Madras High Court
The Divisional Manager vs A.C.Jagadeesann … 1St on 4 March, 2022
C.M.A.No.2638 of 2019
IN THE HIGH COURT OF JUDICATURE OF MADRAS
DATED : 04.03.2022
CORAM:
THE HONOURABLE Ms. JUSTICE P.T. ASHA
C.M.A.No.2638 of 2019
and
CM.P.No.12817 of 2019
The Divisional Manager,
TATA AIG General Insurance Company Limited,
No.1, C.N.C. Road,
Ethiraj Salai,
Egmore,
Chennai. ... Appellant/2nd respondent
Vs.
1.A.C.Jagadeesann … 1st Respondent/Petitioner
2.Lenin Selvakumar … 2nd Respondent/1st Respondent
Prayer: Civil Miscellaneous Appeal is filed under Section 173 of the
Motor Vehicles Act against the Award and Decree dated 01.09.2018 in
M.C.O.P.No.13 of 2017 on the file of the learned Special Sub Judge,
Motor Accidents Claims Tribunal, Tiruvannamalai.
1/49
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For Appellant : Mr.M.B.Raghavan
for M/s.M.B. Gopalan Associates
For Respondents : Mr.J. Ramesh for R1
JUDGMENT
The Insurance Company who was the 2nd respondent before the
Claims Tribunal is the appellant before this Court. The 1st respondent
herein is the claimant before the Claims Tribunal and the 2 nd
respondent herein who is the owner of the vehicle was arrayed as the 1st
respondent before the Tribunal. The 1st respondent is the father of the
2nd respondent herein. The issue that arises for the consideration of this
Court is the liability of the appellant Insurance Company to
compensate the injuries suffered by the 1st respondent while using the
motor vehicle belonging to the 2nd respondent and which was insured
with the appellant Company.
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Facts of the case:
2.In order to appreciate the above issue, it is necessary to give a
brief resume of the facts that have culminated in filing of the appeal as
follows:
(i) Claimant's case:
3.It is the case of the 1st respondent that on 08.10.2014, while he
was driving the Car bearing Registration No.TN 24R 1666, belonging
to the 2nd respondent, he lost control and hit a tamarind tree. The
impact caused grievous injuries to him. The 1st respondent suffered a
left leg knee joint fracture, left hip joint fracture, pelvic bone fracture,
head injury and injuries all over the body (as stated in the claim
petition).
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4.The scene of accident as narrated by the 1st respondent in
Column No.23 of the claim petition is as follows:
“The petitioner submits that on 08.10.2014 at
about 07.30am, the petitioner was going from Bargur to
Mathur Village on business work in the car bearing
Registration No.TN 24R 1666 on the left side of the
road with due care and caution and by observing the
traffic rules. The petitioner submits that while he was
going from Bargur to Athiganoor Village on Mathur to
Bargur road near Perumalkuppam Village one Nadar
Kottai due to the bad conditions of the road, the Car
had lost its control and dashed against a tamarind tree.
Hence, the petitioner had sustained fractures of left leg
knee joint, left hip joint fracture, pelvic bone fracture
and injuries on head, left leg, left hip, and injuries all
over the body. Hence, the petitioner was immediately
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taken to the Government Headquarters Hospital,
Krishnagiri and then to MIOT Hospitals, Chennai for
higher treatment.”
Therefore, the 1st respondent had filed a claim petition under Section
163A of the Motor Vehicles Act, 1988.
Counter of the Insurance Company:
5.The 1st respondent had remained ex parte and the appellant
Insurance Company had taken out a preliminary objection stating that
the 1st respondent, who was the driver on wheels of the insured
vehicle, at the time of the accident, is none other than the father of the
insured and considering the fact that he was the driver of the insured
vehicle, he steps into the shoes of the owner. Further, the he was not
entitled to claim compensation as a third party.
6.The appellant had stated that under Section 147 of the Motor
Vehicles Act, they are liable to indemnify the insurance risk only
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against the third party risk. The 1st respondent being the owner, had
himself caused the accident, therefore, the question of indemnifying
him would not arise. Apart from the preliminary objection, the
appellant had also questioned the claim on merits. They had questioned
the amount of compensation that has been claimed and stated that the
same is an exorbitant claim. The appellant herein had also put the 1st
respondent to strict proof of the fact that the 1st respondent possessed a
valid driving license. The claim that the 1st respondent is the only
breadwinner of the family, etc., had been denied.
