Supreme Court Directs Compilation of Minimum Wage Notifications to Strengthen Motor Accident Compensation Adjudication

Background of the Case

The Supreme Court has issued significant directions to all States and Union Territories, calling for a consolidated and updated compilation of minimum wage notifications. The Court observed that the lack of uniform, reliable and easily accessible minimum wage data has made adjudication in motor accident compensation cases increasingly difficult, particularly while determining notional income for victims.

The directions were delivered by a Division Bench of Justices Sanjay Karol and N. Kotiswar Singh while deciding an appeal arising from a 2013 motor accident case in Madhya Pradesh.

Issue Before the Supreme Court

The Court noted that:

• Minimum wage notifications are revised periodically
• Many States upload incomplete or outdated data
• Courts often struggle to access the applicable wage notification
• This leads to delays and inconsistent compensation awards

The Bench remarked that locating correct wage rates at the time of accident has become “quite a difficult task”, making assessment of compensation unnecessarily cumbersome.

Directions Issued by the Supreme Court

The Court directed all Chief Secretaries of States and Union Territories to:

  1. Submit compilations of all minimum wage notifications within 12 weeks

  2. Ensure periodic electronic submission of revised notifications

  3. Maintain updated digital records for judicial reference

The compiled data will be:

• scanned
• digitised
• preserved with the Centre for Research and Planning, Supreme Court of India

so that it remains readily accessible to courts, tribunals and stakeholders across the country.

Importance of Minimum Wage Data in Motor Accident Claims

Minimum wages are crucial for compensation computation under the Motor Vehicles Act, particularly in cases involving:

• daily wage workers
• informal sector workers
• labourers without income records
• homemakers
• children
• self-employed persons

In such cases, courts rely on minimum wage notifications to determine notional income, which forms the core basis for:

• loss of dependency
• future prospects
• compensation calculation

The Court reiterated that compensation must reflect realistic financial value and not rely on outdated or arbitrary standards.

Statutory Provisions Involved

Motor Vehicles Act, 1988

Relevant provisions:

• Section 166 — Claim for compensation
• Section 168 — Duty to award just compensation
• Section 173 — Appeals against award

The Court emphasised that the duty of tribunals and courts is to award “just and fair compensation”, even if claimants have sought a lesser amount.

Minimum Wages Act, 1948

The Court recognised that minimum wages are fixed by States under the Act and therefore vary region-wise. Judicial reliance on these notifications must be:

• accurate
• contemporaneous
• verifiable

Thus, a centralised digital repository was found essential.

Constitutional Principles Referred

The Court linked compensation jurisprudence to:

• Article 21 — Right to life with dignity
• Article 14 — Equality in awarding compensation

The Court observed that compensation must not be arbitrary or inconsistent merely because data access varies across regions.

Key Judicial Precedents Referred

Puttamma v. K.L. Narayana Reddy (2013)

The Court held that the Second Schedule of the MV Act (1994) is outdated and disconnected from present-day economic conditions.

Meena Devi v. Nunu Chand Mahto (2023)

Reaffirmed that courts should not adopt rigid statutory tables when they fail to reflect current realities.

National Insurance Co. Ltd. v. Pranay Sethi (Constitution Bench, 2017)

Established binding principles for computation under:

• loss of consortium
• funeral expenses
• loss of estate
• future prospects

The Court found that the High Court failed to apply Pranay Sethi properly in the present case.

Case Outcome — Compensation Recalculated

The case involved a 2013 accident in which:

• a father and his nine-year-old son died
• liability of insurer was not disputed

The MACT awarded compensation in 2015.
The High Court enhanced it to ₹3.5 lakh in 2024.

The Supreme Court observed that:

• reliance on the outdated Second Schedule was erroneous
• computation for the deceased minor was legally flawed

The Court recalculated compensation using:

• minimum wages for skilled labour at the relevant time
• monthly income assessed at ₹6,390

Final compensation awarded:

₹11,96,068 with interest from the date of claim petition.

The insurer was directed to release payment within eight weeks.

Significance of the Judgment

The ruling:

• strengthens uniformity in compensation assessment
• prevents delays due to wage-data disputes
• modernises judicial reliance on economic indicators
• ensures realistic and fair compensation
• reinforces victim-centric interpretation of the MV Act

By mandating a national wage-notification repository, the Court has removed a recurring procedural bottleneck affecting thousands of accident claim cases.

Conclusion

The Supreme Court’s directions mark a crucial step towards:

• transparency in judicial compensation calculations
• digitisation of statutory notifications
• consistency in awards across jurisdictions

The judgment aligns compensation determination with prevailing economic realities, reaffirming that the duty of courts under the Motor Vehicles Act is not merely procedural, but constitutional — to ensure just, fair and meaningful relief to accident victims and their families.

Location: Pune, Maharashtra, India

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