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2007 DIGILAW 1817 (RAJ)

United India Insurance Company Ltd. v. Satya Narain Sharma

2007-09-21

ASHOK PARIHAR, R.M.LODHA, SHIV KUMAR SHARMA

body2007
Honble LODHA, J.–The Single Judge of this Court by his order dated 12th October, 2000 has referred the following questions for consideration and determination by the Larger Bench: (one) Whether the award passed under Section 163A of the Motor Vehicles Act, 1988 being passed after detailed evidence as to income, age and disability for compensation to be awarded under structured formula basis is in exclusion to the award passed under Section 166 on negligence basis by a court of law? (two) Whether an issue which has already been disposed of can be reopened for the purpose of proceeding under Section 166? (three) Whether under Sections 163-A and 166, two modes for determining the compensation one on fixed formula basis and the other on assumption basis to be determined by the Tribunal, the two proceedings are in exclusion of each other and proceeding under Section 163A cannot be construed to be an interim compensation as under Section 140 of the Motor Vehicles Act? (Fourth) Whether the judgment reported in 1999 WLC (UC) 185 in the case of Oriental Insurance Company Limited vs. Nathu Ram needs to be reconsidered wherein the award passed under Section 163 has been held to be an interim award. [Editors Note– For the convenience of readers the text of above cited Judgment is reproduced here]– Rajasthan High Court, Jaipur Bench HONBLE D.C. DALELA, J. The Oriental Insc. Co. Ltd. Versus Nathuram & Ors. S.B. Civil Writ Petition No. 6465 of 1997, decided on 15th December, 1998 Virendra Agrawal, for Petitioner; Rakesh Sharma, for Respondents Honble DALELA, J.–The claimant-respondents Nos. 1 to 4 preferred a claim-petition, before the Motor Accident Claims Tribunal, Alwar, under Section 166 of the Motor Vehicles Act, 1988 (hereinafter called, ``the Act), for the alleged loss, suffered by them, on account of death of Smt. Taradevi, who died in the accident that took place on 16-3-96. Along with the claim- petition, the claimants also filed an application under Section 163-A of the act, for interim compensation. In the claim- petition, the claimants alleged that the accident took place due to negligence of the driver & owner of the motor cycle in question, which was insured with the petitioner-insurance company. The learned Tribunal, vide its order dated 18-11-96, awarded a compensation of Rs. 99]300/-, in favour of the claimants, as interim compensation, under Section 163-A of the Act. The learned Tribunal, vide its order dated 18-11-96, awarded a compensation of Rs. 99]300/-, in favour of the claimants, as interim compensation, under Section 163-A of the Act. Feeling aggrieved thereby, this writ petition has been preferred. (2). I have heard the arguments of both the sides. (3). The contention of the learned counsel for the petitioner, is that the learned Tribunal has no jurisdiction to award interim compensation under Section 163-A of the Act. Section 165 to 168 of the Act, provide that a Motor Accident Claims Tribunal is required to adjudicate upon the claim for compensation, in respect of the accident, involving death or bodily injury arising out of the use of the motor vehicle and/or damage to any property of the third party, on the basis of fault, negligence or any wrongful act of the owner or/and driver of the vehicle. For the purpose of such adjudication, it is required to hold an inquiry into the claim and to make award, determining the amount of compensation, which appears to be just. The liability to pay compensation would be of the owner, driver and the insurer of the vehicle, as may be directed by the Tribunal. (4). In addition to the claim of compensation, as above, the claimant has a right to claim compensation in respect of death or permanent disablement, on the principle of `no-fault under Section 140 of the act. (5). The claimant has also a right under Section 163-A of the Act, to claim compensation, as indicated in the Second Schedule of the Act, in the case of death or permanent disablement, without pleading or proving any wrongful act, neglect or default of the owner of the driver. (6). Section 163-B of the Act provides that where a person is entitled to claim compensation under Sections 140 & 163-A of the Act, he would file a claim under either of the Sections and not under both. (7). Section 141 of the Act provides that the right to claim compensation under Section 140, would be in addition to any other right (based on the principle of fault), except the right under Section 163-A of the Act. From Sections 163-A and 141 of the Act, it is amply clear that compensations, awardable under Sections 140 & 163-A are alternative to each other. From Sections 163-A and 141 of the Act, it is amply clear that