THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
DATED : 4th APRIL, 2022
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DIVISION BENCH : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
THE HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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MAC App. No.10 of 2018
0
Appellant : The Branch Manager,
Shriram General Insurance Company Limited
versus
Respondents : Dilu Rai and Others
Appeal under Section 173 of the Motor Vehicles Act, 1988
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Appearance
Mr. Rahul Rathi, Advocate for the Appellant.
Mr. Tarun Choudhury, Advocate for the Respondents No.1 to 5.
Mr. Dilli Bahadur Pradhan, Advocate for the Respondent No.6.
Mr. Sudesh Joshi, Advocate with Mr. Yadev Sharma and Mr.
Sujan Sunwar, Advocates for the Bar Association of Sikkim.
None present for the Sikkim High Court Bar Association.
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JUDGMENT
Meenakshi Madan Rai, J.
1(i). This matter has wound its way to this Court on
account of the differing opinions expressed, on the aspect of
addition of Future prospects to compensation on a Claim Petition
filed under Section 163A of the Motor Vehicles Act, 1988 (for
short, "M. V. Act"), by two Benches of coordinate strength,
comprising of the then Hon‟ble Chief Justices, sitting singly, at
different points in time.
(ii) A Single Bench of the then Hon‟ble Chief Justice
(Jain, CJ.), in The Branch Manager, Bajaj Allianz General Insurance MAC App. No.10 of 2018 2
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
Co. Ltd. vs. Rita Thapa (Manger) and Others1, decided an Appeal
impugning the award of the Learned Motor Accidents Claims
Tribunal which inter alia computed "Future prospects" and "Taxi
fare" in the compensation in a Claim Petition filed under Section
163A of the M. V. Act. The Single Bench in Appeal allowed
compensation under the said heads but reduced the amount
under the head "Future prospects" while the amount for "Taxi
fare" remained unchanged.
(iii) Contrarily, in The Branch Manager, National Insurance
Co. Ltd. vs. Smt. Sujita Newar and Others2, another Bench
comprising of the then Hon‟ble Chief Justice (Sinha, CJ.) while
considering the award granted by the Learned Motor Accidents
Claims Tribunal in a Claim Petition under Section 163A of the M.
V. Act, which included "loss of non-pecuniary damages"
computed at Rs.1,00,000/- (Rupees one lakh) only, opined that
compensation was to be paid strictly as per the Second Schedule
to the Act and set aside the amount granted under the head of
non-pecuniary damages.
(iv) Reiterating this position, in The Branch Manager,
National Insurance Company Ltd. vs. Thinlay Chewang Lachenpa and 3 Others , the Single Bench of the then Chief Justice (Sinha, CJ.),
held that heads like "Future prospects and Transportation" do
not find place in the Second Schedule and setting aside the
amounts granted under the said heads, held that in a Claim
under Section 163A of the M. V. Act the amount awarded under
such heads is incorrect.
1 MAC App. No.02 of 2014 decided on 01-05-2014 : MANU/SI/0014/2014 (Sikkim) 2 Mac App. No.21 of 2014 decided on 07-04-2015 : 2015 SCC OnLine Sikk 69 (Sikkim) 3 MAC App No.19 of 2014 decided on 21-04-2015 : 2015 (2) TAC 714 (Sikkim) MAC App. No.10 of 2018 3
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
2. In view of the differing opinions of two Benches of
coordinate strength of this Court, as reflected hereinabove, a
Single Bench of this Court dealing with an Appeal where the
Learned Motor Accidents Claims Tribunal in a Claim Petition
under Section 163A of the M. V. Act deviated from the structured
formula of the Second Schedule to the Act and included Future
prospects, compensation for Love and affection and Litigation
costs to the total compensation, deemed it apposite to refer this
matter to a larger Bench, for determination of the question, viz.,
(i) Whether in a Claim Petition under Section 163A of the Motor Vehicles Act, 1988 this Court is to strictly adhere to the structured formula in the Second Schedule of the Motor Vehicles Act, 1988, as held in the decisions of Sujita Newar (supra) and Thinlay Chewang Lachenpa (supra) or whether it can venture beyond the structured formula as held in the decision of Rita Thapa (supra) for the purposes of computing compensation in a motor vehicle accident in which the victim meets fatality?
