# United India Insurance Co. Ltd v. Smt. Sawari & Ors

- **Citation:** (2022) 9 ILRA 500
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-09-20
- **Case number:** First Appeal From Order No. 614 of 2019
- **Bench:** Rajesh Bindal, C.J. Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/united-india-insurance-co-ltd-v-smt-sawari-ors-49078
- **Pages:** 16

## Headnote

A. Civil Law - Motor Vehicles Act, 1988 -
Section 163-A- no fault liability-the issue
involved was as to whether compensation
payable under section 163A of the Act as
per the structured formula is in addition or
in alternative for determination of the
compensation on the principle of fault
liability-The
issue
was
answered
in
negative-in view of the non-obstante
clause contained in Section 163A of the
Act,
it
excludes
determination
of
compensation on the principle of fault
liability-The idea for adding Section 163A
in the Act was to give relief to the victims
of the motor accident at the earliest in a
long drawn litigation-It had to be on the
basis of structured formula as provided in
the Second Schedule attached to the Actthe same claim cannot be defeated nor
can
compensation
for
the
same
be
reduced on the basis of the share of the
claimant
in
his/her
responsibility
in
causing the death/permanent disablement
of the victim.(Para 1 to 23)

B. 'Per incuriam' are those decisions given
in ignorance or forgetfulness of some
inconsistent statutory provision or of
some authority binding on the court
concerned, so that in such cases some
part of the decision or some step in the
reasoning on which it is based, is found,
on that account to be demonstrably
wrong. It is a settled rule that if a decision
has been given per incuriam the court can
ignore it.(Para 20) (E-6)

List of Cases cited:

## Text

_Characters 0–39,593 of 53,735. This is a partial read: ask again with offset=39593 for what follows._

500 INDIAN LAW REPORTS ALLAHABAD SERIES

iv. Income after deduction of 1/3rd :
Rs. 1,867/- (rounded up)

v. Annual Income : 1,867 x 12 =
22,400/-

vi. Multiplier applicable : 18

vii. Loss of dependency: Rs.22,400 x
18 = Rs.4,03,200/-

viii. Amount under non-pecuniary
head : 70,000/-

ix. Total compensation : Rs. 4,73,400/-

15. As far as issue of rate of interest is
concerned, it should be 6% from the date of
filing of the petition till 1999 and 4%
thereafter as without any fault of the
Insurance Company, the matter remains
pending .

16. In view of the above, the appeal is
partly allowed. Oral cross are allowed and
compensation is recalculated. Judgment and
award passed by the Tribunal shall stand
modified to the aforesaid extent. The
respondent-Insurance Company shall deposit
the amount within a period of 12 weeks from
today with interest at the rate of 7% from the
date of filing of the claim petition till the
amount is deposited. The amount already
deposited be deducted from the amount to be
deposited. The Insurance Company will
deposit the entire amount can have their right
to recover the amount from owner and the
Insurance Company of the other vehicle. As
far as deceased is concerned, it is a case of
composite negligence, hence, the amount
cannot be deducted from the compensation
awarded to the claimants who are the heirs of
a non tort-feasor.

17. In view of the ratio laid down by
Hon'ble Gujarat High Court, in the case of
Smt. Hansagori P. Ladhani v/s The
Oriental
Insurance
Company
Ltd.,
reported in 2007(2) GLH 291 and this High
Court in, total amount of interest, accrued on
the principal amount of compensation is to be
apportioned on financial year to financial
year basis and if the interest payable to
claimant for any financial year exceeds
Rs.50,000/-, insurance company/owner is/are
entitled to deduct appropriate amount under
the head of 'Tax Deducted at Source' as
provided u/s 194A (3) (ix) of the Income Tax
Act, 1961 and if the amount of interest does
not exceeds Rs.50,000/- in any financial year,
registry of this Tribunal is directed to allow
the claimant to withdraw the amount without
producing the certificate from the concerned
Income- Tax Authority. The aforesaid view
has been reiterated by this High Court in
Review Application No.1 of 2020 in First
Appeal From Order No.23 of 2001 (Smt.
Sudesna and others Vs. Hari Singh and
another) and in First Appeal From Order
No.2871 of 2016 (Tej Kumari Sharma v.
Chola Mandlam M.S. General Insurance Co.
Ltd.) decided on 19.3.2021 while disbursing
the amount.

