domestic activities, as well
as on the progress made in the incorporation
of the unremunerated domestic activities of
women in national accounts.



15. India is a signatory to the said Convention and

ratified the CEDAW Convention on 9th July, 1993.

But even then no law has been made for proper

evaluation of the household work by women as

homemakers.
4




16. The Madras High Court in Minor Deepika (supra)

has observed very pertinently:



"9. The UNICEF in 2000, noted that "unpaid
care work is the foundation of human
experience". The care work is that which is
done by a woman as a mother and definitely
in India, the woman herself will be the last
person to give this role an economic value,
given the social concept of the role of a
mother. But when we are evaluating the loss
suffered by the child because her mother
died in an accident, we think we must give a
monetary value to the work of a caregiver,
for afterall, the home is the basic unit on
which our civilised society rests..."


17. The Madras High Court in its very illuminating

judgment in Minor Deepika (supra) has further

referred to various methods by which the

assessment of work of a homemaker can be made and

the relevant portion from para 10 of the said

judgment is extracted below:-


"...that there have been efforts to
understand the value of a homemaker's unpaid
labour by different methods. One is, the
opportunity cost which evaluates her wages
by assessing what she would have earned had
she not remained at home, viz., the
4


opportunity lost. The second is, the
partnership method which assumes that a
marriage is an equal economic partnership
and in this method, the homemaker's salary
is valued at half her husband's salary. Yet
another method is to evaluate homemaking by
determining how much it would cost to
replace the homemaker with paid workers.
This is called the Replacement Method."



18.Various aspects of the nature of homemaker's job

have been described in para 11 which are very

relevant and are extracted below:-




"11. The role of a housewife includes managing
budgets, co-ordinating activities, balancing
accounts, helping children with education,
managing help at home, nursing care etc. One
formula that has been arrived at determines the
value of the housewife as, Value of housewife =
husband's income - wife's income + value of
husband's household services, which means the
wife's value will increase inversely
proportionate to the extent of participation by
the husband in the household duties. The
Australian Family Property Law provides that
while distributing properties in matrimonial
matters, for instance, one has to factor in
"the contribution made by a party to the
marriage to the welfare of the family
constituted by the parties to the marriage and
any children of the marriage, including any
contribution made in the capacity of a
homemaker or parent."
4




19.In paragraph 13, the Division Bench of the High

Court has observed and, in my view very rightly,

that time has come to scientifically assess the

value of the unpaid homemaker both in accident

claims and in matters of division of matrimonial

properties.



20.It may be of some interest to point out that in

the Constitution of Cambodia, Article 36 provides

as under:-



"Article 36 -
o Khmer citizens of either sex shall have
the right to choose any employment
according to their ability and to the
needs of the society.
o Khmer citizen of either sex shall
receive equal pay for equal work.
o The work by housewives in the home shall
have the same value as what they can
receive when working outside the home.
xxxx xxxx xxxxx"



21.It must be noted that as a result of First World

Conference on Women held in Nairobi in 1985, the
4


Statistical Officers of United Nations

International Research and Training Institute for

the Advancement of Women (INSTRAW), took a major

role in promoting the revision of national

accounts and other information on women's work.



22.The purpose of maintaining such satellite

accounts is to assess the unpaid production of

goods and services by homemakers. In 1934, the

American economist Margaret Reid suggested a

different approach while arguing that if a third

person could be paid to do the unpaid activities

carried out by homemakers such activities should

be counted as part of production.



23.Admittedly, it has to be recognized that the

services produced in the home by the women for

other members of the household are an important

and valuable form of production. It is possible

to put monetary value to these services as for

instance, the monetary value of cooking for
4


family members could be assessed in terms of what

it would cost to hire a cook or to purchase ready

cooked food or by assessing how much money could

be earned if the food cooked for the family were

to be sold in the locality.



24.Jayati Ghosh (Uncovering Women's Work) has

referred to National Sample Surveys and according

to her, the survey showed "57% of rural women and

19% of urban women were engaged in the free

collection of fuel wood for household

consumption. Activities related to food

processing, such as husking and grinding grain,

were engaged in by around 15% of women. Other

unpaid activities such as maintaining kitchen

gardens and looking after livestock and poultry

also occupied a majority of women - 60% in rural

areas and 24% in urban areas. These are all

economic activities which in developed societies

are typically recognized as such because they are
4


increasingly delegated by women and performed

through paid contracts."



25.Alternative to imputing money values is to

measure the time taken to produce these services

and compare these with the time that is taken to

produce goods and services which are commercially

viable. One has to admit that in the long run,

the services rendered by women in the household

sustain a supply of labour to the economy and

keep human societies going by weaving the social

fabric and keeping it in good repair. If we take

these services for granted and do not attach any

value to this, this may escalate the unforeseen

costs in terms of deterioration of both human

capabilities and social fabric.



26.Household work performed by women throughout

India is more than US $ 612.8 billion per year

(Evangelical Social Action Forum and Health

Bridge, page 17). We often forget that the time
4


spent by women in doing household work as

homemakers is the time which they can devote to

paid work or to their education. This lack of

sensitiveness and recognition of their work

mainly contributes to women's high rate of

poverty and their consequential oppression in

society, as well as various physical, social and

psychological problems. The courts and tribunals

should do well to factor these considerations in

assessing compensation for housewives who are

victims of road accident and quantifying the

amount in the name of fixing `just compensation'.



27.In this context the Australian Family Property

Law has adopted a very gender sensitive approach.

It provides that while distributing properties in

matrimonial matters, for instance, one has to

factor in "the contribution made by a party to

the marriage to the welfare of the family

constituted by the parties to the marriage and

any children of the marriage, including any
4


contribution made in the capacity of a homemaker

or parent".



28.For the reasons aforesaid, while agreeing with

the views of brother Singhvi, J., I would humbly

add, that time has come for the Parliament to

have a rethinking for properly assessing the

value of homemakers and householders work and

suitably amending the provisions of Motor

Vehicles Act and other related laws for giving

compensation when the victim is a woman and a

homemaker. Amendments in matrimonial laws may

also be made in order to give effect to the

mandate of Article 15(1) in the Constitution.




.................J.
New Delhi (ASOK KUMAR GANGULY)
July 22, 2010