@ Maheshwarappa & ANR. Vs. C.S. Gurushanthappa & ANR.  INSC 643
(18 August 2010)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7049 OF
2002 Eshwarappa @ Maheshwarappa and Anr. Appellants Versus C. S. Gurushanthappa
and Anr. Respondents
A certain Basavaraj was the driver of a privately owned car. In
the night of October 28, 1992 he took out the car for a joyride and along with
five persons, who were his neighbours, proceeded for the nearby Anjaneya temple
for offering pooja. On way to the temple the car met with a fatal accident in
which Basavaraj and four other occupants of the car died; the fifth passenger
sustained injuries but escaped death. One of the persons dying in that motor
accident was Nagaraj, whose parents are the appellants before this Court.
The heirs and legal representatives of the deceased driver,
Basavaraj filed a claim for compensation under the Workmen's Compensation Act,
1923. They got nothing. The Commissioner under the Workmen's 2 Compensation Act
found and held that the accident did not take place in course of employment and
rejected the claim for compensation.
The heirs of the four occupants of the car, dying in the accident
(including the present appellants) and the fifth passenger suffering injuries
in the accident sought compensation before the Motor Accidents Claims Tribunal.
Their claims proved to be equally barren.
The appellants took the matter in appeal before the High Court
where they were equally unsuccessful. They are now in appeal before this Court
by special leave.
The counsel appearing on behalf of the appellants raised a very
limited issue. He submitted that in any event the appellants were entitled to
the `no fault compensation' as provided under section 140 of the Motor Vehicles
Act, 1988 but they were denied even that by the Tribunal for reasons that are
totally unsustainable in law.
We are, therefore, required to see how and why the appellants were
denied compensation under section 140 of the Act and how far the denial was
justified. The appellants filed a claim petition (MVC 1404/92) before
District Judge and MACT, Chitrandurga under section 166 of the Motor
Act seeking compensation for the death of Nagaraj. The appellants' petition,
along with four other claim petitions (filed by the heirs of the other 3 three
occupants dying in that car accident and the fifth occupant who suffered
injuries in that accident), was disposed of by the Tribunal by a common order
dated May 9, 1996. From the order of the Tribunal, it appears that in four of
the five cases before it, including MVC 1404/92, IAs were filed seeking interim
compensation of rupees twenty five thousand (Rs.25,000.00) only (as the law
stood at that time) in terms of section 140 of the Act. For some reason,
however, no order was passed on the IAs and the Tribunal proceeded to examine
the claimants' claim on merits under section 166 of the Act.
The Tribunal, in its order summarized the cases of each of the
five claimants separately, noting the facts peculiar to the four deceased and
the fifth injured occupant of the ill fated car. It also framed the issues
arising in each case separately. In regard to Nagaraj, the son of the
appellants, it noted that at the time of his death he was eighteen years old.
According to the appellants, he worked at a sweetmeat stall and earned rupees
eight hundred (Rs.800.00) only per month. He was going to Anjaneya temple in
the car being driven by Basavaraj and in the accident he died on the spot. The
appellants claimed compensation of rupees one lakh (Rs.1,00,000.00) only.
case the Tribunal framed four issues which are as under:
Whether the petitioners prove that Nagaraj died due to injuries sustained in a
motor accident that occurred on 28.10.92 at 11:45pm near Bheemasamudra Cross on
Holalkere road due to rash and negligent driving of the car MYG 1624 by its
Whether the petitioners prove that they are the legal representatives of
Nagaraj, the deceased and are entitled to compensation?
is the quantum of compensation to which the petitioners are entitled and from
which of the respondents?
Whether the respondents prove that the accident did not occur during the course
of employment of the driver of the car MYG 1624 and that they are not
vicariously liable to pay compensation?
The first two issues in the case of Nagaraj, as in all the other
cases, were answered by the Tribunal in the affirmative. On issue no.3
appellant no.1, the father of the deceased Nagaraj stated on oath that his son
was aged eighteen years and used to work in the hotel of one Siddappa who paid
him rupees thirty (Rs.30.00) only per day, but the Tribunal disbelieved him and
rejected his testimony. On the basis of the post mortem report, the Tribunal
held that Nagaraj, at the time of his death, was aged about fifteen years. It further
held that there was no evidence to show that at the time of his death Nagaraj
earned anything, pointing out that in paragraph 22 of the claim 5 petition
nothing material was mentioned about the loss of earning due to his death.
