Case Digest: Sharad Singh v. H.D. Narang
Citation: 2025 LiveLaw (SC) 964
Facts
The victim, a 20-year-old Commerce Graduate student and enrolled aspirant at the Institute of Chartered Accountants of India, suffered a motor accident in 2001 that left him paraplegic and bedridden until his death two decades later. The Motor Accident Claims Tribunal and the Delhi High Court fixed his notional income at ₹3,352 per month, based on the minimum wages prescribed for workmen, despite his academic background and career prospects.
Issue
Whether the notional income for calculating motor accident compensation can be determined solely with reference to minimum wages linked to educational qualifications, or whether courts must also consider the nature of likely employment and future prospects.
Decision
The Supreme Court, per Justices K. Vinod Chandran and N.V. Anjaria, held that minimum wages cannot be the sole criterion. Courts must assess income with reference to the nature of work the victim could reasonably have undertaken, considering education, skills, and career trajectory.
Compensation should be realistic and just, not mechanically tied to wage schedules. In this case, the Court fixed the notional income at ₹5,000 per month (as of 2001) with a 40% addition for future prospects. Applying the multiplier method, the Court enhanced the total compensation to ₹40.34 lakhs, along with an additional ₹20 lakhs toward verified medical expenses. Interest at 9% was ordered on the award.
Significance
The ruling reinforces that accident compensation must reflect both actual and potential earning capacity, ensuring fairness for victims with promising academic or professional prospects.