# \ v. UNITED INDIA ASSURANCE CO. LTD., BARODA

- **Citation:** [2004] 3 S.C.R. 213
- **Court:** Supreme Court of India
- **Decided:** 2004
- **Case number:** Civil Appeal No. 3126 of2002
- **Bench:** Y.N. Khare, S.B. Sinha, S.H. Kapadia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/v-united-india-assurance-co-ltd-baroda-19841
- **Pages:** 30

## Headnote

B
Motor Vehicles Act, J 988
Sections 163-A and J 66-Award passed under a proceeding under section c
163-A of the Act-Bench of two judges referring the matter to a larger Bench
doubting the correctness of the decision in Oriental Insurance Co. ltd v.
Hansrajbhai V. Koda/a and Ors., 12001 J 5 SCC 175, wherein it was held that
the award passed under Section 163-A of the Motor Vehicles Act, 1988 is a
final award and not interim in nature"-correctness of-Affirming the Koda/d's
case, the three Judges Bench held, Parliament inserted section 163-A to the D
Act for quick and efficacious relief by granting compensation on the basis of
a structured formula envisaged under Second Schedule to the Act considering
all relevant particulars and without insisting for the proof of negligence in
causing the accident-Remedies envisaged under sections 163-A and 166 of
the Act are distinct and separate and are both final remedies-Claimant cannot
pursue both the remedies.
E
Sections 140 and 163-A-Held, compensation paid under section 140 is
ad-hoc in nature which shall be reduced/adjusted from the amount of
compensation payable under the said Section or Section 163-A of the ActClaim under section 140 is in addition to any other claim which may be made F
under any other law for the time being in force.
4.
A Ben.ch of two judges referred the appeal to a larger Bench of three
judges doubting the correctness of the decision rendered by a Bench of
two judges in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Koda/a and Ors.,
[2001) 5 SCC 175, wherein it was held that the award passed under Section G
163-A of the Motor Vehicles Act, 1988 is a final award and not interim in
nature and that the claimants are debarred from making further claims
on the basis of fault liability under section 166 of the Act. Two review
.l(
petitions seeking review of the judgement in Koda/a 's case and another
simil:ir appeal were also tagged with the main appeal.
213
H
214
Slil'REME COURT R1:ro1ns
1200~1 o S.l'.R.
A
The claimants/appellants contended that the award under section
163-A of the Motor Vehicles Act, 1988 is ~n interim award granting only
'adequate and rational compensation' on a structured formula and not a
final award; that, the actual loss suffered by the victim is not adjudicated
upon in Section 163-A proceeding; that the Act is a beneficial legislation
B and it should be construed liberally; that an award of 'just compensation'
envisaged under section 166 of the Act cannot be denied by treating the
award under section 163-A of the Act as a final award; that the ceiling
provided in Second Schedule indicates that the compensation payable
under Section 163-A is interim in nature which would be adjusted when
a final award is passed under section 166 of the Act; that the proceedings
C envisaged under sections 140 and 163-A of the Act are alternative to each
other; that the Bench in Koda/a 's case did not consider the legislative
history of the Act and misinterpreted and misconstrued the expression 'any
other law' appearing in Section 140(5) of the Act; and that the said
expression also includes other provisions of the Act since the remedies
provided under section 163-A and 166 of the Act are distinct and separate.
D
The respondents contended that by enacting Section 163-A of the Act,
the Parliament intended to make an exception to the provisions of section
166 of the Act for the purpose of implementing the principles of social
justice; and that the award under section 163-A of the Act is a final award
E and not interim in nature for the fact that under the Second Schedule to
the Act, one third of the total income is excluded from the total amount
F
of compensation and that certain provisions relevant for total amount of
compensation payable have been provided.
Dismissing the appeals and the review petitions, the Court
HELD: I.I. The Motor Vehicles Act, 1988 is in the nature ofa social
welfare legislation. Section 140 of the Act deals with interim compensation.
By inse

## Text

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DEEPAL GIRISHBHAI SONI AND ORS .
A
.