Then, rather gratuitously it fixed the amount of compensation at rupees thirty
thousand plus two thousand (Rs.30,000.00 + Rs.2,000.00) observing as follows:
the maximum compensation that can be granted to the petitioner herein would be
only about Rs.30,000-00 as being just and reasonable and a sum of Rs.2,000-00
toward funeral and obsequious expenses etc. and therefore the petitioners are
granted sum total compensation amount of Rs.32,000-00."
Having, thus, put the worth of the life of Nagaraj at rupees
thirty thousand (Rs.30,000.00) only the Tribunal proceeded to consider whether
the appellants were entitled to receive even this amount from the owner of the
car or the insurance company (second part of issue no.3 and issue no.4).
that neither the owner of the car nor the insurance company was liable to pay
anything to any of the claimants, including the appellants, because Basavaraj
had taken out the car of his employer unauthorisedly and against his express
instructions and had caused the accident by driving the car very rashly after
consuming liquor. At the time of accident the car had been taken completely
away from the control of its owner. In a sense it was stolen by the driver,
even though temporarily. The accident was, thus, completely outside the insurance
policy. No compensation was, therefore, payable to any of the claimants under
section 166 of the Motor Vehicles Act.
Up to this stage no exception can be taken to the view taken by
the Tribunal. But surprisingly the Tribunal also rejected the express prayer
made on behalf of the appellants and other claimants to at least grant the `no
fault compensation' as provided under section 140 of the Act. The Tribunal
discussed the issue over six pages in its judgment before turning down the
claim. It seems to have taken the view, that had the claim for `no fault
compensation' been made at the beginning of the proceeding, it might have
considered it favourably. But the claim was pressed at a belated stage when it
was considering the claim for compensation under section 166 of the Act and
more importantly had found that the owner of the car had no responsibility for
the accident. In this connection, the Tribunal observed as follows:
in these cases as already referred to above, if at the initial stage itself if
the learned counsel Sri. M. Gnana Swamy had pressed the Tribunal to pass
interim award on I.A.I in all the four cases, then the I.A.I filed in all four
cases would have been definitely allowed and this Tribunal would have directed
both the respondents 1 & 2 and more particularly respondent No.2 to deposit
the interim compensation amount leaving open the liability aspect at the fag
end of these cases i.e., at the arguments stage. Now that stage is already over
and as such now this Tribunal has to consider equally as to whether at this
stage as per the principle of no fault liability under s.140 of the Motor Vehicles
Act, 1988, these petitioners are entitled for the
interim in compensation amount."
"Now as regards the no fault liability as already referred to above,
perhaps the petitioners would have been granted the interim compensation amount
at the initial stage, but now it cannot be done, since the merits of the cases
are being dealt with after hearing the arguments at the final stage and the
main cases are being disposed of on merits as such."
in view of my finding that the car was being used totally outside the course of
the employment of the driver of the car and totally without the knowledge and
consent of the 1st respondent, I hold that even as regards this no fault
liability claim also, the 1st respondent or for the matter 2nd respondent
amount to any of the petitioner's hearing. Hence this being the position, I am
constrained to observe and hold that although as per the available evidence on
record the petitioners are entitled for compensation amount as granted to them,
in view of my earlier finding on issue No.3 in all the petitions, but all the
same these petitions have got to be dismissed on account of the fact that
neither the first respondent nor the second respondent is liable to pay
compensation amount to any other petitioners herein."
The appellants took the matter in appeal but the High Court in its
brief order did not at all advert to this aspect of the matter.
Coming back to the order passed by the Tribunal, we are completely
unable to appreciate the reasons assigned for denying the appellants the `no
fault compensation' as provided under section 140 of the Act. The Tribunal was
gravely in error in taking the view that a claim for compensation under section
140 of the Act can succeed only in case it is raised at the initial stage of
the proceedings and further that the claim must fail if the accident had taken
place by using the car without the consent or knowledge of its owner.
140 is the first section of chapter X of the Act. It is a small chapter
consisting of only five sections (from 140 to 144) and has the marginal heading
"Liability without Fault in Certain Cases". Section 140 reads as
Liability to pay compensation in certain cases on the principle of no fault.
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.
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
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.
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.
