Jalajakumari v. V.S. Anil Kumar and National Insurance Company Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** ## **TUESDAY, THE 05TH DAY OF NOVEMBER 2019 / 14TH KARTHIKA, 1941** ## **MACA.No.513 OF 2014** **AGAINST THE AWARD IN O.P.(MV) NO.2582/2002 DATED 11-10-2012 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, TRIVANDRUM** ## **APPELLANTS:** |**APPELLANTS**<br>**:**||| |---|---|---| |**1**||**JALAJAKUMARI,**| |||**W/O.DECEASED VIJAYAKUMARAN NAIR**| |||**@ VIJAYAKRISHNAN NAIR K.,**| |||**CHAITHANYAM, MACHINADU,**| |||**PEYADU P.O., THIRUVANANTHAPURAM.**| |**2**||**DEVAKI AMMA,**| |||**M/O.DECEASED VIJAYAKUMARAN NAIR,**| |||**RESIDING AT -DO- -DO-**| |**3**||**SREEJA,**| |||**D/O.DECEASED VIJAYAKUMARAN NAIR,**| |||**RESIDING AT -DO- -DO-**| |**4**||**JITHIN V.KRISHNAN,**| |||**S//O.DECEASED VIJAYAKUMARAN NAIR,**| |||**RESIDING AT -DO- -DO-**| |||**BY ADV. SRI.J.HARIKUMAR**| |**RESPONDENTS**<br>**:**||| |**1**||**V.S.ANIL KUMAR,**| |||**S/O.M.K.SURENDRAN NAIR,**| |||**MACHINADU PUTHEN VEEDU,**| |||**PEYADU P.O., THIRUVANANTHAPURAM.**| |**2**||**NATIONAL INSURANCE COMPANY LIMITED**| |||**REPRESENTED BY ITS DIVISIONAL MANAGER,**| |||**THIRUVANANTHAPURAM B.O.11,**| |||**K.K.BUILDINGS, 11 FLOOR,**| |||**ARISTO JUNCTION, THIRUVANANTHAPURAM.**| **R2 BY ADV.SRI.ABHIJETT LESSLI** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 05.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **MACA.No.513 OF 2014** -2- ## **JUDGMENT** The appellants are the claimants in O.P.(MV) No.2582 of 2002, on the file of the Motor Accident Claims Tribunal, Thiruvananthapuram, a claim petition filed under Section 163A of the Motor Vehicles Act, 1988 claiming compensation on account of the death of one Vijayakumaran Nair @ Vijayakrishnan Nair, husband of the 1[st] appellant, son of the 2[nd] appellant and father of appellants 3 and 4 in a motor accident, which occurred on 26.09.2002 while he was riding a motorcycle bearing registration No.KL-01/A-9458, owned by the 1[st] respondent and insured with the 2[nd] respondent. At the place of accident, the motorcycle skidded. The appellant fell down and sustained injuries, who succumbed to injuries on the very same day, in the hospital. Alleging that the deceased sustained fatal injuries in a motor accident involving motor cycle bearing registration No.KL-01/A-9458, claim petition was filed before the Tribunal under Section 163A of the Motor Vehicles Act claiming a total compensation of Rs.20,50,000/- under various heads. 2. Before the Tribunal, the 1[st] respondent owner of the **MACA.No.513 OF 2014** -3- motorcycle remained absent and he was set ex-parte. The 2[nd] respondent insurer filed written statement contending that the deceased is not a third party and the insurer had not paid any premium to cover the risk of rider or pillion rider. The policy issued is an Act only Policy and therefore, the insurer is not liable to pay any compensation. In the written statement, it was also pointed out that the deceased was working as Senior Assistant in the Kerala State Electricity Board, with an annual income of Rs.1.5 lakhs. Hence a claim under Section 163A of the Motor Vehicles Act is not maintainable. 3. Before the Tribunal, Exts.A1 to A4 were marked on the side of the appellants/claimants. Both sides have not chosen to adduce any oral or documentary evidence. 4. After considering the pleadings and materials on record, the Tribunal arrived at a conclusion that Ext.A1 final report in Crime No.1616 of 2002 of the City Traffic Police Station, Thiruvananthapuram and Ext.A2 post-mortem certificate issued from the Medical College Hospital, Thiruvananthapuram would _prima facie_ show that there was a motor accident, in which the deceased sustained fatal injuries, **MACA.No.513 OF 2014** -4- who succumbed to the injuries. Regarding the question of maintainability of a claim under Section 163A of the Act, the Tribunal noticed that such a claim will not lie as the deceased was drawing more than Rs.1.5 lakhs per annum. In the claim petition it is stated that the deceased was drawing a monthly income of Rs.15,000/-. Therefore, in relation to the death of the deceased, who was working as Senior Assistant in the Kerala State Electricity Board, a claim petition under Section 163A of the Motor Vehicles Act is not maintainable, since the upper limit of annual income is Rs.40,000/-. In view of the aforesaid finding, the Tribunal dismissed O.P.(MV) No.2582 of 2002 as not maintainable. The appellants/claimants were directed to deposit the Court Fee of Rs.19,872.50, which was rounded off to Rs.19,873/-, within a week. 5. Feeling aggrieved by the award passed by the Tribunal, the appellants/claimants are before this Court in this appeal. 6. The appeal was filed along with C.M.Application No.602 of 2014 for condonation of delay of 369 days, which was condoned by the order dated 28.10.2019 subject to the **MACA.No.513 OF 2014** -5- condition that in case compensation is awarded, the appellants will not be entitled to interest for the said amount, for the period of delay. 