7.That apart, the appellant had also contended that the 1st
respondent had himself made a statement to the police that he was not
interested in proceeding with the investigation since the accident had
occurred only due to his carelessness and thereafter, the criminal case
was closed against the petitioner, it would go to show that the 1st
respondent was responsible for the accident.
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Order of the Tribunal:
8.The Tribunal after considering the evidence and the arguments
proceeded to partly allowed the petition granting compensation of
Rs.11,34,265/- to the 1st respondent with interest @ 7.5% per annum.
On the issue now before this Court, the following point for
consideration was framed by the Tribunal which read as:
“Whether the petition was maintainable under
Section 163(A) of the Motor Vehicles Act and whether
the petitioner was entitled to compensation?”
9.The Tribunal had returned a finding, relying upon the Judgment
of the Hon'ble Supreme Court reported as United India Insurance
Company Limited v. Sunilkumar and another in AIR 2017 SC
5710, that where a case is filed under Section 163A of the Motor
Vehicles Act, the claimant was not required to plead or establish that
the death or permanent disablement in respect of which the claim has
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been made was due to negligence of the owners of the vehicle or the
vehicles concerned or any other person. Therefore, the learned Judge
applying the ratio of the Judgment referred to above held that in a
proceeding under Section 163(A) of the Motor Vehicles Act, it is not
open to the insurer to question negligence on the part of the victim.
Thereafter, the learned Judge had proceeded to take note of the
Certificate given by the Medical Board which had assessed the 1st
respondent's disability at 50% and proceeded to award a sum of
Rs.11,34,256/- of which the sum of Rs.10,30,265/- was under the head
of medical expenses as proved by Ex.P.7 – Medical Bills. Challenging
the said Award, the Insurance Company is before this Court.
Submissions:
10.Mr.M.B.Raghavan, learned counsel appearing on behalf of the
Appellant Insurance Company would rest his case on the Judgment of
the Hon'ble Supreme Court reported as Ramkhiladi and another v.
The United India Insurance Company and another [2020 (2) SCC
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550]. The learned counsel would submit that in the said case, the
Hon'ble Supreme Court after considering the earlier decisions had
observed that in order to mulct the liability under Section 163(A) of the
Act on the on the Insurance Company, the claimant should be a third
party. If the owner himself has caused the accident, he cannot claim
compensation for himself under Section 163A of the Act, since a
person cannot be both, an owner as also a recipient. The heirs of the
owner in the case before the Supreme Court could not have maintained
the claim in terms of Section 163A of the Act.
11.The learned Judges had relied upon the Judgments in
Oriental Insurance Co. Ltd. V. Jhuma Saha [(2007) 9 SCC 263],
National Insurance Co. Ltd. V. Laxmi Narain Dhut [(2007) 3 SCC
700] and Premkumari v. Prahlad Dev [(2008) 3 SCC 193] to come to
the above conclusion.
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12.Mr.J.Ramesh, learned counsel appearing on behalf of the
respondents would contend that the ratio laid down in Ramkhiladi's
case supra, would not be applicable to the case on hand, since all the
Judgments relied upon in the said Judgment were cases where the claim
was in respect of fatal accidents.
13.He would rely on the Judgment of the Jammu & Kashmir
Court in Oriental Insurance Company Limited v. Narinder Kumar
and another [2002 ACJ 1116 ], which held that if there is no pleading
taken about the validity of the license and its objection the same cannot
be taken on appeal. This Court is unable to understand as to why this
Judgment has been quoted since in the instant case the appellant
Insurance Company has taken a defence that the act does not
contemplate the owner of the vehicle being indemnified in respect of
the injuries sustained by him in an accident which is the result of own
negligence.
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14.He would rely upon the Judgment of the Hon'ble Supreme
Court reported in T.S.Shylaja v. Oriental Insurance Company and
others [(2014) 2 SCC 587] to buttress his arguments that since if the
claimant was the paid driver of his son, the owner of the vehicle, the
Tribunal ought to have granted him the Award under Section 163A of
the Act.