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:
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
plain reading of the provisions it is evident that all that is required to
attract the liability under section 140 is an accident arising out of the use
of a motor vehicle(s) leading to the death or permanent disablement of any
person. Sub-section (2) provides for a fixed amount as compensation. [In case
of death, currently it is rupees fifty thousand (Rs.50,000.00) only; at the
time the accident from which the appeal arises took place the fixed amount in
case of death was rupees twenty five thousand (Rs.25,000.00) only]. Sub-
section (3) provides that even though the death or permanent disablement
resulting from the motor accident might not be due to any wrongful act, neglect
or default of the owner of the vehicle, it would have no effect either on his
liability or on the amount of compensation. Sub-section (4) conversely provides
that the motor accident resulting in the death or permanent disablement might
be entirely due to the wrongful act, neglect or default of the person in
respect of whose death or permanent disablement the 10 claim is made but that
too would have no effect either on the right to receive the compensation or the
amount of compensation. Sub-section (5) which begins with a non obstante clause
makes it further clear that the liability under section 140 is independent of
the liability of the owner of the vehicle to pay compensation under any other
law for the time being in force. The proviso to sub-section (5), of course,
provides that the amount of compensation under any other law would be reduced
from the amount of compensation payable under section 140 or under section 163A
of the Act.
Then there is section 141 which reads as under:
Provisions as to other right to claim compensation for death or permanent
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.
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.
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 11 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;
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
(1) of section 141 makes the compensation under section 140 independent of any
claim of compensation based on the principle of fault under any other provision
of the Motor Vehicles Act or under
any other law but subject to any claim of compensation under section 163A of
(2) and (3) further provide that even while claiming compensation under the
principle of fault (under section 166) one may claim no fault compensation
under section 140 and in that case the claim of no fault compensation shall be
disposed of in the first place and the amount of compensation paid under
section 140 would be later adjusted if the amount payable as compensation on
the principle of fault is higher than it.
Finally, section 144 gives overriding effect to the provisions of
Chapter X. Section 144 reads as follows:
"144. Overriding effect.-The provisions of this Chapter shall have effect
notwithstanding anything contained in any other provision of this Act or of any
other law for the time being in force."
Seen in isolation the above provisions might appear harsh,
unreasonable and arbitrary in as much as these create the liability of the
vehicle(s) owner(s) even where the accident did not take place due to any
wrongful act, neglect or default of the owner or owners of the vehicle or
vehicles concerned but entirely due to the wrongful act, neglect or default of
the person in respect of whose death or permanent disablement the claim has
been made but the above provisions must be seen along with certain provisions
of Chapter XI. Section 146 forbids the use of the vehicle in a public place
unless there is in force, in relation to the use of the vehicle, a policy of
insurance complying with the provisions of that chapter. Section 147 contains
the provisions that are commonly referred to as `Act only insurance'. The
provisions of sections 146 and 147 are meant to create the large pool of money
for making payments of no fault compensation. Thus the liability arising from
section 140 would almost invariably be passed on to the insurer to be paid off
from the vast fund created by virtue of sections 146 and 147 of the Act unless
the owner of the vehicle causing accident is guilty of some flagrant violation
of the law.
Seen thus, the provisions of chapter X together with sections 146
and 147 would appear to be in furtherance of the public policy that in case of
death or permanent disablement of any person resulting from a motor accident a
minimum amount must be paid to the injured or the heirs of the deceased, as the
case may be, without any questions being asked and independently of the
compensation on the principle of fault.
The provisions of section 140 are indeed intended to provide
immediate succour to the injured or the heirs and legal representatives of the
deceased. Hence, normally a claim under section 140 is made at the threshold of
the proceeding and the payment of compensation under section 140 is directed to
be made by an interim award of the Tribunal which may be adjusted if in the
final award the claimants are held entitled to any larger amounts. But that
does not mean, that in case a claim under section 140 was not made at the
beginning of the proceedings due to the ignorance of the claimant or no
direction to make payment of the compensation under section 140 was issued due
to the over-sight of the Tribunal, the door would be permanently closed. Such a
view would be contrary to the legal provisions and would be opposed to the
In light of the discussions made above, we are unhesitatingly of
the view, that the Tribunal was completely wrong in denying to the appellant,
14 the compensation in terms of section 140 of the Act. We find and hold that
the appellant (as well as the other 3 claimants) were fully entitled to no
fault compensation under section 140 of the Act. We, accordingly, direct the
insurance company to pay to the appellant Rs.25,000/- along with simple
interest @ 6% p.a. from the date of the order of the Tribunal till the date of
payment. The other 3 claimants are not before this Court, but that is
presumably because they are too poor to come to this Court. Since, we have
allowed the claim of the appellants, there is no reason why this order should
not be extended to the other 3 claimants as well. We, accordingly, do so. The
insurance company is directed to make the payment as directed in this judgment
within 3 months.
In the result, the appeal is allowed but with no order as to
.....................................J (AFTAB ALAM)
.......................................J (R.M. LODHA)
August 18, 2010.