compensations, awardable under Sections 140 & 163-A are alternative to each other. One may claim compensation either under Section 140 or under Section 163-A. One cannot claim under both the sections, namely, Section 140 as well as 163-A. Therefore, the right to claim compensation under Section 163-A, is an alternative to one, provided under Section 140. Like the claim under Section 140, the claim under Section 163-A, is in addition to the right to claim compensation under Section 165 to 168 of the Act. (8). Under Section 140 as well as under Section 163-A, compensation is awardable on the principle of `no fault, because, under Section 163-A also the claimant is not required to plead and prove fault, neglect or wrongful act of the owner/driver. (9). The compensation, awardable under Section 140, is certainly an interim compensation. Therefore, the compensation awardable under Section 163-A, is in the nature of interim compensation. The amount may be adjusted against the total amount of compensation awarded under Sections 165 to 168 of the Act. (10). The Explanation to Section 165, clearly declares that the claim of compensation, required to be adjudicated upon by the Motor Accident Claims Tribunal, includes the claim for compensation under Sections 140 & 163-A of the Act. Thus, the Motor Accident Claims Tribunal has jurisdiction to adjudicate and award interim compensation under Section 163-A of the Act. (11). In the case of Trilok Chand (1996) 4 SCC 362 ), Honble The Supreme Court has pointed out certain defects & deficiencies into the Second Schedule of the Act. Yet, it has held that the Schedule can be used as guidelines. The learned Tribunal, in the instant case in hand, has assessed & calculated the compensation on the basis of the guidelines, provided in the Second Schedule. The learned counsel for the petitioner, has not been able to point out any defect in the assessment & calculation, done by the learned Tribunal. (12). The petition does not seem to have any force. Hence, it is dismissed. (2). The aforesaid questions arise from the facts which may briefly be noticed immediately here-in-after. (3). On 28-7-1999 at about 12.30 p.m., a seven year old child- Gajanand Sharma was returning home from the school. (12). The petition does not seem to have any force. Hence, it is dismissed. (2). The aforesaid questions arise from the facts which may briefly be noticed immediately here-in-after. (3). On 28-7-1999 at about 12.30 p.m., a seven year old child- Gajanand Sharma was returning home from the school. At that time, one car bearing registration No. RJ-27-C-8866 coming from Delhi dashed against him and as a result of the accident, the child sustained grave injuries and he died that very night. (4). The parents applied for compensation under Sections 166 and 163A of the Motor Vehicles Act, 1988 (for short, `M.V. Act) before the Motor Accident Claims Tribunal, Jaipur District, Jaipur claiming compensation of Rs. 8]50]000/-. The owner of the vehicle as well as the insurer were impleaded as non-applicants and it was alleged that at the time of accident, the vehicle was being driven rashly and negligently by the driver. (5). The owner did not respond despite service. The insurer resisted the claim on diverse grounds available to them in law. (6). On the basis of the claim petition and the reply by the insurer, the Tribunal framed the following issues, namely: (i) Whether the death of Gajanand Sharma occurred on 28-7-1999 due to the accident caused by the vehicle RJ-27-C-8866? (ii) Whether the non-applicant No. 1 was the registered owner of the concerned vehicle and the said vehicle was insured with non-applicant No. 2? (iii) What was the age of Gajanand Sharma at the time of his death? (iv) What was the income of the deceased at the time of his death? (v) Relief? (7). After framing the issues, the Tribunal proceeded with the determination of the compensation under Section 163A by giving it the title of `interim compensation. The Tribunal held that the death of the child-Gajanand Sharma occurred because of the accident caused by the vehicle RJ-27-C-8866. The age of the child at the time of death was found to be seven years. The Tribunal applied structured formula provided in Second Schedule appended to the M.V. Act and by estimating the income of the child at Rs. 500/- p.m. multiplied the same by multiplier of 15 and concluded that the claimants were entitled for compensation of Rs. 90]000/- . The Tribunal also awarded a sum of Rs. 2]000/- towards funeral expenses of the deceased child and an amount of Rs. 500/- p.m. multiplied the same by multiplier of 15 and concluded that the claimants were entitled for compensation of Rs. 90]000/- . The Tribunal also awarded a sum of Rs. 2]000/- towards funeral expenses of the deceased child and an amount of Rs. 2]500/- towards loss of estate and, thus, in all granted