15.Heard the learned counsels appearing on either side and
perused the papers.
Discussion:
16.The core issue involved in the above appeal is
“Whether the appellant Insurance Company is
liable to compensate the 1st respondent for the injuries
sustained by him in an accident which was caused by
him without any third party intervention?.”
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(i)Evolution of the concept of "No Fault Liability":
17.The claim is made under Section 163A which has been
introduced in the Motor Vehicles Act, 1988, by the amending Act 54 of
1994 which in legal parlance is called “no fault liability”. To
understand the above principle, it is necessary to briefly trace the origin
of the codification of rules for claiming compensation for the death or
bodily injury to a person. The concept has its genesis in the Law of
Torts. The codification insofar as India is concerned has its roots in the
Fatal Accidents Act, 1855. This Act was restricted to only
compensation for death. The Act attempted to compensate families for
the loss of a person whose death is the result of the wrongful act,
negligence or default of another. The Act contains only four sections
and did not restrict itself to road accident. Thereafter, the Motor
Vehicles Act, 1939 (hereinafter referred to as the 1939 Act) came to be
enacted. In 1982, amendment was introduced to the act in and by
which Chapter VII A was introduced. The amendment was brought
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about by the Motor Vehicles (Amendment Act 1982 Act 47 of 1982),
for the sake of brevity referred to as the 1982 Amendment.
18.The 85th report of the Law Commission of India was a
precursor for introducing the 1982 Amendment to the 1939 Act. The
Law Commission had proposed amendments to Chapter VIII of the
Motor Vehicles Act, 1939, relating to the question of insurance of
Motor Vehicles and adjudication for claiming compensation in respect
of accidents from motor vehicles. Under the Law, as it then stood, the
Tribunal could grant compensation only if it is proved the accident was
on account of the negligence on the part of the driver or the owner of
the vehicle.
19.The Hon'ble Supreme Court had been suggesting that the
principle of “No Fault Liability” be introduced in cases of claims
arising out of road accident. In the Judgment of the Hon'ble Supreme
Court reported as Concord of India Insurance Co. Ltd., v. Nirmala
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Devi and others, [AIR 1979 SC 1666 = (1979) 4 SCC 365], the
Bench consisting of Hon'ble Justice V.R. Krishna Iyer and Hon'ble
Justice R.S.Pathak had observed that the jurisprudence of
compensation for motor accidents must develop in the direction of
“No Fault Liability”. In the language of the Bench which was authored
by the Hon'ble Justice V.R. Krishna Iyer, the following reasons were
quoted for the need for development in the direction of “No Fault
Liability”.
“2. Medieval roads with treacherous dangers
and total disrepair, explosive increase of heavy
vehicles often terribly overloaded and without
cautionary signals, reckless drivers crazy with speed
and tipsy with spirituous potions, non-enforcement of
traffic regulations designed for safety but offering
opportunities for systematised corruption and little else
and, as a cumulative effect, mounting highway
accidents, demand a new dimension to the law of
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torts through no fault liability and processual
celerity and simplicity in compensation claims cases.”
20. In a later Judgment of the Hon'ble Supreme Court
reported as Rattan Singh v. State of Punjab (1979) 4 SCC 719), the
Bench, once again led by the Hon'ble Justice V.R. Krishna Iyer, in very
strong words had articulated the menace caused on account of the use
of motor vehicles on the road as follows:
“1.This petition for special leave under Article
136 is by a truck driver whose lethal hands at the
wheel of an heavy automobile has taken the life of a
scooterist a deadly spectacle becoming so common
these days in our towns and cities. This is a case which
is more a portent than an event and is symbolic of the
callous yet tragic traffic chaps and treacherous
unsafety of public transportation the besetting sin of
our highways which are more like fatal facilities than
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means of mobility. More people die of road accidents
than by most diseases, so much so the Indian highways
are among the top killers of the country. What with
frequent complaints of the State's misfeasance in the
maintenance of roads in good trim, the absence of
public interest litigation to call state transport to
order, and the lack of citizens' tort consciousness, and
what with the neglect in legislating into law no fault
liability and the induction On the roads of heavy duty
vehicles beyond the capabilities of the highways
system, Indian Transport is acquiring a menacing
reputation which makes travel a tryst with Death. It
looks as if traffic regulations are virtually dead and
police checking mostly absent. By these processes of
lawlessness, public roads are now lurking death traps.