18. Record be sent back to tribunal
forthwith.

19. This Court is thankful to both the
learned Advocates for ably assistting this
Court.
----------
(2022) 9 ILRA 500
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 20.09.2022

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE JASPREET SINGH, J.

First Appeal From Order No. 614 of 2019

United India Insurance Co. Ltd.
 ...Appellant
Versus
Smt. Sawari & Ors. ...Respondents
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
501
Counsel for the Appellant:
Mr. Deepak Kumar Agarwal

Counsel for the Respondents:
Sri Ravindra Pratap Singh

A. Civil Law - Motor Vehicles Act, 1988 -
Section 163-A- no fault liability-the issue
involved was as to whether compensation
payable under section 163A of the Act as
per the structured formula is in addition or
in alternative for determination of the
compensation on the principle of fault
liability-The
issue
was
answered
in
negative-in view of the non-obstante
clause contained in Section 163A of the
Act,
it
excludes
determination
of
compensation on the principle of fault
liability-The idea for adding Section 163A
in the Act was to give relief to the victims
of the motor accident at the earliest in a
long drawn litigation-It had to be on the
basis of structured formula as provided in
the Second Schedule attached to the Actthe same claim cannot be defeated nor
can
compensation
for
the
same
be
reduced on the basis of the share of the
claimant
in
his/her
responsibility
in
causing the death/permanent disablement
of the victim.(Para 1 to 23)

B. 'Per incuriam' are those decisions given
in ignorance or forgetfulness of some
inconsistent statutory provision or of
some authority binding on the court
concerned, so that in such cases some
part of the decision or some step in the
reasoning on which it is based, is found,
on that account to be demonstrably
wrong. It is a settled rule that if a decision
has been given per incuriam the court can
ignore it.(Para 20) (E-6)

List of Cases cited:

1. Shriram Gen. Ins. Co. Ltd. Vs Asif & ors. FAFO
No. 2434 of 2018

2. NICL Vs Pushpa & ors. (2015) 9 SCC 166

3. Smt. Sarla Verma & ors. Vs DTC & anr. (2009)
2 TAC 677 SC

4. Girishbhai Soni & ors. Vs United India Ins. Co.
Ltd. (2004) 5 SCC 385

5. Smt. Jagdish Kumari & ors. Vs Om Prakash &
ors. FAFO No. 560 of 2012

6. NICL Vs Pranay Sethi & ors. (2017) 16 SCC
680

7. United India Ins. Co. Ltd. Vs Sunil Kumar &
anr. (2018) 1 TAC 3 SC

8. NIACL Vs Shah Mahasukhlal Mafatlal & ors.
(2020) 4 TAC 59 Guj

9. OICL & ors. Vs Hansrajbhai V. Kodala & ors.
(2001) 5 SCC 175

10. NICL Vs Gurumallama & ors. (2009) 16 SCC
43

11. United India Ins. Co. Ltd. Vs Sunil Kumar &
ors. (2017) SCC Online SC 1443

12. Ramkhiladi & ors. Vs The United India Ins.
Co. & ors. (2020) 2 SCC 550

13. NIACL Vs Jasmin Bibi FMAT No. 769 of 2015

14. The Branch Mgr. Shriram Gen. Ins. Co. Ltd.
Vs Dilurai MAC No. 10 of 2018

15. OICL Vs Smt. Maya (2017) 8 ADJ 92

16. K.S. Panduranga Vs St. of Karn.(2013) 3
SCC 721
(Delivered by Hon'ble Rajesh Bindal, C.J.)

1. The matter has been placed before
this Bench for consideration of the
following question, referred to a larger
Bench, by the learned Single Judge vide
order dated February 8, 2021:

"Whether in the proceedings under
Section 163-A of the Motor Vehicles Act,
1988 it is open for the Tribunal to exercise
discretion
for
the
assessment
of
compensation contrary to second schedule
502 INDIAN LAW REPORTS ALLAHABAD SERIES
appended to the Act, 1988 notwithstanding
that a sum of rupees five lacs is the fixed
amount w.e.f. 22.05.2018 in such a
proceedings."

