Hamza & Shameera v. Mohammed Sherif, Jasmine & The New India Assurance Co. Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT :** **THE HONOURABLE MR. JUSTICE J.B.KOSHY** **& THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN** ## **MONDAY, THE 15TH SEPTEMBER 2008 / 24TH BHADRA 1930** ## **MACA.No. 1638 of 2004(D)** **-----------------------OPMV.750/2003 of MOTOR ACCIDENT CLAIMS TRIBUNAL, OTTAPALAM** **....................** ## **APELLANTS/PETITIONER** **--------------------** **1. HAMZA, KANNANTHODI HOUSE, CHEEPRACHERY POST, OTTAPALAM TALUK, PALAKKAD DISTRICT, REP. BY HIS POWER OF ATTORNEY HOLDER SHAMEERA, W/O. HAMZA, KANNANTHODI HOUSE, CHEEPRACHERY POST, OTTAPALAM TALUK, PALAKKAD DISTRICT.** **2. SHAMEERA, W/O.HAMZA, KANNANTHODI HOUSE, CHEEPRACHERY POST, OTTAPALAM TALUK, PALAKKAD DISTRICT.** **BY ADV. SRI.THOMAS ABRAHAM SRI.K.B.ARUNKUMAR** ## **RESPONDENTS: RESPONDENTS** **------------------------** **1. MOHAMMED SHERIF, PADINJARETHARA HOUSE, KUTHNOOR POST, ALATHUR TALUK, PALAKKAD DISTRICT.** **2. JASMINE, RAHIYA MANZIL, PADINJARETHARA HOUSE, KUTHNOOR POST, ALATHUR TALUK, PALAKKAD DISTRICT.** **3. THE NEW INDIA ASSURANCE CO.LTD.,** - **T.B.ROAD, PALAKKAD.** **BY ADV. SRI.LAL GEORGE FOR R3 SRI.A.R.GANGADAS FOR R1 & R2** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 15/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **J.B.KOSHY & K.P.BALACHANDRAN, JJ.** -------------------------------------M.A.C.A.No.1638 OF 2004 ------------------------------------Dated 15[th] September, 2008 ## **JUDGMENT** ## **Koshy,J** . The unfortunate parents (father and mother) filed an application for compensation for the death of their child in a motor accident on 14.5.2003. They filed application under section 163-A of the Motor Vehicles Act. The Tribunal awarded a total compensation of Rs.1,58,220/= out of which Rs.1,50,000/= was awarded for death and loss of family contribution. It is the contention of the appellants that only Rs.15,000/= was taken as the notional income and then one third was deducted for calculating compensation. It is also contended by the appellants that Rs.15,000/= was fixed as the notional income of a nonearning person in the second schedule framed in 1994. Salary of a Government employee in 1994 is tripled in 2003 even without any promotion and considering the decrease in money value, at least Rs.30,000/= should be taken as the notional income. It is further contended that even though the child was aged only 3, the father was aged 28 years at the time of the accident and mother was aged 21 years. In various decisions of the Supreme Court it is stated that when the motor accident victim is unmarried, multiplier should be fixed MACA.1638/2004 2 considering the age of the claimants. If father's age is taken into account, 18 should have been taken as the multiplier. But, considering the age of the victim, the Tribunal has taken 15 as the multiplier. It is now well settled law that in a claim under section 163-A, courts have no option but to award compensation as per the second schedule and the question of negligence etc. need not be considered. What is to be relevant is only the fact that the death occurred or injury sustained in a motor accident. Then, for calculating compensation, age of the claimants, income of the victim etc. should be known. In case of permanent disability, percentage of disability also should be known. Then what is to be done is only arithmetical calculation. It is true that the Hon'ble Supreme Court in **Uttar Pradesh State Road Transport Corporation (U.P.S.R.T.C.)** v. **Trilok Chandra** (1996 (2) KLT 218 (SC)) held that there were some errors in the second schedule, but, the Court did not set aside the second schedule. If claims are filed under section 163-A, the Tribunal or court cannot deviate from the structured formula given in the second schedule. It is also stated that the Attorney General undertook that those errors will be corrected. But, the second schedule was not amended. The second schedule being a statutory formula, unless it is amended, courts and Tribunals are bound by the same when claim is filed under section 163-A. The differences MACA.1638/2004 3 between sections 163-A, 166 and 140 of the Motor Vehicles Act were considered in detail by a three member bench of the Supreme Court in **Deepal Girishbhai Soni and others** v. **United India Insurance Co. Ltd., Baroda** ((2004) 5 SCC 385). In the above case, the Hon'ble Supreme Court has considered in detail the scope of claims under section 163-A and that is the only decision wherein the provisions of section 163-A were explained in detail after considering the legislative history and various other aspects. Paragraph 18 of the above judgment refers to the legislative history. At paragraphs 29 and 30 it was held as follows: “29. The Second schedule referred to in Section 140 of the Act provides for a structured formula for the purpose of grant of compensation to a third party involved in fatal accident/injury. By reason thereof a multiplier system is introduced pursuant whereto and in furtherance whereof the amount of compensation is required to be calculated having regard to the age of the victim and his annual income. However, in terms of the note appended to the said Schedule the amount of compensation so arrived at in the case of fatal accident, the claim is to be reduced by onethird, in consideration of the expenses which the victim would have incurred towards maintaining himself, had he been alive. 