3. Briefly summarized, the factual background of the
instant matter is that on 22-05-2017 a Claim Petition under
Section 163A of the M. V. Act was filed before the Learned Motor
Accidents Claims Tribunal, South Sikkim, at Namchi, by the
widow, two minor children, widowed mother and a physically
challenged brother of the victim driver Roshan Rai, aged about
32 years, who passed away in a motor vehicle accident. The
deceased driver was driving a Tipper Truck on 21-05-2016 from
Namchi to Tingley, South Sikkim, when the accident occurred
and he succumbed to his injuries on the spot. The vehicle was
insured with the Appellant herein from 14-06-2015 to 13-06- MAC App. No.10 of 2018 4
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
2016. The total compensation sought was Rs.14,57,840/-
(Rupees fourteen lakhs, fifty seven thousand, eight hundred and
forty) only, as the victim was earning a monthly salary of
Rs.3,300/- (Rupees three thousand and three hundred) only.
4(i). The Learned Motor Accidents Claims Tribunal, vide
the impugned Judgment, dated 27-04-2018, in MACT Case
No.05 of 2017 (Smt. Dilu Rai and Others vs. The Branch
Manager, Shriram General Insurance Company and Another),
granted a total compensation of Rs.10,16,860/- (Rupees ten
lakhs, sixteen thousand, eight hundred and sixty) only,
calculated under the following heads;
(i) Loss of earnings : Rs.7,06,860/-
(ii) Funeral expenses : Rs. 15,000/-
(iii) Loss of estate : Rs. 15,000/-
(iv) Love and affection : Rs.2,50,000/-
(v) Litigation Costs : Rs. 25,000/-
(vi) Loss of Consortium: Rs. 5,000/-
Total Rs.10,16,860/-
(ii) While calculating Loss of earnings, the Learned Motor
Accidents Claims Tribunal also added 40 per cent of the monthly
income as Future prospects of the deceased to the compensation
besides computing Litigation costs of Rs.25,000/- (Rupees
twenty five thousand) only, and compensation for Loss of love
and affection calculated at Rs.2,50,000/- (Rupees two lakhs and
fifty thousand) only, supra.
5. Aggrieved by the impugned Judgment and Award,
the Branch Manager, Shriram General Insurance Company was
before this Court in Appeal before a Single Judge in MAC App.
No.10 of 2018.
MAC App. No.10 of 2018 5
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
6(i). The arguments advanced by Learned Counsel for the
Appellant in the MAC Appeal supra, before the Single Bench inter
alia were that in a Claim Petition under Section 163A the
Learned Motor Accidents Claims Tribunal is required to
determine and limit the amount of compensation as specified in
the Second Schedule of the M. V. Act as held by this Court in
Sujita Newar (supra), Thinlay Chewang Lachenpa (supra) and The
Branch Manager, National Insurance Co. Ltd. vs. Karma Bhutia and
Others4. That, the Second Schedule of the M. V. Act made no
provision for compensation under non-pecuniary heads. That, in
view of the above settled position of law, the quantum of
compensation be modified exempting the heads aforestated in
the impugned Judgment, which are not envisaged under the
Second Schedule of the M. V. Act.
(ii) Repelling the contentions advanced by the Learned
Counsel for the Appellant, Learned Counsel for the Respondent
Nos.1 to 5, contended that the Hon‟ble Supreme Court in
National Insurance Company Limited vs. Pranay Sethi and Others5
has formulated a standardised calculation of compensation for
Claim Petitions both under Section 163A and Section 166 of the
M. V. Act. That, in view of this position, Future prospects
granted by the Learned Motor Accidents Claims Tribunal in the
impugned Judgment does not suffer from any infirmity.