2. Brief facts of the case, as are found
from the record of the case, are that on
April 28, 2015 at about 9 O'clock Raj
Bahadur, having a valid driving licence,
while going to Lucknow from Tikait Nagar
driving Bus bearing registration No.UP 41T
4269, met with an accident on BarabankiBahraich Road due to which he sustained
grievous injuries. He succumbed to his
injuries on April 30, 2015. The registered
owner of the aforesaid vehicle was Shashi
Bhushan and the vehicle was being
operated by the U.P. Road Transport
Corporation on contractual basis. At the
time of accident, the vehicle was insured
with United India Insurance Company
Limited, which was valid. A claim petition
was filed under Section 163A of the Act1
by the widow and three minor children of
the deceased Raj Bahadur also impleading
parents of the deceased as opposite party
Nos.4 and 5 before the Tribunal2. The
learned Tribunal allowed the claim petition
vide order dated August 7, 2019 and
awarded
compensation
of
₹9,97,200/-
along with simple interest @ 7% per
annum from the date of filing of the claim
petition till the date of actual payment,
which was to be paid by the appellant. The
total awarded amount of compensation
included the benefit of future prospect is to
the tune of ₹2,59,200/-. Deduction of 1/4th
was directed to be made towards personal
expenses. A sum of ₹70,000/- was awarded
towards conventional heads. Out of the
total awarded compensation, ₹3,00,000/-
along with interest were directed to be paid
to the widow of the deceased and
₹5,00,000/- along with interest were
directed to be divided amongst three minor
children equally. Rest of the awarded
compensation i.e. ₹1,97,200/- along with
interest was directed to be paid to the
parents of the deceased, who were opposite
party Nos.4 and 5 in the claim petition.

3. The arguments raised by learned
counsel for the appellant before the learned
Single Judge was that in an application
filed under Section 163A of the Act, only
structured formula as contained in Second
Schedule attached to the Act could be
applied. In support, he referred to a
judgment of this Court in Shriram
General Insurance Co. Ltd. v. Asif and
others3 and judgments of Hon'ble the
Supreme Court in National Insurance
Company
Limited
v.
Pushpa
and
others4, Smt. Sarla Verma and others v.
Delhi
Transport
Corporation
and
another5 and Deepal Girishbhai Soni and
others
v.
United
India
Insurance
Company Ltd.6. Whereas the stand taken
by the learned counsel for the claimant was
that the Court is not bound to apply the
structured formula, hence assessment of the
compensation was just and fair.

4. Considering two conflicting views
of this Court in F.A.F.O. No.560 of 2012
titled as Smt. Jagdish Kumari and others
v. Om Prakash and others7 and in Asif's
case (supra), the learned Single Judge
found it appropriate to refer the matter to
the larger Bench for consideration.

5. Mr. Deepak Kumar Agarwal,
learned
counsel
for
the
Insurance
Company/appellant submitted that the
scope of Sections 163A and 166 of the Act
is all together different. Section 163A of the
Act provides for no fault liability while
providing for assessment of compensation
in terms of Second Schedule attached to the
Act. Its' application is limited only to the
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
503
cases where the actual income claimed is or
restricted up to ₹40,000/-. This Section
does not have any application in the present
case. A plain reading of the aforesaid
Section shows that it starts with nonobstante clause. Meaning thereby, no other
provisions of the Act providing for
assessment or payment of compensation
will be applicable.

6. Section 140 of the Act provides for
payment of interim compensation but the
same does not have any application in an
application filed under Section 163A of the
Act.
However,
interim
compensation
payable under Section 140 of the Act can
be set off against final compensation
assessed for which application can be filed
under Section 166 of the Act. In such
application just amount of compensation is
required to be assessed by the Court. The
onus to prove number of issues lies on the
claimant. In support of his arguments, he
placed reliance upon the judgments of
Hon'ble the Supreme Court in Deepal
Girishbhai Soni's case (supra), Smt.
Sarla Verma's case (supra), National
Insurance Company Ltd. v. Pranay Sethi
and others8, United India Insurance Co.
Ltd. v. Sunil Kumar and another9 and
the Full Bench judgment of Gujarat High
Court in New India Assurance Co. Ltd. v.
Shah
Mahasukhlal
Mafatlal
and
others10. He further referred to the
Rules11. In terms of Rule 204 of the Rules,
separate forms have been prescribed to be
filled up by a claimant while filing
applications under Section 163A or 166 of
the Act. Hence, the scope of both the
sections are well defined.