..\:
v.
UNITED INDIA ASSURANCE CO. LTD., BARODA
MARCH I 8, 2004
[Y.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.]
B
Motor Vehicles Act, J 988
Sections 163-A and J 66-Award passed under a proceeding under section c
163-A of the Act-Bench of two judges referring the matter to a larger Bench
doubting the correctness of the decision in Oriental Insurance Co. ltd v.
Hansrajbhai V. Koda/a and Ors., 12001 J 5 SCC 175, wherein it was held that
the award passed under Section 163-A of the Motor Vehicles Act, 1988 is a
final award and not interim in nature"-correctness of-Affirming the Koda/d's
case, the three Judges Bench held, Parliament inserted section 163-A to the D
Act for quick and efficacious relief by granting compensation on the basis of
a structured formula envisaged under Second Schedule to the Act considering
all relevant particulars and without insisting for the proof of negligence in
causing the accident-Remedies envisaged under sections 163-A and 166 of
the Act are distinct and separate and are both final remedies-Claimant cannot
pursue both the remedies.
E
Sections 140 and 163-A-Held, compensation paid under section 140 is
ad-hoc in nature which shall be reduced/adjusted from the amount of
compensation payable under the said Section or Section 163-A of the ActClaim under section 140 is in addition to any other claim which may be made F
under any other law for the time being in force.
4.
A Ben.ch of two judges referred the appeal to a larger Bench of three
judges doubting the correctness of the decision rendered by a Bench of
two judges in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Koda/a and Ors.,
[2001) 5 SCC 175, wherein it was held that the award passed under Section G
163-A of the Motor Vehicles Act, 1988 is a final award and not interim in
nature and that the claimants are debarred from making further claims
on the basis of fault liability under section 166 of the Act. Two review
.l(
petitions seeking review of the judgement in Koda/a 's case and another
simil:ir appeal were also tagged with the main appeal.
213
H
214
Slil'REME COURT R1:ro1ns
1200~1 o S.l'.R.
A
The claimants/appellants contended that the award under section
163-A of the Motor Vehicles Act, 1988 is ~n interim award granting only
'adequate and rational compensation' on a structured formula and not a
final award; that, the actual loss suffered by the victim is not adjudicated
upon in Section 163-A proceeding; that the Act is a beneficial legislation
B and it should be construed liberally; that an award of 'just compensation'
envisaged under section 166 of the Act cannot be denied by treating the
award under section 163-A of the Act as a final award; that the ceiling
provided in Second Schedule indicates that the compensation payable
under Section 163-A is interim in nature which would be adjusted when
a final award is passed under section 166 of the Act; that the proceedings
C envisaged under sections 140 and 163-A of the Act are alternative to each
other; that the Bench in Koda/a 's case did not consider the legislative
history of the Act and misinterpreted and misconstrued the expression 'any
other law' appearing in Section 140(5) of the Act; and that the said
expression also includes other provisions of the Act since the remedies
provided under section 163-A and 166 of the Act are distinct and separate.
D
The respondents contended that by enacting Section 163-A of the Act,
the Parliament intended to make an exception to the provisions of section
166 of the Act for the purpose of implementing the principles of social
justice; and that the award under section 163-A of the Act is a final award
E and not interim in nature for the fact that under the Second Schedule to
the Act, one third of the total income is excluded from the total amount
F
of compensation and that certain provisions relevant for total amount of
compensation payable have been provided.
Dismissing the appeals and the review petitions, the Court
HELD: I.I. The Motor Vehicles Act, 1988 is in the nature ofa social
welfare legislation. Section 140 of the Act deals with interim compensation.
By inserting Section 163-A, the Parliament intended to provide for making
of an award consisting of a pre-determined sum without insisting on a longdrawn trial or without proof of negligence in causing the accident. The
G 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, 1855. The Act and the Rules framed by the State suggest
that a new device was sought to be evolved so as to grant a quick and
efficacious relief to the victi1_11s falling within the specified category. The
H heirs of the deceased or the victim in terms of the said provisions were
D.G. SONI r. UNITED INDIA ASSURANCE CO .. LTD .