Further, that in view of Section 168 of the M. V. Act the
compensation should be „just‟ and „reasonable‟ and the award of
Rs.10,16,860/- (Rupees ten lakhs, sixteen thousand, eight
4 MAC App No.11 of 2015 decided on 03-03-2016 : 2016 (2) TAC 812 (Sikkim) 5 (2017) 16 SCC 680 MAC App. No.10 of 2018 6
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
hundred and sixty) only, granted to the Claimants fulfilled this
criteria. That, the Hon‟ble Supreme Court in R. K. Malik and
Another vs. Kiran Pal and Others6 granted Future prospects in a
Claim filed under Section 163A of the M. V. Act, in consonance
whereof this Court in Rita Thapa (supra) similarly awarded Future
prospects in a Claim Petition filed under Section 163A of the M.
V. Act. Strength was also garnered from the decision in Reshma
Kumari and Others vs. Madan Mohan and Another7. That, no
infirmity arises in the Litigation costs and Future prospects
correctly computed and granted by the Learned Motor Accidents
Claims Tribunal in the impugned Judgment.
(iii) Learned Counsel for the Appellant in rebuttal
contended that the Judgment relied on by the Respondent Nos.1
to 5 in R. K. Malik (supra) is not applicable to the facts and
circumstances of the present case as the issue involved therein
was with regard to the notional income of children who were
victims of a motor vehicle accident.
(iv) After giving due consideration to the submissions,
the Single Bench in MAC App. No.10 of 2018 referred to the
Second Schedule of the M. V. Act and the previous Judgments of
the Court on Section 163A of the M. V. Act as discussed supra in
Rita Thapa, Sujita Newar and Thinlay Chewang Lachenpa and in
view of the differing opinions thereof, referred the matter to a
larger Bench. Vide Order dated 26-06-2021, the Division Bench
issued notice to the Members of the Bar, who were requested to
6 AIR 2009 SC 2506 7 (2013) 9 SCC 65 MAC App. No.10 of 2018 7
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
address the Court on the issue, if they so desired. The matter
was taken up for hearing on 09-03-2022.
7(i). Learned Counsel for the Appellant, while reiterating
the arguments placed earlier before the Single Bench of this
Court (extracted supra) walked this Court through the ratio in
Deepal Girishbhai Soni and Others vs. United India Insurance Co.
Ltd., Baroda8 with specific attention to the legislative intent and
history of Section 163A of the M. V. Act. It was argued that the
matter of insertion of Section 163A by the Act 54 of 1994 has
been discussed elaborately as also the objects and reasons of
the Motor Vehicles (Amendment) Act, 1994. That, Paragraph 51
of the said Judgment in no uncertain terms elucidates the
scheme envisaged under Section 163A, and leaves no doubt that
in terms of the said provision, a distinct and specified class of
citizens, namely, persons whose income per annum is
Rs.40,000/- (Rupees forty thousand) only, or less is covered
thereunder, whereas Sections 140 and 166 cater to all sections
of society. That, it was further observed that where such
beneficial legislation has a scheme of its own and there is no
vagueness or doubt therein, the Court should not expand the
scope of the Statute on the pretext of extending the statutory
benefit to those who are not covered thereby. That, the object
underlying the statute is required to be given effect by applying
the principles of purposive construction.
(ii) That, the decision in Reshma Kumari (supra) relied on
by Learned Counsel for the Respondents No.1 to 5 before the
8 (2004) 5 SCC 385 MAC App. No.10 of 2018 8
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
Learned Single Bench, was one under Section 166 of the M. V.
