Delhi High Court

The New India Assurance Co.Ltd. vs Sh.Amru Ram & Ors. on 12 November, 2008

Author: V.B.Gupta

*      HIGH COURT OF DELHI : NEW DELHI

    MAC App. No.533/2008 & CM No.15069/2008

%            Judgment reserved on:24th October, 2008

             Judgment delivered on:12th November, 2008

The New India Assurance Co. Ltd.,
3/10-11, Asaf Road, (Laxman House),
New Delhi                         ....Appellant.

                       Through: Mr. Pankaj Seth, Adv.

                                Versus

1. Sh. Amru Ram, S/o. Sh. Asha Ram,

2. Smt. Shamo, W/o. Sh. Amru Ram,

3. Smt. Kali Bai, W/o. late Sh. Om Parkash,

4. Babli, D/o. late Sh. Om Parkash,
Respondents No.1 to 4 R/o. E-224,
Sanjay Colony, Bhati Mines, Mehrauli,
New Delhi.

5. Sh. Ved Prakash,
R/o. Bharat Mines, Mehrauli,
New Delhi.


6. Sh. Singh Ram,
R/o. Village Bawana,
Delhi                                     ...Respondents.
               Through: Nemo.

Coram:
HON'BLE MR. JUSTICE V.B. GUPTA

1. Whether the Reporters of local papers may


MAC App. No.533/2008                               Page 1 of 14
      be allowed to see the judgment?                  Yes

2. To be referred to Reporter or not?                 Yes

3. Whether the judgment should be reported
   in the Digest?                                     Yes

V.B.Gupta, J.

Present appeal under Section 173 of the Motor

Vehicles Act, 1988 (for short as „Act‟) has been filed

against award dated 19th July, 2008 passed by Ms.

Deepa Sharma, Judge, MACT (for short as „Tribunal‟),

New Delhi.

2. The facts in brief are that deceased Om Parkash

was going to see his truck on 30th August, 1996 at the

site and when he reached at ring road No.8, a vehicle

No.DIL 1507 knocked him down. He sustained fatal

injuries and expired on 31st August, 1996. It is alleged

that the accident has taken place due to rash and

negligent driving of the offending vehicle by its

driver/respondent No.6. The offending vehicle is

owned by respondent No.5 and it is insured with

appellant.

3. Vide impugned judgment, the Tribunal awarded a

sum of Rs.5 lacs as compensation along with 7.5%

interest per annum from the date of filing of the

petition till realization.

4. Insurance Company being aggrieved with this

award has filed the present appeal.

5. It has been contended by the learned counsel for

the appellant that the Tribunal has proceeded with the

wrong assumption that even though respondents no.1

to 4 filed their petition under section 166 of the Act

and lead evidence accordingly, but without making any

prayer for conversion of their petition under section

166 of the Act to section 163A of the Act, the Tribunal

passed the award under section 163A of the Act on its

own, while delivering its finding pertaining to rash and

negligent driving of the offending vehicle, on the part

of respondent no.6 i.e. driver in the happening of the

accident resulting into death of deceased, considering

the Act as a socio-beneficiary legislation.

6. It is evident from the record that initially this

petition was filed under Section 166 read with Section

140 of the Act but the Tribunal has converted the claim

petition into under Section 163A of the Act on its own.

7. Section 163A of the Act reads as under;

"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 or 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 Workmen's 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."

8. In Rukmani Devi v. New India Assurance Co.

Ltd. & Anr., III (2008) ACC 68, this Court has

observed as under;

"The provisions with regard to the no fault liability were inserted having regard to the fact that road accidents in India have reached an alarming proportion and in many of the cases it could be noticed that the victims were being deprived of the compensation amount in the absence of proving rash or negligent driving due to inability in producing any independent witness. To come to the rescue of such victims, earlier Section 140 was brought on the Statute book whereby the provision was made to pay a fixed sum of Rs. 50,000/- (through an amendment by Act 54 of 1994 to substitute the amount of Rs. 25,000/- by Rs. 50,000/-) in respect of the death of any person and a fixed sum of Rs. 25,000/- (through an amendment by Act 54 of 1994 to substitute the amount of Rs. 12,000/- to

Rs. 25,000/-) is payable in respect of the permanent disablement of any person on the principle of no fault liability. This right given under Section 140 of the Motor Vehicles Act was in addition to the right to claim compensation in respect of any such death or permanent disablement under any other provisions of Act or of any other law for the time being in force. Section 163-A was introduced in the Act again by way of a social security scheme. It would be evident from the objects and reasons of the Motor Vehicles (Amendment) Act, 1994 that after the enactment of 1988 Act several representations and suggestions were made by the State Governments, transport operators and members of public in relation to certain provisions thereof and after taking note of the said suggestions made by the various Courts and the difficulties experienced in implementing the various provisions of the Motor Vehicles Act, the Government of India appointed a Review Committee. The Review Committee appointed by the Government in its report made the following recommendations: "The 1988 Act provides for enhanced compensation for hit and run cases as well as for no fault liability cases. It also provides for payment of compensation on proof-of-fault basis to the extent of actual liability incurred which ultimately means an unlimited liability in accident cases. It is found that the determination of compensation takes a long time. According to information available, in Delhi alone there are 11214 claims pending before the Motor Vehicle

