New India Assurance Co. Ltd. vs Rejeshwar Pandey And Ors.
2006 Latest Caselaw 430 Del

JUDGMENT

Sanjiv Khanna, J.

1. New India Assurance Company Limited, the appellant, has filed the present appeal under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act, for short) against award dated 15th May, 2004 passed in Suit No. 41/2003 titled Sudha Devi and Ors. v. Rajeshwar Pandey and Ors.

2. By the impugned award learned Tribunal has awarded compensation of Rs. 5,55,000/- to respondents 4-7 before this Court under Section 163A of the Act.

3. In brief, it was the submission of the appellant insurance company, that the amount awarded was exorbitant and illegal as it exceeds the prescribed limit mentioned in the IInd Schedule of the Act and learned Tribunal should have apportioned the amount as two vehicles were involved in the accident. Some factual inaccuracies in the award were highlighted and it was argued that the learned Tribunal has passed the award under a mistaken and erroneous impression that the appellant insurance company had insured the two wheeler scooter. It was submitted that the appellant insurance company had insured the three wheeler scooter involved in the accident and the insurance company of the two wheeler scooter was not made a party.

4. Section 163A of the Act was enacted and introduced the principle of no fault liability in cases of motor accidents. It is a social security provision under which compensation is required to be paid, on the basis of calculation or a formula prescribed in the IInd Schedule to the Act. Distinction between Section 140, 163A and 166 of the Act has been explained by the Supreme Court in the case of Deepal Girishbhai Soni v. United India Insurance Co. Limited . It was held that Section 163A is based upon the concept of no fault liability and does away with the requirement to prove that the driver of the offending vehicle was guilty of rash and negligent driving. Section 163A of the Act provides for a pre-determined structured formula for payment of compensation to the victims of road accident or the legal heirs of persons who die in a road accident. The formula is based upon the income of the deceased or the person suffering permanent disability and applying a multiplier on the basis of the age and the extent of disability. This provision was enacted as there has been an increase in number of road accidents in India and in some cases it is difficult to prove and establish that rash and negligent driving by the offending vehicle has caused death or injury. More ever, it curtails the length of trial and prevent delay. The claimants recover the amount without fighting a lengthy legal battle.

5. However, the Supreme Court has clarified that Section 163A is applicable where annual income of the deceased or victim does not exceed Rs. 40,000/- per annum and payment of compensation under Section 163A of the Act is in full and final settlement.

6. Distinction between claims under Section 166 and Section 163A of the Act is that the former applies to cases where compensation is claimed on the basis of fault liability and no maximum limit has been prescribed for the compensation payable. In such cases negligence has to be established. Section 163A prescribes a maximum limit and a pre-determined formula for calculation of compensation on the basis of no fault liability. Section 163A is for grant of compensation where annual income of the deceased or victim does not exceed Rs. 40,000/- per annum. A claimant may have option to either go under Section 163A or Section 166 but he cannot be paid compensation under both the provisions or pursue his remedy simultaneously under both the provisions. Thus, Section 163A is a social security provision and would apply even in cases where there is negligence on the part of the victim. Section 163A begins with non-obstante clause and use the expression "notwithstanding anything contained in this Act or any other law for the time being enforced or any instrument having the force of law". Requirements and satisfaction of conditions of other Sections of the Act may not be mandatory to make a claim for compensation under Section 163A of the Act. Under Section 163A of the Act, there is no need to prove negligence.

7. It is admitted case that the deceased, Mr. Bharat Kumar Singh, had met with a road accident on 15th November, 2000 and later on expired. There is a dispute whether Mr. Bharat Kumar Singh was driving a three wheeler scooter or was traveling in the said scooter bearing No. DL-1D 5615. It is the case of the insurance company that Mr. Bharat Kumar Singh was driving the said scooter in a rash and negligent manner, when he met with an accident with a two wheeler scooter. However, it is admitted that the three wheeler scooter was owned by Mr. Rajeshwar Pandey, respondent No. 1, herein and was duly insured with the appellant. As per the insurance policy placed by the appellant on record, the insurance also covered legal liability towards driver, coolies and other employees in connection with the operation, or maintaining or unloading the motor vehicle. Thereof, I do not think it will make any difference whether Mr. Bharat Kumar Singh was driving the said vehicle. Even if it is presumed that Mr. Bharat Kumar Singh was driving the three wheeler vehicle and the accident was caused due to his rash and negligent driving, in view of the decision of the Supreme Court in the case of Deepal Girish Bhai Soni (supra), compensation under Section 163A of the Act is payable.