7. Heard the learned counsel for the appellants and also the learned Standing Counsel for the 3[rd] respondent Insurer. 8. The issue that arises for consideration in this appeal is as to whether any interference is warranted on the impugned award passed by the Tribunal. 9. Section 163A of the Motor Vehicles Act, 1988 deals with special provisions as to compensation on structured formula basis. The said provision was inserted vide Section 51 of the Motor Vehicles (Amendment) Act, 1994, with effect from 14.11.1994. Sub-section (1) of Section 163A states that, notwithstanding anything contained in the Motor Vehicles Act or in any law for the time being in force, or instrument having the force of law, the owner of the motor vehicle or 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 of the victim, as the case may be. As per the **MACA.No.513 OF 2014** -6- Explanation to sub-section (1) of Section 163A, for the purposes of sub-section (1), 'permanent disability' shall have the same meaning and extent as in the Workmen's Compensation Act, 1923. Sub-section (2) of Section 163A provides that, 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. Sub-section (3) of Section 163A provides further that, 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. 10. In **Oriental Insurance Company Ltd. v. Meena Variyal [(2007) 5 SCC 428]** the Apex Court held that, the victim of a motor accident or his dependents have an option either to proceed under Section 166 of the Motor Vehicles Act or under Section 163A of the said Act. Once they approach the Tribunal under Section 166 of the Act, they have necessarily to take upon themselves the burden of establishing the negligence **MACA.No.513 OF 2014** -7- of the driver or owner of the vehicle concerned. But if they proceed under Section 163A of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependents to establish any negligence or default on the part of the owner or driver of that vehicle. 11. As held by the Apex Court in **Oriental Insurance Company Ltd. v. Rajni Devi [(2008) 5 SCC 736]** a person who borrowed motor vehicle from its real owner, who was authorised to drive the said vehicle by its owner, would step into the shoes of the owner of that vehicle. 12. In the instant case, the deceased was not the owner of the motorcycle involved in the accident. The 1[st] respondent was the owner of the said motorcycle and the 2[nd] respondent was its insurer. At the place of accident, the motorcycle ridden by the deceased skidded accidentally. The deceased fell down and sustained fatal injuries, who succumbed to the injuries on the same day in the hospital. When the fact that the accident occurred as the deceased lost control of the motorcycle is not in dispute, conclusion is irresistible that, the accident is a self made one, occurred solely due to the rash and negligent riding **MACA.No.513 OF 2014** -8- of the motorcycle by the deceased himself, who stepped into the shoes of the owner of that vehicle. 13. In **Oriental Insurance Co. Ltd. v. Jhuma Saha [(2007) 9 SCC 263]** the Apex Court was dealing with a case in which the deceased was the owner of the insured Maruti van. While he was driving the said vehicle it dashed against a tree on the road side, when he attempted to save a goat which ran across the road. The deceased suffered injuries, who later on succumbed to injuries. The Apex Court noticed that, for the reasons stated in the claim petition or otherwise, the deceased himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which the deceased was driving. Therefore, the question before the Apex Court was as to the maintainability of the claim made under Section 166 of the Motor Vehicles Act. In that context, the Apex Court held that, the liability of the insurer is to the extent of indemnification of the insured against the injured person, a third person, or in respect of damages to property. Thus, if the insured cannot be fastened with any liability under the provisions of the Act, the question of the insurer being liable to **MACA.No.513 OF 2014** -9- ## indemnify the insured, does not arise. 14. In **Jhuma Saha** , the Apex Court relied on its earlier judgment in **Dhanraj v. New India Assurance Co. Ltd. [(2004) 8 SCC 553]** in which it was held that, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 of the Motor Vehicles Act does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle. 15. In **National Insurance Co. Ltd. v. Sasilatha [1999 (3) KLT 519]** a Division Bench of this Court, after referring to the judgment of the Apex Court in **Oriental Insurance Co. Ltd. v. Sunitha Rathi [(1998) 1 SCC 365]** held that the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. It is therefore clear that if the insured is not held liable, insurer cannot be directed to indemnify the insured. The only liability for the **MACA.No.513 OF 2014** -10- insurer is to indemnify the insured and not to pay any compensation for the alleged bodily injuries sustained by the insured. A reading of Section 140 of the Motor Vehicles Act makes it clear that no fault liability is cast on the owner of the vehicle and not directly on the insurer. If the owner of the vehicle is found liable under Section 140, naturally, the liability of the insured also would arise. 