Act wherein Future prospects were indeed admissible for
computation of compensation. That, the ratio clarifies that
Claimants are given an option of selecting two remedies
provided under the Motor Vehicles Act either under Section 163A
or under Section 166. That, by incorporating Section 163A in
the 1988 Act the Claimants are not required to establish
wrongful act of the owner of a motor vehicle. That, the insurer
shall be liable to pay compensation on a structured formula basis
as indicated in the Second Schedule of the Act. That, an award
under Section 163A is to be in full and final settlement of the
claim as would appear from the different columns contained in
the Second Schedule appended to the Act. To drive home this
point, Learned Counsel for the Appellant also averred to the
decision of National Insurance Company Ltd. vs. Gurumallamma and 9 Another . That, in light of the observations of the Hon‟ble
Supreme Court in the various Judgments supra the question of
addition of Future prospects in a claim petition under Section
163A does not arise.
(iii) Learned Counsel for the Respondents-Claimants No.1
to 5 while repudiating the arguments supra and reiterating the
arguments advanced before the Learned Single Judge in MAC
App. No.10 of 2018 contended that in Puttamma and Others vs. L. 10 K. Narayana Reddy and Another the Supreme Court has
specifically held that the Second Schedule, enacted in 1994, has
now become redundant, irrational and unworkable due to the
9 2009 (9) Scale 764 10 (2013) 15 SCC 45 MAC App. No.10 of 2018 9
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
changed scenario including the present cost of living, current
rate of inflation and increased life expectancy. Hence, based on
these observations it can safely be assumed that the Second
Schedule is no longer required to be strictly adhered to and that
"just compensation" would also be applicable to the Second
Schedule and "Future prospects" ought to be included while
computing compensation under Section 163A of the M. V. Act.
The attention of this Court was also invited to the decision in R.
K. Malik (supra) on the basis of which the decision in Rita Thapa
(supra) was arrived at.
8. Learned Advocate appearing for Respondent No.6
submitted that no reliefs were sought from him, hence he had no
submissions to put forth.
9. Mr. Sudesh Joshi, Learned Counsel appearing for the
Bar Association of Sikkim, in his argument contended that
Section 166 arises out of a "Fault Liability" while Section 163A
deals with "Strict Liability". Learned Counsel would elucidate
that when Claimants opt for compensation under Section 163A
there is no requirement for them to establish who the fault lay
with, whereas proof of the rash and negligent act is required
under Section 166. Section 168 of the M. V. Act which deals
with "Just Compensation" falls into place only on a petition being
filed under Section 166, while clothing the Court with discretion
to compute "just compensation" adding Future prospects. That,
invoking Section 168 in a Petition under Section 163A as urged
by Counsel for the Respondents would require an amendment to
the Act. While referring to the ratio in Pranay Sethi (supra) it was MAC App. No.10 of 2018 10
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
contended that the Supreme Court referred specifically to
Section 168 in the decision thereby indicating that it was dealing
with a Petition under Section 166 of the Act and not one under
Section 163A. That, compensation in a Claim Petition under
Section 163A cannot be awarded over and above the Schedule
provided in the Act.
10. Learned Counsel for the parties were heard at length
and their submissions duly considered. The Judgments cited at
the Bar have been keenly perused.
11. It is no longer res integra that compensation to be
granted under Section 166 and Section 163A of the M. V. Act
differ from each other and the remedies under Section 163A and
Section 166 are distinct based on different legal regimes.
Section 163A deals with payment of compensation on a
structured formula basis, on the principle of „strict liability‟ where
the Claimant is not required to plead or establish that the death
or permanent disablement in respect of which the Claim was
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. While on this point, it would be worthwhile to refer to
the background of the insertion of Section 163A into the Act.
12. In the Eighty-Fifth Report on Claims for
Compensation under Chapter 8 of the Motor Vehicles Act, 1939,
of the Law Commission of India, May, 1980, in Chapter 3,
Liability without fault, two new measures were proposed (i)
introduction of Section 92A in the Motor Vehicles, Act, 1939, by
which the doctrine of no fault liability was to be introduced and MAC App. No.10 of 2018 11
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
(ii) imposition of strict liability on death or bodily injury caused
by an accident as specified in Section 110(1) of the same Act.