215
. 1 -I:
assured of a speedy and effective remedy which was not available to the A
claimants under Section 166 of the Act. 1232-F; 234-C-E!
.......
' '
1.2. Section 163-A of the Act was 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, C<lmp~Psation is to be B
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 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. C
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 D
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 E
of use of a motor vehicle. (234-E-H; 235-A]
2.1. Payment of the amount in terms of Section 140 of the Act is ad
hoc in nature. A claim made thereunder is in addition tO any other claim
which may be made under any other law for the time being in force.
Section 163-A does not contain any provision identical to Section 140(5) p
of the Act which indicates that whereas in terms of the latter, the liability
of the owner of the vehicle to give compensation or relief under any other
law for the time being in force continues subject of course to the effect
that the amount paid thereunder shall be reduced from the amount of
compensation payable under the said Section or Section 163-A of the Act.
[235-B-C; 236-A-B] G
2.2. By reason of Section 163-A, 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. A prov_ision of law providing
for compensation is presumed to be final in nature unless a contra H
I
!--
216
SUPREME COURT REPORTS
12004] 3 S.C.R.
A indication is found to be in the statute either expressly or by necessary
~· (
implication. While granting compensation, the Tribunal is required to
adjudicate upon the disputed question as regard age and income of the
deceased or the victim, as the case may be. Unlike Section 140 of the Act,
adjudication on several issues arising between the parties is necessary in
B
a proceeding under Section 163-A of the Act. 1236-B-DI
General Manager, Kera/a State Road Transport Corporation,
Trivandrum v. Mrs. Susamma Thomas and Ors., 119941 2 SCC 176, referred
to.
c
2.3. The Parliament intended to provide for a final amount of
compensation under section 163-A of the Act and not an interim one.
Under the scheme envisaged under Section 163-A, the rights and
obligations of the parties are to be determined finally. The amount of
compensation payable is not to be altered or varied in any other
proceedings. rt does not contain any provision providing for set off against
D a higher compensation unlike Section 140 of the Act. 1236-G-H; 237-A-BI
2.4, The remedy for payment of compensation under Sections 163A and 166 of the Act are final and independent of each other. A claimant
cannot pursue his remedies thereunder simultaneously. Thus one must opt/
elect to go either for a proceeding under Section 163-A or under Section
E 166 of the Act, but not under both. 1238-D-EI
2.5. In agreement with Kodala's case, unlike Sections 140 and 141
of the Act, the Parliament did not want to provide additional compensation
in terms of Section 163-A of the Act. Whenever the Parliament intended
F
to provide for adjustment or refund of the compensation payable on the
basis of no-fault liability from the amount of compensation payable under
,;.,
the award on the basis of fault liability under Section 166 of the Act, the
I •
same has expressl)I been provided for. Since no such procedure for refund
or adjustment of compensation has been provided for in relation to the
proceedings under Section 163-A of the Act, it must be held that the
G scheme of the provisions under Sections 163-A and 166 of the Act are
distinct and separate in nature, [238-E-F; 239-B-DI
2.6. In Section 140(5) of the Act, the expression "also" has been used
which is indicative of the fact that the owner of the vehicle would be
)l -
additionally"liable to pay compensation under any other law for the time
H being in force. Right to claim compensation under Section 140, having
D G. SONI"· UNITED INDIA ASSURANCE CO, LTD
217
<
,I -.I;
regard to the provisions contained in Section 141, is in addition to any A
other right to claim compensation on the principle of fault liability. Such
a provision does not exist in Section 163-A of the Act. If no amount is
payable under the fault liability or the compensation which may be
received from any other law, no refund of the amount received by the
claimant under Section 140 is postulated in the Scheme. Section 163-A, B
on the other hand, nowhere provides that the payment of compensation
of no-fault liability in terms of the structured formula is in addition to
the liability to pay compensation in accordance with the right to get
~
compensation on the principle of fault liability. It is also not correct to
contend that the expression "any other law for the time being in force"
used in Section 140(5) would include any other provisions of the Motor c
Vehicles Act. Had the intention of the Parliament been to include the other
provisions of Motor Vehicles Act within the meaning of the expression
"any other law for the time being in force", it could have said so expressly.
