Oriental Insurance Co. Ltd. v. Santha — 1999 DIGILAW 334 (KER)

Judgment :- K.S. Radhakrishnan, J. This is an appeal preferred by the Insurance Company challenging an interim award passed by the Motor Accidents Claims Tribunal, Thrissur, in O.P. (M.V.) No. 675 of 1995, under S.140 of the Motor Vehicles Act, 1988, awarding compensation. 2. When the appeal came up for admission before a Division Bench of this Court, it doubted the correctness of the interpretation given to S.140 of the Motor Vehicles Act by another Division Bench of this Court in Thomas v. Mathew, 1995 (2) KLT 260, and referred this matter to a Full Bench, and hence this appeal before us. 3. In the instant case, the motor accident occured on 31.5.1994, due to the collision of a tempo van and a lorry. Lorry was insured with the appellant. Driver of the tempo van died in the accident. Legal representatives of the deceased preferred a claim petition under S.140 of the Motor Vehicles Act, 1988, hereinafter referred to as the 'Act', and the Tribunal passed an interim award dated 8.11.1996, awarding an amount of Rs. 25,000/- each to the claimants. 4. Counsel for the Insurance Company, Sri. Jacob Murikan, submitted that since the driver of the tempo van was negligent, Tribunal committed an error in awarding the interim compensation to his legal representatives under S.140 of the Act. According to counsel, where death or permanent disablement has resulted from an accident occurred due to collision of two vehicles, what is envisaged in S.140 of the Act is to meet the liability of third parties, and not to meet the liability of the owners themselves, or their legal representatives. In support of his contention, counsel relied on the above mentioned decision of this Court in Thomas's case. 5. Counsel for the claimants, Sri. V. Chitambaresh, on the other hand, submitted that in the case of 'no fault liability', there is no scope for enquiry as to who is at fault, and the question as to who is negligent in the accident is to be decided in the final proceedings under S.168 of the Act, and not at the stage of determining a claim under S.140 of the Act. In support of his contention, counsel relied on a Division Bench decision of this Court in New India Assurance Co. Ltd. v. Leela, 1996 A.C.J. 1246. 6. In support of his contention, counsel relied on a Division Bench decision of this Court in New India Assurance Co. Ltd. v. Leela, 1996 A.C.J. 1246. 6. The Division Bench in Thomas's case, to which one of us, Radhakrishnan, J., was a party, was dealing with a case of 'no fault liability' under S.140 of the Act. In that case, Tribunal found that the accident occurred due to the negligence of the claimant. Consequently, the claim petition was dismissed in toto. On appeal before this Court, claimant raised an alternative contention under 'no fault liability'. Division Bench examined the said contention and held that if the accident was admittedly due to the negligence of the claimant alone, who was driving the motor cycle, and the car owner was totally innocent of the occurrence, then to allow the faulter to collect large amount of his loss from the non-faulting party was seemingly inconsistent with the principles of justice, equity and good conscience. Bench felt that joint and several liability was understood in law as an equal liability which did not telescope into each other, and that the said liability was by and large to third parties, and not against each other. 7. Another Division Bench of this Court in New India Assurance Co. Ltd's case, to which one of us, K.K. Usha, J., was a party, took a contrary view. Bench held that by a mere reading of the Section, it can be seen that an enquiry into the question as to who was responsible for the accident or on whose negligence the accident happened is not contemplated at all, while a claim under S.140 of the Act is being considered by the Tribunal. Bench also disagreed with the view taken by a Division Bench of the Madras High Court in K. Nandakumar v. Managing Director, Thanthai Periyar Transport Corporation Ltd., 1992 ACJ 1095. 8. In view of the conflicting views expressed by two Division Benches of this Court, it has become necessary to examine in detail the scope of S.140 of the Act, which highlights the principle of no fault liability. No fault liability is a new liability created by statute outside the tort system. It has nothing to do with causing or not causing harm, nor with fault or no fault, and is not akin to a theory of absolute liability. No fault liability is a new liability created by statute outside the tort system. It has nothing to do with causing or not causing harm, nor with fault or no fault, and is not akin to a theory of absolute liability. The said theory has been incorporated in S.92A of the Motor Vehicles Act, 1939, and now S.140 of the present Act. The scope of S.92A came up for consideration before a Full Bench of this Court, to which Usha, J. was a party, in Neeli v. Narayana Filial, 1992 (2) KLJ 937 (F.B.). Full Bench held that no fault liability was a new liability created by statute and upon such creation, gave rise to a corresponding right to the victim or his legal representatives, to claim the amounts covered by S.92A(2), and it was created by statute outside the tort system, and it belonged to substantive law to that extent it modified the liability under the law of torts. 9. Question now posed for consideration is whether the claimants who are the legal representatives of the victim are to plead and prove that victim was not negligent so as to raise a claim for interim award under S.140 of the Act, in a case where death or permanent disablement has resulted in the accident. 