Section 92A and 92B whereby "no fault liability" was inserted in
the M. V. Act of 1982 with provision of Rs.15,000/- (Rupees
fifteen thousand) only, in case of death and a sum of
Rs.75,000/- (Rupees seventy five thousand) only, in respect of
permanent disablement. Section 92A to Section 92E of the
1939 Act were replaced by Section 140 to Section 144 of the M.
V. Act of 1988. The amount of compensation in case of death
was raised to Rs.50,000/- (Rupees fifty thousand) only, and for
permanent disablement to Rs.25,000/- (Rupees twenty five
thousand) only. A Review Committee was constituted by the
Government of India in 1990 and in view of the
recommendations of the Review Committee and the Transport
Development Council, the Act was amended in 1994 whereby
Section 163A came to be inserted for payment of compensation
on no fault basis or strict liability on a structured formula. At
this juncture, it is clarified that there is no necessity for this
Court to enter into a prolix discussion on Section 166 and
Section 140 of the M. V. Act or its insertion by way of
amendment and its consequent implications. We will confine
ourselves to the provisions of Section 163A of the M.V. Act and
the reference made to this Court.
13. The origin of the theory of strict liability as envisaged
under Section 163A of the M. V. Act, for hazardous activities can
be traced to the Judgment of Blackburn J., in Rylands vs. MAC App. No.10 of 2018 12
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
11 Fletcher . In November, 1861, Fletcher brought an action
against Rylands and Horrocks, to recover damages for an injury
caused to his mines by water overflowing into them from a
reservoir which the Defendants had constructed. Blackburn J.,
held the Defendant owner to be liable holding that the person
who, for his own purposes, brings on his land, and collects and
keeps there anything likely to do mischief, if it escapes, must
keep it in at his peril, and if he does not do so, is prima facie
answerable for all the damage which is the natural consequence
of its escape.
14. In Union of India vs. Prabhakaran Vijaya Kumar and 12 Others the Supreme Court observed that strict liability focuses
on the nature of the Defendant‟s activity rather than, as in
negligence, the way in which it is carried on. That, there are
many activities which are so hazardous that they may constitute
a danger to the person or property of another. The principle of
strict liability states that the undertakers of these activities have
to compensate for the damage caused by them irrespective of
any fault on their part. That, in cases where the principle of
strict liability applies, the Defendant has to pay damages for
injury caused to the Plaintiff even though the Defendant may not
have been at any fault. It was further held that the basis of the
doctrine of strict liability is twofold; (i) The people who engage in
particularly hazardous activities should bear the burden of the
risk of damage that their activities generate (ii) it operates as a
loss distribution mechanism, the person who does such
11 (1866) LR 1 Ex 265 12 (2008) 9 SCC 527 MAC App. No.10 of 2018 13
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
hazardous activity being in the best position to spread the loss
via insurance and higher prices of its products.
15. In Deepal Girishbhai Soni (supra) the question that
arose before the Hon‟ble Supreme Court on appeal was whether
a proceeding under Section 163A of the M. V. Act is a final
proceeding and the Claimant who is granted compensation
thereunder is debarred from making a Claim under Section 166
of the Act as well. The Supreme Court inter alia held that the
provisions of Section 163A of the M. V. Act was inserted by way
of a social security scheme and is a Code by itself. It was
elucidated therein that 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 by the State Governments, transport
operators and members of the 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 Review Committee. The Review Committee
in its report made the following recommendations inter alia that
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. That, proposals had been
made from time to time that the finalisation of compensation
claims would be greatly facilitated to the advantage of the MAC App. No.10 of 2018 14
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
claimant, the vehicle-owner as well as the insurance company if
a system of structured compensation can be introduced. Under
such a system of structured 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 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. That, the
recommendations of the Review Committee and representations
from the public were placed before the Transport Development
Council for seeking their views pursuant whereto several
sections were amended. Section 163A was inserted in the Act to
provide for payment of compensation in motor accident cases in
accordance with the Second Schedule providing for the
structured formula which may be amended by the Central
Government from time to time. That, Section 140 of the Act
dealt with interim compensation but by inserting Section 163A,
Parliament intended to provide for the making of an award
consisting of a predetermined sum without insisting on a long-
drawn trial or without proof of negligence in causing the
accident. The amendment was, thus, a deviation from the
common law liability under the law of torts and was also in
derogation of the provisions of the Fatal Accidents Act. That, the
Act in no uncertain terms suggested that a new device was
sought to be evolved so as to grant a quick and efficacious relief MAC App. No.10 of 2018 15
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
to the victims falling within the specified category. The heirs of
the deceased or the victim in terms of the said provisions were
assured of a speedy and effective remedy which was not
available to the claimants under Section 166 of the Act.