16. In **Sasilatha** the Division Bench of this Court was dealing with a case in which the owner of a jeep herself has come forward for compensation under Section 140 of the Act against the insurer of her own vehicle, which was held to be the offending vehicle. On the basis of evidence, the Tribunal came to the conclusion that there was no negligence on the part of the Driver of the KSRTC bus, but, on the other hand the accident happened only due to the negligence on the part of the driver of the Jeep. The Division Bench, after referring to the judgment of the Apex Court in **Sunitha Rathi** , in which it was held that the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance, held that such a **MACA.No.513 OF 2014** -11- claim made by the owner of the vehicle cannot be maintained under Section 140 of the Motor Vehicles Act. 17. In **Yallwwa v. National Insurance Co. Ltd. [(2007) 6 SCC 657]** the question that came up for consideration before the Apex Court was as to whether an order passed by the Tribunal under Section 140 of the Motor Vehicles Act is an appealable one. In that context, the Apex Court held that Section 140 of the Act, which provides for no fault liability, uses the words 'accident arising out of the use of a motor vehicle', 'the owner of the vehicle' and when more than one vehicles are involved, 'the owners of the vehicles' shall jointly and severally be liable to pay compensation. The said provision, therefore makes the owners of the vehicle liable, but not the insurer per se. 18. In view of the law laid down in the decisions referred to supra, Section 140 of the Motor Vehicles Act makes the owner of the vehicle liable but not the insurer per se. The liability of the insurer under Section 140 of the Act therefore arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of **MACA.No.513 OF 2014** -12- insurance. When the liability of the insurer is to indemnify the insured and not to pay compensation for the bodily injury or death of the insured, the claim made by the insured for that purpose cannot be sustained under Section 140 of the Act. If that be so, such a claim made by a person who borrowed the motor vehicle from its real owner, who was authorised to drive the said vehicle by its owner, who steps into the shoes of the owner of that vehicle (as held by the Apex Court in **Rajni Devi** ) cannot be entertained under Section 140 of the Act, so also a claim made by his legal heirs. 19. In **New India Assurance Company Ltd. v. Sadanand Mukhi [(2009) 2 SCC 417]** , after considering the requirements of policies and limits of liability under Section 147 of the Motor Vehicles Act, the Apex Court held that, the said provision provides for two types of insurance; one statutory in nature and the other contractual in nature. Whereas the Insurance Company is bound to compensate the owner or the driver of the motor vehicle in case any person dies or suffers injury as a result of an accident; in case the owner of the vehicle or others are proposed to be covered, additional **MACA.No.513 OF 2014** -13- premium is required to be paid for covering their life and property. Therefore, by taking an 'act policy' the owner of the vehicle fulfills his statutory obligation as contained in Section 147 of the Motor Vehicles Act. If the liability of the insurer is contractual, its liability extends to the risk covered by the policy of insurance. If additional risks are sought to be covered, additional premium has to be paid. 20. In **Sadanand Mukhi** the Apex Court was dealing with a case in which the owner of the motorcycle got the said vehicle insured with the appellant Insurance Company. On 08.09.2000, the son of the insured while riding the motorcycle met with an accident and he died. The accident took place as a stray dog came in front of the vehicle. The appellant insurer contended that the rider of the motorcycle is not a third party. Further, the accident occurred while the deceased himself was riding the motorcycle in uncontrollable speed and in a rash and negligent manner, which was the cause of accident. Therefore, in absence of negligence on the part of the owner of the vehicle, the claimants cannot seek compensation. 21. In **Khadeeja and others v. Rushdi and another** **MACA.No.513 OF 2014** -14- **[2016 (3) KLT 400]** a Division Bench of this Court held that, the intention of the Legislature while inserting Section 163A of the Act, vide the Motor Vehicles (Amendment) Act, 1994, was only to ensure that a claimant who opts for the special provisions as to payment of compensation on structured formula basis need 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 or neglect or default of the owner of the vehicle or vehicles concerned or any other person. Section 163A of the Act was never intended to provide relief to those who suffered in a road accident only on account of their own rash and negligent act, not because of any rash and negligent act of another person in using a motor vehicle. 