Delhi High Court
Iffco Tokio General Insurance Co. ... vs Nisha Bai Arvind Devedekar & Ors on 10 April, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 10th April, 2012
+ MAC.APP. 384/2009
IFFCO TOKIO GENERAL INSURANCE CO. LTD.
..... Appellant
Through: Ms. Shantha Devi Raman,
Advocate
versus
NISHA BAI ARVIND DEVEDEKAR & ORS...... Respondents
Through: Nemo.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appeal is for reduction of compensation of ` 10,18,000/-
awarded for the death of Dewadekar Arvind who died in a
motor accident which occurred on 21.07.2007.
2. Although the Claim Petition was filed under Section 166 of the
Motor Vehicles Act (the Act), the Motor Accident Claims
Tribunal (the Claims Tribunal) converted the same under
Section 163-A of the Act to grant relief to the Respondents (the
Claimants) as negligence on the part of the driver of the
offending vehicle DL-6CG-7842 was not proved.
3. It is urged by the learned counsel for the Appellant that in a
Petition filed under Section 163-A of the Motor Vehicles Act,
the compensation has to be awarded as per the structured
formula given in the Second Schedule and there is a cap of `
40,000/- in such cases.
4. I am supported in this view by the reports of the Supreme Court
in Oriental Insurance Company v. Hansrajbhai v. Kodala,
(2001) 5 SCC 175, Deepal Girishbhai Soni v. United India
Insurance Company Limited, (2004) 5 SCC 385 and Oriental
Insurance Company Limited v. Meena Variyal (2007) 5 SCC
428.
5. In Oriental Insurance Company v. Hansrajbhai v. Kodala
(supra), it was held as under:
"15. In this context if we refer to the Review
Committee's Report, the reason for enacting Section
163-A is to give earliest relief to the victims of the motor
vehicle accidents. The Committee observed that
determination of cases takes a long time and, therefore,
under a system of structural compensation, the
compensation that is payable for different classes of
cases depending upon the age of the deceased, the
monthly income at the time of death, the earning
potential in the case of a minor, loss of income on
account of loss of limb etc. can be notified and the
affected party can then have option of their accepting
'lump sum' compensation under the Scheme of
structural compensation or of pursuing his claim
through the normal channels. The Report of the Review
Committee was considered by the State Governments
and comments were notified. Thereafter, the Transport
Development Council made suggestions for providing
adequate compensation to victims of road accidents
without going into long drawn procedure. As per the
objects and reasons, it is a new pre-determined formula
for payment of compensation to road accidents victims
on the basis of age/income, which is more liberal and
rational. On the basis of the said recommendation after
considering the Report of the Transport Development
Council, the Bill was introduced with 'a new pre-
determined formula for payment of compensation to
road accident victims on the basis of age/income, which
is more liberal and rational', i.e. Section 163-A. It is
also apparent that compensation payable under Section
163-A is almost based on relevant criteria for
determining the compensation such as annual income,
age of the victim and multiplier to be applied. In
addition to the figure which is arrived at on the basis of
said criteria, the Schedule also provides that amount of
compensation shall not be less than Rs.50,000/-. It
provides for fixed amount of general damage in case of
death such as (1) Rs.2000/- for funeral expenses (2)
Rs.5000/- for loss of consortium, if beneficiary is the
spouse (3) Rs.2400/- for loss of estate (4) for medical
expenses supported by the bills, voucher not exceeding
Rs.15000/-. Similarly, for disability in a non-fatal
accident Para 5 of the Schedule provides for
determination of compensation on the basis of
permanent disability. Para 6 provides for notional
income for those who had no income prior to an
accident at Rs.15000/- per annum. There is also
provision for reduction of 1/3rd amount of compensation
on the assumption that the victim would have incurred
the said amount towards maintaining himself had he
been alive. The purpose of this Section and the II
Schedule is to avoid long drawn litigation and delay in
payment of compensation to the victims or his heirs who
