The
Oriental Insurance Co. Ltd. Vs. Hansrajbhai V. Kodala & Ors [2001] Insc 192
(4 April 2001)
M.B.
Shah & D.P. Mohapatra Shah, J.
Appeal (civil) 2569 of 2001 Appeal (civil) 2570 of 2001
Appeal (civil) 2571 of 2001 Appeal (civil) 2572 of 2001 Appeal (civil) 2573 of
2001
L.I.T.J
Leave
granted.
The
common question involved in these appeals is whether the compensation payable
under Section 163A of the Motor Vehicles Act, 1988 (hereinafter referred to as the
Act) as per the structured formula basis is in addition or in the alternative
to the determination of the compensation on the principle of fault liability,
after following the procedure prescribed under the Act? For convenience we
would refer to few facts in Civil Appeal arising out of S.L.P. (Civil) No.8742
of 1999 in which the judgment and order dated 4.8.98 passed by the High Court
of Gujarat at Ahmedabad in FA No.2473 of 1996 is challenged. Petition claiming
compensation of Rs.2,50,000/- was filed before the Claims Tribunal on the
ground that one bus bearing registration No. G.J.3T 9815 met with an accident
and Mayur, son of respondent Nos. 1 and 2, aged about 6 years died as a result
thereof. The claimants also filed an application under Section 163A of the Act
for interim compensation on structured formula basis. The Insurance Company-
appellant contended that as the bus was not insured with it, it was not liable
to pay compensation. The Claims Tribunal granted the prayer of the respondents
and directed the appellant to pay Rs.1,62,000/- to the respondents as interim
compensation. The appellants preferred appeal before the High Court contending
inter alia that in order to provide quicker relief to the accident victims,
Section 163A was inserted and is not meant for interim compensation but is an
alternative to the determination of compensation under Section 168. It was
further contended that the application under Section 163A was a substantial
application and not an interim application. The High Court by judgment and
order dated 4.8.1998 held that the award under section 163A was an interim
award and the claimants were entitled to proceed further with determination of
compensation under Section 168 of the Act. That order is under challenge.
For
determining the question involved, the scheme for payment of compensation under
the Act can be divided as under: -
(i)
Section 140For no-fault liability in case of death or disablement;
(ii)
Section 161In case of hit and run motor accidents, where the identity of the
vehicle cannot be ascertained compensation amount is Rs.25000/- in case of
death and Rs.12500/- in case of grievous hurt;
(iii)
Section 163ASpecial provisions as to payment of compensation on structured
formula basis without establishing or proving any wrongful act or neglect or
default of any person;
(iv)
Section 168Determination of compensation payable in pursuance of any right on
the principle of fault liability.
Chapter
XII provides for constitution of Claims Tribunals by the State Government for the
purpose of adjudicating the claims for compensation and the procedure thereof.
The Claims Tribunal is required to determine the application for payment of
compensation either under section 140 or section 163A on the basis of no-fault
liability and also on the basis of right to receive the compensation on the
principle of fault liability on the basis of Law of Torts, as modified by the
Fatal Accidents Act, 1855 read with Motor Vehicles Act, 1988.
For
appreciating the rival contentions, it would be necessary to refer to the
relevant provisions of the Sections 140 (Chapter X), 161, 162, 163A, 163B
(Chapter XI) and 167 (Chapter XII) of the Act which are as under:
140.
Liability to pay compensation in certain cases on the principle of no fault.
(1)
Whether 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 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 the 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.
(1) 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 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 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.
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, 1860 (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 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 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 twelve thousand 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 sub-
section.
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 sub-section 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 sub- section
(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 purpose 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 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 Workmens 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.
167.
Option regarding claims for compensation in certain cases.Notwithstanding
anything contained in the Workmens 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 under the Workmen’s Compensation Act,
1923, the person entitled to compensation may without prejudice to the
provisions of Chapter X claim such compensation under either of those Acts but
not under both.