22. In **Ningamma v. United India Insurance Co. Ltd. [(2009) 13 SCC 710]** the Apex Court, after referring to Para. 42 of the Three-Judge Bench decision in **Deepal Girishbhai Soni v. United India Insurance Company Ltd. [(2004) 5 SCC 385]** held that, the Parliament by introducing Section 163A in the Motor Vehicles Act provided for payment of **MACA.No.513 OF 2014** -15- compensation on structured formula basis by mandating that the owner of a motor vehicle or the authorised insurer would be liable to pay compensation, as indicated in the Second Schedule in the case of death or permanent disablement due to accident arising out of the use of the motor vehicle, to the legal heirs or the victim, as the case may be, in a claim made under sub-section (1) of Section 163A of the Act. After referring to the judgment of a Two-Judge Bench in **Oriental Insurance Company Ltd. v. Rajni Devi [(2008) 5 SCC 736]** the Apex Court held further that, Section 163A of the Act cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The liability under Section 163A of the Act is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to the claim. A person who borrowed motor vehicle from its real owner, who was authorised to drive the said vehicle by its owner, would step into the shoes of the owner of that vehicle. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under **MACA.No.513 OF 2014** -16- Section 163A of the Act. 23. In **National Insurance Company Ltd. v. Sinitha** **[(2012) 2 SCC 356]** the main question that came up for consideration before the Apex Court was whether a claim for compensation made under Section 163A of the Motor Vehicles Act, can be defeated either by the owner or by the Insurance Company, by pleading and establishing, that the accident in question was based on the 'negligence' of the offending vehicle. After analysing the provisions under Section 140 and Section 163A of the Act, the Apex Court held that, sub-section (2) of Section 163A is in pari materia with sub-section (3) of Section 140 and it is not essential for a claimant seeking compensation, to 'plead or establish' that the accident out of which the claim arises suffers from 'wrongful act' or 'neglect' or 'default' of the offending vehicle. Under sub-section (4) of Section 140, there is a specific bar, whereby the concerned party (owner or Insurance Company) is precluded from defeating a claim raised under Section 140 of the Act, by 'pleading and establishing ''wrongful act', 'neglect' or 'default', there is no such or similar prohibiting clause in Section 163A of the Act. The additional **MACA.No.513 OF 2014** -17- negative bar, precluding the defence from defeating a claim for reasons of a 'fault' ('wrongful act', 'neglect' or 'default'), as has been expressly incorporated in Section 140 of the Act (through sub-section (4) thereof), having not been embodied in S.163A of the Act, has to have a bearing on the interpretation of Section 163A of the Act. The Legislature designedly included the negative clause through sub-section (4) in Section 140 of the Act, yet consciously did not include the same in the scheme of Section 163A of the Act. The presence of sub-section (4) in Section 140 of the Act and the absence of a similar provision in Section 163A, leaves no room for any doubt that the only object of the Legislature in doing so was that the Legislature desired to afford liberty to the defence to defeat a claim for compensation raised under Section 163A of the Act, by pleading and establishing 'wrongful act', 'neglect' or 'default'. A claim which can be defeated on the basis of any of the aforesaid considerations is regulated under the 'fault' liability principle. Therefore, the Apex Court concluded, that Section 163A of the Act is founded on the 'fault' liability principle. 24. The principle laid down by the Apex Court in **Sinitha** **MACA.No.513 OF 2014** -18- was followed by a Full Bench of this Court in **Oriental Insurance Co. Ltd. v. Joseph V. V. @ Johny [2012 (2) KHC 1]** . It was a case in which the deceased was the rider of the motorcycle at the time of accident, as permitted by the owner of that motorcycle which was covered by an 'Act only' policy, and the Tribunal found the cause for the accident as the negligence of the rider himself. After referring to various judgments of the Apex Court and also the judgment of another Full Bench of this Court in **National Insurance Company Ltd. v. V. Malathi C. Salian [2003 (3) KLT 460]** the Full Bench held that in a case where, though a claim is raised under Section 163A of the Act, once the insurer or the insured comes up with the defence of absolving the liability to pay compensation on the ground that the deceased was responsible for the death or injury on account of either wrongful act, negligent act or default, then, the liability of the insurer can be absolved, if such plea or defence is established. After referring to the judgment of the Apex Court in **Rajni Devi** the Full Bench observed that, if the owner of the vehicle insures the vehicle by paying additional premium, as personal accident coverage, **MACA.No.513 OF 2014** -19- then by virtue of the terms of contract of insurance, the insurer would be liable to pay compensation depending upon the limits of liability. 