Smt. Kaushnuma
Begum & Ors Vs. The New India Assurance Co. Ltd. & Ors [2001] Insc 2 (3 January 2001)
K.T.Thomas,
R.P.Sethi Thomas, J.
Special Leave Petition (civil) 1431 of 2000
L.J
Leave
granted.
Can a
claim be maintained before the Motor Accident Claims Tribunal (Tribunal for
short) on the basis of strict liability propounded in Rylands vs. Fletcher
(1861-1873 All England Reports 1)? The Tribunal dismissed a claim made before
it solely on the ground that there was neither rashness nor negligence in
driving the vehicle and hence the driver has no liability, and the corollary of
which is that the owner has no vicarious liability to pay compensation to the
dependants of the victim of a motor accident. A Division Bench of the High
Court of Allahabad dismissed the appeal filed by the claimants by a cryptic
order stating that there is no error in the Tribunals order. Hence this appeal
by special leave.
The
accident which gave rise to the claim occurred at about 7.00 P.M. on 20.3.1986. The vehicle involved in the accident
was a jeep. It capsized while it was in motion.
The
cause of the capsize was attributed to bursting of the front tyre of the jeep.
In the process of capsizing the vehicle hit against one Haji Mohammad Hanif who
was walking on the road at that ill-fated moment and consequently that
pedestrian was crushed and subsequently succumbed to the injuries sustained in
that accident.
Appellants
are the widow and children of Haji Mohammad Hanif, the victim of the accident.
They filed a claim petition before the Tribunal in 1986 itself claiming a sum
of Rs.2,36,000/- as total compensation. They said that deceased Haji Mohammad Hanif
was aged 35 when he died and that he was earning a monthly income of Rs.1500/-
during those days by doing some business in manufacturing steel trunks.
The
owner of the jeep disclaimed the liability by denying even the fact of the
accident in which his jeep was involved. Alternatively, he contended that any
liability found against him in respect of the said jeep the same should be realised
from the insurance company as the vehicle was covered by valid insurance
policy. The Tribunal repelled the above contentions of the jeep owner. However,
the Tribunal found as follows: It appears that the front wheel of the jeep
suddenly got burst resulting in the disbalance and occurrence of this accident
as it is mentioned in Ex-2 the report of the Police Station.
Whatever
is the circumstance, the rash and negligence of the alleged jeep is not
established. Consequently, the Tribunal dismissed the claim for compensation.
However, the Tribunal directed the insurance company to pay Rs.50,000/- to the
claimants by way of no fault liability envisaged in Section 140 of the Motor
Vehicles Act, 1988 (for short the MV Act) (corresponding to Section 92-A of the
Motor Vehicles Act, 1939 the old MV Act).
Aggrieved
by the said rejection of the claim the appellants moved the High Court of Allahabad
in appeal, as per the provisions of the MV Act. On 28.4.1999, a Division Bench
of the High Court dismissed the appeal for which a very short order has been
passed. It reads thus: Heard learned counsel for the appellant. Finding has
been recorded that the tempo overturned and there were no negligence or
rashness of the driver. Hence Rs.50,000/- has been awarded as compensation
which is the minimum amount.
There
is no error in the order. Dismissed.
We
have to proceed on two premises based on the finding of the Tribunal. The first
is that there was no negligence or rashness on the part of the driver of the
jeep. Second is that the deceased was knocked down by the jeep when its front tyre
burst and consequently the vehicle became disbalanced and turned turtle. Should
there necessarily be negligence of the person who drove the vehicle if a claim
for compensation (due to the accident involving that vehicle) is to be
sustained? For considering the above question we may refer to the relevant
provisions of the MV Act. Chapter XII of the MV Act subsumed the provisions
relating to Claims Tribunal.
Whatever
could be considered and determined by the civil courts in suits claiming
compensation in respect of accidents, arising out of the use of motor vehicles,
have been now directed to be determined by Claims Tribunals established by the
State under the provisions of the MV Act.
Of
course, when accident in this case happened it was the old MV Act which was in
force. But the old Act contained identical provisions in respect of a lot of
matters connected with Claims Tribunal. For the purpose of the appeal only
those provisions which are identically worded need be considered. So it would
be convenient to refer to the provisions of the new Act.
