Delhi High Court
Tata A.I.G. General Insurance Co. ... vs U.P. Roadways & Ors. on 16 March, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 23rd February, 2012
Pronounced on: 16th March, 2012
+ MAC. APP. No.81/2007
TATA A.I.G. GENERAL INSURANCE CO. LTD.
..... Appellant
Through: Ms. Anjalli Bansal, Advocate
Versus
U.P. ROADWAYS & ORS. ..... Respondents
Through: Ms. Garima Prashad with Mr.
Shadab Khan & Mr. Pradeep
Kumar, Advocates for the
Respondent No.1.
Mr. S.L. Gupta with Mr. Ram
Ashray, Advocates for the
Respondents No.2 to 7.
+ MAC. APP. No.749/2011
U.P. ROADWAYS & ORS. ..... Appellants
Through Ms. Garima Prashad with
Mr. Shadab Khan &
Mr. Pradeep Kumar, Advocates
for the Appellant No.1.
Mr. S.L. Gupta with Mr. Ram
Ashray, Advocates for
Appellant Nos.2 to 8.
Versus
TATA A.I.G. GENERAL INSURANCE CO. LTD.
..... Respondent
MAC. APP. Nos. 81/2007 & 749/2011 Page 1 of 14
Through: Ms. Anjalli Bansal, Advocate
for the Respondent Insurance
Company
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. These are two Cross-Appeals arising out of a common judgment
dated 08.09.2006 passed by the Motor Accident Claims
Tribunal (the Claims Tribunal) in Suit No.1/2003.
2. On 31.01.2003, the deceased Bhagat Singh was proceeding in a
Maruti Van No.DL-2C-R-4847 from Delhi to Sikandrabad. In
the Claim Petition, it was averred that bus bearing No.UP-14-
D-8876 was parked on the road in a negligent manner so as to
endanger human life or personal safety of others without
placing any red flag, red light etc. The deceased swerved his
vehicle towards left side in order to save himself from a vehicle
coming from the opposite direction and dashed against the
stationary bus resulting into injuries which proved fatal. The
compensation of `9 lakhs was claimed by the legal
representatives of the deceased Bhagat Singh.
3. On appreciation of evidence, the Claims Tribunal reached a
conclusion that the accident was caused on a very wide road.
The bus was parked on the kuchcha portion of the road. Thus,
the Claims Tribunal opined that the accident was caused only
on account of the rash and negligent driving of the Maruti van
by the deceased himself. It was held that there was no liability
on the part of the driver or owner of the U.P. Roadways to pay
any compensation. The compensation of `50,000/- on the basis
of no fault liability was ordered to be paid by the owners of
both the vehicles. The liability was thus fastened on the
Appellant Tata A.I.G. General Insurance Co. Ltd., who was the
insurer of the Maruti Van, to pay 50% of the compensation.
Rest 50% was to be paid by the U.P. Roadways, the owner of
bus No. UP-14-D-8876.
4. In MAC APP No.81/2007, the contention raised is that since the
driver of the Maruti Van (the owner's son) was not a third
party, the Appellant Insurance Company was liable to pay any
compensation including the 50% of the compensation
mentioned earlier on the basis of no fault liability under
Section 140 of the Act.
5. In the Cross-Objections filed by the Claimants in MAC APP
No. 81/2007, the finding on negligence is not disputed. It is,
however, averred that the Claim Petition should be considered
under Section 163-A of the Motor Vehicles Act to award
compensation without proving any negligence on the part of
the driver of the Maruti Van and U.P. Roadways should be
made liable to pay the compensation on the part of its driver
without any proof of negligence.
6. It is not disputed as also it is well settled that liability of the
Insurance Company is either statutory or contractual. Where
the owner or his representative drives a vehicle and himself
suffered injury or death, there is no statutory liability of the
Insurance Company to pay the compensation in the case of any
accident, except where the vehicle is driven by a paid driver
and liability to pay the compensation is covered under the
Workmen Compensation Act. (New India Assurance Company
Ltd. v. Sadanand Mukhi & Ors., 2009(1) Scale 252, Ningamma
& Anr. v. United India Insurance Company Limited, (2009) 13
SCC 710).
