Delhi High Court
Bhagwati & Ors vs Mohd Vakeel & Anr (National Insurance ... on 22 May, 2025
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on:22.05.2025
+ MAC.APP. 227/2018 & CM APPL. 4580/2020
BHAGWATI & ORS ..... Appellants
versus
MOHD VAKEEL & ANR (NATIONAL
INSURANCE COMPANY LIMITED) ..... Respondents
Advocates who appeared in this case:
For the Appellants : Mr. Kamal Deep Advocate (through V.C.).
For the Respondents : Ms. Hetu Arora Sethi with Mr. Prakhar
Mani Tripathi, Advocates.
CORAM
HON'BLE MR JUSTICE AMIT MAHAJAN
JUDGMENT
1. The present appeal is filed under Section 173 of the Motor
Vehicles Act, 1988 (hereafter 'MV Act') seeking enhancement of
compensation awarded by the learned Motor Accident Claims Tribunal
vide award dated 21.12.2017 (hereafter 'the impugned award'),
passed in DAR No. 482/2017.
2. The brief facts are that on 29.07.2017, at about 8:00 p.m., while
the deceased was returning back to his home he was hit by a vehicle
bearing No. DL 5 SBA 0667, being driven by Respondent No. 1
allegedly in a rash and negligent manner. The deceased fell down and
received injuries all over his body whereafter he was taken to a nearby
hospital but due to his critical condition was shifted to another hospital
where he was declared brought dead.
3. A criminal case was registered against Respondent No. 1 vide
FIR No. 614/2017 under Sections 279/337 of the Indian Penal Code,
1860 ('IPC').
4. The Detailed Accident Report ('DAR') filed by the
Investigating Officer before the learned Tribunal came to be treated as
a claim petition for the grant of the compensation.
5. The learned Tribunal, after examining the pleadings, evidence,
and documents on record, assessed the compensation at ₹4,24,500/-
and awarded an interest at the rate of 9% per annum to the legal heirs
of the deceased/ appellants. The details thereof are as under:
S.no. Heads of Compensation Amount
1. Loss of Dependency ₹4,20,000/-
2. Loss of Estate ₹2,500/-
3. Funeral Expenses ₹2,000/-
TOTAL ₹4,24,500/-
6. Aggrieved by the quantum of compensation awarded, the
appellants have preferred the present appeal.
7. The learned counsel for the appellants submitted that the
learned Tribunal while computing the compensation payable to the
appellants had erroneously relied upon Section 163A of the MV Act
rather than applying the principle under Section 166 of the MV Act
since there was clear negligence on part of Respondent No. 1 while
driving the offending vehicle.
8. He submitted that the learned Tribunal relied upon the second
schedule of the MV Act and considered notional income of ₹40,000/-
per annum as the income of the deceased. He contended that even
when there is no documentary or other evidence regarding the income,
the learned Tribunal ought to have applied minimum wages prevalent
at the time of the accident.
9. He submitted that the learned Tribunal had erroneously relied
upon the second schedule of the MV Act and awarded meagre a sum
of ₹2,500/- under the head of loss of estate and ₹2,000/- towards
funeral expenses.
10. He further submitted that the learned Tribunal had failed to
award any future prospects towards the income of the deceased.
11. Per contra, the learned counsel for Respondent No. 1 contended
that the learned Tribunal passed the impugned award after due
appreciation of evidence that came on record, which requires no
interference. Hence, was prayed that the appeal filed by the appellant
be dismissed.
Analysis
12. The short question for consideration before this Court is
whether the compensation that has been awarded to the appellants
ought to be enhanced.
13. It is well-settled that the amount of compensation awarded
under the MV Act should be just and, to the extent possible, should
fully and adequately restore the claimant to a position as existed prior
to the accident. The object being to make good the loss suffered as a
result of the accident in a fair, reasonable and equitable manner.
14. By its very nature, when a tribunal or court is tasked with
determining the amount of compensation in accident cases, it
inevitably involves a degree of estimation, hypothetical assessments,
and a measure of compassion related to the severity of the disability
sustained. However, all these factors must be evaluated with objective
standards.