are in dire need of relief. If such affected claimant opts
for accepting the lump-sum compensation based on
structured formula, he would get relief at the earliest. It
also gives vital advantage of not pleading or
establishing any wrongful act or neglect or default of the
owner of the offending vehicle or vehicles. This no-fault
liability appears to have been introduced on the basis of
the suggestion of the Law Commission to the effect that
'the expanding notions of social security and social
justice envisage that liability to pay compensation must
be "no-fault liability" and as observed by this Court in
Ramanbhai's case (Supra), "in order to meet to some
extent the responsibility of the society to the deaths and
injuries caused in road accidents." However, this benefit
can be availed of by the claimant only by restricting his
claim on the basis of income at a slab of Rs.40,000/-
which is the highest slab in the II Schedule which
indicates that the legislature wanted to give benefit of
no-fault liability to a certain limit. This would clearly
indicate that the Scheme is in alternative to the
determination of compensation on fault basis under the
Act. The object underlining the said amendment is to
pay compensation without there being any long drawn
litigation on an predetermined formula, which is known
as 'structured formula' basis which itself is based on
relevant criteria for determining compensation and the
procedure of paying compensation after determining the
fault is done away. Compensation amount is paid
without pleading or proof of fault, on the principle of
social justice as a social security measure because of
ever increasing motor vehicles accidents in a 'fast
moving' society. Further, the law before insertion of
Section 163-A was giving limited benefit to the extent
provided under Section 140 for no-fault liability and
determination of compensation amount on fault liability
was taking a long time. That mischief is sought to be
remedied by introducing Section 163-A and the disease
of delay is sought to be cured to a large extent by
affording benefit to the victims on 'structured formula'
basis. Further, if the question of determining
compensation on fault liability is kept alive it would
result in additional litigation and complications in case
claimants fail to establish liability of the owner of the
defaulting vehicles."
6. This Court in New India Assurance Co. Ltd. v. Pitamber & Ors.
(MAC.APP. No.304/2009 decided on 23.01.2012) and Pitamber
& Ors. v. Nirdosh Kumar & Anr. (MAC.APP. 345/2009
decided on 23.01.2012) while relying on the earlier mentioned
judgments of the Supreme Court has taken a view that there is a
cap of `40,000/- on the income if one approaches the Court for
compensation under Section 163-A of the Act.
7. The deceased was aged about 28 years on the date of the
accident. In the circumstances, the loss of dependency on the
income of ` 40,000/- per annum comes to ` 4,79,999/- rounded
off to ` 4,80,000/- (40,000/- x 2/3 x 18).
8. Award of compensation for the loss of love and affection is not
permissible under Section 163-A. Only a sum of `9,500/- can
be awarded under the non-pecuniary heads if one chooses to
approach the Court under Section 163-A of the Act.
9. Thus, the award of compensation towards Loss of Consortium,
Funeral Expenses and Loss to Estate would be `5,000/-,
`2,000/- and `2,500/- respectively.
10. The compensation comes to `4,89,500/-. The overall
compensation is thus reduced from ` 10,18,000/- to `4,89,500/-.
11. The excess amount of ` 5,28,500/- along with the proportionate
interest and the interest accrued, if any, during the pendency of
the Appeal shall be refunded to the Appellant Insurance
Company. Rest of the amount shall be released/held in fixed
deposits in favour of the Respondents (the Claimants) in terms
of the Claims Tribunal's order.
12. The Respondents (the Claimants) shall get interest @ 8% per
annum on the awarded amount from the date of institution of
the Petition till the date of deposit of the compensation in this
Court as granted by the Claims Tribunal.
13. The Appeal is allowed in above terms.
14. The statutory amount of ` 25,000/- shall also be returned to the
Appellant Insurance Company.
15. Pending applications also stand disposed of.
(G.P. MITTAL)
JUDGE
APRIL 10, 2012
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