7. The question for consideration is whether the Claim Petition
filed and decided under Section 166 of the Motor Vehicles Act
can be converted into one under Section 163-A so as to claim
compensation without proving any negligence on the part of
the driver of the vehicle involved in the accident. There is no
prohibition in law to convert the said Petition unless some
prejudice is shown by the opposite party, in my view, a Claim
Petition filed under Section 166 can be converted to one under
Section 163-A of the Act. The question for consideration is
whether the Claimants(Respondents No.2 to 8) can claim
compensation from the owner/driver of the Bus No. UP-14-D-
8876 under Section 163-A of the Act. The case is covered by
the judgment of the Supreme Court in National Insurance
Company Limited v. Sinitha & Ors., 2011 (13) SCALE 84.
Relying thereon, this Court in MAC APP No. 506/2011 titled
„Usha Sharma & Anr. v. Adarsh Kumar & Anr.' decided on
19th January, 2012, held as under:
"10. There is another aspect of the case. A Claim
under Section 163-A of the Act can be maintained by a
person without proving any "wrongful act", "neglect"
or "default" of the driver of the vehicle who caused the
accident. But at the same time, if the person claiming
the compensation himself is responsible for that
accident or in other words, where the accident
occurred because of the wrongful act, neglect or default
of the Claimant or the deceased, the owner of the
vehicle would be entitled to escape the liability under
Section 163-A of the Act.
11. The distinction between award of
compensation on the basis of „liability without fault‟
under Section 140 and payment of compensation under
Section 163-A of the Act was drawn by the Supreme
Court in National Insurance Company Limited v.
Sinitha & Ors., 2011 (13) SCALE 84. I extract Paras
13, 14, 15 and 16 of the report hereunder for ready
reference:-
"13. In the second limb of the present
consideration, it is necessary to carry out a
comparison between Sections 140 and 163-A of the
Act. For this, Section 163-A of the Act is being
extracted hereunder:
Section 163-A. 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 authorized
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.
A perusal of Section 163(A) reveals that Sub-
section (2) thereof is in pari materia with Sub-
section (3) of Section 140. In other words, just as in
Section 140 of the Act, so also under Section 163-A
of the Act, it is not essential for a claimant seeking
compensation, to "plead or establish", that the
accident out of which the claim arises suffers from
"wrongful act" or "neglect" or "default" of the
offending vehicle. But then, there is no equivalent
of Sub-section (4) of Section 140 in Section 163-A of
the Act. Whereas, under Sub-section (4) of Section
140, there is a specific bar, whereby the concerned
party (owner or insurance company) is precluded
from defeating a claim raised under Section 140 of
the Act, by "pleading and establishing", "wrongful
act", "neglect" or "default", there is no such or
similar prohibiting clause in Section 163-A of the
Act. The additional negative bar, precluding the
defense from defeating a claim for reasons of a
"fault" ("wrongful act", "neglect" or "default"), as
has been expressly incorporated in Section 140 of
the Act (through Sub-section (4) thereof), having
not been embodied in Section 163-A of the Act, has
to have a bearing on the interpretation of Section
163-A of the Act. In our considered view the
legislature designedly included the negative clause
through sub-section (4) in Section 140, yet
consciously did not include the same in the scheme
of Section 163-A of the Act. The legislature must
have refrained from providing such a negative
clause in Section 163-A intentionally and
purposefully. In fact, the presence of Sub-section
(4) in Section 140, and the absence of a similar
provision in Section 163-A, in our view, leaves no
room for any doubt, that the only object of the
Legislature in doing so was, that the legislature
desired to afford liberty to the defense to defeat a
claim for compensation raised under Section 163-A
of the Act, by pleading and establishing "wrongful
act", "neglect" or "default". Thus, in our view, it is
open to a concerned party (owner or insurer) to
defeat a claim raised under Section 163A of the
Act, by pleading and establishing anyone of the
three "faults", namely, "wrongful act", "neglect" or
"default". But for the above reason, we find no
plausible logic in the wisdom of the legislature, for
providing an additional negative bar precluding
the defense from defeating a claim for
compensation in Section 140 of the Act, and in
avoiding to include a similar negative bar in
Section 163A of the Act. The object for
incorporating Sub-section (2) in Section 163A of
the Act is, that the burden of pleading and
establishing proof of "wrongful act", "neglect" or
"default" would not rest on the shoulders of the
claimant. The absence of a provision similar to
Sub-section (4) of Section 140 of the Act from
Section 163A of the Act, is for shifting the onus of
proof on the grounds of "wrongful act", "neglect"
or "default" onto the shoulders of the defense
(owner or the insurance company). A claim which
can be defeated on the basis of any of the aforesaid
considerations, regulated under the "fault" liability
principle. We have no hesitation therefore to
conclude, that Section 163A of the Act is founded
on the "fault" liability principle.