7. On the other hand, Mr. Ravindra
Pratap Singh, learned counsel for the
claimants submitted that Hon'ble the
Supreme Court in Pranay Sethi's case
(supra) also considered the scope of
Section 163A of the Act. His submission is
that once just and fair compensation is to
be assessed, the same cannot be restricted
to structured formula.

8. Heard learned counsel for the
parties and perused the paper book.

9. To appreciate the issue involved, it
is necessary to examine the relevant
provisions of the Act, which stood at the
relevant time read as under:-

"140. Liability to pay compensation
in certain cases on the principle of no
fault.--
(1)
Where
death
or
permanent disablement of any person has
resulted from an accident arising out of the
use of a motor vehicle or motor vehicles,
the owner of the vehicle shall, or, as the
case may be, the owners of the vehicles
shall, jointly and severally, be liable to pay
compensation in respect of such death or
disablement
in
accordance
with
the
provisions of this section.

(2) The amount of compensation
which shall be payable under sub-section
(1) in respect of the death of any person
shall be a fixed sum of fifty thousand
rupees and the amount of compensation
payable under that sub-section in respect of
the permanent disablement of any person
shall be a fixed sum of twenty-five
thousand rupees.

(3) In any claim for compensation
under sub-section (1), the claimant shall not
be required to plead and establish that the
death or permanent disablement in respect
of which the claim has been made was due
to any wrongful act, neglect or default of
the owner or owners of the vehicle or
vehicles concerned or of any other person.

(4) A claim for compensation under
sub-section (1) shall not be defeated by
504 INDIAN LAW REPORTS ALLAHABAD SERIES
reason of any wrongful act, neglect or
default of the person in respect of whose
death or permanent disablement the claim
has been made nor shall the quantum of
compensation recoverable in respect of
such death or permanent disablement be
reduced on the basis of the share of such
person in the responsibility for such death
or permanent disablement.

(5)
Notwithstanding
anything
contained in sub-section (2) regarding
death or bodily injury to any person, for
which the owner of the vehicle is liable to
give compensation for relief, he is also
liable to pay compensation under any other
law for the time being in force:

Provided that the amount of such
compensation to be given under any other
law shall be reduced from the amount of
compensation payable under this section or
under section 163A.

141. Provisions as to other right to
claim
compensation
for
death
or
permanent disablement.-- (1) The right
to claim compensation under section 140
in
respect
of
death
or
permanent
disablement of any person shall be in
addition to any other right, except the
right to claim under the scheme referred
to in section 163A such other right
hereafter in this section referred to as the
right on the principle of fault to claim
compensation in respect thereof under
any other provision of this Act or of any
other law for the time being in force.

(2) A claim for compensation under
section 140 in respect of death or
permanent disablement of any person
shall be disposed of as expeditiously as
possible and where compensation is
claimed in respect of such death or
permanent disablement under section 140
and also in pursuance of any right on the
principle
of
fault,
the
claim
for
compensation under section 140 shall be
disposed of as aforesaid in the first place.

(3)
Notwithstanding
anything
contained in sub-section (1), where in
respect of the death or permanent
disablement of any person, the person
liable to pay compensation under section
140 is also liable to pay compensation in
accordance with the right on the principle
of fault, the person so liable shall pay the
first-mentioned compensation and--

(a) if the amount of the firstmentioned compensation is less than the
amount
of
the
second-mentioned
compensation, he shall be liable to pay
(in
addition
to
the
first-mentioned
compensation) only so much of the
second-mentioned compensation as is
equal to the amount by which it exceeds
the first-mentioned compensation;

(b) if the amount of the firstmentioned compensation is equal to or
more than the amount of the secondmentioned compensation, he shall not be
liable to pay the second-mentioned
compensation.

x x x x

161.
Special
provisions
as
to
compensation in case of hit and run
motor accident.--(1) For the purposes of
this section, section 162 and section 163-

(a) "grievous hurt" shall have the same
meaning as in the Indian Penal Code (45 of
1860);

(b) "hit and run motor accident" means
an accident arising out of the use of a motor
vehicle or motor vehicles the identity
whereof cannot be ascertained in spite of
reasonable efforts for the purpose;

(c) "scheme" means the scheme
framed under section 163.