Section
165(1) of the MV Act confers power on the Sate Government to constitute one or
more Motor Accidents Claims Tribunals by notification in the Official Gazette
for such area as may be specified in the notification. Such Tribunals are
constituted for the purpose of adjudicating upon claims for compensation in
respect of accidents involving the death of or bodily injury to persons arising
out of the use of motor vehicles, or damages to any property of a third party
so arising, or both. Section 175 of the MV Act contains a prohibition that no
civil court shall have jurisdiction to entertain any question relating to any
claim for compensation which may be adjudicated upon by the Claims Tribunal.
It
must be noted that the jurisdiction of the Tribunal is not restricted to decide
claims arising out of negligence in the use of motor vehicles. Negligence is
only one of the species of the causes of action for making a claim for
compensation in respect of accidents arising out of the use of motor vehicles.
There are other premises for such cause of action.
Even
if there is no negligence on the part of the driver or owner of the motor
vehicle, but accident happens while the vehicle was in use, should not the
owner be made liable for damages to the person who suffered on account of such
accident? This question depends upon how far the Rule in Rylands vs. Fletcher
(supra) can apply in motor accident cases. The said Rule is summarised by Blackburn, J, thus:
The
true rule of law is that the person who, for his own purposes, brings on his
land, and collects and keeps there anything likely to do mischief if it escapes,
must keep it at his peril, and, if he does not do so, he is prima facie
answerable for all the damage which is the natural consequence of its escape.
He can excuse himself by showing that the escape was owing to the plaintiffs
default, or, perhaps, that the escape was the consequence of vis major, or the
act of God; but, as nothing of this sort exists here, it is unnecessary to
inquire what excuse would be sufficient.
The
House of Lords considered it and upheld the ratio with the following dictum: We
think that the true rule of law is that the person who, for his own purposes,
brings on his land and collects and keeps there anything likely to do mischief
if it escapes, must keep it in at his peril, and, if he does not do so, he is
prima facie answerable for all the damage which is the natural consequence of
its escape.
He can
excuse himself by showing that the escape was owing to the plaintiffs default,
or, perhaps, that the escape was the consequence of vis major or the act of
God; but, as nothing of this sort exists, here, it is unnecessary to inquire
what excuse would be sufficient. The above Rule eventually gained approval in a
large number of decisions rendered by courts in England and abroad. Winfield on
Tort has brought out even a chapter on the Rule in Rylands vs. Fletcher. At
page 543 of the 15th Edn. of the calibrated work the learned author has pointed
out that over the years Rylands v. Fletcher has been applied to a remarkable
variety of things: fire, gas, explosiions, electricity, oil, noxious fumes,
colliery spoil, rusty wire from a decayed fence, vibrations, poisonous
vegetation. He has elaborated seven defences recognised in common law against
action brought on the strength of the rule in Rylands vs. Fletcher. They are:
(1)
Consent of the plaintiff i.e. volenti non fit injuria.
(2)
Common benefit i.e. where the source of the danger is maintained for the common
benefit of the plaintiff and the defendant, the defendant is not liable for its
escape.
(3)
Act of stranger i.e. if the escape was caused by the unforeseeable act of a
stranger, the rule does not apply.
(4)
Exercise of statutory authority i.e. the rule will stand excluded either when
the act was done under a statutory duty or when a statute provides otherwise.
(5)
Act of God or vis major i.e. circumstances which no human foresight can provide
against and of which human prudence is not bound to recognise the possibility.
(6)
Default of the plaintiff i.e. if the damage is caused solely by the act or
default of the plaintiff himself, the rule will not apply.
(7)
Remoteness of consequences i.e. the rule cannot be applied ad infinitum,
because even according to the formulation of the rule made by Blackburn, J., the defendant is answerable
only for all the damage which is the natural consequence of its escape.
The
Rule in Rylands vs. Fletcher has been referred to by this Court in a number of
decisions. While dealing with the liability of industries engaged in hazardous
or dangerous activities P.N. Bhagwati, CJ, speaking for the Constitution Bench
in M.C. Mehta & anr. vs. Union of India and ors. {1987 (1) SCC 395},
expressed the view that there is no necessity to bank on the Rule in Rylands
vs. Fletcher. What the learned Judge observed is this: We have to evolve new
principles and lay down new norms which would adequately deal with the new
problems which arise in a highly industrialised economy. We cannot allow our
judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any
other foreign country. We no longer need the crutches of a foreign legal order.
It is
pertinent to point out that the Constitution Bench did not disapprove the Rule.
On the contrary, learned judges further said that we are certainly prepared to
receive light from whatever source it comes. It means that the Constitution
Bench did not foreclose the application of the Rule as a legal proposition.