25. The scope of Section 163A of the Motor Vehicles Act and the object behind the said provision introduced by Act 54 of 1994 came up for consideration before a Division Bench of the Karnataka High Court in **Appaji v. M. Krishna [2004 ACJ 1289]** . The Division Bench rendered the said judgment on 17.12.2003 (prior to the Three-Judge Bench decision of the Apex Court in **Deepal Girishbhai Soni** dated 18.03.2004) after examining in detail the provisions of Section 163A of the Act as well as the objects and reasons which led to the introduction of such a provision in the Act, by Act 54 of 1994. In the said case, the Division Bench was dealing with a case were the deceased Arun Kumar was riding a motorcycle and the accident occurred while the deceased was trying to avoid a cyclist who suddenly emerged on the road. The Division Bench held that, Section 163A of the Act was never intended to provide relief to those who suffered in a road accident not because of the negligence of another person making use of a **MACA.No.513 OF 2014** -20- motor vehicle, but only on account of their own rash, negligent or imprudent act resulting in death or personal injury to them. The objects and reasons underlying the introduction of the provision also envisaged adequate compensation to victims of road accidents without going into what was described as long drawn procedure. There is nothing to suggest that Section 163A was intended to be available even in a situation where the accident in question had caused death or physical injury to none except the person who was rash and negligent in using the motor vehicle. The Division Bench held further that, the right to receive compensation under Section 163A of the Act pre-supposes that the person who makes a claim is a victim or the legal heirs of a victim. One who is the victim of his own actions of rash or negligent driving cannot invoke Section 163A for making a claim. The concern of the Legislature and the jurists is understandably for the victim in contradistinction to the victimiser or one who falls a victim to his own action. The Parliament did not intend to provide for compensation to the person responsible for the accident on structured formula basis in such cases. The Division Bench held in categorical terms **MACA.No.513 OF 2014** -21- that, the 'non obstante' clause in Section 163A simply dispenses with proof of fault by the claimants against the driver or the owner of the vehicle involved in the accident. The claimant under Section 163A, therefore, need not prove that the driver or the owner of the vehicle was at fault in the sense that the accident had occurred on account of any negligence or rashness on their part. That does not, however, mean that claimant can maintain a claim on the basis of his own fault or negligence and argue that even when he himself may have caused the accident on account of his own rash and negligent driving, he can nevertheless made the insurance company pay for the same. Inasmuch as Section 163A of the Act dispenses with proof of fault, it does so only where the claimant is not solely responsible for the accident. The above view expressed by the Division Bench of the Karnataka High Court in **Appaji** is also in consonance with the view expressed by the Apex Court in **Ningamma** . 26. In **United India Insurance Co. v. Sunil Kumar [(2014) 1 SCC 680]** a Two-Judge Bench of the Apex Court expressed its difficulty to accept the reasoning by the Two- **MACA.No.513 OF 2014** -22- Judge Bench in **Sinitha** , stating that the principle laid down in **Hansrajbhai Kodala** , which was accepted by the Three-Judge Bench in **Deepal Girishbhai Soni** has not been properly appreciated or applied in **Sinitha** . Consequently, the matter was ordered to be placed before the learned Chief Justice of India for referring the matter to a Larger Bench for a correct interpretation of the scope of Section 163A of the Act. 27. In **United India Insurance Company Ltd. v. Sunil Kumar [2017 (4) KLT 1093]** a Three-Judge Bench of the Apex Court held that in a proceeding under Section 163A of the Motor Vehicles Act, 1988 it is not open for the Insurer to raise any defence of negligence on the part of the victim. The grant of compensation under Section 163A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by sub-section (2) of Section 163A of the Act. Paragraphs 5 to 8 of the said decision read thus; 5. In **Deepal