Further,
Section 164 empowers the Central Government to make rules for the purpose of
carrying into effect the provisions of Chapter XI which include making such
rules for (a) the forms to be used for the purpose of the said chapter and (f)
the identification by certificates or otherwise of persons or vehicles exempted
from the provisions of the Chapter. Learned counsel appearing on behalf of the
respondents, however, submitted that uptil now, the Central Government has not
framed any such rules as provided under Section 164. Thereafter, Chapter XII
deals with Claims Tribunals. Section 165 provides for establishment of Claims
Tribunals for the purpose of adjudicating upon claims for compensation in
respect of accidents involving a death of, or bodily injury to, persons arising
out of or use of motor vehicles, or damages to any property of a third party so
arising, or both, and Explanation to sub-section (1) provides that claims for
compensation in respect of accidents involving the death of or bodily injury to
persons arising out of the use of motor vehicle includes claims for
compensation under Section 140 and 163A. Hence, the application claiming
compensation under Section 140 or 163A and/or on the right to claim
compensation on the principle of fault liability is required to be filed before
the Claims Tribunal. Section 166 provides who can make application for such
compensation and where it could be filed.
Additionally,
sub-section (4) of section 166 makes provision that the Claims Tribunal shall
treat the report of accidents forwarded to it under sub-section (6) of Section
158 as an application for compensation under the Act and sub-section (6) of
section 158 provides for submitting the report to the Claims Tribunal by the
officer in charge of the police station as soon as any information regarding
any accident involving death or bodily injury to any person is recorded or
report under Section 158 is completed by a police officer. Section 168 requires
the Claims Tribunal to determine the amount of compensation which appears to it
to be just and specify person or persons to whom compensation is to be paid by
making an award. Such award shall also specify the amount which shall be paid
by the insurer or owner or driver of the vehicle involved in the accident or by
all or any of them, as the case may be. Proviso to sub-section (1) of Section
168 makes it clear that in an application which is filed under Section 165, if
there is a claim for compensation under Section 140 in respect of death or
permanent disablement of any person, the same is to be disposed of in first
place in accordance with provisions of Chapter X (i.e. Sections 140 to 143).
Legislative
History Statement of Objects and Reasons:
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 163A was
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.
The
Law Commission of India in its 119th Report in the Introductory Chapter
observed [para 1.6] that previously there was recommendation for inserting
provision in the Motor Vehicles Act to extend protection to victims of hit and
run accidents where the person liable to pay such compensation or his
whereabouts cannot be ascertained after reasonable effort by providing that in
such an event, the person entitled to such compensation shall be entitled to
receive it from the State. In para 1.7 for introducing provision for no fault
liability, the Commission observed as under:
By
1980, a wind was blowing that compensation to the victims of motor accidents
should be by way of social security and the liability to pay the same must be
No-fault liability. The law, as it stands at present, save the provision 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 compensation and
which fault caused the harm such as bodily injury or death. In the event of
death of a victim of a motor accident and the consequent harm caused to his
dependants, the question whether the person responsible for the action causing
harm had committed a fault or it was an inevitable accident, is hardly relevant
from the point of view of victim or his/her dependants. The expanding notions
of social security and social justice envisaged that the liability to pay
compensation must be a No-fault liability.
Before
the Motor Vehicles Act 1939 was repealed by the present Act, the Legislature
introduced Chapter VII-A in the Motor Vehicles Act, 1939. While interpreting
the said provisions, this Court in Gujarat State Road Transport Corporation, Ahmedabad
v. Ramanbhai Prabhatbhai and Another [(1987) 3 SCR 404] referred to the
aforesaid recommendations made by the Law Commission and observed thus: - When
the Fatal Accidents Act, 1855 was enacted there were no motor vehicles on the
roads in India. Today, thanks to the modern civilization, thousands of motor
vehicles are put on the road and the largest number of injuries and deaths are
taking place on the roads on account of the motor vehicles accidents. In view
of the fast and constantly increasing volume of traffic, the motor vehicles
upon the roads may be regarded to some extent as coming within the principle of
liability defined in Rylands v. Fletcher, [1868] L.R. 3 H.L.330, 340. From the
point of view of the pedestrian the roads of this country have been rendered by
the use of the motor vehicles highly dangerous. Hit and run cases where the
drivers of the motor vehicles who have caused the accidents are not known are
increasing in number.