10. In this connection we may examine the scope of S.140 of the Act, which is extracted below for easy reference: "140. Liability to pay compensation in certain cases on the principle of no-fault. (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this Section. (2) The amount of compensation which shall be payable under sub-s.(1) in respect of the death of any person shall be a fixed sum of twenty-five thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twelve thousand rupees. (2) The amount of compensation which shall be payable under sub-s.(1) in respect of the death of any person shall be a fixed sum of twenty-five thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twelve thousand rupees. (3) In any claim for compensation under sub-s.(1) the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. (4) A claim for compensation under sub-s.(1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement." S.140 falls in Chapter X of the Act. S.140(1) says due to use of a motor vehicle or motor vehicles death or permanent disablement results to any person, owner of the vehicle or owners of vehicles shall be jointly and severally liable to pay compensation for such death or disablement. S.140(1) deals with only the case of death or permanent disablement What is permanent disablement is dealt with in S.142 of the Act. S.140(2) has statutorily fixed an amount of Rs. 25,000/- in the case of death and Rs. 12,000/- in the case of permanent disablement. Tribunal has to award this amount. Tribunal has no jurisdiction to award a lesser or higher amount. Therefore the amount of compensation in the case of death or permanent disablement is fixed by the statute itself. Further, S.140(3) says while passing orders by the Tribunal on such a claim, claimant is not required to plead or establish that the death or permanent disablement in respect of which claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicles. Further, S.140(3) says while passing orders by the Tribunal on such a claim, claimant is not required to plead or establish that the death or permanent disablement in respect of which claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicles. S.140(4) further says that claim for compensation under sub-s.-(1) shall not be defeated by reason of any wrongful act, negect or default of the person in respect of whose death or permanent disablement the claim has been made. 11. It is, therefore, evident from the above mentioned statutory provisions that the claim for compensation for death or permanent disablement has to be disbursed immediately, without casting any burden on the claimant to plead or establish absence of negligence. Nature of enquiry contemplated under S.140 is very limited. The liability for compensation for death or permanent disablement under S.140 is made indefeasible, peremptory and total. In order to sustain a claim under S.140, there is no necessity for the claimant to plead or establish that the death or permanent disablement was due to wrongful act, neglect or default of the owner or owners of the vehicles. 12. In the matter of interpretation of S.92A of the old Act, various High Courts have taken contrary views. Madras High Court in K. Nandakumar v. Managing Director, Thanthai Periyar Transport Corporation Ltd., 1992 ACJ 1095 (Mad.) was dealing with a case where a bus and a motor-cycle collided and due to negligence on the part of the motor-cyclist, he sustained injuries. Madras High Court took the view that a person can make a claim for compensation against another only when the other person is at fault and not when he alone is at fault. Identical is the view taken by a Division Bench of this Court in Thomas's case. A Division Bench of this Court in Krishna Pillai v. Jalal Ahamed,1989 (1) KLT 942 =1989 ACJ 991 (Ker.) however granted the benefit of S.92A taking the view that claimant need not establish the fault of the driver. Legislature evidently did not want the injured in such cases to be totally denied of compensation. The Bench pointed out it is in this background that S.92 A was incorporated into the Act for compensation to be paid in extreme cases, namely, death or permanent disablement, even in the absence of fault of the driver. Legislature evidently did not want the injured in such cases to be totally denied of compensation. The Bench pointed out it is in this background that S.92 A was incorporated into the Act for compensation to be paid in extreme cases, namely, death or permanent disablement, even in the absence of fault of the driver. This decision was quoted with approval by another Division Bench of this Court in K.P. All v. M. Madhavan,1990 ACJ 373, wherein also this Court granted the benefit of S.92A. The Bench took the view that even though the deceased was negligent and consequently claimants were not entitled to get compensation, they are entitled to compensation under S.92A applying the no fault theory. Accordingly, an award was passed granting an amount of Rs. 15,000/- under S.92A eventhough it was found that deceased was negligent. 