(2)
Notwithstanding
anything
contained
in
the
General
Insurance
Business (Nationalisation) Act, 1972 (57 of
1972) or any other law for the time being in
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
505
force or any instrument having the force of
law, the General Insurance Corporation of
India formed under section 9 of the said
Act and the insurance companies for the
time being carrying on general insurance
business in India shall provide for paying in
accordance with the provisions of this Act
and the scheme, compensation in respect of
the death of, or grievous hurt to, persons
resulting from hit and run motor accidents.

(3) Subject to the provisions of this
Act and the scheme, there shall be paid as
compensation--

(a) in respect of the death of any
person resulting from a hit and run motor
accident, a fixed sum of 1 [twenty-five
thousand rupees];

(b) in respect of grievous hurt to any
person resulting from a hit and run motor
accident, a fixed sum of 2 [twelve thousand
and five hundred rupees].

(4) The provisions of sub-section (1)
of section 166 shall apply for the purpose
of making applications for compensation
under this section as they apply for the
purpose
of
making
applications
for
compensation referred to in that subsection.

162. Refund in certain cases of
compensation paid under section 161.--
(1) The payment of compensation in
respect of the death of, or grievous hurt
to, any person under section 161 shall be
subject to the condition that if any
compensation (hereafter in this subsection
referred
to
as
the
other
compensation) or other amount in lieu of
or by way of satisfaction of a claim for
compensation is awarded or paid in
respect of such death or grievous hurt
under any other provision of this Act or
any other law or otherwise so much of the
other compensation or other amount
aforesaid as is equal to the compensation
paid under section 161 shall be refunded
to the insurer.

(2) Before awarding compensation in
respect of an accident involving the death
of, or bodily injury to, any person arising
out of the use of a motor vehicle or motor
vehicles under any provision of this Act
(other than section 161) or any other law,
the tribunal, court or other authority
awarding such compensation shall verify
as to whether in respect of such death or
bodily injury compensation has already
been paid under section 161 or an
application for payment of compensation
is pending under that section, and such
tribunal, court or other authority shall,--

(a) if compensation has already been
paid under section 161, direct the person
liable to pay the compensation awarded
by it to refund to the insurer, so much
thereof as is required to be refunded in
accordance with the provisions of subsection (1);

(b) if an application for payment of
compensation is pending under section
161 forward the particulars as to the
compensation awarded by it to the
insurer.

Explanation.--For the purposes of
this
sub-section,
an
application
for
compensation under section 161 shall be
deemed to be pending--

(i) if such application has been
rejected, till the date of the rejection of
the application, and
(ii) in any other case, till the date of
payment of compensation in pursuance of
the application.

163A. Special provisions as to
payment of compensation on structured
formula
basis.--
(1)
Notwithstanding
anything contained in this Act or in any
other law for the time being in force or
instrument having the force of law, the
506 INDIAN LAW REPORTS ALLAHABAD SERIES
owner of the motor vehicle of 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.

163B. Option to file claim in certain
cases.-- Where a person is entitled to claim
compensation under section 140 and
section 163A, he shall file the claim under
either of the said sections and not under
both.

x x x x

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 subsection (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.

x x x x

(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."