The Parliament has chosen to use the expression "any other law", to mean
a law other than the provisions of the Motor Vehicles Act. The proviso D
appended to Sub-Section (5) of Section' 140 of the Act is required to be
given a purposive meaning. Further, different forms prescribed under the
State Motor Vehicle Rules as regard determination of the final
compensation is suggestive of the fact that both proceedings are meant to
be final in nature. (239-E-H; 240-A-B and EJ
2.7. In Section 163-A of the Act, the expression "notwithstanding E
anything contained in this Act or in any other law for the time being in
force" has been used, which goes to show that the Parliament intended to
insert a non-obstante clause of wide nature which would mean that the
,-
provisions of Section 163-A would apply despite the contrary provisions
existing in the said Act or any other law for the time being in force. Section F
_,,.
'
163-A of the Act covers cases where even negligence is on the part of the
J-
/
victim. It is by way of an exception to Section 166 and the concept of social
justice has been duly taken care of. [240°-G-H; 241-A-B)
Oriental Insurance Co. Ltd v. Hansrajbhai V. Koda/a and Ors., [2001)
G
l sec 175, affirmed.
2.8. This Court does not agree with the findings in Kodala's that if
a person invokes provisions of Section 163-A of the Act, the annual income
'<
of Rs. 40,000 per annum shall be treated as a cap. The proceeding under
Section 163-A being a social security provision, providing for a distinct H
I
).-.
218
SUPRl:ML: COURT REPOR rs
120041 3 S.C.R.
A scheme, only those whose annual income is upto Rs. 40,000 can take the
benefit thereof. All other claims arc required to be determined in terms
't- '
of Chapter XII of the Act. 1241-C-DI
3.1. The Act is a beneficial one and, th us, deserves liberal
B
construction with a view to implementing the legislative intent but it is
trite that where such beneficial legislation has a scheme of its own and
there is no vagueness or doubt therein, the court would not travel beyond
the same and extend the scope of the statute on the pretext of extending
the statutory benefit to those who are not covered thereby. For the purpose
of interpretation of statute, same is to be read in its entirety. The purport
c and object of the Act must be given its full effect. The object underlying
the statute is required to be given effect to by applying the principles of
purposive construction. 1237-D-E; 238-B-D]
Regional Director, Employees' State Insurance Corporation, Trichur v.
Ramanuja Match Industries. AIR (1985) SC 278; 1198511 SCC 218, Kuna/
D Singh v. Union of India and Anr., 1200314 SCC 524; State of Tripura and
Anr. v. Roopchand Das and Ors., (20031 I SCC 421; High Court of Gujarat
and Anr. v. Gujarat Kisan Mazdoor Panchayat and Ors., JT (2003) 3 SC 50;
Indian Handicrafts Emporium and Ors. v. Union of India and Ors., 12003]
7 SCC 589; Ameer Trading Corporation Ltd. v. Shapoorji Data Processing
E
Ltd., JT (2003) 9 SC 109 - (2003) 9 SCALE 713 and Ashok Leyland v. State
of Tamil Nadu and Anr., (2004) I SCALE 224, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3126 of2002.
From the Judgment md Order dated 9.11.2002 of the Gujarat High
-,
Court in F.A. No. 2272 of 2000.
F
WITH
,.,._
,. -
C.A. No. 3127/2002, R.P. (C) No. 160/2002 in C.A. No. 2573/2001,
R.P. (C) No. 161/2002 in C.A. No. 2572/2001 and C.A. No. 1680/2004.
G
Gaurab Banerjee, G.L. Sanghi, Jitender Sharma, Arunabh Chaudhary,
I
A.P. Medh, Hrishikesh Barna and Ms. Pragya Bhagel for Ms. M. Karanjawala,
Ms. Seema Sund, R.C. Mishra for Dr. Meera Agarwal, K.L. Nandwani, Debasis
Misra, Parmanand Jha, Ms. Minakshi Vij and Himinder Lal for the appearing
parties.