The State must rise to the gravity of the situation and
provide road safety measures through active police
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presence beyond frozen indifference, through
mobilisation of popular organisations in the field of
road safety, frightening publicity for gruesome
accidents, and promotion of strict driving licensing
and rigorous vehicle invigilation, lest human life
should hardly have a chance for highway use.
2.These strong observations have become
imperative because of the escalating statistics of road
casualties. Many dangerous drivers plead in court,
with success, that someone else is at fault. In "the
present case, such a plea was put forward with a
realistic touch but rightly rejected by the courts below.
Parking of heavy vehicles on the wrong side, hurrying
past traffic signals on the sly, neglecting to keep to the
left of the road, driving vehicles crisscross often in a
spirituous state, riding scooters without helmets and
with whole families on pillions, thoughtless cycling and
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pedestrian jay walking with lawless ease, suffocating
jam-packing of stage carriages and hell-driving of
mini-buses, overloading of trucks with perilous
projections and, above all, police man, if any, proving
by helpless presence that law is dead in this milieu
charged with me(sic)lee such is the daily, hourly scene
of summons by Death to innocent persons 1 and 2 who
take to the roads, believing in the bona fides of the
traffic laws. We hope that every State in India will take
note of the human price of highway neglect, of State
transport violations and the like, with a sombre
sensitivity and reverence for life.”
This Scenario unfortunately has not changed in over four decades.
21.These Judgments gave the nudge for the Law makers to
contemplate an amendment to the 1939 Act. The 85th Law Commission
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was entrusted with this task. The suggestions of the Law Commission
in this regard are as follows:
“3.16.In a “No fault System”, compensation is
granted for certain injuries without proof of fault.
“Compensation” in this context means compensation
for actual losses, but not for intangible damage. The
injured person will, under a”no fault” system, be in a
better position, compared with traditional tort law,
since he will be entitled to receive immediate
compensation for his actual loss (expenses, loss of
profits or wages) without lengthy litigation or proof of
fault.”
22.After extracting the need for reform in the Law, the Law
Commission has provided the following justification for introducing
this reform, namely, social justice and practical necessity. The Law
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Commission observed that the incorporation of the “No Fault Liability”
principle has to be considered for the following reasons:
"3.34.The incorporation of “No-fault liability”
principle will considerably reduce the delay that occurs
in the disposal of claims cases by the Claims Tribunal,
making it easy for the person sustaining injury in an
accident of the nature specified in Section 110(1) (or
the heirs of a person killed in such an accident) to
obtain compensation without being required to fight a
long-drawn battle for obtaining it.”
Ultimately, they have made the following suggestions:
“3.45.Having regard to the considerations set out
in this Chapter, it appears to be appropriate to provide
for liability without fault in relation to death or bodily
injury caused by accidents from motor vehicles. Such a
liability would rest on the risk created by the use of a
motor vehicle, and not on fault.”
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23.In the light of the recommendations of the Law Commission,
Section 92A was introduced in the Motor Vehicles Act, 1939, through
an amendment in 1982, by which this doctrine of liability without fault
was first introduced. Initially, the amount fixed under this Section was
a sum of Rs.15,000/- for death and Rs.7,500/- for Permanent disability.
Thereafter, the Motor Vehicles Act, 1988 hereinafter referred to as the
1988 Act was enacted and Section 92A of the 1939 Act was replaced
by Section 140 whereby the compensation for death under the “No
Fault Liability” clause was enhanced to a sum of Rs.50,000/- and the
compensation for permanent disabilities was enhanced to a sum of
Rs.25,000/-. Though the new Act had been enacted, representations
were received from various quarters calling for reconsideration of the
Act. Thereafter, a Review Committee was constituted by the
Government of India in the year 1990 and in terms of the
Recommendations made by this Review Committee, the Act was
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amended in the year 1994 in terms where of a new pre-determined
formula in the form of Section 163A for payment of compensation to
road accident victims on the basis of their income and age on a no fault
basis was provided. The amended Act contained a provision in Section
163B giving an option to the claimant to claim compensation either
under Section 140 or under Section 163A. This had caused a great deal
of confusion and claimants were moving applications both under the
provisions of Section 140/163A and 166.
