Minimum Wages Act can only serve as a guide when there is no clue about the deceased's monthly income - SC

Case: Gurpreet Kaur and Others v. United India Insurance Company and Others
Bench: division bench of Justices Surya Kant and MM Sundresh 

In a recent decision, the Supreme Court held that a State notification issued under the Minimum Wages Act could not be relied upon to ascertain the wage of the deceased when there is already positive evidence regarding his monthly income.

A division bench said that such notification could be a guiding factor only in a case where there is no clue known to estimate the monthly income of the deceased.

Based on the monthly instalment of 11550 that the deceased paid towards a tractor loan from March 10, 2014, the tribunal calculated the deceased's monthly income to be "25,000" per month. Even after his death, the entire loan liability was discharged by March 24, 2015.

However, the High Court said that the mere fact that the deceased paid loan instalments could not be evidence that the money represented his income or form the basis for judgment of his income at ₹25,000.

High Court assessed the deceased's income at 7,000 per month, based on the notification issued by Haryana, and reduced the compensation granted to appellants based upon this premise.

The SC disapproved of the High Court's approach and ruled that the tribunal's decision was correct.

In the Court's view, the notification of the Minimum Wages Act relied upon by the High Court can only serve as a guide when there is no clue about the deceased's monthly income. It, therefore, set aside the HC's decision and restored the compensation awarded by the MACT.