under Section 163 A compensation of Rs. 94]500/- to the claimants. The Tribunal awarded interest @ 12% on the said amount on the date of filing of the claim application until realisation. (8). The insurer challenged the said award by filing an appeal before this court principally on the ground that Section 163 A of the M.V. Act does not contemplate interim award and, therefore, the award must be treated to be final award. Alternatively, the insurer prayed in the appeal that if the award dated 5th July, 200 is treated as interim award, the interim compensation be modified to Rs. 50]000/-. (9). On the reference made by the Single Judge for consideration of the aforesaid noticed questions by the Larger Bench, this Full Bench has been constituted by the Chief Justice. (10). Our task of going deep into the controversy has been made easy in view of the two decisions of the Supreme Court which directly cover the controversy in hand. (11). First, we may reproduce Sections 163 A and 166 of the M.V. Act. The said sections read thus: "163A. Special provisions as to payment of compensation on structured formula basis.(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. Explanation. For the purposes of this sub-section, permanent disability shall have the same meaning and extent as in the Workmens Compensation Act,1923 (8 of 1923). Explanation. For the purposes of this sub-section, permanent disability shall have the same meaning and extent as in the Workmens Compensation Act,1923 (8 of 1923). (2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule." 166. Application for compensation - (1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of Section 165 may be made- (a) by the person who has sustained the injury; or (b) by the owner of the property; or (c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or (d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be: Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application. (2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed: Provided that where no claim for compensation under Section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant. (3) *** (4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act." (12). (3) *** (4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act." (12). The two Judge Bench of the Supreme Court in a group of matters being Civil Appeal No. 2568/2001 - Oriental Insurance Company Limited vs. Hansrajbhai V. Kodala and others and others connected matters was seized with the question as to whether the compensation payable under Section 163 A of the Motor Vehicles Act, 1988 as per the structured formula was in addition or in the alternative to the determination of compensation on the principle of fault liability, after following the procedure prescribed under the Act. This is exactly the issue before us. (13). The Supreme Court referred to Sections 140, 161, 163-A and 168 of the M.V. Act and in paragraph 22 of the report recorded its conclusion thus: "22. In the result, the contention of the claimants that right to get compensation under Section 163A is additional to claim compensation on no fault liability is rejected for the following reasons:- (1) There is no specific provision in the Act to the effect that such compensation is in addition to the compensation payable under the Act. Wherever the Legislature wanted to provide additional compensation, it has done so. (Section 140 and 141). (2) In case where compensation is paid on no fault liability under Sections 140 and 161 in case of hit and run motor accidents, the Legislature has provided adjustment or refund of the said compensation in case where compensation is determined and payable under the award on the basis of fault liability under Section 168 of the Act. There is no such procedure for refund or adjustment of compensation paid where the compensation is paid under Section 163A. (3) The words "under any other law for the time being in force would certainly have different meaning from the words under this Act or under any other provision of this Act." (4) In view of the non-obstante clause notwithstanding anything contained in this Act the provisions of Section 163A would exclude determination of compensation on the principle of fault liability. (5) The procedure of giving compensation under Section 163A is inconsistent with the procedure prescribed for awarding compensation on fault liability. (5) The procedure of giving compensation under Section 163A is inconsistent with the procedure prescribed for awarding compensation on fault liability. Under Section 163A compensation is awarded without proof of any fault while for getting compensation on the basis of fault liability claimant is required to prove wrongful act, neglect or default of the owner of the vehicle or vehicles concerned. (6) Award of compensation under Section 163A is on predetermined formula for