Judicial Pronouncement:
24.The issue regarding the filing of a simultaneous application
under Section 140 / 163A and Section 166 of the Act came up for
consideration before the Hon'ble Supreme Court in the Judgment of
Deepal Girishbhai Soni and others v. United India Insurance
Company Limited, Baroda [(2004) 5 SCC 385].
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25.A Bench consisting of the Hon'ble Chief Justice and two other
Judges, traced the legislative history and after analysing the relevant
provisions of Section 140, 163A and 166 observed as follows:
“39. Section 163A was introduced in the Act
by way of a social security scheme. It is a code by
itself. It appears from the Objects and Reasons of the
Motor Vehicles (Amendment) Act, 1994 that after
enactment of the 1988 Act several representations
and suggestions were made from the State
Governments, transport operators and members of
public in relation to certain provisions thereof.
Taking note of the observations 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
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Review Committee. The Review Committee 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
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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
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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."
The Bench ultimately held as follows:
“57.We, therefore, are of the opinion that
remedy for payment of compensation both under
Section 163A and 166 being final and independent of
each other as statutorily provided, a claimant cannot
pursue his remedies thereunder 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."
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The learned Judges had in clear terms stated that it is no doubt true that
the Motor Vehicles Act was a beneficial legislation requiring a liberal
construction, however, its trite that in such cases the Courts should not
travel beyond the scheme of the legislation and extend the statutory
benefit to those who are not covered thereby.
26.The Hon'ble Supreme Court in the case reported as Shivaji
Dayanu Patil and another v. Smt.Vatschala Uttam More [AIR 1991
SC 1769] has touched upon the introduction and the statement of the
objects and the reasons for amending the 1939 Act to introduce the
concept of "No Fault Liability". The Hon'ble Supreme Court held as
follows:
"There has been a rapid development of road
transport during the past few years and large increase in
the number of motor vehicles on the road. The incidence of
road accidents by motor vehicles has reached serious
proportions. During the last three years, the number of
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road accidents per year on the average has been around
1.45 lakhs and of these the number of fatal accidents has
been around 20,000 per year. The victims of these
accidents are generally pedestrians belonging to the less
affluent sections of society. The provisions of the Act as to
compensation in respect of accidents can be availed of only
in cases of accidents which can be proved to have taken
place as a result of a wrongful act or negligence on the
part of the owners or drivers of the vehicles concerned.
Having regard to the nature of circumstances in which
road acci- dents take place, in a number of cases, it is
difficult to secure adequate evidence to prove negligence.
Further, in what are known as "hit-and-run" accidents, by
reason of the identity of the vehicle involved in the accident
not being known, the persons affected cannot prefer any
claims for compensation. It is, therefore, considered
necessary to amend the Act suitably to secure strict
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enforcement of road safety measures and also to make, as
a measure of social justice, suitable provisions first for
compensation without proof of fault or negligence on the
part of the owner or driver of the vehicle and, secondly, for
compensation by way of solatium in cases in which the
identity of the vehicle causing an accident is unknown..... "
27.The Judgment reported as Ningamma and another v.
United India Insurance Co. Ltd., [(2009) 13 SCC 710] was another
case where the Hon'ble Supreme Court had discussed Section 163A. In
that case, the deceased-victim had been travelling in a bike that he had
borrowed from the real owner and had hit a bullock cart carrying iron
sheets, as a result of which he sustained fatal injuries. His legal
representatives thereupon sued the owner of the motor bike that the
deceased had borrowed and the insurance company. The Hon'ble
Judges of the Supreme Court after discussing the law on the subject
had held that in order to claim compensation, the recipient had to be a
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third party. If the driver is the owner of the motor vehicle or if the
vehicle had been driven by another, he would step into the shoes of the
owner and therefore, from a reading of Section 163A, it is clear that the
legal representative of the deceased is not entitled to compensation.