14. There is also another reason, which supports
the aforesaid conclusion. Section 140 of the Act
falls in Chapter X of the Motor Vehicles Act, 1988.
Chapter X of the Motor Vehicles Act, 1988 is titled
as "Liability Without Fault in Certain Cases". The
title of the chapter in which Section 140 falls,
leaves no room for any doubt, that the provisions
under the chapter have a reference to liability "...
without fault ...", i.e., are founded under the "no-
fault" liability principle. It would, however, be
pertinent to mention, that Section 163A of the Act,
does not find place in Chapter X of the Act. Section
163A falls in Chapter XI which has the title
"Insurance of Motor Vehicles Against Third Party
Risks". The Motor Vehicles Act, 1988 came into
force with effect from 1.7.1989 (i.e., the date on
which it was published in the Gazette of India
Extraordinary Part II). Section 140 of the Act was
included in the original enactment under chapter
X. As against the aforesaid, Section 163A of the Act
was inserted therein with effect from 14.11.1994
by way of an amendment. Had it been the intention
of the legislature to provide for another provision
(besides Section 140 of the Act), under the "no-
fault" liability principle, it would have rationally
added the same under Chapter X of the Act. Only
because it was not meant to fall within the ambit of
the title of Chapter X of the Act "Liability Without
Fault in Certain Cases", it was purposefully and
designedly not included thereunder.
15. The heading of Section 163A also needs a
special mention. It reads, "Special Provisions as to
Payment of Compensation on Structured Formula
Basis". It is abundantly clear that Section 163A,
introduced a different scheme for expeditious
determination of accident claims. Expeditious
determination would have reference to a provision
wherein litigation was hitherto before (before the
insertion of Section 163A of the Act) being long
drawn. The only such situation (before the
insertion of Section 163A of the Act) wherein the
litigation was long drawn was under Chapter XII
of the Act. Since the provisions under Chapter XII
are structured under the "fault" liability principle,
its alternative would also inferentially be founded
under the same principle. Section 163A of the Act,
catered to shortening the length of litigation, by
introducing a scheme regulated by a pre-
structured formula to evaluate compensation. It
provided for some short-cuts, as for instance, only
proof of age and income, need to be established by
the claimant to determine the compensation in
case of death. There is also not much discretion in
the determination of other damages, the limits
whereof are also provided for. All in all, one
cannot lose sight of the fact that claims made
under Section 163A can result in substantial
compensation. When taken together the liability
may be huge. It is difficult to accept, that the
legislature would fasten such a prodigious liability
under the "no-fault" liability principle, without
reference to the "fault" grounds. When
compensation is high, it is legitimate that the
insurance company is not fastened with liability
when the offending vehicle suffered a "fault"
("wrongful act", "neglect", or "defect") under a
valid Act only policy. Even the instant process of
reasoning, leads to the inference, that Section 163A
of the Act is founded under the "fault" liability
principle.
16. At the instant juncture, it is also necessary to
reiterate a conclusion already drawn above,
namely, that Section 163A of the Act has an
overriding effect on all other provisions of the
Motor Vehicles Act, 1988. Stated in other words,
none of the provisions of the Motor Vehicles Act
which is in conflict with Section 163A of the Act
will negate the mandate contained therein (in
Section 163A of the Act). Therefore, no matter
what, Section 163A of the Act shall stand on its
own, without being diluted by any provision.
Furthermore, in the course of our determination
including the inferences and conclusions drawn by
us from the judgment of this Court in Oriental
Insurance Company Limited v. Hansrajbhai v.
Kodala, (2001) 5 SCC 175, as also, the statutory
provisions dealt with by this Court in its aforesaid
determination, we are of the view, that there is no
basis for inferring that Section 163A of the Act is
founded under the "no-fault" liability principle.
Additionally, we have concluded herein above, that
on the conjoint reading of Sections 140 and 163A,
the legislative intent is clear, namely, that a claim
for compensation raised under Section 163A of the
Act, need not be based on pleadings or proof at the
hands of the claimants showing absence of
"wrongful act", being "neglect" or "default". But
that, is not sufficient to determine that the
provision falls under the "fault" liability principle.