In Charan
Lal Sahu vs. Union of India {1990 (1) SCC 613} another Constitution Bench of
this Court while dealing with Bhopal gas leak disaster cases, made a reference
to the earlier decisions in M.C. Mehta (supra) but did not take the same view.
The rule of strict liability was found favour with. Yet another Constitution
Bench in Union Carbide Corporation and ors. vs. Union of India and ors. {1991
(4) SCC 584} referred to M.C. Mehtas decision but did not detract from the Rule
in Rylands vs. Fletcher.
In
Gujarat State Road Transport Corporation, Ahmedabad vs. Ramanbhai Prabhatbhai
and anr. {1987 (3) SCC 234} the question considered was regarding the
application of the Rule in cases arising out of motor accidents. The
observation made by E.S. Venkataramiah, J. (as he then was) can profitably be
extracted here: 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.
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
throughout the world to make the liability for damages arising out of motor
vehicles accidents as a liability without fault.
Like
any other common law principle, which is acceptable to our jurisprudence, the
Rule in Rylands vs. Fletcher can be followed at least until any other new
principle which excels the former can be evolved, or until legislation provides
differently. Hence, we are disposed to adopt the Rule in claims for
compensation made in respect of motor accidents.
No
Fault Liability envisaged in Section 140 of the MV Act is distinguishable from
the rule of strict liability.
In the
former the compensation amount is fixed and is payable even if any one of the
exceptions to the Rule can be applied. It is a statutory liability created
without which the claimant should not get any amount under that count.
Compensation
on account of accident arising from the use of motor vehicles can be claimed
under the common law even without the aid of a statute. The provisions of the
MV Act permits that compensation paid under no fault liability can be deducted
from the final amount awarded by the Tribunal. Therefore, these two are resting
on two different premises. We are, therefore, of the opinion that even apart
from Section 140 of the MV Act, a victim in an accident which occurred while
using a motor vehicle, is entitled to get compensation from a Tribunal unless
any one of the exceptions would apply. The Tribunal and the High Court have,
therefore, gone into error in divesting the claimants of the compensation
payable to them.
Now,
we have to decide as to the quantum of compensation payable to the appellants.
We first thought that the matter can be remitted to the Tribunal for fixation
of the quantum of compensation but we are mindful of the fact that this is a
case in which the accident happened more than 13 years ago. Hence we are
inclined to fix the quantum of compensation here itself.
Appellants
claimed a sum of Rs.2,36,000/-. But PW-1 widow of the deceased said that her
husbands income was Rs.1,500/- per month. PW-4 brother of the deceased also
supported the same version. No contra evidence has been adduced in regard to
that aspect. It is, therefore, reasonable to believe that the monthly income of
the deceased was Rs.1,500/-. In calculating the amount of compensation in this
case we lean ourselves to adopt the structured formula provided in the Second
Schedule to the MV Act. Though it was formulated for the purpose of Section
163A of the MV Act, we find it a safer guidance for arriving at the amount of
compensation than any other method so far as the present case is concerned.
The
age of the deceased at the time of accident was said to be 35 years plus. But
when that is taken along with the annual income of Rs.18,000/- figure indicated
in the structured formula is Rs.2,70,000/-. When 1/3 therefore is deducted the
balance would be Rs.1,80,000/-. We, therefore, deem it just and proper to fix
the said amount as total compensation payable to the appellants as on the date
of their claim.
Now,
we have to fix up the rate of interest. Section 171 of the MV Act empowers the
Tribunal to direct that in addition to the amount of compensation simple
interest shall also be paid at such rate and from such date not earlier than
the date of making the claim as may be specified in this behalf. Earlier, 12%
was found to be the reasonable rate of simple interest. With a change in
economy and the policy of the Reserve Bank of India the interest rate has been lowered. The nationalised banks
are now granting interest at the rate of 9% on fixed deposits for one year.
We,
therefore, direct that the compensation amount fixed hereinbefore shall bear
interest at the rate of 9% per annum from the date of the claim made by the
appellants. The amount of Rs.50,000/- paid by the Insurance Company under
Section 140 shall be deducted from the principal amount as on the date of its
payment, and interest would be recalculated on the balance amount of the
principal sum from such date.
We
direct the first respondent Insurance Company to pay the above amount to the
claimants by depositing it in the Tribunal. Once such deposit is made the same
shall be disbursed to the claimants in accordance with the principles laid down
by this Court in General Manager, Kerala State Road Transport Corporation vs. Susamma
Thomas & ors. {1994 (2) SCC 176}. The appeal is disposed of accordingly.
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