Monday, June 27, 2022

Housewife’s income: All in a day’s work

In a laudable judgment on an insurance claim over an accident, the Court went into great detail about a homemaker’s work to append economic value to it. It said that courts must award just compensation by appraising facts and circumstances.

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By Shaheen Parween

In yet another remarkable judgment on gender equality, the Supreme Court said that while calculating the notional income of a housewife, it should make an attempt to fix an approximate economic value for all the work she does.

The bench, comprising Justices NV Ramana, Surya Kant and Aniruddha Bose, made the above observations while hearing an insurance claim by three surviving dependants of a deceased couple. This impugned a judgment of the Delhi High Court through which the motor accident compensation of Rs 40.71 lakh awarded by the Motor Accidents Claims Tribunal was reduced to Rs 22 lakh. However, the apex court bench enhanced the compensation to Rs 33.20 lakh, which is to be paid to the father of the deceased man by the insurance company, with 9 percent annual interest from May 2014.

The deceased couple, Vinod and Poonam, who were on a motorcycle, were hit by a Santro car at around 7 am on April 12, 2014, at a Delhi intersection. This led to craniocerebral injuries and haemorrhagic shock, leading to their deaths. An FIR was registered under Sections 279 and 304 of the Indian Penal Code against the driver. Subsequently, a claim petition was filed under Section 166 of the MV Act by the couple’s two young daughters and septuagenarian parents. This was contested by the driver, who claimed that the deceased were driving negligently and the accident was a result of their own actions. The insurance company offered a compensation of Rs 6.47 lakh for the death of Poonam and Rs 10.71 lakh for Vinod.

The Tribunal took note of the charge sheet filed against the driver and also his failure to step into the witness box. Relying on the strong testimony of the independent witness, it was concluded that the driver was indeed driving rashly and thus, liability ought to be fixed on the respondent insurer.

Regarding the quantum of compensation, the Tribunal began by determining the ages of Poonam and Vinod 26 and 29 years, respectively. Consequently, an age multiplier of 17 was adopted. Although the deceased’s father took the plea that Vinod was earning Rs 14,000 every month as a teacher at Pratap Public School in Delhi, he was unable to substantiate his claim with documentary evidence. Thus, the minimum wage in Delhi was adopted for computation of loss of dependency. An additional 25 percent income was accounted for future prospects of Poonam, and one-third of Vinod’s salary was deducted towards personal expenses. Rs 2.50 lakh was given for each deceased as compensation for loss of love and affection, estate and funeral charges. Thus, the Tribunal awarded a total sum of Rs 40.71 lakh for both the deceased to the claimants.

This computation was challenged by the insurer before the High Court on the ground that the Tribunal had erroneously relied on the minimum wage as notified by the government of Delhi, even though there was no proof that the deceased were employed in the capital. Instead, it said that given their established residence in Haryana, the minimum wage notified for that state ought to be the basis for calculation of loss of dependency.

Simultaneously, the insurer pleaded that in the case of Poonam, addition of future prospects should be reversed and there should be deduction of personal expenses. Further, compensation was sought to be halved on grounds of contributory negligence. A submission was   made highlighting the then divergent law on the issue of payment of “future prospects” to non-permanent employees. Pending resolution of this issue, the insurer pleaded no such addition be granted to the claimants.

The High Court concurred with these contentions and consequently reduced the notional income for both the deceased by adopting the lowest minimum wage applicable for unskilled workers in Haryana, instead of Delhi. Similarly, one-third of Poonam’s income was deducted towards personal expenses and future prospects were denied to both of them. However, given the totality of circumstances and Poonam’s contribution to her household, 25 percent additional gratuitous income was added to her salary. The High Court, thus, brought down the total compensation payable to the claimants to Rs 22 lakh.

However, the Supreme Court did not concur with the High Court judgment and observed:

“Any compensation awarded by a Court ought to be just, reasonable and consequently must undoubtedly be guided by principles of fairness, equity, and good conscience. Not only did the family of the deceased consist of septuagenarian parents, but there were also two toddler girls, aged merely 3 and 4 years; each of whom requires exceptional care and expenditure till they reach the stage of self dependency. Tragically, in addition to the married couple, the negligence of the driver also extinguished the life of the family’s third child who was a foetus in Poonam’s womb at the time of the accident. Thus, the appropriate deduction for personal expenses for both Vinod and Poonam ought to be 1/4th only, and not 1/3rd as applied by the Tribunal and the High Court, more so when there were four family members dependent on the deceased.”

Supplementing the judgment, Justice Ramana gave his reasoning with respect to the question of notional income of a housewife and whether future prospects should apply to her or not. Emphasising the role of a housewife, he said:

“The sheer amount of time and effort that is dedicated to household work by individuals, who are more likely to be women than men, is not surprising when one considers the plethora of activities a housemaker undertakes. A housemaker often prepares food for the entire family, manages the procurement of groceries and other household shopping needs, cleans and manages the house and its surroundings, undertakes decoration, repairs and maintenance work, looks after the needs of the children and any aged member of the household, manages budgets and so much more. In rural households, they often also assist in the sowing, harvesting and transplanting activities in the field, apart from tending cattle… However, despite all the above, the conception that housemakers do not ‘work’ or that they do not add economic value to the household is a problematic idea that has persisted for many years and must be overcome.”

He further elaborated: “It is a recognition of the multitude of women who are engaged in this activity, whether by choice or as a result of social/cultural norms. It signals to society at large that the law and the courts of the land believe in the value of the labour, services and sacrifices of homemakers. It is an acceptance of the idea that these activities contribute in a very real way to the economic condition of the family, and the economy of the nation, regardless of the fact that it may have been traditionally excluded from economic analyses. It is a reflection of changing attitudes and mindsets and of our international law obligations. And, most importantly, it is a step towards the constitutional vision of social equality and ensuring dignity of life to all individuals.”

Returning to the question of how the notional income of a homemaker is to be calculated, Justice Ramana said that there can be no fixed approach and in such cases, the attempt by the Court is to fix an approximate economic value for all the work done. Courts must keep in mind the idea of awarding just compensation in such cases, looking at the facts and circumstances.

The Court, however, clarified that 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 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.

It said that “the rationale behind the awarding of future prospects is therefore no longer merely about the type of profession, whether permanent or otherwise, although the percentage awarded is still dependent on the same. The awarding of future prospects is now a part of the duty of the Court to grant just compensation, taking into account the realities of life, particularly of inflation, the quest of individuals to better their circumstances and those of their loved ones, rising wage rates and the impact of experience on the quality of work”.

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This judgment has come as a welcome relief to homemakers whose tedious work is often ignored.

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