To decide whether a provision is governed by the
"fault" liability principle the converse has also to
be established, i.e., whether a claim raised
thereunder can be defeated by the concerned party
(owner or insurance company) by pleading and
proving "wrongful act", "neglect" or "default".
From the preceding paragraphs (commencing
from paragraph 12), we have no hesitation in
concluding, that it is open to the owner or
insurance company, as the case may be, to defeat a
claim under Section 163A of the Act by pleading
and establishing through cogent evidence a "fault"
ground ("wrongful act" or "neglect" or "default").
It is, therefore, doubtless, that Section 163A of the
Act is founded under the "fault" liability principle.
To this effect, we accept the contention advanced
at the hands of the Learned Counsel for the
Petitioner."
12. In this case, the accident took place on
account of the neglect or default of deceased Sunny
himself. His legal representatives, therefore, would not
be entitled to the grant of compensation from the owner
under Section 163-A of the Act also. Similar view was
taken by the Punjab and Haryana High Court in FAO
No.1413/2000 titled General Manager, Chandigarh
Transport Undertaking-I, Chandigarh & Anr v.
Kanwaljit Kaur & Ors., decided on 09.05.2011."
8. Thus, there is no manner of doubt that the accident having been
caused on account of the deceased's own negligence, the
compensation under Section 163-A of the Act is not
permissible.
9. Now the question for consideration is whether the compensation
awarded under Section 140 of the Act on the basis of no fault
liability is to be paid by the owner of bus No. UP-14-D-8876
i.e. the First Respondent or by the owner and insurer of Maruti
Van No.DL-2C-R-4847. Section 140 of the Motor Vehicles Act
is extracted hereunder:
"140. Liability to pay compensation in certain cases on
the principle of no fault. - (1) Where death or
permanent disablement of any person has resulted from
an accident arising out of the use of a motor vehicle or
motor vehicles, the owner of the vehicles shall, or, as the
case may be, the owners of the vehicles shall, jointly and
severally, be liable to pay compensation in respect of
such death or disablement in accordance with the
provisions of this section.
(2) The amount of compensation which shall be payable
under sub-section (1) in respect of the death of any
person shall be a fixed sum of [fifty thousand rupees] and
the amount of compensation payable under that sub-
section in respect of the permanent disablement of any
person shall be a fixed sum of [twenty - five thousand
rupees].
(3) In any claim for compensation under sub-section (1),
the claimant shall not be required to plead and establish
that the death or permanent disablement in respect of
which the claim has been made was due to any wrongful
act, neglect or default of the owner or owners of the
vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall
not be defeated by reason of any wrongful act, neglect or
default of the person in respect of whose death or
permanent disablement the claim has been made nor
shall the quantum of compensation recoverable in
respect of such death or permanent disablement be
reduced on the basis of the share of such person in the
responsibility for such death or permanent disablement.
(5) Notwithstanding anything contained in sub-section
(2) regarding death or bodily injury to any person, for
which the owner of the vehicle is liable to give
compensation for relief, he is also liable to pay
compensation under any other law for the time being in
force :
Provided that the amount of such compensation to be
given under any other law shall be reduced from the
amount of compensation payable under this section or
under section 163 - A]."
10. Compensation under Section 140 of the Act is not to be claimed
by the victim from himself. Thus, even if an accident takes
place because of negligence or default of the victim himself, the
owner of the other vehicle involved in the accident is liable to
pay the compensation. Thus, the entire compensation of
`50,000/- was liable to be paid by U.P. Roadways through its
Manager/Incharge, Sikandrabad Depot, District Bulandshahar,
U.P. along with interest @ 7.5% from the date of filing of the
petition till the date of deposit.
11. The compensation deposited by the Appellant Tata A.I.G.
General Insurance Co. Ltd. shall be refunded to it along with
interest accrued during the pendency of the Appeal. The U.P.
Roadways, the First Respondent is liable to pay the entire
compensation of `50,000/- under Section 140 of the Act which
shall also be liable to pay interest @ 7.5% till the date of
deposit in this Court. The deficiency in the amount paid shall
be made up and deposited with the Registrar General of this
Court within 30 days. On such deposit, the amount shall be
released to the Claimants.
12. Both the Appeals are disposed of in above terms.
(G.P. MITTAL)
JUDGE
MARCH 16, 2012
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