This Judgment had gone on to consider the question as to whether the
legal representatives could claim compensation under Section 166 of
the Motor Vehicles Act. The Bench held that if the claimants are able
to prove the negligence of the deceased in the accident then they could
seek compensation under Section 166 of the Act. Therefore, a reading
of the Judgment clearly indicates that the Hon'ble Supreme Court had
clearly laid down that the victim of an accident or his legal
representatives are not left remediless. It only states that in order to
claim compensation under Section 163A, a claim cannot be made if
the victim himself is the owner of the vehicle which has caused the
accident without any third party intervention.
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28.In a later Judgment of the Hon'ble Supreme Court reported in
United India Insurance Company Limited v. Sunilkumar and
another, [AIR 2017 SC 5710], the issue before the Court was as
follows:
“Whether in a claim proceeding under Section
163A of the Motor Vehicles Act, 1988, (hereinafter
referred to as “the Act) it is open to the insurer to raise
the defence / plea of negligence?”
The Bench concluded as follows:
“8. From the above discussion, it is clear that
grant of compensation Under Section 163-A of the Act
on the basis of the structured formula is in the nature of
a final award and the adjudication thereunder is
required to be made without any requirement of any
proof of negligence of the driver/owner of the vehicle(s)
involved in the accident. This is made explicit by
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Section 163A(2). Though the aforesaid Section of the
Act does not specifically exclude a possible defence of
the Insurer based on the negligence of the claimant as
contemplated by Section 140(4), to permit such defence
to be introduced by the Insurer and/or to understand
the provisions of Section 163A of the Act to be
contemplating any such situation would go contrary to
the very legislative object behind introduction of
Section 163A of the Act, namely, final compensation
within a limited time frame on the basis of the
structured formula to overcome situations where the
claims of compensation on the basis of fault liability
was taking an unduly long time. In fact, to understand
Section 163A of the Act to permit the Insurer to raise
the defence of negligence would be to bring a
proceeding Under Section 163A of the Act at par with
the proceeding Under Section 166 of the Act which
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would not only be self-contradictory but also defeat the
very legislative intention.”
29.In fact, even prior to the above Judgment, another Judgment
of the Hon'ble Supreme Court in Gujarat State Road Transport
Corporation v. Ramanbhai Prabhatbhai and another (1987) 3 SCR
404, reference has been made to the background in which the Chapter
VIIA was introduced in the Act. The Hon'ble Supreme Court had
proceeded to discuss the concept with an illustration as follows:
“Where a pedestrian without negligence on his
part is injured or killed by a motorist whether
negligently or not, he or his legal representatives as the
case may be should be entitled to recover damages if the
principle of social justice should have any meaning at
all. In order to meet to some extent the responsibility of
the society to the deaths and injuries caused in road
accidents there has been a continuous agitation through
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C.M.A.No.2638 of 2019
out the world to make the liability for dam- ages arising
out of motor vehicles accidents as a liability without
fault. In order to meet the above social demand on the
recommendation of the Indian Law Commission Chapter
VIIA was introduced in the Act.”
and had proceeded to hold as follows:
"It is thus seen that to a limited extent relief has
been granted under section 92-A of the Act to the legal
representatives of the victims who have died on
account of motor vehicles accidents. Now they can
claim Rs.15,000 without proof of any negligence on the
part of the owner of the vehicle or of any other person.
This part of the Act is clearly a departure from the
usual common law principle that a claimant should
establish negligence on the part of the owner or driver
of the motor vehicle before claiming any compensation
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for the death or permanent disablement caused on
account of a motor vehicle accident.”
30.This Court in a Judgment in Sarffia Bee and others v.
B.Sathar and others [2002 ACJ 449] had occasioned to deal with
Section 92A of the said 1939 Act as amended by Act 47 of 1982. The
learned Judge has observed that the provision of 92A of the Motor
Vehicles Act, 1939 and Section 140 of the Motor Vehicles Act 1988,
were benevolent provisions and a liberal interpretation therefore be
taken while considering the scope of these provisions. The learned
Judge had briefly touched upon the history of the introduction of
Section 92A in the said Judgment which is extracted herein below:
“16. Section 92(A) of Motor Vehicles Act, 1939
came to be introduced by the Act 47 of 1982.
