Notional Income
MVA
Motor Vehicles Act, 1988 (59 of 1988), Section 166 - Future prospects - Notional income - Argument that no 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. Hem Raj v. Oriental Insurance Co. Ltd. ((2018-2)190 PLR 480 (SC), (2018) 15 SCC 654), relied. #2021 SCeJ 001
Notional income - Guidelines - Homemaker
Notional income - Guidelines
Therefore, on the basis of the above, certain general observations can be made regarding the issue of calculation of notional income for homemakers and the grant of future prospects with respect to them, for the purposes of grant of compensation which can be summarized as follows:
a. Grant of compensation, on a pecuniary basis, with respect to a homemaker, is a settled proposition of law.
b. Taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in the same as compared to men, the fixing of notional income of a homemaker attains special significance. It becomes a recognition of the work, labour and sacrifices of homemakers and a reflection of changing attitudes. It is also in furtherance of our nation’s international law obligations and our constitutional vision of social equality and ensuring dignity to all.
c. Various methods can be employed by the Court to fix the notional income of a homemaker, depending on the facts and circumstances of the case.
d. The Court should ensure while choosing the method, and fixing the notional income, that the same is just in the facts and circumstances of the particular case, neither assessing the compensation too conservatively, nor too liberally.
e. The granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.(N.V. Ramana, J.) #2021 SCeJ 001
Notional income - Homemakers - Attempt of the Court in such matters should therefore be towards determining, in the best manner possible, the truest approximation of the value added by a homemaker for the purpose of granting monetary compensation.
Motor Vehicles Act, 1988 (59 of 1988), Section 166 - Notional income - Homemakers – For calculation of Notional income of a homemaker there can be no fixed approach - Attempt by the Court is to fix an approximate economic value for all the work that a homemaker does, impossible though that task may be - Courts must keep in mind the idea of awarding just compensation in such cases, looking to the facts and circumstances - There can be no exact calculation or formula that can magically ascertain the true value provided by an individual gratuitously for those that they are near and dear to - The attempt of the Court in such matters should therefore be towards determining, in the best manner possible, the truest approximation of the value added by a homemaker for the purpose of granting monetary compensation. (N.V. Ramana, J). #2021 SCeJ 001
Also see: Homemaker
Methodology of computing the notional income of a homemaker
Motor Vehicles Act, 1988 (59 of 1988), Section 166 - Methodology of computing the notional income of a homemaker - It must be remembered that all the above methods are merely suggestions - Whichever method a Court ultimately chooses to value the activities of a homemaker, would ultimately depend on the facts and circumstances of the case - The Court needs to keep in mind its duty to award just compensation, neither assessing the same conservatively, nor so liberally as to make it a bounty to claimants [National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680; Kajal v. Jagdish Chand, (2020) 4 SCC 413]. (N.V. Ramana, J.) #2021 SCeJ 001
Also see: Homemaker
Notional income for nonearning victims - Homemekers
Future prospects - Notional income - Notional income for nonearning victims - Homemekers - It is my opinion that the above principle applies with equal vigor, particularly with respect to homemakers. Once 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. #2021 SCeJ 001
Also see: Homemaker
Where the victim is proved to be employed but claimants are unable to prove the income
Motor Vehicles Act, 1988 (59 of 1988), Section 166 - Future prospects - Notional income. Where the victim is proved to be employed but claimants are unable to prove the income - 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. . (N.V. Ramana, J.) #2021 SCeJ 001
The gratuitous services rendered by the 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.
Lis arose pertaining to the criteria for determination of compensation payable to the dependants of a woman who died in a road accident and who did not have regular source of income. Singhvi, J. opined that it is highly unfair, unjust and inappropriate to compute the compensation payable to the dependants of a deceased wife/mother who does not have a 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 the 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. Ganguly, J., in his concurring opinion, said that women make a significant contribution at various levels.
Arun Kumar Agrawal v. National Insurance Company Limited, (2010) 9 SCC 218
"63. Household work performed by women throughout India is more than US $612.8 billion per year (Evangelical Social Action Forum and Health Bridge, p. 17). We often forget that the time 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 accidents and quantifying the amount in the name of fixing "just compensation".
64. 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 contribution made in the capacity of a homemaker or parent."