15. Upon careful consideration of the rival submissions and a
perusal of the impugned award, this Court finds merit in the appeal.
Issue of applicability of 163A of the MV Act
16. The learned counsel for the appellants contended that the
learned Tribunal erred in granting compensation to the appellants by
applying the provisions of Section 163A of the MV Act, instead of
adjudicating the claim under Section 166 of the MV Act. It was argued
that there was clear and unambiguous negligence on the part of
Respondent No. 1 in driving the offending vehicle, and thus, the claim
ought to have been decided under Section 166 of the MV Act. For
clarity, Sections 163A and 166 of the MV Act provide for distinct
statutory schemes--the former based on no-fault liability and the latter
requiring proof of negligence. The same read as under :
"163A. Special provision as to payment of compensation on
structure 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.
"166 Application for compensation
(1) An application for compensation arising out of an accident
of the nature specified in sub-section (1) of section 165 may be
made--
(a)by the person who has sustained the injury; or
(b)by the owner of the property; or
(c)where death has resulted from the accident, by all or any of
the legal representatives of the deceased; or
(d)by any agent duly authorised by the person injured or all or
any of the legal representatives of the deceased, as the case may
be:
Provided that where all the legal representatives of the
deceased have not joined in any such application for
compensation, the application shall be made on behalf of or for
the benefit of all the legal representatives of the deceased and
the legal representatives who have not so joined, shall be
impleaded as respondents to the application.
(2)Every application under sub-section (1) shall be made, at the
option of the claimant, either to the Claims Tribunal having
jurisdiction over the area in which the accident occurred, or to
the Claims Tribunal within the local limits of whose jurisdiction
the claimant resides or carries on business or within the local
limits of whose jurisdiction the defendant resides, and shall be
in such form and contain such particulars as may be prescribed:
Provided that where no claim for compensation under section
140 is made in such application, the application shall contain a
separate statement to that effect immediately before the
signature of the applicant.
(3) -
(4) The Claims Tribunal shall treat any report of accidents
forwarded to it under sub-section (6) of section 158 as an
application for compensation under this Act."
17. As regards the learned Tribunal's decision to treat the claim
under Section 166 of the MV Act as one under Section 163A of the
MV Act, this Court has already settled the permissibility of such
conversion. In Raj Narain Jha v. Jagdish and Ors. (M/s New India
Assurance Co. Ltd.) : MAC. APP. 383/2017, this Court held that a
claim filed under Section 166 of the MV Act may be considered under
Section 163A of the MV Act where the circumstances so warrant. The
Court observed as under:
"2. The Court would note that in terms of the decision of this
Court in United India Insurance Co. Ltd. vs Rita Devi in MAC
APP. No. 256/2007 decided on 05.12.2014, wherein it has been
held inter alia, that the decision of the learned Tribunal to
convert a Claim Petition filed under Section 166 to under
section 163A of the Motor Vehicle Act, was just and the same
could not be faulted with. Therefore, in order to ensure that the
claimant would not be rendered remediless, resulting in
miscarriage of justice, the learned Tribunal ought to have
considered the claim under section 163A of the Act and grant of
compensation to the claimant under the principle of no-fault
liability."
18. Similarly, this Court in Tata A.I.G. General Insurance Co. Ltd.
vs. U.P. Roadways & Ors. : MAC. APP. 81/2007 observed as under:
"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."
19. In the present case, the onus was on the appellants to prove that
Respondent No. 1 was negligent. However, no such evidence was
placed on record. PW-1/ the wife of the deceased, deposed as to the
occurrence of the accident but admitted during cross-examination that
she was not an eye-witness and had learned of the incident from a
neighbour.
20. Apart from PW-1's testimony, no other evidence--oral or
documentary--was led by the appellants to establish that Respondent
No. 1 was driving the vehicle negligently at the time of the accident.