Previously, the provisions of the Act, as to
compensation in respect of accidents, can be availed
of only in case of accident which can be proved to
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C.M.A.No.2638 of 2019
have taken place, as a result of a wrongful act or
negligence on the part of the owner or driver of the
vehicle concerned. Having regard to nature and
circumstances in which the road accidents take place,
in a number of cases, it is difficult to secure adequate
evidence to prove negligence. It is, therefore,
considered necessary to amend the Act suitably to
secure strict enforcement of road safety measures and
also to make, as a measure of social justice, suitable
provisions first for compensation without proof of
fault or negligence on the part of the owner or driver
of the vehicle. This is the object of introduction
of Section 92(A) of the Act.
17. Under Sub-section (2) of Section 92-A,
the amount first fixed under compensation for 'no fault
liability' was Rs. 15,000/-. Thus, Section 92-A was in
the nature of a beneficial legislation enacted, with a
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C.M.A.No.2638 of 2019
view to confer the benefit of expeditious payment of a
limited amount by way of compensation to the victims
of an accident arising out of the use of a motor vehicle
on the basis of no fault liability'. In the matter of
interpretation of a beneficial legislation, the approach
of the Courts is to adopt a construction which
advances the beneficent purpose underlying the
enactment in preference to a construction which tends
to defeat that purpose. This principle has been laid
down by the Apex Court in (Shivaji Dayanu Patil v.
Vatschala Uttam More); (Motor Owners' Insurance
Co. Ltd. v. Jadayji Keshayji Modi) and 1987 ACJ 411 :
(AIR 1987 SC 1184) (SC) (Skandia Insurance Co. Ltd.
v. Kokilaben Chandravadan).”
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31.The Division Bench of the Karnataka High Court in one of the
Judgment reported as Appaji V. M.Krishna [(2005) ACC 591], had
occasion to trace out the legislative history of the no fault liability. The
Bench had categorically observed as follows:
"It is evident from the above that Section
163A was never intended to provide relief to those
who suffered in a road accident not because of the
negligence of another person making use of a motor
vehicle, but only on account of their own rash,
negligent or imprudent act resulting in death or
personal injury to them. The recommendations of the
Law Commission were concerned more with the
victims of hit and run accident cases where the
particulars of offenders could not be ascertained. It
also expressed concern about the security of victims of
road accidents and recommended dispensing with
proof of fault on the part of the owner or driver of the
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C.M.A.No.2638 of 2019
vehicle. The recommendations it is clear were made
from the point of view of victims of accidents on the
roads more than those who were responsible for the
same. The Review Committee too had viewed the
situation from the point of view of such victims and
expressed concern about the time it took for disposal of
ordinary cases before the Tribunals. The objects and
reasons underlying the introduction of the provision
also envisaged adequate compensation to victims of
road accidents without going into what was described
as long drawn procedure.”
32.The line was therefore clearly drawn as to who could claim
compensation under the No Fault Liability. As the term suggest, it is
an accident that has occurred not on account of the fault of the victim
but the fault of another and the victim is not bound to prove the other's
fault. If the legislative intent was to provide compensation to the
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person who was himself instrumental for the accident then the principle
of "Contributory Negligence" would be rendered otiose.
Summation:
33.A reading of the reports of the Law Commission and the
various Judgments referred above highlights the fact that the principle
of "No Fault Liability" which traces its origin to Tortious liability has
been incorporated into the Act primarily to cover innocent victims who
fall prey to the rash and negligent use of a Motor Vehicle, particularly,
hit and run accidents and where the person concerned has sustained an
injury or has been killed for "No Fault" of his.
34.Considering the fact that the entire dispute revolves around
the interpretation of Section 163A, it would be necessary to extract the
specific provision as follows:
"163A. Special provisions as to payment of
compensation on structured formula basis.—
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(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
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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. "
35.Section 163A (1) can be broken down as follows:
"(a)The Section opens with a non - obstante
clause that this provision would apply even if there is
any contrary provision in this Act or any other Law
which is in force during the relevant time.
(b)The liability to pay in the case of death or
permanent disability rests upon the owner of the
motor vehicle or its authorised insurer which arises
out of the use of the motor vehicle.