8. I also do not think that the concept of apportionment applies to Section 163 A of the Act. As already stated above, the said Section begins with a non-obstante clause and in clear terms states that the owner of the motor vehicle or the authorised insurer shall be liable to pay compensation in case of death or permanent disability as per the IInd Schedule. Section 163A is based upon the principle of no fault liability. Another object of Section 163A of the Act is to ensure expeditious determination of cases of claims under the structured scheme without pursuing the claim through normal channel and undergoing a long drawn out legal procedure. The object of IInd Schedule and Section 163A of the Act is to avoid delays and a tedious complicated litigation requiring pleadings and detailed evidence to prove and establish wrongful act, neglect or default on part of a third person. If we bring in the concept of proportionately or apportionment to proceedings under Section 163A of the Act, we will compel the claimants to leave evidence and also prove negligence and comparative faults of the drivers of the respective vehicles involved in the accident. This question of comparative fault will become a relevant and contentious issue determination of which will have to be made in every case after recording lengthy evidence. Such interpretation will be contrary to the concept, object and purpose behind Section 163A of the Act and the language used in the said Section. Compensation under Section 163A of the Act is to be awarded without proof of any fault and without leading evidence to prove wrongful act, negligence or fault of the driver of the vehicle involved in the accident. In case Courts or Tribunal are required to apportion the respective faults of the drivers involved in the accident, it will have to adjudicate, decide and go into these questions, which are required to be determined as in a normal case under Section 166 of the Act.

9. I may refer here to the judgment of the Supreme Court in the case of Kaushnuma Begum and Ors. v. New India Assurance Co. Limited and Ors. wherein the deceased had died after a vehicle had capsized due to bursting of front tire. The Supreme Court noticed that negligence is one of the species of cause of action for making a claim for compensation in respect of accidents but there are other grounds on which a claim for compensation can be based. Judgment in the case of Rylands v. Fletcher (1861-73) All E.R. 1 Rep. was referred to and it was held that though the said rule still continues to apply and is regarded as an acceptable legal proposition, but the rule of strict liability has increasingly found favor in several judgments. I do not, therefore, think that the insurance company can deny its liability or state that it is partly liable and the balance amount not payable on the basis of principle of apportionment or the compensation payable should be proportioned between owner of the two wheeler and the appellant insurance company. I may also mention over here that the grounds available to an insurance company as are clearly specified under Section 149(2) of the Act, unless requisite permission under Section 170 of the Act has been obtained.

10. In view of the findings given above, the erroneous and wrong facts stated in the impugned award that the appellant insurance company was the insurer of the two wheeler scooter is inconsequential and not material. The liability of the insurance company under Section 163A of the Act cannot be denied and it is liable to make payment of the compensation.

11. I also find that the learned Tribunal has calculated the total income of the deceased at Rs. 35,376/- per annum which is less than Rs. 40,000/- as mentioned in the IInd Schedule. There is also no dispute that the deceased was 40 years old at the time of his death and, therefore, as per the IInd Schedule, the multiplier applicable is 15 or 16. However, the learned Tribunal has applied multiplier of 15. Learned Tribunal has also noticed that the deceased had left behind the widow and three minor sons. I do not think that learned Tribunal has erred in applying multiplier of 15 as while awarding compensation claimed under Section 163A of the Act, IInd Schedule has been followed. In view of above, I uphold the compensation awarded to respondents 4 to 7.

12. The respondents 2 to 3 have also filed cross-objections. The respondent No. 3 was the owner of the two wheeler scooter and the respondent No. 2 was the driver of the said two wheeler scooter. In the cross-objections they have made allegations that late Mr. Bharat Kumar Singh was driving the said three wheeler scooter rashly, negligently in a careless manner and at a very fast speed, when the said three wheeler turned turtle and Mr. Bharat Kumar Singh expired. It is alleged that the respondent No. 2 had suffered grievous injuries due to said accident. Reliance is also placed upon the FIR and other reports and the result of the police investigation.

13. As per the impugned award, the insurance company i.e. appellant has been directed to make the payment of compensation to the respondents 4 to 7 herein. I have already upheld the award passed by the learned Tribunal. In view thereof, I see no reason to decide the cross-objections. However, it is clarified that it will be the liability of the appellant insurance company to make payment of the compensation to the respondents 4 to 7.

14. In view of the above, the appeal filed by the insurance company is dismissed. The compensation awarded will be paid in terms of the impugned award. In the facts and circumstances of the present case there will be no order as to costs.