30. Clause (2) of the said Second Schedule provides that the amount of compensation shall not be less than Rs.50,000/-. It also provides for grant of compensation under several heads, namely (3) general MACA.1638/2004 4 damages in case of death, (4) general damages in case of injuries and disabilities, (5) disability in non-fatal accidents, and (6) notional income for compensation to those who had no income prior to accident. However, the maximum amount which is to be paid under the different heads has also been specified.” The Hon'ble Supreme Court also held that fault of the driver of the offending vehicle need not be proved. It is further held that in view of section 163-B of the Act, an option had been provided to enable the claimants to claim compensation either under section 140 or section 163-A. If a claim under section 140 is filed, another claim under section 163-A will not lie, even though sections 163-A and 140 are based on strict liability (liability without fault) principle formulated in **Rylands** v. **Fletcher** (1861-73 All ER (Reprint) 1 ) referred to in **Kaushnuma Begum and others** v. **New India Assurance Co. Ltd.** (AIR 2001 S.C 485). 2. At paragraph 46 of the judgment in the above case, the Hon'ble Supreme Court also held as follows. “46. S.163-A which has an overriding effect provides for special provisions as to payment of compensation on structured formula basis. Sub-s.(1) of S.163-A contains nonobstante clause in terms whereof the owner of the motor vehicle or the authorised insurer is MACA.1638/2004 5 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 of the victim, as the case may be, Sub-s. (2) of S.163-A is in pari materia with sub-s.(3) of S.140 of the Act.” Again, at paragraph 48, it was held that while granting compensation, the Tribunal is required to adjudicate only the question as regards the age and income, if disputed. At paragraph 51 it was held as follows: “51. The scheme envisaged under S.163-A, in our opinion, leaves no manner of doubt that by reason thereof the rights and obligations of the parties are to be determined finally. The amount of compensation payable under the aforementioned provisions is not to be altered or varied in any other proceedings. It does not contain any provision providing for set off against a higher compensation unlike S.140. In terms of the said provision, a distinct and specified class of citizens, namely, persons whose income per annum is Rs.40,000/= or less is covered thereunder whereas Ss.140 and 166 cater to all sections of society.” The above three member bench decision clearly shows that section 163-A read with the second schedule is a complete machinery for awarding compensation. The object behind introduction of section 163-A is to prevent long drawn out litigation and the statutorily provided formula cannot be altered by the Tribunal or court when MACA.1638/2004 6 claims are filed under section 163A, provided the annual income of the victim is below Rs.40,000/=. Section 163-A provides a multiplier method for payment of compensation in case of personal injuries and consolidated amount in case of death. Apart from the above, general damages to be awarded in case of injuries and disabilities are also mentioned under section 163-A. In **Bangalore Metropolitan Transport Corporation** v. **Sarojamma and another** ((2008) 5 SCC 142) the Hon'ble Supreme Court held that formula in the second schedule should be strictly followed in claims under section 163-A. It is pointed out by the learned counsel for the insurance company that compensation was calculated using the multiplier method in the above case. A perusal of the second schedule would show that consolidated amount is mentioned for death and multiplier method is adopted for calculating compensation for permanent disability. Even though a higher multiplicand can be taken in claims under section 166 than the notional income fixed in the second schedule, considering the inflation and since the claim is filed under section 163-A, only Rs.15,000/= can be taken as the notional income and calculated compensation. The above statutory formula is applicable even though the accident occurred in 2003 and the second schedule was framed in 1994. 3. For a child below 15, the multiplier fixed is 15 for MACA.1638/2004 7 calculating compensation for permanent disability. For death, if the annual income is Rs.12,000/=, the amount fixed is Rs.2,40,000/= and if it is Rs.18,000/=, the amount fixed is Rs,3,60,000/=. Therefore, if the notional annual income is Rs.15,000/=, the amount is Rs.3,00,000/=. One third has to be deducted and the compensation payable will be Rs.2,00,000/=. The same view was taken and explained by a Division Bench of this Court in **National Insurance Co. Ltd.** v. **Muneer** (2003 (1) KLT 137). We refer to paragraphs 6 and 7 of the above judgment. The contention of the claimants that in case of death of unmarried person, age of the claimants should be taken into consideration and 18 should be taken as the multiplier also cannot be accepted. In any event, if the claim is filed under section 166 and if the motor accident victim is unmarried, age of the victim as well as age of the claimants should be taken into account and whichever is lower only need be taken for calculation. But, in section 163-A, there is no option. Statutory formula is there. Compensation amount is fixed and that has to be paid. In this case, Rs.15,000/= is the notional income fixed in the second schedule. The child was aged only three years. Amount payable as compensation is Rs.2,00,000/= for the death with general damages as mentioned in the second schedule. MACA.1638/2004 8 Therefore, the total compensation payable will be Rs.2,08,220/= instead of Rs,1,58,220/=. The additional amount of Rs.50,000/= should be deposited by the third respondent insurance company with 7.5% interest from the date of application till its deposit, over and above the amount decreed by the Tribunal. On deposit of the amount, appellants are allowed to withdraw the same in equal proportion. The appeal is partly allowed. **J.B.KOSHY JUDGE** **K.P.BALACHANDRAN JUDGE** tks