10. The background in which Section
163A was added in the Act was considered
by Hon'ble the Supreme Court in The
Oriental Insurance Co. Ltd. and others
v. Hansrajbhai V. Kodala and others12.
The issue involved therein was as to
whether
compensation
payable
under
Section 163A of the Act as per the
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
507
structured formula is in addition or in
alternative
for
determination
of
the
compensation on the principle of fault
liability after following the procedure
prescribed under the Act. The issue was
answered in negative. It was opined that in
view of the non-abstante clause contained
in Section 163A of the Act, it excludes
determination of compensation on the
principle of fault liability. The idea for
adding Section 163A in the Act was to give
relief to the victims of the motor accident at
the earliest in a long drawn litigation. It had
to be on the basis of structured formula as
provided in the Second Schedule attached
to the Act. It also opined that in case the
question of determination of compensation
on fault liability is also permitted, it would
result
in
additional
litigation
and
applications. Relevant paragraphs thereof
are extracted below:-

"8. From the provisions quoted above,
it appears that no specific mention is made
that remedy provided under Section 163A
is in addition or in the alternative to the
determination of compensation on the basis
of fault liability. Section 163Awas not there
in the original Act of 1988. It was inserted
by Act No. 54 of 1994 w.e.f. 14.11.1994.
Hence,
for
arriving
at
the
proper
conclusion, it would be necessary to cull
out legislative intent by referring to the
legislative history as well as Objects and
Reasons for inserting the said provision.

x x x x

14. In this context if we refer to the
Review Committees Report, the reason for
enactingSection 163Ais to give earliest
relief to the victims of the motor vehicle
accidents. The Committee observed that
determination of cases takes long time and,
therefore, under a system of structural
compensation, the 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 minor, loss
of income on account of loss of limb etc. can
be notified and the affected party can then
have option of their accepting lump sum
compensation under the scheme of structural
compensation or of pursuing his claim
through the normal channels. The Report of
the Review Committee was considered by
the State Governments and comments were
notified.
Thereafter,
the
Transport
Development Council made suggestions for
providing adequate compensation to victims
of road accidents without going into long
drawn procedure. As per the objects and
reasons, it is a new pre-determined formula
for payment of compensation to road
accidents victims on the basis of age/income
which is more liberal and rational. On the
basis of the said recommendation after
considering the Report of the Transport
Development
Council,
the
Bill
was
introduced with a new pre-determined
formula for payment of compensation to
road accident victims on the basis of
age/income which is more liberal and
notional, i.e.Section 163A. ..... The purpose
of this Section and the Second Schedule is to
avoid long drawn litigation and delay in
payment of compensation to the victims or
his heirs who are in dire need of relief. If
such affected claimant opts for accepting the
lump-sum compensation based on structured
formula, he would get relief at the earliest. It
also gives vital advantage of not pleading or
establishing any wrongful act or neglect or
default of the owner of the offending vehicle
or vehicles.

11. With reference to interpretation of
Section 163A of the Act and its scope,
paragraphs 19 to 21 of the aforesaid
judgment can be gainfully referred to,
which read as under:-
508 INDIAN LAW REPORTS ALLAHABAD SERIES

"19. Lastly, for interpretation and
construction of Section 163A , we would
refer to its heading and language. The
heading is "Special provisions as to
payment of compensation on structured
formula basis". At the outset, we would
make it clear that for interpretation of the
words of Section the language of the
heading cannot be used to control the
operation of the Section, but at the same
time being part of the statute it prima-facie
furnishes some clue as to the meaning and
purpose of Section. [Re: K.P. Varghese v.
ITO (1982) 1 SCR p.629 at 647]. In case of
ambiguity or doubt heading can be referred
to as an aid in construing the provision.
This heading indicates that the legislature
has envisaged special provision for paying
compensation on structural formula basis
instead of paying the compensation by long
drawn litigation after establishing fault
liability. Section also begins with nonobstante clause notwithstanding anything
contained in this Act or any law for the
time being in force. This would mean that it
is not subject to any adjudication of right to
claim compensation as provided under the
Act. The owner of the motor vehicle or the
authorised insurer would be liable to pay
compensation due to accident arising out of
the use of motor vehicle. Section 163B
further clarifies that claim petition can be
filed either under Section 140 or under
Section 163A but not under both sections.