Where
a pedestrian without negligence on his part is injured or killed by a motorist,
whether negligently or not, he or his legal representatives as the case may be
should be entitled to recover damages if the principle of social justice should
have any meaning at all. In order to meet to some extent the responsibility of
the society to the deaths and injuries caused in road accidents there has been
a continuous agitation through out the world to make the liability for damages
arising out of motor vehicles accidents as a liability without fault. In order
to meet the above social demand on the recommendation of the Indian Law
Commission Chapter VIIA was introduced in the Act.
Sections
92-A to 92-E of the Act are to be found in Chapter VIIA.
The
Court further observed as under: - This part of the Act is clearly a departure
from the usual common law principle that a claimant should establish negligence
on the part of the owner or driver of the motor vehicle before claiming any
compensation for the death or permanent disablement caused on account of a
motor vehicle accident.
To
that extent the substantive law of the country stands modified. The special
provisions contained in section 109-A to section 109-C of the Act providing for
a scheme for granting relief to victims or the legal representatives of victims
of hit and run motor vehicle accident cases is another novel effort on the part
of the Government to remedy the situation created by the modern society which
has been responsible for introducing so many fast moving vehicles on roads.
Thereafter
a Committee to Review the Provisions of Motor Vehicles Act, 1988 and Central
Motor Vehicle Rules, 1989 (hereinafter referred to as the Review Committee) was
set up by the Government of India in March 1990. The Review Committee in its
report suggested changes in a number of provisions in the Act. The Review
Committee considered that determination of the claims cases pending before the
Claims Tribunal takes a long time. To obviate such delay, proposals were made
that finalisation of compensation claims would greatly facilitate to the
advantage of claimants, the vehicle owners as well as the insurance companies,
if a system of structured compensation can be introduced. Under such scheme the
affected party can have the option of their accepting the lump sum compensation
as is notified in that scheme of structured compensation or of pursuing his
claim through the normal channels. Thereafter, the Review Committee considered
the suggestion of General Insurance Corporation that claimants should first
file their claims with Motor Accident Claims Tribunals and the insurers be
allowed six months time to confirm their prima facie liability subject to defences
available under the Act.
After
such confirmation, the claimants should be required to exercise their option
for conciliation under Structured Compensation Formula within stipulated time.
Finally,
the Committee also observed: Para 4.11.2:
.In
case a claimant opts for conciliation, necessary consent award may be given by
MACT and if he does not opt for it, he may proceed with regular Motor Accidents
Claims Tribunal in the usual course. The Committee also recommended that the
decision of the insurer to accept liability before the expiry of the stipulated
period should be the final one and after it is available it will be open to the
insured to claim compensation under the structured compensation.
Further,
the statement of objects and reasons for amending the Act inter alia mentions
that the recommendations of the Review Committee were forwarded to the State
Governments for comments and they generally agreed with these recommendations.
The draft of the proposals based on the recommendation of the Review Committee
and representations from the public were placed before the Transport
Development Council for seeking their views in the matter. The Transport
Development Council made certain suggestions and the relevant suggestion is,(b)
providing adequate compensation to victims of road accidents without going into
long drawn procedure. The proposed legislation inter alia provide for (h)
increase in the amount of compensation to the victims of hit and run cases;
(k) a
new pre-determined formula for payment of compensation to road accident victims
on the basis of age/income, which is more liberal and rational.
The
next question iswhether the recommendations made by the Review Committee are
reflected in the provisions, which are inserted by the said Act. It is
contended that the relevant provisions nowhere provide that lump sum
compensation payable under the structured formula basis is alternative and
optional to the determination of compensation under Section 168. As stated
above, the Legislature has not specified or clarified that compensation payable
under Section 163-A is in the alternative or in addition. Therefore, we are
referring to the reasons for inserting Section 163A in context of other provisions.