That, Section 163A was, thus, enacted for grant of immediate
relief to a section of the people whose annual income is not more
than Rs.40,000/- (Rupees forty thousand) only, having regard to
the fact that in terms of Section 163A of the Act read with the
Second Schedule appended thereto, compensation is to be paid
on a structured formula not only having regard to the age of the
victim and his income but also the other factors relevant
therefor. An award made thereunder, therefore, would be in full
and final settlement of the claim as shall appear from the
different columns contained in the Second Schedule appended to
the Act. The same is not interim in nature. The note appended to
column 1 which deals with fatal accidents makes the position
furthermore clear stating that from the total amount of
compensation one-third thereof is to be reduced in consideration
of the expenses which the victim would have incurred towards
maintaining himself had he been alive. This together with the
other heads of compensation as contained in columns 2 to 6
leaves no manner of doubt that Parliament intended to lay a
comprehensive scheme for the purpose of grant of adequate
compensation to a section of victims who would require the
amount of compensation without fighting any protracted
litigation for proving that the accident occurred owing to
negligence on the part of the driver of the motor vehicle or any MAC App. No.10 of 2018 16
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
other fault arising out of use of a motor vehicle. The Judgment
went on to explain that under Section 163A the compensation is
required to be determined on the basis of a structured formula
whereas in terms of Section 140 only a fixed amount is to be
given. That, the scheme envisaged under Section 163A left no
doubt that by reason thereof the rights and obligations of the
parties were to be determined finally. The amount of
compensation payable under the aforementioned provisions was
not to be altered or varied in any other proceedings neither did it
contain any provision providing for set-off against a higher
compensation, unlike Section 140. In terms of the said provision,
a distinct and specified class of citizens, namely, persons whose
income per annum is Rs.40,000/- (Rupees forty thousand) only,
or less is covered thereunder whereas Sections 140 and 166
cater to all sections of society. It was opined that the remedy
for payment of compensation both under Sections 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.
16. Later in time in 2009, Gurumallamma (supra) a two
Judge Bench opined that;
"5. Section 163-A was inserted by Act 54 of 1994 as a special measure to ameliorate the difficulties of the family members of a deceased who died in the use of a motor vehicle. It contains a non obstante clause. It makes the owner of a motor vehicle or the authorised insurer liable to pay in the case of death, the amount of compensation as indicated in the Second Schedule to his legal heirs.
MAC App. No.10 of 2018 17
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
6. The Second Schedule provides for the amount of compensation for third-party fatal accident/injury cases claims. It provides for the age of the victim and also provides for the multiplier for arriving at the amount of compensation which became payable to the heirs and legal representatives of the deceased depending upon his annual income.
7. The Second Schedule furthermore provides that in a case of fatal accident, the amount of claim shall be reduced by one-third in consideration of the expenses which the victim would have incurred upon himself, had he been alive. It provides for the amount of minimum compensation of Rs 50,000. It furthermore provides for payment of general damages as specified in Note 3 thereof.
