National Insurance Co. Ltd. vs Kaku Devi & Ors.
2012 Latest Caselaw 184 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Decided on: 10th January, 2012
+       MAC APP. 280/2009

        NATIONAL INSURANCE CO. LTD.      ..... Appellant
                     Through: Mr. A.K. Soni, Advocate

                     versus

        KAKU DEVI & ORS                    ..... Respondents
                     Through:           Nemo.

        CORAM:
        HON'BLE MR. JUSTICE G.P.MITTAL

                              JUDGMENT

G. P. MITTAL, J. (ORAL)

1. The Appellant National Insurance Company Limited impugns the judgment dated 18.02.2009 passed by the Motor Accident Claims Tribunal (The Tribunal) whereby the compensation of ` 7,61,000/- was awarded for the death of Babu Lal, who was aged about 30 years on the date of the accident.

2. The Petition was filed under Section 163-A of the Motor Vehicles Act (the Act) for grant of compensation on the basis of structured formula as given in the second Schedule to the Act. The Tribunal relied on Ved Prakash & Ors. v. Gurmit Singh & Ors., 1992 ACJ 1147 and deducted one-third of the deceased's income to assess the loss of dependency.

3. Learned counsel for the Appellant Insurance Company argues that where a petition is filed under Section 163-A of the Act, the Tribunal was bound to grant compensation in accordance with the structured formula including the amount under the head of non pecuniary damages. The Tribunal erred in taking the deceased's income to be ` 41,640/- per annum while there is a limit of ` 40,000/- to a Claimant who approaches the Tribunal for grant of compensation under Section 163-A of the Act.

4. It is well settled that petitions filed under Section 163-A and 166 of the Act are two alternative remedies. If a person wants to claim compensation under structured formula without proving negligence on the part of the driver of the offending vehicle, there is a cap of `40,000/- for the annual income. If a person wants to claim a compensation of higher income he has to approach the Court under Section 166 of the Act.

5. In Deepal Girishbhai Soni & Ors. v. United India Insurance Co.

Limited, Baroda, AIR 2004 SC 2107, it was held as under:-

"67. We, therefore, are of the opinion that Oriental Insurance Co. Ltd. v. Hansrajbhai Kodale, AIR 2001 SC 1832 has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163-A, the annual income of Rs.40,000/- per annual shall be treated as a cap. In our opinion, the proceeding under Section 163- A being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs.40,000/- can take the benefit thereof. All

other claims are required to be determined in terms of Chapter XII of the Act".

6. The Respondents/Claimants themselves had given the deceased's income to be ` 40,000/- per annum which is near the income of a unskilled worker on the basis of the minimum wages.

7. The deductions and non pecuniary damages were also required to be made in accordance with the second Schedule. The compensation on the basis of the structured formula is reassessed as ` 4,53,333/- (i.e. ` 40,000/- minus one-third x 17).

8. The Tribunal erred in granting a sum of `1,00,000/- towards loss of love and affection and ` 10,000/- towards loss of estate.

9. In addition, the Respondents Claimants were entitled to a sum of `5,000/- towards loss of consortium, `2,000/- towards funeral expenses and `2,500/- towards loss of estate under Section 163- A of the Act. The overall compensation comes to `4,62,833/-.

10. The amount of compensation shall carry interest @ 7.5% per annum from the date of filing of the petition till the date of deposit. 40% of the award amount shall be payable to Respondent No.1 Smt. Kaku Devi. 8% to Respondents No. 2 to 6 and 10% each to Respondents No.7 and 8 along with the proportionate interest.

11. The amount awarded shall be held in fixed deposits in UCO Bank, Delhi High Court Branch, New Delhi and shall be released as per the Tribunal's order.

12. The excess amount deposited along with the interest earned, if any, during the pendency of the Appeal, as also the statutory amount of `25,000/- if deposited, shall be returned to the Appellant Insurance Company.

13. The Appeal is allowed in above terms.

(G.P. MITTAL) JUDGE JANUARY, 10, 2012 vk