Girishbhai Soni v. United India Insurance Co. Ltd., Baroda [(2004) 5 SCC 385]** the **MACA.No.513 OF 2014** -23- issue before a three judge bench of this Court was with regard to the mutual exclusiveness of the provisions of Section 163A and Section 166 of the Act. While dealing with the said question, this Court had the occasion to go into the reasons and objects for the incorporation of Section 140 and 163A of the Act which came in by subsequent amendments, details of which are being noted separately herein below. The Bench also took the view that while Section 140 of the Act deals with cases of interim compensation leaving it open for the claimant to agitate for final compensation by resort to the provisions of Section 166 of the Act, Section 163A of the Act provides for award of final compensation on a structured formula following the provisions of Second Schedule appended to the Act. Both Sections i.e. Sections 140 and 163A are based on the concept of ‘no fault liability’ and have been enacted as measures of social security. It was further noted that in a proceeding under Section 163A of the Act the Tribunal may be required to adjudicate upon various disputed questions like age, income, etc. unlike in a proceeding under Section 140 of the Act. 6. **Deepal Girishbhai Soni's case (supra)** , in fact, arose out of a reference made for a decision on the correctness of the view expressed in **Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala [(2001) 5 SCC 175]** that determination of compensation in a proceeding under Section 163A of the Act is final and further proceedings under Section 166 of **MACA.No.513 OF 2014** -24- the Act is barred. The opinion rendered in Hansrajbhai V. Kodala (supra) contains an elaborate recapitulation of the reasons behind the enactment of Section 92A to 92E of the Old Act (i.e. Motor Vehicles Act, 1939) (corresponding to Sections 140 to 144 of the present Act) introducing for the first time the concept of ‘no fault liability’ in 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 death or permanent disablement caused on account of a motor vehicle accident. In the said report, there is a reference to the deliberations of the Committee constituted to review the provisions of the Motor Vehicles Act, 1988 and the suggestions of the Transport Development Council on the basis of which the draft Bill of 1994 was enacted, inter alia, to provide for: - “(h) increase in the amount of compensation to the victims of hit-and-run cases; - (k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational.” 7. As observed in **Hansrajbhai v. Kodala (supra)** one of the suggestions made by the Transport Development Council was “to provide adequate compensation to victims of road accidents without going into long drawn procedure.” As a sequel to the recommendations made by the Committee and the Council, Section 140 was **MACA.No.513 OF 2014** -25- enacted in the present Act in place of Section 92A to 92E of the Old Act. Compensation payable thereunder, as under the repealed provisions, continued to be on the basis of no fault liability though at an enhanced rate which was further enhanced by subsequent amendments. Sections 140 and 141 of the present Act makes it clear that compensation payable thereunder does not foreclose the liability to pay or the right to receive compensation under any other provision of the Act or any other law in force except compensation awarded under Section 163A of the Act. Compensation under Section 140 of the Act was thus understood to be in the nature of an interim payment pending the final award under Section 166 of the Act. Section 163A, on the other hand, was introduced in the New Act for the first time to remedy the situation where determination of final compensation on fault basis under Section 166 of the Act was progressively getting protracted. The Legislative intent and purpose was to provide for payment of final compensation to a class of claimants (whose income was below Rs. 40,000/- per annum) on the basis of a structured formula without any reference to fault liability. In fact, in **Hansrajbhai V. Kodala (supra)** the bench had occasion to observe that: “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 vehicle **MACA.No.513 OF 2014** -26- accidents in a fast-moving society. Further, the law before insertion of Section 163A 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 a 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.” 8. From the above discussion, it is clear that grant of compensation under Section 163A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by Section 163A(2). Though the aforesaid Section of the Act does not specifically exclude a possible defence of the Insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the Insurer and/or to understand the provisions of Section 163A of the Act to be **MACA.No.513 OF 2014** -27- contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention. 