8. .............................................
9. .................................. The Tribunal in a proceeding under Section 163-A of the Act is required to determine the amount of compensation as specified in the Second Schedule. It is not required to apply the multiplier except in a case of injuries and disabilities."
17. In Puttamma (supra) a two Judge Bench while dealing
with a claim petition under Section 166 of the M.V. Act in Appeal
observed that the Second Schedule was redundant, irrational
and unworkable and suggested that the Central Government
amend the Second Schedule.
18. In Reshma Kumari (supra) the Supreme Court again
reiterated what had been held in Deepal Girishbhai Soni (supra)
and observed that;
"13. The 1988 Act gives a choice to the claimants to seek compensation on structured formula basis as provided in Section 163-A or make an application for compensation arising out of an accident of the nature specified in sub-section (1) of Section 165 under Section 166:
..............................................................................
13.2. By incorporating Section 163-A in the 1988 Act, Parliament has provided the remedy for payment of compensation notwithstanding anything contained in the 1988 Act or in any other law for the time being in force or instrument having the force of law, that the owner of a motor vehicle or authorised insurer shall be liable to pay MAC App. No.10 of 2018 18
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
compensation on structured formula basis as indicated in the Second Schedule in the case of death or permanent disablement due to accident arising out of the use of motor vehicle.
13.3. The peculiar feature of Section 163-A is that for a claim made thereunder, the claimants are not 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 or owners of the vehicle concerned. The scheme of Section 163-A is a departure from the general principle of law of tort that the liability of the owner of the vehicle to compensate the victim or his heirs in a motor accident arises only on the proof of negligence on the part of the driver. Section 163-A has done away with the requirement of the proof of negligence on the part of the driver of the vehicle where the victim of an accident or his dependants elect to apply for compensation under Section 163- A. When an application for compensation is made under Section 163-A the compensation is paid as indicated in the Second Schedule. The Table in the Second Schedule has been found by this Court to be defective to which we shall refer at a little later stage."
19. These observations unequivocally clarify that
compensation under Section 163A is based on strict liability, in
other words the requirement of proof of negligence on the part
of the driver is done away with under Section 163A. So far as
reliance on Pranay Sethi (supra) by Learned Counsel for
Respondents No.1 to 5 is concerned, we are in agreement with
Learned Counsel appearing on behalf of the Bar Association of
Sikkim and reliance by Learned Counsel for the Respondents
No.1 to 5 on the ratio is a misconception of the law. The ratio
observes inter alia that the determination of income while
computing compensation has to include future prospects so that
the method will come within the ambit and sweep of just
compensation as postulated under Section 168 of the M. V. Act.
It needs no reiteration that the Supreme Court has clearly spelt
out as evident from the decisions cited supra that compensation MAC App. No.10 of 2018 19
The Branch Manager, Shriram General Insurance Company Limited vs. Dilu Rai and Others
to be computed under Section 163 of the M. V. Act is on the
structured formula as it is based on no fault liability. Once a
person invokes the provisions of Section 163A, the question of
inclusion of pecuniary compensation for non-tangibles and future
prospects does not arise. The ratio in R.K. Malik (supra) which
adverts to the decision in Lata Wadhwa and Others vs. State of
Bihar and Others13 holds no relevance herein as those matters
were concerned with deaths of minors who were non-earning
members.
20. In light of all the foregoing discussions, we hold that
under Section 163A Future prospects or any other additional
non-pecuniary heads find no place and compensation in a Claim
Petition under Section 163A of the M. V. Act is to be strictly
computed on the structured formula provided in the Second
Schedule to the Act. The reference stands answered
accordingly.
21. The matter be sent back to the Court of the Learned
Single Judge for disposal as per law.
( Bhaskar Raj Pradhan ) ( Meenakshi Madan Rai )
Judge Judge
04-04-2022 04-04-2022
Approved for reporting : Yes
ds
13
(2001) 8 SCC 197