payment of compensation to road accident victims and that formula itself is based on criteria similar to determining the compensation under Section 168. The object was to avoid delay in determination of compensation." (14). The correctness of the aforesaid judgment in the case of Kodala was put in issue before the Supreme Court in the case of Deepal Girishbhai Soni and others vs. United India Insurance Company Limited, Baroda. The matter, thus, was referred to a three Judge Bench of the Supreme Court. The judgment of the three Judge Bench in the case of Deepal Girishbhai Soni and others is reported in (2004) 5 SCC 385 = (RLW 2004(2) SC 252). The three Judge Bench surveyed the relevant statutory provisions contained in M.V. Act, particularly Sections 140, 141, 142, 163A, 163B, 166 and 168. On analysis of the statutory provisions, the three Judge Bench of the Supreme Court held that Kodalas case was rightly decided. The Bench, however, did not agree with the finding in Kodalas case that if a person invokes the provisions of Section 163A, annual income of Rs. 40]000/- per annum shall be treated as a cap. The Larger Bench held that the proceedings under Section 163A being a social security provision, providing for a distinct scheme, only those whose annual income is up to Rs. 40]000/- can take the benefit thereof and all other claim are required to be determined in terms of Chapter XII of the Act. (15). The Supreme Court in Deepal Girishbhai Soni authoritatively pronounced that the remedy for payment of compensation both under Section 163A and 166 was final and independent of each other; the claimant cannot pursue his remedies under Sections 163A and 166 simultaneously. One, thus, most opt/elect to go either for a proceeding under Section 163 A or under Section 166 but not under both. This is what the Bench held in paragraphs 57, 59, 60, 61, 62, 63 and 66 thus: "57. One, thus, most opt/elect to go either for a proceeding under Section 163 A or under Section 166 but not under both. This is what the Bench held in paragraphs 57, 59, 60, 61, 62, 63 and 66 thus: "57. We, therefore, are of the opinion that remedy for payment of compensation both under Sections 163-A and 166 being final and independent of each other as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. One, thus, must opt/elect to go either for a proceeding under Section 163-A or under Section 166 of the Act, but not under both. 59. The question may be considered from different angles. As for example, if in the proceedings under Section 166 of the Act, after obtaining compensation under Section 163-A, the awarded fails to prove that the accident took place owing to negligence on the part of the driver or if it found as of fact that the deceased or the victim himself was responsible therefor as a consequence whereto the Tribunal refuses to grant any compensation; would it be within its jurisdiction to direct refund either in whole or in part the amount of compensation already paid on the basis of structured formula? Furthermore, if in a case the Tribunal upon considering the relevant materials comes to the conclusion that no case has been made out for awarding the compensation under Section 166 of the Act, would it be at liberty to award compensation in terms of Section 163-A thereof? 60. The answer to both the aforementioned questions must be rendered in the negative. In other words, the question of adjustment or refund will invariably arise in the event if it is held that the amount of compensation paid in the proceedings under Section 163-A of the Act is interim in nature. 61. 60. The answer to both the aforementioned questions must be rendered in the negative. In other words, the question of adjustment or refund will invariably arise in the event if it is held that the amount of compensation paid in the proceedings under Section 163-A of the Act is interim in nature. 61. It is, therefore, evident that whenever the Parliament intended to provide for adjustment or refund of the compensation payable on the basis of no-fault liability, as for example, Sections 140 and 161 in case of hit and run motor accident, from the amount of compensation payable under the award on the basis of fault liability under Section 168 of the Act, the same has expressly been provided for and having regard to the fact that no such procedure for refund or adjustment of compensation has been provided for in relation to the proceedings under Section 163-A of the Act, it must be held that the scheme of the provisions under Sections 163-A and 166 are distinct and separate in nature. 62. It is also not of much relevance that in terms of Section 140 of the Act, the owner of the vehicle has been fastened with the statutory liability and in Section 163-A thereof both the owner as also his authorised insurer has been made so liable. 