13. The Madhya Pradesh High Court in New India Assurance Co. v. Phoolwati, AIR 1986 M.P.187, granted the benefit of S.92A and held that the liability under S.92A has got different character, and it is not based on any tortious consideration. The Court held the question of a civil offence, giving rise to a tortious liability, does not at all arise in the case of S.92 A for the reason that it created no fault liability which is manifest on the face of the provision. In another decision in Mahila Ramdei v. Nandkumar, AIR 1988 M.P. 98, Madhya Pradesh High Court took the view that liability to be discharged under S.92A ?s indefeasible, peremptory, total and also inexorable. The Court held it is the duty of the Court or the Tribunal to ensure that such liability is not only expeditiously adjudged, but to ensure further that it is duly discharged by such person, saddled with the statutory liability under the Act to discharge the same, at the earliest date. A Full Bench of the Madhya Pradesh High Court in State Election Commission, Bhopal v. Ras Bihari Raghawanshi, AIR 1995 M.P. 244, rejected the contention of the Insurance Company on the basis of violation of the conditions of the policy which excluded liability if the accident occurred beyond 80 kilo meters from Jabalpur. The Full Bench held that the applicability of that condition was foreign to the scope of enquiry in relation to claim under S.140 of the Act. InNational Insurance Co. The Full Bench held that the applicability of that condition was foreign to the scope of enquiry in relation to claim under S.140 of the Act. InNational Insurance Co. Ltd. v. Ravishankar,1996 ACJ 258, Madhya Pradesh High Court has taken the view that once it is held that the vehicle was insured and was involved in the accident and the claimant suffered grievous injuries causing some permanent disability, S.140 would immediately come into play. 14. In a recent decision, in New India Insurance Co. Ltd. v. Prakash Narain Agnihotri, AIR 1999 M.P. 52, Madhya Pradesh High Court held that S.140 of the Act is the provision studded in benevolent legal provisions of the Act. What the Tribunal has to do is to find out whether prima facie there was an accident in which motor vehicles were involved, whether the claimant was involved in the said accident, whether he sustained injuries which are capable of causing permanent disability or the death and lastly whether the vehicle involved in the accident was insured with the insurance company. Rejecting the order of the Tribunal, Madhya Pradesh High Court directed payment under S.140 of the Act to the claimant. Karnataka High Court in Vunala v. Chikkahanumathiah, AIR 1999 Kant. 150 following the decision of the Supreme Court in 1996 ACJ 555, held that S.140 was a beneficial provision inserted into the Motor Vehicles Act. The said provision was made considering the rise in the number of motor accidents taking place in the country and the difficulty of the claimants in proving the negligence on the part of others and for granting compensation for permanent disability or death caused in an accident by the use of the motor vehicle. Court pointed out that the provision for no fault liability was a beneficial legislation and consequently approach of the Courts was to adopt a construction which advances the beneficial purpose underlying the enactment in preference to the construction which tends to defeat the purpose. 15. Supreme Court in Gujarat S.R.T.C. v. Ramanbhai Prabhatbhai, (1987) 3 SCC 234 considering the scope of S.92 A of the old Act held that in a claim under S.92A claimant shall not be called upon to plead and establish that the death or permanent disablement has been made due to the wrongful act, neglect or default of the owner. 15. Supreme Court in Gujarat S.R.T.C. v. Ramanbhai Prabhatbhai, (1987) 3 SCC 234 considering the scope of S.92 A of the old Act held that in a claim under S.92A claimant shall not be called upon to plead and establish that the death or permanent disablement has been made due to the wrongful act, neglect or default of the owner. To that extent, Supreme Court held, substantive law of the country is modified. Supreme Court while considering the scope of S.92A of the old Act in Shivaji Dayanu Patil v. Vatschala Uttam More, (1991) 3 SCC 530 held that S.92A was in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no fault liability. In the matter of interpretation of a beneficial legislation the approach of the Courts is to adopt a construction which advances the beneficent purpose underlying the enactment in preference to a construction which tends to defeat that purpose. Supreme Court in a later decision in K. Nandakumar v. Managing Director, Thanthal Periyar Transport Corporation Ltd., (1996) 2 SCC 73 was dealing with a case where the appellant suffered permanent disability as a result of the accident, which occurred on 15.1.1987, due to the collision of a motor-cycle and a bus. Motor-cycle was driven by the claimant himself. Contention that claimant was negligent and cannot claim interim compensation was upheld by the Tribunal and the reversed the said decision and considered the scope of S.92A in the light of S.92A(4) and held that claimant was entitled to get compensation, even though he was negligent under S.92A of the Act. Direction was therefore, given to pay compensation to him with interest at the rate of 12% per annum from the date of the claim petition till payment. In this contention, we may point out that the view expressed by the Madras High Court also was not followed by a Division Bench of this Court in New India Assurance Co. Ltd. v. Leela,1996 ACJ 1246. 16. Above mentioned judicial pronouncements clearly establish that the nature of enquiry under S.140 is very limited. There is no question of fixation of negligence on any person, while determining a claim under S.140. Ltd. v. Leela,1996 ACJ 1246. 