21. Based on the evidence on record, the learned Tribunal came to
the reasoned conclusion that negligence on the part of Respondent No.
1 could not be established. Accordingly, and in line with judicial
precedents, the learned Tribunal considered the claim under Section
163A of the MV Act and awarded compensation on a no-fault liability
basis.
22. In view of the rulings in Raj Narain Jha v. Jagdish and Ors.
(M/s New India Assurance Co. Ltd.) (supra) and Tata A.I.G. General
Insurance Co. Ltd. vs. U.P. Roadways & Ors. (supra), and having
regard to the fact that the appellants failed to discharge the burden of
proving negligence, this Court is of the view that the learned Tribunal
rightly treated the claim as one under Section 163A of the MV Act to
avoid denial of compensation. The impugned award, insofar as it
grants compensation under Section 163A of the MV Act, is therefore
affirmed.
Compensation payable to the Appellants
23. In the present case, the learned Tribunal, after considering the
pleadings, evidence, and documents placed on record, assessed the
compensation at ₹4,24,500/- and awarded interest thereon at the rate
of 9% per annum in favour of the legal heirs of the
deceased/appellants.
24. The learned Tribunal computed the compensation by applying
the principles enshrined under Section 163A of the MV Act which is a
beneficial provision introduced to award compensation on a 'no-fault
liability' basis, thereby relieving claimants of the burden to establish
negligence. Although this section was repealed by the Motor Vehicles
(Amendment) Act, 2019 which came into effect on 01.04.2022--a
similar provision has been reintroduced under Section 164 of the MV
Act.
25. However, considering the facts of the present case, the accident
occurred on 27.07.2019, at which time Section 163A of the MV Act
was in force and fully applicable.
26. In exercise of the powers conferred under sub-section (3) of
Section 163A of the MV Act, the Ministry of Road Transport and
Highways issued Notification S.O. 2022(E) dated 22.05.2018,
whereby the Second Schedule was substituted. The relevant portion is
reproduced below:
" MINISTRY OF ROAD TRANSPORT AND HIGHWAYS
NOTIFICATION
New Delhi, the 22nd May, 2018
S.O. 2022(E).--In exercise of the powers conferred by sub-
section (3) of section 163A of the Motor Vehicles Act, 1988 (59
of 1988), the Central Government, keeping in view the cost of
living, hereby makes the following amendment to the Second
Schedule to the said Act, namely:--
In the Motor Vehicles Act, 1988, for the Second Schedule, the
following Schedule shall be substituted namely:--
"THE SECOND SCHEDULE
(See Section 163A)
SCHEDULE FOR COMPENSATION FOR THIRD PARTY
FATAL ACCIDENTS/INJURY CASES CLAIMS
1. (a) Fatal Accidents:
Compensation payable in case of Death shall be five lakh
rupees.
(b) Accidents resulting in permanent disability:
Compensation payable shall be = [Rs. 5,00,000/- × percentage
disability as per Schedule I of the Employee's Compensation
Act, 1923 (8 of 1923)] :
Provided that the minimum compensation in case of permanent
disability of any kind shall not be less than fifty thousand
rupees.
(c) Accidents resulting in minor injury:
A fixed compensation of twenty-five thousand rupees shall be
payable:
2. On and from the date of 1st day of January, 2019 the amount
of compensation specified in the clauses (a) to (c) of paragraph
(1) shall stand increased by 5 per cent annually.
3. This notification shall come into form on the date of its
publication in the Official Gazette."
29. A perusal of the above notification reveals a significant shift
from the structured formula approach under the erstwhile Second
Schedule to a simplified, lump-sum award system, pegging the
compensation for fatal accidents at ₹5,00,000/-.
30. The legislative intent underlying this amendment is to ensure
adequate and expeditious relief to the victims' families in cases where
negligence cannot be established, while maintaining consistency and
certainty in the amount awarded.
31. Since the accident in the present case occurred on 27.07.2019, a
question arises whether the enhanced compensation notified by the
Central Government can be applied retrospectively.