For the purpose of interpretation in such cases, this Court in of Orissa &
Ors. [(1987) 3 SCC 279] observed that reason for a statute is a safest guide to
its interpretation and held thus (P.288-89): - .The reason for a statute is the
safest guide to its interpretation. The words of a statute take their colour
from the reason for it. How do we discover the reason for a statute? There are
external and internal aids. The external aids are Statement of Objects and
Reasons when the Bill is presented to Parliament, the reports of committees
which preceded the Bill and the reports of Parliamentary Committees. Occasional
excursions into the debates of Parliament are permitted. Internal aids are the
preamble, the scheme and the provisions of the Act. Having discovered the
reason for the statute and so having set the sail to the wind, the interpreter
may proceed ahead. No provision in the statute and no word of the statute may
be construed in isolation. Every provision and every word must be looked at
generally before any provision or word is attempted to be construed. The
setting and the pattern are important Again, while the words of an enactment
are important, the context is no less important.
In
this context if we refer to the Review Committees Report, the reason for
enacting Section 163A is 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. It is also apparent that
compensation payable under Section 163A is almost based on relevant criteria
for determining the compensation such as annual income, age of the victim and
multiplier to be applied. In addition to the figure which is arrived at on the
basis of said criteria, schedule also provides that amount of compensation
shall not be less than Rs.50,000/-. It provides for fixed amount of general
damage in case of death such as
(1)
Rs.2000/- for funeral expenses
(2)
Rs.5000/- for loss of consortium if beneficiary is the spouse
(3)
Rs.2400/- for loss of estate
(4) for
medical expenses supported by the bills, voucher not exceeding Rs.15000/-.
Similarly,
for disability in non- fatal accident para 5 of the Schedule provides for
determination of compensation on the basis of permanent disability. Para 6
provides for notional income for those who had no income prior to accident at
Rs.15000/- per annum.
There
is also provision for reduction of 1/3rd amount of compensation on the
assumption that the victim would have incurred the said amount towards
maintaining himself had he been alive. 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. This no fault
liability appears to have been introduced on the basis of the suggestion of the
Law Commission to the effect that the expanding notions of social security and
social justice envisage that liability to pay compensation must be no fault
liability and as observed by this Court in Ramanbhais case (Supra), in order to
meet to some extent the responsibility of the society to the deaths and
injuries caused in road accidents. However, this benefit can be availed of by
the claimant only by restricting his claim on the basis of income at a slab of
Rs.40,000/- which is the highest slab in the Second Schedule which indicates
that the legislature wanted to give benefit of no fault liability to a certain
limit. This would clearly indicate that the scheme is in alternative to the
determination of compensation on fault basis under the Act. The object
underlining the said amendment is to pay compensation without there being any
long drawn litigation on an predetermined formula, which is known as structured
formula basis which itself is based on relevant criteria for determining
compensation and the procedure of paying compensation after determining the
fault is done away. Compensation amount is paid without pleading or proof of
fault, on the principle of social justice as a social security measure because
of ever increasing motor vehicles accidents in a fast moving society. Further,
the law before insertion of Section 163-A was giving limited benefit to the
extent provided under Section 140 for no fault liability and determination of
compensation amount on fault liability was taking long time. That mischief is
sought to be remedied by introducing Section 163A and the disease of delay is
sought to be cured to a large extent by affording benefit to the victims on
structured formula basis. Further, if the question of determining compensation
on fault liability is kept alive it would result in additional litigation and
complications in case claimants fail to establish liability of the owner of the
defaulting vehicles.
Use of
specific words also and in addition in Sections 140 and 141:
The
aforesaid conclusion gets support from the language used in Sections 140, 141,
161 and 163A. Sections 140 to 143 provide for liability of the owner of the
vehicle in case of death or permanent disablement of any person resulting from
an accident arising out of use of a motor vehicle or motor vehicles to pay
compensation without any pleading or establishing that death or permanent
disablement was due to any wrongful act, neglect or default of the owner or
owners of the vehicle or vehicles. By way of earliest relief, victim is
entitled to get the amount of compensation of Rs.50,000/- in case of death and
Rs.25,000/- in case of permanent disablement. It is further provided that such
claim shall not be defeated by reason of any wrongful act, neglect or default
of the person in respect of whose death or permanent disablement has occurred.
