Notional income for homemakers in claims case signals their value, rules SC

In a significant ruling, the Supreme Court has said that fixing notional income of homemakers in compensation related cases is a signal to the society that the law and the courts value their labour, services and sacrifices.

Women spend more time on "unpaid care giving services for household members" as compared to men, the apex court said citing a survey.

In far reaching ramifications, especially in award of compensation to road accident victims involving homemakers, the top court said that fixing of notional income for them 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.

 

A bench of Justices N V Ramana, S Abdul Nazeer and Surya Kant said in Tuesday's verdict that grant of compensation, on a pecuniary basis, to homemakers is a settled proposition of law.

Deciding an appeal filed by two surviving daughters and a parent of the deceased couple which met with an accident here, the bench modified the Delhi High Court order and enhanced the compensation of Rs 22 lakh to the claimants by Rs 11.20 lakh, to a total of Rs 33.20 lakh.

The high court had brought down the compensation of Rs 40.71 lakh awarded by the accident claims tribunal saying that the woman who died in the accident was a homemaker and not an earning member.

The top court said the enhanced compensation be paid within two months along with interest at the rate of 9 per cent per annum from the date of filing of the Detailed Accident Report May 23, 2014.

It said that taking into account the gendered nature of housework, with an overwhelming percentage of women being engaged in it as compared to men, the fixing of notional income for them attains special significance.

It becomes 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, the bench said.

On the question of how much notional income can be fixed, the bench said that 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.

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, it said, adding that the granting of future prospects, on the notional income calculated in such cases, is a component of just compensation.

Justice Ramana, who concurred with the other judges in award of compensation to family members of road accident victims, penned down a separate judgement and said 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.

The bench further added that the issue of fixing notional income for a homemaker serves extremely important functions and 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.

The top court said: 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."

It said that whichever method a court ultimately chooses to value the activities of a homemaker, "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".

The bench said that one method could be of using the formula provided in the Motor Vehicles Act, 1988, which said that the income of a spouse could be calculated as one-third of the income of the earning surviving spouse.

The bench, however, said: As 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.

The top court referred to the Report of the Union Ministry of Statistics and Programme Implementation, called Time Use in India 2019, which is the first 'Time Use Survey' in the country and collates information from 1,38,799 households for the period January, 2019 to December, 2019, reflects the same gender disparity.

It said that the key findings of the survey suggest that, on an average, women spend nearly 299 minutes a day on unpaid domestic services for household members versus 97 minutes spent by men on average.

Similarly, in a day, women on average spend 134 minutes on unpaid care giving services for household members as compared to the 76 minutes spent by men on average, it said.