32. The Hon'ble Apex Court in the case of New India Assurance
Co. Ltd. vs. Urmila Halder : Special Leave Petition (Civil) No. 6260
of 2019 affirmed the view of the Calcutta High Court that such a
notification applies to all pending cases, irrespective of the date of the
accident. The relevant extract of the judgment is as follows:
"9. Having considered the matter, we do not find any reason to
interfere with the judgment impugned. With regard to the
judgments of this Court relied upon by learned counsel for the
appellant, having gone through the same we find that they are
distinguishable from the facts of the present case and thus, the
ratio of those cases would not apply in the present case.
10. The order of the High Court is well discussed and we agree
with the view taken. We may, however, add that a beneficial
legislation would necessarily entail the benefit to be passed on
to the claimant in the absence of any specific bar to the same. In
the present case, the liability of the appellant-Insurance
Company has not been interfered with. Only the computational
mode and the modality have been further clarified, which rightly
has been noted by the High Court and accordingly, the claim
has been enhanced to ₹5,00,000/- (Rupees Five Lakhs)."
33. This Court in Santra Devi & Ors. V. New India Ass Co Ltd. &
Ors. in MAC.APP.913/2016, while addressing the same issue agreed
with the view taken by Hon'ble Calcutta High Court in Urmila Halder
v. New India Assurance Co. Ltd. & Ors. : 2018 SCC OnLine Cal
11751 wherein it was held that enhanced compensation amount
payable under the amended Section 163A of the MV Act would be
applicable to all pending cases irrespective of the date of accident, and
observed as under :
"5. The Hon'ble Calcutta High Court opined that the
notification bringing into force amended Section 163A of the MV
Act does not expressly or by necessary intendment make it
inapplicable to claim applications / appeals which are pending
before judicial forums as on that date.
6. The view taken by the Hon'ble Calcutta High Court has
been upheld by the Hon'ble Apex Court in a SLP being SLP
No.6260/2019 filed by the New India Assurance Company Ltd.
The Hon'ble Apex Court observed that the beneficial legislation
would necessarily entail the benefit to be passed on to the
claimant in the absence of any specific bar.
7. In view of the above, the benefit of the amendment in
Section 163A of the MV Act cannot be denied to the claimants,
therefore, the Insurance Company is directed to pay a
compensation of ₹5,00,000/- to the claimants.
xxxx xxxx
xxxx
9. The balance amount along with interest at the rate of 9%
per annum, from the date of the said amendment, that is,
22.05.2018, is directed to be disbursed directly to the appellants
in equal proportions after verification of their identity, within a
period of six weeks."
34. In light of the above discussion, this Court is of the opinion that
the compensation awarded to the appellants deserves to be enhanced
in view of the revised schedule notified by the Ministry of Road
Transport and Highways.
35. Accordingly, the compensation awarded by the learned Tribunal
is enhanced from ₹4,24,500/- to a consolidated sum of ₹5,00,000/-.
The claimants would also be entitled to the interest to be calculated
from the date of notification dated 22.05.2018, whereby the
amendment was carried in the MV Act.
Liability
36. In the present case the learned Tribunal had directed
Respondent No. 1 to compensate the appellants.
37. The learned Tribunal noted that at the time of the accident
Respondent No. 1 was driving the offending vehicle with a learners
license that to without any instructor being present in the vehicle,
which is in contravention to the Rule 3 of the Central Motor Vehicles
Rules, 1989 as well as constitutes a breach of the insurance policy
issued by the Insurance Company.
38. Thus, in the opinion of this Court Respondent No. 1 is liable to
pay the balance compensation amount to the appellants along with
interest at the rate of 9% per annum, from the date of the said
amendment, that is, 22.05.2018 before the learned Tribunal which is to
be disbursed directly to the appellants in equal proportions after
verification of their identity, within a period of six weeks.
39. The appeal stands partly allowed and disposed of in the
aforesaid terms. Pending application(s), if any, also stand disposed of.
AMIT MAHAJAN, J
MAY 22, 2025