20. The learned counsel for the
claimants however submitted that if we
compare the language used in Sections
163A and 140(1), it would be apparent that
Section 140 contemplates payment of
compensation by the owner of the vehicle.
As against this, Section 163A contemplates
payment of compensation by the owner of
the vehicle or authorised insurer. It is
submitted that even if we read the said
phrase "owner of the motor vehicle of
authorised insurer" as "owner of the motor
vehicle or authorised insurer" on the
assumption that "of" is wrongly used, then
also it is their contention that Section 163A
envisages payment either by the authorised
insurer or by the owner of the motor
vehicle. It has wider implication and,
therefore, compensation beyond maximum
of Rs.50000/- is provided in Second
Schedule and hence the payment under
Section 163A should not be considered as
alternative to payment of compensation
under the fault liability. In our view, it is
true that Section 140 talks of payment of
compensation by the owner of the vehicle,
while Section 163A after reading of as or
would mean that owner of the vehicle or
the authorised insurer would be liable to
pay compensation under Section 163A. But
that would not make any difference because
determination
of
compensation
under
Section 163A is final and not as an interim
measure. As stated above, the legislature
has deliberately not provided that it is in
addition to the compensation payable on
the principle of fault liability. There is no
provision for adjusting the compensation
payable under Section 163A with the other
payment on fault liability under the Act.

21. In the result, the contention of the
claimants that right to get compensation
under Section 163A is additional to claim
compensation on no fault liability is
rejected for the following reasons: -

(1) There is no specific provision in
the Act to the effect that such compensation
is in addition to the compensation payable
under the Act. Wherever the Legislature
wanted to provide additional compensation,
it has done so. [Sections 140 and 141]

(2) In case where compensation is paid
on no fault liability under Sections 140 and
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
509
161 in case of hit and run motor accidents,
the Legislature has provided adjustment or
refund of the said compensation in case
where compensation is determined and
payable under the award on the basis of
fault liability under Section 168 of the Act.
There is no such procedure for refund or
adjustment of compensation paid where the
compensation is paid underSection 163A .

(3) The words under any other law for
the time being in force would certainly
have different meaning from the words
under this Act or under any other provision
of this Act.

(4) In view of the non-obstante clause
notwithstanding anything contained in this
Act the provisions of Section 163A would
exclude determination of compensation on
the principle of fault liability.

(5)
The
procedure
of
giving
compensation under Section 163A is
inconsistent with the procedure prescribed
for
awarding
compensation
on
fault
liability. Under Section 163A compensation
is awarded without proof of any fault while
for getting compensation on the basis of
fault liability claimant is required to prove
wrongful act, neglect or default of the
owner of the vehicle or vehicles concerned.

(6) Award of compensation under
Section 163A is on predetermined formula
for payment of compensation to road
accident victims and that formula itself is
based on criteria similar to determining the
compensation under Section 168. The
object was to avoid delay in determination
of compensation."

12. It was a case in which in the order
of the High Court impugned before Hon'ble
the Supreme it was held that award under
Section 163A of the Act was an interim
award and claimants were entitled to
proceed further for determination of
compensation under Section 168 of the Act.
The Supreme Court allowed the appeal of
Insurance Company and judgment of the
High Court was set-aside.

13. Correctness of the aforesaid
judgment of Hon'ble the Supreme Court
was under consideration in a subsequent
judgment of Hon'ble the Supreme Court in
Deepal Girishbhai Soni's case (supra). In
the aforesaid case, Hon'ble the Supreme
Court also considered the legislative history
of Section 163A of the Act in paragraphs
18 to 23, which are extracted below:-

"18. A claim for damages owing to
injuries suffered by reason of negligence on
the part of the driver of a motor vehicle
used to be governed only by law of tort.
The Indian Motor Vehicles Act, 1914 is the
first enactment relating to motor vehicles.
The Indian Motor Vehicles Act, 1939 which
replaced the 1914 Act consolidated and
amended the law relating to motor vehicles
in India. Under the 1939 Act as also the
Fatal Accidents Act, 1855 compensation
was solely based on law of tort. The civil
courts had the jurisdiction to try a suit
claiming compensation by the plaintiffs for
injuries or damages suffered by them by a
party whose action had inflicted the injury.
In the year 1956, the Motor Vehicle
Accidents
Claims
Tribunals
were
established to deal with such claims
purported to be for providing speedy trial.
However, proof of negligence was a
condition
precedent
for
grant
of
compensation under the 1939 Act.