Sub-section (5) of Section 140 upon which much reliance is placed by learned
counsel for the Insurance Companies as well as the claimants requires
consideration and interpretation, which inter alia provides that owner of the vehicle
is also liable to pay compensation under any other law for the time being in
force. The word also indicates that the owner of the vehicle would be
additionally liable to pay compensation under any other law for the time being
in force. The proviso to sub-section (5) further clarifies that the amount of
compensation payable under any other law for the time being in force is to be
reduced from the amount of compensation payable under sub-section (2) or under
section 163A. This is further crystalized in Section 141 which provides that
right to claim compensation under Section 140 is in addition to any other right
to claim compensation on the principle of fault liability and specifically
excludes the right to claim compensation under the scheme referred to in
Section 163A. Section 163B also provides that where a person is entitled to
claim compensation under Section 140 and Section 163A, he can file the claim
under either of the said sections, but not under both. Similarly, Section
141(1) also crystalises that right to claim compensation under Section 140 is
in addition to the right to claim compensation in respect thereof under any
other provision of the Act or any other law for the time being in force. Sub-
section (2) further provides that if the claimant has filed an application for
compensation under Section 140 and also in pursuance of any right on the
principle of fault liability, the claim for compensation under Section 140 is
to be disposed of in the first place and as provided in sub-section (3) the
amount received under sub-section (2) of Section 140 is to be adjusted while
paying the compensation on the principle of fault liability. On the basis of
fault liability if additional amount is required to be paid then the claimant
is entitled to get the same but there is no provision for refund of the amount
received under Section 140(2), even if the Claims Tribunal arrives at the
conclusion that the claimant was not entitled to get any compensation on the
principle of fault liability. Further, Section 144 gives overriding effect to
the provisions made under Chapter X by providing that the provisions of the
chapter shall have effect notwithstanding any thing contained in any provision
of the Act or of any other law for the time being in force. From the aforesaid
Sections, one aspect is abundantly clear that right to claim compensation on
the basis of no-fault liability under Section 140 is in addition to the right
to claim compensation on the principle of fault liability or right to get
compensation under any other law. Such amount is required to be reduced from
the amount payable under the fault liability or compensation which may be
received under any other law. If nothing is payable under the Act then the
claimant is not required to refund the amount received by him. As against this,
there is specific departure in the scheme envisaged for paying compensation
under Section 163A.
Section
163A nowhere provides that this payment of compensation on no fault liability
on the basis of 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 and unless otherwise provided for the same cause,
compensation cannot be paid again.
Provisions
for refund of compensation if compensation is received under any other law or
under the Act:
Further,
as the legislature has not provided for refund or adjustment of compensation
received under the Act and compensation payable under Section 163A, it would
mean that Scheme of payment of compensation under Section 163A is in
alternative to determination of compensation under Section 168. As stated
above, sections 140(5) and 141(3) make provisions for reduction of compensation
paid under Section 140. Under proviso to sub-Section (5) of Section 140, the
amount of such compensation which the claimant is entitled to receive under any
other law is required to be reduced from the amount of compensation payable
under Section 140 or under Section 163A. Under Section 141(3), if a person gets
the compensation on principle of fault liability, then also provision is made
for adjustment of compensation received under section 140. There is no such
provision for adjustment of compensation received under section 163A from the
compensation receivable under the Act on the principle of fault. Similarly,
section 161 provides for payment of compensation in case of hit and run motor
accidents.
Under
Section 161(3), in cases in respect of the death of any person resulting from a
hit and run motor accident, a fixed sum of Rs.25,000/- is to be paid as
compensation and in case of grievous hurt, the amount fixed is Rs.12,500/-.