(c)Such compensation is payable to the legal
heirs or the victim himself."
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36.The scheme of the Act contemplates 4 players - the victim, the
driver of the offending vehicle, owner of the offending vehicle and
lastly, its insurer. In any accident which results in any damage to
person or property the person who is primarily at fault is the driver of
the vehicle that caused the accident. Once, the fault is fixed on the
driver, the owner of the vehicle becomes vicariously liable. At times
the owner and the driver may be the same person. Thereafter, if the
vehicle possesses a valid insurance then the insurer is bound to
indemnify the owner of the vehicle. Therefore, considering the object
of the Act and the judicial pronouncements, it is clear that a person
claiming compensation under the "No Fault Liability" has to first
establish a third party involvement in the mishap. The Judgment in
United India Insurance Company Limited v. Sunilkumar and
another, [AIR 2017 SC 5710], only emphasis that the Insurer cannot
set up the defence of negligence, it has not done away with the primary
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proof that the accident involved a third party intervention /
involvement.
37.The facts in the case of Ramkhiladi and another v. The
United India Insurance Company and another [2020 (2) SCC 550]
will squarely apply to the facts of the instant case. The learned Judges
had concisely set out the question that was posed for the Court's
consideration as follows:
" 5..........is whether, in the facts and
circumstances of the case and in a case where the
driver, owner and the insurance company of another
vehicle involved in an accident and whose driver was
negligent are not joined as parties to the claim
petition, meaning thereby that no claim petition is filed
against them and the claim petition is filed only
against the owner and the insurance company of
another vehicle which was driven by the deceased
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himself and the deceased being in the shoes of the
owner of the vehicle driven by himself, whether the
insurance company of the vehicle driven by the
deceased himself would be liable to pay the
compensation under Section 163A of the Act?;
Whether the deceased not being a third party to the
vehicle No. RJ 02 SA 7811 being in the shoes of the
owner can maintain the claim under Section 163A of
the Act from the owner of the said vehicle? "
38.In Ramkhiladi and another v. The United India Insurance
Company and another [2020 (2) SCC 550], the Tribunal had relied
upon the principle that in a claim under Section 163A the claimant was
not required to plead or establish negligence. The High Court had
overturned this finding and held that the application under Section
163A of the Act against the Insurance Company of the vehicle driven
by the deceased himself is liable to be dismissed. This was the subject
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matter of challenge before the Hon'ble Supreme Court. The learned
Judge explained the principle and the purport of a claim under section
163A in Para 5.5 which is extracted hereinbelow:
"5.5 It is true that, in a claim under Section
163A of the Act, there is no need for the claimants to
plead or establish the negligence and/or that the death
in respect of which the claim petition is sought to be
established was due to wrongful act, neglect or default
of the owner of the vehicle concerned. It is also true
that the claim petition under Section 163A of the Act is
based on the principle of no fault liability. However, at
the same time, the deceased has to be a third party
and cannot maintain a claim under Section 163A of
the Act against the owner/insurer of the vehicle which
is borrowed by him as he will be in the shoes of the
owner and he cannot maintain a claim under Section
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163A of the Act against the owner and insurer of the
vehicle bearing registration No. RJ 02 SA 7811."
39.The tenor and purport of the above Judgment is the principle
of 'No Fault Liability” obviously implies that the injury or death or the
claimant is the result of the involvement of a third party with the
claimant being an innocent by stander and the accident has occurred
out of no fault of his.
Therefore, in the light of the above, the Award passed by the
learned Special Sub Judge, Motor Accidents Claims Tribunal,
Tiruvannamalai, in M.C.O.P.No.13 of 2017 is liable to be set aside and
is accordingly set aside. No costs. Consequently, connected
Miscellaneous Petition is closed.
04.03.2022
Index : Yes/No
Internet : Yes/No
Speaking order / Non speaking order
mps
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To
The Special Sub Judge,
Motor Accidents Claims Tribunal,
Tiruvannamalai.
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C.M.A.No.2638 of 2019
P.T. ASHA, J,
mps
C.M.A.No.2638 of 2019
and
CM.P.No.12817 of 2019
04.03.2022
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