DEEPAL GIRISHBHAI SONI AND ORS. v. UNITED INDIA ASSURANCE CO. LTD., BARODA

Citation: [2004] 3 S.C.R. 213

Court: Supreme Court of India

Bench: V.N. KHARE, S.B. SINHA, S.H. KAPADIA

Case summary

DEEPAL GIRISHBHAI SONI AND ORS. v. UNITED INDIA ASSURANCE CO. LTD., BARODA.pdf

Judgment text

DEEPAL GIRISHBHAI SONI AND ORS. ... \: v. UNITED INDIA ASSURANCE CO. LTD. , BARODA MARCH I 8, 2004 [Y. N. KHARE, CJ. , S. B. SINHA AND S. H. KAPADIA, JJ. ] Motor Vehicles Act, J988 Sections 163-A and J66-Awardpassed under a proceeding under section 163-A ofthe Act-Bench oftwo 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 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 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.

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 Act- Claim under section 140 is in addition to any other claim which may be made 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 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 petitions seeking review of the judgement in Koda/a 's case and another . l( simil:ir appeal were also tagged with the main appeal.

214 Slil'REME COURT R1:ro1ns 1200~1 o S. l'. R.

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 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 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.

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 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 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 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 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 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 I -\ same is indicative of the fact that an order passed thereunder is interim in nature.

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' 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. 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 'I 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 is passed in terms of Section 168 of the Act The learned counsel would 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 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.

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 eing in force", it could have said so expressly. The very fact that the Parliament has chosen to use the expression "any other law", the same, in our considered opinion, would mean a Jaw other than the provisions of the Motor Vehicles Act. The proviso appended to Sub-Section (5) of Section 140 ofthe Act is required to be given a purposive meaning. It is not in dispute that the claim of compensation irrespective of the death or bodily injury may arise under other statutes as, for example, Workmen's Compensation Act, Factories Act, Fatal Accidents Act and other acts governing various industries including hazardous industries.

Jn the event, the motor vehicle in question is insured, ultimately the liability would also be fastened upon the insurer having regard to the provision laid down in Chapter XI of the Act. We may also notice that Rule 211(1) of Gujarat Motor Vehicle Rules provides for the application for compensation in terms of Sub-Section (I) of Section 166 of the Act. A·claim application is to be filed in Form Comp. A. Rule 231 thereof provides for an application for compensation in respect of liability without fault and for the said purpose the claim application prescribed therefor is to be filed in Form No. CWF. The very fact that different forms had been prescribed as regard determination of the final compensation is also suggestive of the fact that both proceedings are meant to be final in nature. Column No. 10 in Form Comp.

A requires the claimant to give brief particulars of the accident which would include the nature and extent of fault on the part of the driver of the vehicle, but no such column is provided for in Form CWF. Subject to the said distinction, all other particulars required to be furnished are almost identical. We may notice that Section 167 of the Act provides that where death of, or bodily injury to, any person gives rise to claim of compensation under the Act and also under the Workmen's Compensation Act, 1923, he cannot claim compensation under both the Acts. The Motor Vehicles Act contains different expressions as, for example, "under the provision of the Act", "provisions of this Act", "under any other provisions of this Act" or "any other law or otherwise".

In Section 163-A, the expression "notwithstanding 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 )r 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 163-A of the D. G. SONI 1· UNITED INDIA ASSURANCE CO, LTD. [SINHA.. I] 24 J Act covers cases where even negligence is on the part of the victim. It is by way of an exception to Section 166 and the concept of social justice has been duly taken care of. Conclusion : We, therefore, are of the opinion that Koda/a (supra) has correctly been decided. However, we do not agree with the findings in Koda/a (supra) that if a person invokes provisions of Section 163-A, the annual income of Rs. 40,000 per annum shall be treated as a cap.

In our opinion, the proceeding under Section 163-A being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs. 40,000 can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act. However, in this case, we may notice that the parties have proceeded to file two applications - one, under Section 163-A and another under Section 166 of the Act. Both have been entertained. Both the Tribunal as also the High Court have proceeded on the basis that the amount of compensation under Section 163-A is by way of an interim award and the same would not '1'. preclude the claimants to proceed with his claim made in terms of Section 166 of the Act. It is submitted at the Bar that the appellants have withdrawn 50% of the amount and rest of the amount has been invested. The appellants have lost both of thei~ parents in the accident. Only one of the appellants at the relevant time was a major.

It appears that 70% of the amount permitted to be. withdrawn has been deposited in the Fixed Deposit. We agree with the submission of Mr. Banerjee that the Claim of the appellants made under Section 163-A be treated to be one under Section 140 of the Act and upon adjusting the amounts provided for thereunder, the appellants may refund the rest thereof to the insurer. Keeping in view of the limited questions posed before us, in our opinion, it is not necessary to go into the purported discrepancies existing in the Second Schedule of the Act. We, for the reasons aforementioned, do not find any merit in the review applications which are dismissed. So far as Civil Appeal Nos. 3126/2002 and 3127/2002 are concerned, we in exercise of our jurisdiction under Article 142 of the Constitution direct that the claim applications of the appellants under Section 163-A of the AC:t be treated to be applications under Section 140 thereof.

The amount invested by the Tribunal may be allowed to be withdrawn by the respondent - Insurance Company. The appellants shall refund the excess amount withdrawn by them after adjusting the amount payable in terms of Section 140 of the Act and the interest which would have accrued thereon shall be adjusted towards· the compensation received by the claimant within four weeks from the date of communication of this order whereafter, the Motor Vehicles Accident Claims Tribunal shall proceed to determine their claim petitions filed under Section 166 of the Act in accordance with law. This order shall not be treated as a precedent. Section 163-A was introduced in the year 1994. The executive authority of the Central Government has the requisite jurisdiction to amend the Second Schedule from time to time. Having regard to the inflation and fall in the rate of bank interest; it is desirable that the Central Government bestows serious consideration to this aspect of the matter.

Subject to the aforementioned directions, the appeals and the review petitions are dismissed. No Costs. Appeals/Petitions dismissed. ·~ I