9. For the aforesaid reasons, we answer the question arising by holding that in a proceeding under Section 163A of the Act it is not open for the Insurer to raise any defence of negligence on the part of the victim.” (underline supplied) 28. In **Jiljet and another v. Stamphem George and** **others [2018 (5) KHC 206]** , this Court noticed that in **Ningamma** , it has been specifically held by the Apex Court that the insured/person riding the motorcycle will not be a 'third party' and that, such rider, who rides the motorcycle after borrowing it from the insured, will step into the shoes of the insured. What was required to be insured mandatorily as per Section 147 of the Motor Vehicles Act is the liability towards 'third party' and if at all anybody else is to be covered, **MACA.No.513 OF 2014** -28- particularly, the insured (whose liability towards 'third party' is agreed to be satisfied by the insurer), wider coverage has to be obtained paying additional premium. There is no concept of owner/insured becoming liable to pay compensation to himself under any circumstances and as such, no liability can be shifted to the shoulders of the insured. A question arose for consideration before the Apex Court, as to whether the liability still can be mulcted upon the insurer under Section 163A of the Act, if the negligence on the part of the injured/deceased was specifically pleaded and proved by the insurer, notwithstanding the fact that there is no such burden on the part of the claimant to plead or prove negligence in getting compensation under Section 163A of the Act. The question was answered in the negative by the Apex Court as per the verdict in **Sinitha** holding that the specific bar under sub-section (4) of Section 140 of the Act (precluding the defense from defeating a claim for reason of fault) is conspicuously absent/omitted while drafting Section 163A by the law makers. However, the said decision was subsequently doubted by a coordinate Bench and it was referred to Larger Bench. The Larger Bench has **MACA.No.513 OF 2014** -29- answered the reference as per the verdict in **Sunil Kumar** that insurance company cannot raise or establish a defense with reference to negligence in a claim under Section 163A of the Act. Be that as it may, the question involved in the present appeal is not with reference to the scope of Section 163A, but as to the status of a person riding the vehicle and gets himself injured. It is in respect of this situation, that the legal position has been made clear by the Apex Court in **Ningamma** holding that such rider will step into the shoes of the insured and that, the insurer is not liable to compensate him. As held by the Apex Court in **New India Assurance Company Ltd. v. Prabhadevi [(2013) 14 SCC 719]** , after referring to the dictum laid down in **Dhanraj v. New India Assurance Company Ltd. [(2004) 8 SCC 553]** and **Oriental Insurance Company Ltd. v. Sunitha Rathi [(1998) 1 SCC 365]** , no liability could be shifted to the shoulders of the insurance company, in the absence of wider coverage, if any, on payment of additional premium. 29. In the instant case, as the accident is a self made one, there cannot be any statutory coverage of liability on the **MACA.No.513 OF 2014** -30- shoulders of the Insurance Company to pay compensation to the appellants/claimant, on account of the death of the deceased in the accident, who stepped into the shoes of the owner of the motorcycle, in view of the law laid down by the Apex Court in **Ningamma** . 30. Moreover, at the time of the accident, deceased was working as Senior Assistant in the Kerala State Electricity Board and drawing a monthly salary of Rs.15000/-, as stated in the claim petition. 31. In **Deepal Girishbhai Soni V.United India Insurance Co.Ltd** (2004 KHC 595), the Apex Court held that the benefit of Section 163A of the Motor Vehicles Act cannot be extended to anybody belonging to a higher class of income by fixing an artificial cap. In the said decision, the Apex Court held that the Tribunal or High Court was not justified in reckoning the annual income (in cases where the annual income was more than Rs.40,000/-) by providing a cap at the stage of Rs.40,000/, working out the compensation accordingly, under Section 163A of the Act. 32. The law laid down by the Apex Court in Deepal **MACA.No.513 OF 2014** -31- Girishbhai Soni's case (supra) was followed by a Division Bench of this Court in **Oriental Insurance Co.Ltd V. Santha and others [2016(1) KLJ 342** ] and **Janardhanan P @ Babu by Lrs and others V. P.K.Kunhiraman and Anothe** r **[2016(3) KHC 160]** . 33. In the instant case, going by the averments in the claim petition, the annual income of the deceased was Rs. 1,80,000/- (Rs.15,000 X 12). Therefore the Tribunal rightly dismissed the claim petition filed under Section 163A of the Act, since the deceased was a person having annual income above Rs.40,000/-. In the result, the appeal fails and the same is accordingly dismissed. No order as to costs. Sd/- **ANIL K. NARENDRAN JUDGE** bpr