..,.
H
The Judgment of the court was delivered by
D.G. SONI 1·. UNITED INDIA ASSURANCE CO .. LTD. ISINHA, .I]
219
S.B. SINHA, J. Leave granted in S.L.P. (C) No. 708 of 2003.
A
Reference to this Bench :
A Division Bench of this Court by an order dated 19.04.2002 doubting
the correctness of 2-Judge Bench decision in Oriental Insurance Co. Ltd v.
Hansrajbhai v Koda/a and Ors., [2001] 5 sec 175 (Kodala) has referred B
the matter to a 3-Judge Bench whereby and whereunder the proceedings
under Section 163-A of the Motor Vehicles Act, 1988 (hereinafter referred
to and called for the sake of brevity as "the Act") has been held to be a final
4'
proceeding as a result whereof the claimants had been debarred from
proceeding with their further claims made on the basis of fault liability in
terms of Section 166 thereof.
C
Subject matter :
The appeals arise out of judgment and order dated 9.11.2000 passed by
the High Court of Gujarat at Ahmedabad in First Appeal No. 2272 of 2000
whereby and whereunder the claims of the appellants have been calculated D
limiting the income of the deceased at Rs. 40,000 per annum .. Two review
applications have also been filed seeking review of the judgment and order
passed in KJdala 's case (supra).
An application under Article 136 of the Constitution of India has also
been filed marked as S.L.P. (C) No. 708 of 2003 arising out of the judgment E
and order dated 28.8.2002 passed by the High Court of Himachal Pradesh in
F.A.O. [MVA] No. 181 of2001.
Background Fact :
The fact of the matter may be noticed from C.A. No. 3126 of 2002.
The parents of the appellants herein met with an untimely death in an accident
arising out of use of a motor vehicle on or about 4.9.1998. The appellant No
1 was at the relevant time·a major and the other three appellants were minors.
The appellants filed two claim petitions; one under Section 163-A of
F
the Act and the other under Section 166 thereof claiming compensation for G
a sum of Rs. 4,97,800 for the death of their mother, Ms. Prabhaben as also
a sum of Rs. 17, 30,900 for the death of their father, Shri Girishbhai Soni.
Proceeding on the basis that in terms of Section 163-A of the Act, merely an
)(
interim relief was to be granted, the Motor Accidents Claim Tribunal in
MAC Petition No. "2133/1998 and M.A.C. Petition No. 2134/1998 vide its
order dated 24.3.2000 awarded a sum of Rs. 4,20,500 and Rs. 11,74,500/- H
220
SUPREME COURT REPORTS
[2004] 3 S.C.R.
A respectively with interest at the rate of 12% per annum from the date of the
application till realisation. It is not in dispute that although while passing the
said order the learned Tribunal considered the matter also on their own merits
but directed that the applications filed by the appellants herein purported to
be under Section 166 of the Act would be determined separately.
B
The respondent - Insurance Company being aggrieved by and dissatisfied
with the said order dated 24.3.2000 pr~ferred appeals before the High Court
of Gujarat at Ahmedabad. By reason of the impugned judgment, the High
Court having regard to the concession made at the bar to the effect that in
view of the cap of annual income of Rs. 40,000/- as contained in the Second
C Schedule appended to the Act, the awarded amount should be reduced to Rs.
3,24,500 from Rs. 4,20,500 and to Rs. 3,78,500 from Rs. I 1,74,500
respectively.
While modifying the order of the Tribunal in each of the said appeals,
the High Court clarified that the said sum would be paid to the appellants
D herein by way of interim compensation observing:
"It is also observed that as has been agreed between the parties th is
whole amount as indicated above shall be disbursed to the respondents
at this stage itself as per the apportionment ordered by the Tribunal
for respective respondents and there is no need to invest 70% of the
E
amount in the fixed deposit etc., as has been ordered by the Tribunal
and l 00% of this amount i.e., Rs. 3,24,500 in First Appeal No. 2272
of 2000 and Rs. 3,78,500 in First Appeal No. 2273 of 2000, shall be
disbursed to the respondents in each of these two matters respectively.