Thereafter,
under Section 162, the legislature has provided for refund of compensation paid
under Section 161 on the principle of hit and run motor accident by providing
that the payment of compensation under Section 161 shall be subject to the
condition that if any compensation is awarded under any other provision of this
Act or any other law or otherwise, so much amount as is equal to the
compensation paid under Section 161 is required to be adjusted or refunded to
the insurer. Under section 162(2), duty is cast on the Tribunal, Court or other
authority awarding such compensation to verify as to whether in respect of such
death or bodily injury, compensation has already been paid under Section 161
and to make adjustment as required thereunder. Result is claimant is not
entitled to have additional compensation but at the same time he can proceed by
filing application under Section 165 or under the Workmen Compensation Act
(i.e. other law) and if he gets compensation under either of the said
provisions, the amount paid under Section 161 is to be refunded or adjusted.
The
contention of the learned counsel for the claimants that compensation payable
under Section 163A is in addition to the determination of compensation on the
basis of fault liability and thereafter it could be adjusted on the similar
lines provided under Section 140 read with Section 141 or Section 162 cannot be
accepted. The Legislature has specifically provided scheme of adjustment of
compensation under Section 140 read with Section 141 and Section 162 if the
claimants get compensation under the Act, while there is no such provisions
under Section 163A. Addition or introduction of such scheme in provisions would
be impermissible.
Use of
different words such asany other law, under this section any other law for the
time being in force, provisions of this Act or any other provision of this Act
in different sections:
The
learned counsel for the claimants submitted that the proviso to sub-section (5)
of Section 140 would mean that even in case where compensation is determined
under the structured basis formula under Section 163A, the claimant is entitled
to claim compensation on the basis of fault liability and if he gets higher
amount on the basis of fault liability then from that amount compensation which
is paid under Section 163A is to be reduced. At the first blush the argument of
the learned counsel appears to be attractive as the proviso to sub-section (5)
of section 140 is to some extent ambiguous and vague. It may mean that amount
of compensation given under any other law may include the amount payable on the
basis of fault liability, therefore, in view of said proviso compensation
amount payable under any other law is to be reduced from the compensation
payable under Section 140 or 163A. For appreciating this contention and for
ascertaining appropriate meaning of the phrase compensation under any other law
for the time being in force, the proviso to sub-section (5) is required to be
considered along with other provisions. The scheme of other provision section
167 indicates that the aforesaid phrase is referable to compensation payable
under the Workmen’s Compensation Act, 1923 or any other law which may be in
force but not to the determination of compensation under the Act, and would not
include the compensation which is determined under the provision of the Act.
This section 167 in terms provides that where death of, or bodily injury to,
any person gives rise to claim compensation under the Act and also under
Workmen’s Compensation Act, 1923, such person cannot claim compensation under
both the Acts.
Further,
in Section 140(5), the legislature has used the words under any other law for
the time being in force and under any other law. In Section 141 (1), the
legislature has used the phrase under any other provision of this Act or of any
other law for the time being in force. In sub-section (2), the legislature has
specifically provided that a claim for compensation under Section 140 shall be
disposed of as expeditiously as possible and where compensation is also claimed
in pursuance of any right on principle of fault, the application under Section
140 is to be disposed of in first place. Whereas, there is no such reference
for payment of compensation under Section 163A.
Further,
in Section 161(2), the legislature has used the phrase any other law for the
time being in force and provisions of this Act. Similarly, in Section 162, the
legislature has used the words under any other provisions of this Act or any
other law or otherwise. As against this, in Section 163A, legislature has used
the phrase notwithstanding anything contained in this Act or in any other law
for the time being in force. When the Legislature has taken care of using
different phrases in different sections, normally different meaning is required
to be assigned to the language used by the Legislature unless context otherwise
requires. However, in relation to the same subject matter, if different words
of different import are used in the same statute, there is presumption that
they are not used in the same sense. {Re: Board of Revenue v. Arthur Paul AIR
1956 SC 35 at 38}. In this light, particularly Section 141 which provides for
right to claim compensation under any other provision of this Act or of any
other law for the time being in force, proviso to sub-section (5) of Section
140 would mean that it does not provide for deduction or adjustment of
compensation payable under the Act, that is, on the principle of fault
liability which is to be determined under Section 168.
