Institute of Legal and Management Studies

The Supreme Court has held that minimum wages cannot be determined solely on the basis of a person's educational qualification, without reference to the nature of work carried on. The Court was deciding a motor accident compensation case where the quantum of income was in dispute.

The case concerned a 20-year-old B.Com final year student who had also enrolled with the Institute of Chartered Accountants of India, but was rendered paraplegic after a motor accident in 2001 and remained bedridden for two decades until his death. The Tribunal and the Delhi High Court had computed his income for the purpose of awarding compensation by applying the minimum wages notified for workmen, i.e., Rs. 3,352/- per month. The High Court reasoned that although the victim had academic prospects, he had not yet attained the qualification of a Chartered Accountant, and therefore the income could not be fixed at that level.

Disagreeing with this approach, a Bench of Justices K. Vinod Chandran and N.V. Anjaria observed that the minimum wages schedule cannot be applied on the basis of educational qualification alone. “We were not convinced that the minimum wages would be determined on the basis of the educational qualification alone without reference to the nature of work carried on,” the Court said, adding that adopting the wages of a skilled worker was also not proper in the circumstances. Taking into account that the victim would reasonably have been employed as an accountant upon graduation, the Court fixed a monthly income of Rs. 5,000/- in 2001, with 40% addition towards future prospects as per Pranay Sethi.

On this basis, the Court enhanced the compensation to Rs. 40.34 lakhs, besides directing the insurer to pay an additional Rs. 20 lakhs towards verified medical expenses incurred by the victim's parents during his lifetime. The ruling reaffirms that in assessing loss of income, courts must look beyond rigid classifications of minimum wages and factor in the realistic employment prospects of victims.

Case : Sharad Singh v HD Narang

Citation : 2025 LiveLaw (SC) 964

Click here to read the judgment