It may also be made very clear that in view of the agreed position
F
G
between the parties, we have not embarked upon the question of
interpreting Section 163-A and the Schedule and without entering
into the exercise of interpreting the relevant provisions we have passed
this order only because both the sides h~ve shown a good gesture
before us. At the time of awarding of compensation under section
166 of the Act all the contentions factual and legal as may be available
to the respective parties are open to be agitated when the main petitions
are considered by the Tribunal."
Submissions :
Mr. Gaurab Banerjee, learned senior counsel appearing on behalf of the
..,.. '
appellants and Mr. G.L. Sanghi, learned sehior counsel appearing on behalf
H of the review petitioners would take us through the legislative history leading
D.G SONI v. UNITED INDIA ASSURANCE CO .. LTD. [SINHA,J.]
22 J
>
I -\
to enactment of Section 163-A of the Motor Vehicles Act and submit that the A
same is indicative of the fact that an order passed thereunder is interim in
nature.
'I
'
'
The learned counsel would urge that the said Act being a beneficent
legislation deserves liberal construction and in that view of the matter the
remedy available to a claimant against a tort feasor for obtaining a 'just' B
compensation in terms of Section 166 of the Act cannot be taken away only
because an interim award has been made in terms of Section 163-A of the
->t
Act as in the said proceeding actual loss suffered by the victim is not
adjudicated upon and merely 'adequate compensation' on a structured formula
is to be paid thereunder.
C
The learned counsel would point -otlt that the said Act provides for
exercise of an option limited only to filing of a claim application under
Section 140 and Section 163-A, and, thus, the remedy under Section 166 is
not barred.
The learned counsel would contend that a ceiling has been provided in
the Second Scheduled so far _as income of the victim is concerned to the
extent of Rs. 40,000 per annum is also indicative of the fact that the
compensation payable thereunder is only interim in nature and the sum
awarded in the said proceeding is to be adjusted as and when a final award
D
is passed in terms of Section 168 of the Act The learned counsel would E
submit that it is judicially accepted that the Second Schedule appended to the
Act contains a large number of anomalies and in that view of the matter a
proceeding under Section 163-A should not be held to be a final one.
Mr. Banerjee would urge that upon a proper analysis of the scheme of
the Act it would appear that the concept of 'no fault liability' is envisaged F
both under Section 140 of the Act and Section 163-A thereof and the
proceeding thereunder being alternative to each other providing for identi.cal
rights and liabilities, an order under Section 140 being not final; there is no
reason as to why an award made under Section 163-A thereof should be
treated to be final.
G
The learned counsel would contend that the Bench in deciding Koda/a
(supra) not only failed to take into consideration the legislative history of the
Act but also mis-interpreted the scheme and structure thereof. The Bench in
KDdala (supra), the learned counsel would argue, furthermore failed t<1 consider
the effect of the Act which is beneficent in nature and, thus, was required to H
222
SUPREME COURT REPORTS
[2004] 3 S.C.R.
A be construed liberally. Right to prosecute a remedy under common law must
be barred either expressly or by necessary implication and such a bar having
not been provided as regard a proceeding under Section 163-A of the Act, it
is inconceivable, the learned counsel would submit, that a remedy provided
for under the statute would not be made available to the suitor.
B
The learned counsel would contend that the Bench deciding Koda/a
(supra) misinterpreted and misconstrued the expression "any other law"
appearing in Sub-Section (5) of Section 140 to mean ·'any other law for the
time being in force as, for example, the Workmen's Compensation Act, 1923".
The said expression, the learned counsel would contend, would embrace also
C the other provisions of the said Act. According to the learned counsel, the
expressions "any other law" would by necessary implication include the other
provisions of the Motor Vehicles Act having regard to the fact that the
remedies provided for under Sections 163-A and 166 are distinct and separate
and are based on different legal regimes. It was pointed out that whereas
under the former "adequate and rational compensation" is provided for, the
D latter provides for "just compensation".