Specific
Language of Section 163A including its heading:
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 non-obstante 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 163-B further clarifies that claim petition can be filed
either under Section 140 or under Section 163A but not under both sections.
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 as 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. 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
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 under Section 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.
In the
result, the question involved in these matters is answered accordingly. The
appeals filed by the Insurance Companies are allowed and the impugned judgments
and orders are quashed and set aside. However, there will be no order as to
costs.
Before
parting with the judgment, we would like to draw the attention of the Central
Government for revision and appropriate correction of the Second Schedule,
which provides for payment of compensation on structured formula basis, by
exercise of its power under Section 163A(3).
The
learned counsel for the parties submitted that in U.P. State Road Transport
Corporation and others v. Trilok Chandra and others [(1996) 4 SCC 362 Para 18] this
Court has pointed out errors in the Second Schedule thus: We must at once point
out that the calculation of compensation and the amount worked out in the
Schedule suffers from several defects. For example, in Item 1 for a victim aged
15 years, the multiplier is shown to be Rs.3000. The total should be 3000x
15=45,000 but the same is worked out at Rs.60,000.
Similarly,
in the second item the multiplier is 16 and the annual income is Rs 9000; the
total should have been Rs.1,44,000 but is shown to be Rs.1,71,000. To put it
briefly, the table abounds in such mistakes. Neither the tribunals nor the
courts can go by the ready reckoner. It can only be used as a guide. Besides,
the selection of multiplier cannot in all cases be solely dependant on the age
of the deceased. For example, if the deceased, a bachelor, dies at the age of
45 and his dependants are his parents, age of the parents would also be
relevant in the choice of the multiplier. But these mistakes are limited to
actual calculations only and not in respect of other items.
What
we propose to emphasize is that the multiplier cannot exceed 18 years purchase
factor. This is the improvement over the earlier position that ordinarily it
should not exceed 16. We thought it necessary to state the correct legal
position as courts and tribunals are using higher multiplier as in the present
case where the Tribunal used the multiplier of 24 which the High Court raised
to 34, thereby showing lack of awareness of the background of the multiplier
system in Davies v. Powell Duffryn Associated Collieries Ltd., [1942 AC 601 :
(1942) 1 All ER 657].
In
addition, the learned counsel also pointed out that in case of fatal accident
and disability in non-fatal accident, it has been provided that notional income
for the claimant who had no income prior to accident shall be Rs.15000/- per
annum and still however the Second Schedule provides table of income ranging
from Rs.3000/- to Rs.40000/- and the brake-up also does not provide any
calculation for Rs.15000/-, as the columns in the Schedule inter alia provide
for compensation for a person having income of Rs.12000/-, and thereafter
straightway at Rs.18000/-. The learned counsel also submitted that despite the
specific provision in Section 163A(3) that the Central Government may, keeping
in view the cost of living, by notification in Official Gazette from time to
time amend the Schedule, nothing has been done so far. Further, by order dated
30.8.2000, this Court again noticed number of anomalies in the Second Schedule
and, therefore, thought it fit to have assistance of either the Attorney
General of India or the Solicitor General of India. When the matter was called
out on 15.12.2000, Mr. Altaf Ahmad, ASG, stated before the Court that the order
passed by this Court on 30.8.2000 has already engaged serious attention of the
Ministry of Surface Transport Department and the Government was considering the
matter for bringing necessary correction in the Second Schedule of the Motor
Vehicles Act.
Thereafter,
we again sought assistance of the Additional Solicitor General on the
interpretation of Section 163A and also to verify whether there are corrections
in the Second Schedule. Learned Additional Solicitor General stated that
amendment might take some time. In this view of the matter, we think it would
be appropriate if the Central Government takes necessary action as early as
possible under Section 163A(3). Ordered accordingly.
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