63. In Sub-section (5) of Section 140 of the Act the expression "also" has been used which is indicative of the fact that the owner of the vehicle would be additionally liable to pay compensation under any other law for the time being in force. Proviso appended to Sub-Section (5) of Section 140 states that the amount of compensation payable under any other law for the time being in force is to be reduced from the amount of the compensation payable under Sub-section (2) thereof or under Section 163-A of the Act. Right to claim compensation under Section 140, having regard to the provisions contained in Section 141 is in addition to any other right to claim compensation on the principle of fault liability. Such a provision does not exist in Section 163-A. If no amount is payable under the fault liability or the compensation which may be received from any other law, no refund of the amount received by the claimant under Section 140 is postulated in the Scheme. Such a provision does not exist in Section 163-A. If no amount is payable under the fault liability or the compensation which may be received from any other law, no refund of the amount received by the claimant under Section 140 is postulated in the Scheme. Section 163-A, on the other hand, nowhere provides that the payment of compensation of no-fault liability in terms of the structured formula is in addition to the liability to pay compensation in accordance with the right to get compensation on the principle of fault liability. It is also not correct to contend that the expression ``any other law for the time being in force" used in Section 140(5) would include any other provisions of the Motor Vehicles Act. Had the intention of the Parliament been to include the other provisions of Motor Vehicles Act within the meaning of the expression "any other law for the time being in force", it could have said so expressly. The very fact that the Parliament has chosen to use the expression "any other law", the same, in our considered opinion, would mean a law other than the provisions of the Motor Vehicles Act. The proviso appended to Sub-Section (5) of Section 140 of the Act is required to be given a purposive meaning. ........... 66. We may notice that Section 167 of the Act provides that where death of, or bodily injury to, any person gives rise to claim of compensation under the Act and also under the Workmens Compensation Act, 1923, he cannot claim compensation under both the Acts. The Motor Vehicles Act contains different expressions as, for example, "under the provision of the Act," "provisions of this Act", "under any other provisions of this Act" or "any other law or otherwise." In Section 163-A, the expression "notwithstanding anything contained in this Act or in any other law for the time being in force" has been used, which goes to show that the Parliament intended to insert a non-obstante clause of wide nature which would mean that the provisions of Section 163-A would apply despite the contrary provisions existing in the said Act or any other law for the time being in force. Section 163-A of the Act covers cases where even negligence is on the part of the victim. Section 163-A of the Act covers cases where even negligence is on the part of the victim. It is by way of an exception to Section 166 and the concept of social justice has been duly taken care of." (16). In the light of the legal position exposited by the Supreme Court in Kodalas case and reiterated in Deepal Girishbhai Soni, we do not deem it necessary to have a fresh look at the matter; it need not be since the answer to the questions referred by the Single Judge can be found from the two decisions of the Supreme Court referred to hereinabove. (17). We answer thus: Re : Question (One) We hold that the award passed by the Tribunal under Section 163A of Chapter XI of the M.V. Act under structured formula is a final award and once that award has been passed, no further award under Chapter XII of the M.V. Act could be passed by the Tribunal. Re: Question (Two) Our answer to question No. 1 answers question No. 2 as well. Re: Question (Three) We hold, as we must, that the provisions contained in Sections 163A and 166 of the M.V. Act provide for two different modes but the two modes cannot simultaneously be invoked by the claimants. The claimants must opt/elect to go either for a proceeding under Section 163A or under Section 166 of the M.V. Act but not under both. The award under Section 163 A is final and cannot be described as `interim and no proceeding for compensation under Section 166 can be undertaken once the award is declared under Section 163A. Re: Question (Four) The judgment of this Court in the case of Oriental Insurance Company Limited vs. Nathuram & Others - 1999 WLC (Raj.) UC 185 does not lay down the correct law and is over-ruled. (18). The appeal shall now be posted before the Single Judge for its disposal accordingly.