Accidents Tribunals, as on 31.3.1990. Proposals have been made from time to time that the finalisation of compensation claims would be greatly facilitated to the advantage of the claimant, the vehicle owner as well as the Insurance Company if a system of structured compensation can be introduced. Under such a system of structured compensation that is payable for different clauses of cases depending upon the age of the deceased, the monthly income at the time of death, the earning potential in the case of the minor, loss of income on account of loss of limb etc., can be notified. The affected party can then have the option of either accepting the lump sum compensation as is notified in that scheme of structured compensation or of pursuing his claim through the normal channels. The General Insurance Company with whom the matter was taken up, is agreeable in principle to a scheme of structured compensation for settlement of claims on "fault liability" in respect of third party liability under Chapter XI of M.V. Act, 1988. They have suggested that the claimants should first file their Claims with Motor Accident Claims Tribunals and then the insurers may be allowed six months‟ time to confirm their prima facie liability subject to the defences available under Motor Vehicles Act, 1988. After such confirmations of prima

facie liability by the insurers the claimants should be required to exercise their option for conciliation under structured compensation formula within a stipulated time."

40. The recommendations of the Review Committee and representations from public were placed before the Transport Development Council for seeking their views pursuant whereto several sections were amended. Section 163A was inserted in the Act to provide for payment of compensation in motor accident cases in accordance with the Second Schedule providing for the structured formula which may be amended by the Central Government from time to time."

9. Section 163B of the Act reads as under;

"163B. Option to file claim in certain cases.

Where a person is entitled to claim compensation under section 140 and section 163A, he shall file the claim under either of the said sections and not under both."

10. The embargo under Section 163B of the Act gives

an option to file claim petition either under Section

140 or under Section 163A of the Act and not under

both the provisions, but no such restriction has been

placed under the Act in choosing either of the two

remedies i.e. under Section 166 of the Act or under

Section 163A of the Act. Section 140 of the Act deals

with grant of interim compensation, but Section 163A

provides for a situation to grant a pre-determined sum

without insisting on a long drawn trial or without proof

of negligence in causing the accident. The said Section

163A was a kind of new mechanism evolved by the

legislature so as to grant quick and efficacious relief to

the victims falling within the specified category, which

was not available to the victims under Section 166 of

the Act.

11. The object of section 163A and the Second

Schedule of the Act is to avoid long-drawn litigation

and to avoid delay in payment of compensation to the

victim or his heirs who needs urgent relief, and

therefore, the Courts have been permitting the

claimants to make application under section 163A of

the Act at any stage of the proceedings, so long as no

order is passed on the application under section 140 of

the Act.

12. Further, the object with which section 163A of the

Act has been inserted and the non-obstant clause with

which sub-section (1) of section 163A of the Act

commences clearly indicate that the legislature did not

intend to prevent the claimant from getting

compensation as per the structured formula merely

because in his original claim petition he had prayed for

compensation on the basis of "fault liability" principle.

There is no prohibition in any provision of the Act

against the claimant praying for compensation as per

the structured formula after his having filed a claim

petition under section 166 of the Act.

13. Remedy for payment of compensation both under

sections 163A and 166 being final and independent of

each other as statutorily provided, a claimant cannot

pursue his remedies there under simultaneously. One

thus, must opt/elect to go either for a proceeding

under section 163A or under section 166 of the Act,

but not under both.

14. Taking a purposive interpretation of Section 163A

of the Act, the clear intendment of the legislation was

to come to the rescue of all those who in the absence

of an evidence are not in a position to file a claim

petition under Section 166 of the Act where death of

the victim or permanent disablement of the victim is

required to be proved by establishing the factum of

negligence involving the offending vehicle resulting in

to causing the accident but under Section 163A, the

requirement of proving the negligence has been

dispensed with.

15. In the present case, the claimants have not

produced any eye witness to prove the factum of rash

and negligent driving on the part of offending vehicle,

and have not been able to prove the income of the

deceased.

16. The Tribunal while passing the award under

section 163A of the Act held as under;

"It is also apparent that it is the duty of the tribunal to keep in mind that petitioners before it are the victims of an act which had happened due to fault of others. Most of the time, they are poor persons. In the present case also the petitioners were the father, mother, widow and son of the deceased who are very poor persons. They are illiterate and are not very well aware of the various provisions of the act. It is also settled provisions of law that filing of a petition under a particular provisions of the Act does not debar the court/tribunal from considering it into another provisions of the Act, keeping in mind the welfare of the petitioner. Since the Act is meant for welfare of the victims of the accident, keeping in view all the facts and circumstances of this case, I consider the present petition u/s. 163A of the MV Act."

17. In Oriental Insurance Co. v. Zarifa and

others, AIR 1995 J & K 81, the Jammu and Kashmir

High Court has observed as under;

"Before concluding, it is also observed that it is a social welfare legislation under which the compensation is provided by way of Award to the people who sustain bodily injuries or get killed in the vehicular accident. These people who sustain injuries or whose kith and kins are

killed, are necessarily to be provided such relief in a short span of time and the procedural technicalities cannot be allowed to defeat the just purpose of the Act, under which such compensation is to be paid to such claimants."

18. In the present case, the claimants have alleged

that deceased was earning Rs.7,000/- per month but

admittedly they have not been able to prove that

income. The Tribunal under these circumstances has

taken the income of the deceased to be Rs.40,000/- per

annum for the purpose of determining the loss of

dependency. Income of Rs.40,000/- per annum taken

by the Tribunal comes to Rs.2,500/- per month. Since

the deceased was aged about 25 years and had large

family to support with, the income of Rs.2,500/- per

month taken by the Tribunal is quite reasonable, since

the minimum wages of a skilled worker during the year