Mr. Jitendra Sharma, learned senior counsel appearing on behalf of the
respondents, on the other hand, would submit that Section 163-A which was
introduced by the Parliament in the year 1994 carries absolutely a different
scheme vis-a-vis 'no-fault liability' introduced in the year 1982 in Motor
E Vehicles Act, 1939 which was in pari materia with Section 140 in the 1988
Act. By enacting Section 163-A, Mr. Sharma would contend, an exception
to the provisions of Section 166 was made out for the purpose of implementing
the principles of social justice.
F
Drawing our attention to the Second Schedule appended to the Act, the
learned counsel would submit that the very fact that in terms thereof, onethird of the total income is to be excluded from the total amount of
compensation and further certain provisions relevant for computation of total
amount of compensation payable thereunder have been provided for, is not
itself suggestive of the fact that thereby the payment directed thereunder is
G not by way of an interim or on account payment but is a final one.
LEGISLATIVE HISTORY:
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
H of tort. The Indian Motor Vehicles Act, l 914 is the first enactment relating
I
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\
I .I;
D.G. SONI 1· UNITED INDIA ASSURANCE CO. LTD. !SINHA. IJ
223
to motor vehicles. The Motor Vehicles Act, 1939 which replaced the 1914 A
Act consolidated and amended the law .relating to motor vehicles in Jndia.
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 B
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.
The 85th Law Commission in its report submitted in May, 1980, C
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 an accident of the 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 D
accepted by the Parliament.
While making the aforementioned recommendations, the Commission
referred to the foliowing observations made by this Court in Bishan Devi and
Ors. v. Sirbaksh Singh and Anr., [1980] I 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."
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
E
and a sum of Rs. 75,000/- in respect of permanent disablement by introducing F
the concept of "no-fau It liability''. The amount of compensation, however,
had been revised from time to time.
The Law Commission furthermore recommended for laying of a scheme
m 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 l 99th Law Commission in its report submitted in
1987 stated the law as it stood then in the following terms:
G
"the law as it stands present, save the provisions in chapter VIIA
inserted by the Motor Vehicles (Amendment) Act, 1982, enables the H
A
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r2004J 3 S.C.R.
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."
The present Act came into force thereafter in terms whereof inter alia
Sections 92-A to 92-E of the 1939 Act were replaced by Sections 140 to 144
B 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
C 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-detennined 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.
D STATUTORY PROVISIONS:
Chapter X of the said Act provides for liability without fault in certain
cases. Section 140 provides for liability upon the owner of the vehicle to pay
compensation on the principle of no fault. The said provision reads thus:
E
"140. Liability to pay compensation in certain cases on the principle
of no fault. - (I) Where death or permanent disablement of any person
bas 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
F
accordance with the provisions of this section.
G
H
(2) The amount of compensation which shall be payable under subsection ·o) 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 (I), the claimant
shall not be required to plead and establish that the death or pennanent
disablement in respect of which the claim has been made was due to
a~y wrongful act, neglect or default of the owner or owners of the
vehicle or vehicles concerned or of any other person.
r
f
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D.G. SONI v. UNITED INDIA ASSURANCE CO. LTD. [SINHA. J]
225
(4) A claim for compensation under sub-section (l) shall not be A
defeated by reason of any wrongfu I 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 B
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 : C
Provided that the amount of such compensation to be given under
any other law shall be reduced from the amount of compensation
payable under this section or under Section 163-A."
Sections 141 and 142 of the said Act read as under:
D
"141. Provisions as to other right to claim compensation for death or
permanent disablement - (I) 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 163-A (such other right
hereafter in this section referred to as the right on the principle of E
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 F
expeditiously as possible and where compensation is claimed in respect
of such death or pennanent 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.
G
(3) Notwithstanding anything contained in sub-section (l ), 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
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SUPREME COURT REPORTS
[2004] 3 S.C.R.