16. Above mentioned judicial pronouncements clearly establish that the nature of enquiry under S.140 is very limited. There is no question of fixation of negligence on any person, while determining a claim under S.140. The only question to be considered by the Tribunal at that stage was whether the accident had occurred and whether it resulted in death or permanent disablement. Question as to whether the accident occurred due to negligence of victim is not a matter to be gone into by the Tribunal. R.393 of the Kerala Motor Vehicles rules, 1989 deals with matters to be furnished to the Tribunal at the time of considering the claim under S.140. Rules do not enable the claimants to plead or establish the wrongful act, neglect or default of the owner. The rule is extracted below for easy reference: "393. Award of claims under S.140:- The Claims Tribunal shall proceed to award the claims under S.140 of the Act on the basis of the following: (1) Registration certificate of the motor vehicles involved in the accident. (2) Insurance Certificate or policy relating to the insurance of the vehicle against third party risks; (3) Copy of the first information report; (4) Post-mortem certificate or certificate of injury from the Medical Officer; and, (5) The nature of treatment given by the Medical Officer, who has examined the victim". R.378(4) of the Rules specifically says that in any claim for compensation under sub-s.(1) of S.140 of the Act, the claimant shall not be required to plead and establish that a death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or any other person. R.378(5) also authorises the Claim Tribunal to obtain necessary information from the police, medical and other authorities, and proceed to settle the claims, whether the parties who were given notice appeared or not on the appointed date. These provisions would indicate that Tribunal is not to follow the procedure to be followed in adjudicating claim under S.166 of the Act. In other words, the intention of the Legislature as well as the rule-making authority was to dispose of claims under S.140 of the Act read with Rr. 393 and 378(4) as expeditiously as possible. 17. These provisions would indicate that Tribunal is not to follow the procedure to be followed in adjudicating claim under S.166 of the Act. In other words, the intention of the Legislature as well as the rule-making authority was to dispose of claims under S.140 of the Act read with Rr. 393 and 378(4) as expeditiously as possible. 17. S.140 is enacted as a piece of welfare legislation, and also as a measure of social justice in order to meet, to some extent, the responsibility of society to a death or injuries caused in road accidents. It is also intended to take care of wives, infants and other dependants and to prevent their destitution by providing immediate relief to persons of victims. Therefore, the question as to at whose fault the accident occurred is foreign to the determination of a claim under no fault liability. These are matters to be reserved for determination when final adjudication is made under S.168 of the Act. Legislature has laid down such provisions for no fault liability to take care of tortuious situations in which an insurer finds itself, if saddled with undeserving liability. The liability under S.140(1) is to be discharged instantly by the insurer when he is ordered to do so. But it is open to the insurer to agitate the question of restitution during the trial of the claim for compensation on the principle of fault, and it shall be duty then of the Claims Tribunal to deal with the same under S.168 of the Act. 18. The payment of no fault liability under S.140 of the Act to the victim, if he is permanently disabled, or his legal representatives in the case of death, is one time payment of fixed amount to mitigate their difficulties and till final award is passed under S.168 of the Act. This is a payment made by the insurer or owner as the case may be in the case of death to the legal representatives of the victim, and in the case of permanent disablement to the victim, so as to meet unfortunate situation and not for future restitution from the claims in the final proceedings under S.168 of the Act. 19. The approach of the Tribunal in adjudicating the claims under Ss.140 and 166 of the Act is different. 19. The approach of the Tribunal in adjudicating the claims under Ss.140 and 166 of the Act is different. Tribunal is required to satisfy itself that the accident has arisen out of the use of the motor vehicle, that the said accident has resulted in permanent disablement of the person who is making the claim or death of the person, whose legal representatives are making the claim, and the claim is made against the owner and insurer of the motor vehicle involved in the accident. These information's are to be furnished by the claimants in their claim petition. Once these particulars are furnished the Tribunal is bound to order compensation, irrespective of the fact whether the claim is made by the third party or not Therefore, the finding of the Division Bench in Thomas's case that the no fault liability is intended only to meet the claims of third parties cannot be accepted. We, therefore, hold that the claimants are entitled to get the benefit of no fault liability under S.140, whether the accident occurred due to the victim's negligence or not. 20. In view of the above mentioned legal principles we are of the view that the Division Bench in Thomas's case has not laid down law correctly and the same is overruled. The Division Bench in New India Assurance Co. Ltd. 's case has laid down the law correctly and we approve the same. Accordingly, we hold that the Tribunal is right in granting the interim relief prayed for by the claimants. We hold that claimants are entitled to get the amount awarded by the Tribunal with interest at 12% per annum from the date of claim petition till date of payment or realisation. It is so ordered. M.F.A. is disposed of as above.