19. The 85th Law Commission in its
report submitted in May, 1980, proposed
two new measures, i.e. (i) introduction of
Section 92-A in the Motor Vehicles Act,
1939 by which the doctrine of liability
without fault was to be introduced and, (ii)
the imposition of strict liability as regard
death or bodily injury caused by the
510 INDIAN LAW REPORTS ALLAHABAD SERIES
accident or nature specified in Section
110(1) thereof. Recommendations were
also made by the Law Commission to the
effect that claim on fault basis should be
barred but the same had not been accepted
by the Parliament.

20. While making the aforementioned
recommendations, the Commission referred
to the following observations made by this
Court in Bishan Devi and others Vs.
Sirbaksh Singh and Anr. [(1980) 1 SCC
273]:

"the law as it stands requires that the
claimant should prove that the driver of the
vehicle was guilty of rash and negligent
driving."

21. By reason of Section 92-A, 92-B
in Motor Vehicles Act, 1939 inserted in the
year 1982, a sum of Rs. 15,000/- was to be
provided in case of death and a sum of Rs.
7,500/-
in
respect
of
permanent
disablement by introducing the concept of
"no-fault
liability".
The
amount
of
compensation, however, had been revised
from time to time.

22. The Law Commission furthermore
recommended for laying of a scheme in
terms whereof the victims of 'hit and run
accident' could claim compensation where
the identity of the vehicle involved in the
accident was unknown. Yet again, the 199th
Law Commission in its report submitted in
1987 stated the law as it stood then in the
following terms:

"the law as it stands present, save the
provisions in chapter VIIA inserted by the
Motor Vehicles (Amendment) Act, 1982,
enables the victim or the dependants of the
victim in the event of death to recover
compensation on proof of fault of the
person liable to pay the compensation and
which fault caused the harm."
23. The present Act came into force
thereafter in terms whereof inter alia
Section 92-A to 92-E of the 1939 Act were
replaced by Section 140 to 144 whereby
and
whereunder
the
amount
of
compensation in case of death was raised to
Rs. 50,000/- and for permanent disablement
to Rs.25,000/-. However, having regard to
number of representations received from
various quarters, a review committee was
constituted by the Government of India in
the year 1990 to examine the same and
review such provisions of the said Act, as
may be found necessary. In terms of the
recommendations
of
the
Review
Committee
as
also
the
Transport
Development
Council,
the
Act
was
thereafter amended in the year 1994 in
terms whereof a new pre-determined
formula in the form of Section 163-A for
payment of compensation to road accident
victims on the basis of age and income on a
no-fault basis was provided.

14. After considering the legislative
history of Section 163A of the Act, Hon'ble
the
Supreme
Court
opined
that
determination
of
compensation
under
Sections 163A and 166 of the Act being
final and independent of each other, the
claimant cannot pursue his remedies
thereunder simultaneously. One has to
opt/elect to either proceed under Section
163A or Section 166 of the Act but not
under both. The relevant paragraphs 42, 46
and 57 are extracted below:-

"42. Section 163A was, thus, enacted
for grant of immediate relief to a section of
people whose annual income is not more
than Rs. 40,000/- having regard to the fact
that in terms of Section 163-A 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, shall be
9 All. United India Insurance Co. Ltd. Vs. Smt. Sawari & Ors.
511
in full and final settlement of the claim as
would 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
column Nos. 2 to 6 thereof leaves no
manner of doubt that the 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 other
fault arising out of use of a motor vehicle.

x x x x
46. Section 163-A which has an overriding
effect provides for special provisions as to
payment of compensation on structured
formula basis. Sub-Section (1) of Section
163-A contains non-obstante clause in
terms whereof the owner of the motor
vehicle or the authorised insurer is 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. Sub-Section (2) of Section 163-A is in
pari materia with Sub-Section (3) of
Section 140 of the Act.

x x x x

57. We, therefore, are of the opinion
that remedy for payment of compensation
both under Section 163-A 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
163-A or under Section 166 of the Act, but
not under both." (emphasis supplied)

15. The issue was further examined
by Hon'ble the Supreme Court in National
Insurance
Company
Limited
v.
Gurumallamma and others13 wherein it
was opined that in a proceeding under
Section 163A of the Act the amount of
compensation has to be assessed in terms of
Second Schedule attached to the Act.
Relevant paragraph 8 thereof is extracted
below:-

"8. ...........