A
and -
(a) if the amount of the first-mentioned 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
B
which it exceeds the first-mentioned compensation;
(b) if the amount of the first-mentioned compensation is equal to or
more than the amount of the second-mentioned compensation, he
shall not be liable to pay the second-mentioned compensation.
C
142. Permanent disablement. -For the purposes of this Chapter,
permanent disablement of a person shall be deemed to have resulted
from an accident of the nature referred to in sub-section ( 1) of section
140 if such person has suffered by reason of the accident, any injury
or injuries involving:-
D
(a) permanent privation of the sight of either eye or the hearing of
E
either ear, or privation of any member or joint; or
(b) destruction or permanent impairing of the powers of any member
or joint; or
(c) permanent disfiguration of the head or face."
Section 144 provides for a non-obstante clause.
Section 163-A was inserted by Act 54 of I 994 which came into force
from I 4.1 I .1994. The said provision has been inserted to provide for a new
pre-determined structured formula for payment of compensation to road
F accident victims on the basis of age/ income of the deceased or the person
~ ' (
suffering permanent disablement.
_..
Sections 163-A and I 63-B read thus:
"163-A. Special provisions. as to payment of compensation on
G
structured-formula basis. - (I) 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 Ii.able to pay in the case of death or
permanent disablement due to accident arising out of the use of motor
H
vehicle, compensation, as indicated in the Second Schedule, to the
legal heirs or the victim, as the case may be.
)I.
•
D.G. SONI v. UNITED INDIA ASSURANCE CO,. LTD. [SINHA. J.]
227
Explanation. - For the purposes of this sub-section, 'permanent A
disability' shall have the same meaning and extent as in the Workmen's
Compensation Act, 1923 (8 of 1923 ).
(2) In any clail)l for compensation under sub-section (I), 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 B
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.
C
163-B. 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."
The second schedule referred to in Section 140 of the Act provides for
a structured formula for the purpose of grant of compensation to a third party
D
"
involved in fatal accident/injury. By reason thereof a multiplier system is
introduced pursuant whereto and in furtherance whereof the amount of
compensation is required to be calculated having regard to the age of the E
victim and his annual income. However, in terms of the note appended to
the said Schedule the amount of compensation so arrived at in the case of
fatal accident, the claims is to be reduced by one-third, in consideration of
the expenses which the victim would have incurred towards maintaining
himself, had he been alive.
Clause (2) of the said Second Schedule provides that the amount of
compensation shall not be less than Rs. 50,000. lt also provides for grant of
compensation under several heads, namely, (3) General Damages in case of
death, (4). General Damages in case of injuries and disabilities, (5). Disability
F
in non-fatal accidents and (6) notional income for compensation to those who G
had no income prior to accident. However, the maximum amount which is
to be paid under the different heads had also been specified.
Chapter XII deals with constitution of claims tribunals, application for
compensation, option regarding claims for compensation in certain cases,
award of the claims tribunal etc. Sections 166, 167 and 168 read thus:
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228
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B
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SUPREME COURT REPORTS
(2004] 3 S.C.R.
"166. Application for compensation. - (I) An application for
compensation arising out of an accident of the nature specified in
sub-section (I) 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
D
application.
(2) Every application under sub-section (I) 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
E
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:
F
Provided that where no claim for compensation under section 140 ·is
made in such application, the application shall contain a separate
statement to that effect immediately before the signature of the
applicant.
(3) ***
(4) The Claims Tribunal shall treat any report of accidents forwarded
G
to it under sub-section (6) of section 158 as an application for
compensation under this Act.
H
167. Option regarding claims for compensation in certain cases.
-Notwithstanding anything contained in the Workmen's Compensation
Act, 1923 (8 of 1923) where the death of, or bodily injury to, any
person gives rise to a claim for compensation under this Act and also
f
.J.
I
~
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D.G. SONI''· UNITED INDIA ASSURANCE CO, LTD. [SINHA, .I]
229
under the Workmen's Compensation Act, 1923, ihe person entitled to A
compensation may without prejudice to the provisions of Chapter X
claim such compensation under either of those Acts but not under
both .
168. Award of the Claims Tribunal.