National Insurance Co. Ltd. v. PP Damodaran, Radhamani and Harin PD (MACA No. 441 of 2015)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **WEDNESDAY, THE 23RD DAY OF OCTOBER 2019 / 1ST KARTHIKA, 1941** ## **MACA.No.441 OF 2015** **AGAINST THE AWARD IN OP(MV)No.677/2009 DATED 29-09-2014 OF MOTOR ACCIDENT CLAIMS TRIBUNAL ,PERUMBAVOOR** ## **APPELLANT/3rd RESPONDENT:** **NATIONAL INSURANCE CO. LTD CUDDOLORE REP. BY THE MANAGER, NATIONAL INSURANCE CO. LTD., KOCHI REGIONAL OFFICE, 2ND FLOOR, OMANA BUILDING, PADMA JN, MG ROAD, KOCHI-35** **BY ADV. SRI.A.R.GEORGE** ## **RESPONDENTS/CLAIMANTS IN THE OP:** - **1 PP DAMODARAN S/O.APPUKUTTY PUTHIYAPURAYIL HOUSE, KONNAKADU P.O., KASARAGOD DISTRICT.671533** - **2 RADHAMANI W/O.PP.DAMODARAN -DO- -DO- 671533** - **3 HARIN PD S/O.PP DAMODARAN, (NOW MAJOR) -DO- -DO- 671533** ## **BY ADV. SMT.ANUPAMA JOHNY** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 23.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** -2- MACA. No. 441 of 2015 ## **JUDGMENT** The appellant, who is the 3[rd] respondent in O.P(MV)No.677 of 2009 on the file of the Motor Accidents Claims Tribunal, Perumbavoor, has filed this appeal challenging the award of the Tribunal dated 29.09.2014, in a claim petition filed by the respondents herein, claiming compensation on account of the death of one Vipindas, in a motor accident, which occurred on 25.01.2009, while he was riding a motorcycle bearing Registration No.KL-17/A-9404. At the place of accident, the motorcycle was hit by a lorry bearing registration No.TN-31/E-7003, owned by the 1[st] respondent and driven by the 2[nd] respondent before the Tribunal and insured with the appellant herein. Claimants are the parents and minor brother of the deceased. Alleging that the accident occurred due to the rash and negligent driving of the lorry by its driver, claim petition was filed before the Tribunal, invoking the provisions under Section 163A of the Motor Vehicles Act, claiming a total compensation of -3- MACA. No. 441 of 2015 4,18,000/-. 2. On 10.02.2015, when this appeal came up for admission, this Court issued notice to the respondents/claimants. An interim stay as prayed for was granted for a period of six weeks in I.A.No.497 of 2015, which was extended until further orders on 25.09.2015. 3. Before the Tribunal, Exts.A1 to A7 were marked on the side of the claimants. Exts.B1 and B2 were marked on the side of the appellant/insurer. Both sides have not chosen to adduce any oral evidence. 4. After considering the pleadings and materials on record, the Tribunal arrived at a conclusion that in a claim petition filed under Section 163A of the Motor Vehicles Act, the question of rashness and negligence does not have much relevance. Once the factum of motor accident stands established the claimants are entitled to receive compensation. Under various heads, the Tribunal awarded a total compensation of Rs.3,88,500/- and directed the appellant insurer to deposit the said amount before the -4- MACA. No. 441 of 2015 Tribunal together with interest at the rate of 8% percent per annum, from the date of petition, till realisation. The operative portion of the award reads thus: “In the result, the petitioner as OP(MV) 677/09 is allowed as follows: 1. R1 to R3 are directed to pay a sum of Rs.3,88,500/- at 8% interest from the date of petition till realisation, to the petitioners as compensation. R3 is directed to deposit the amount within one month from the date of this award. 2. Of the award amount, the petitioners 1 to 2 are entitled to 45% each and the 3[rd] petitioner is entitled to the balance 10%. 3. Out of the 45% apportioned to 1[st] and 2[nd] petitioners, they are entitled to withdraw a sum of Rs.75000/- each and the balance shall be in fixed deposit for a period of three years with permission to withdraw quarterly interest. 4. The 3[rd] petitioner, on declaration of the age of majority is entitled to withdraw Rs.25000/retaining the balance in fixed deposit for a period of three years with permission to withdraw quarterly interest. 5. Petitioners are entitled to proportionate costs for the award amount. 6. Respondent shall pay a sum of Rs.3553/-as -5- MACA. No. 441 of 2015 Court Fee.” 5. Challenging the finding of the Tribunal in the impugned award as to the entitlement of the legal representatives of deceased in a claim petition under Section 163A of the Motor Vehicles Act, without a finding as to negligence, the appellant insurer is before this Court in this appeal, relying on the judgment of the Apex Court in **National Insurance Co. Ltd. v. Sinitha [2011 (4) KLT 821 (SC)]** and **United India Insurance Co. Ltd. v. Sunil Kumar [2013 (4) KLT 488 (SC)]** . 6. 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 -6- MACA. No. 441 of 2015 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 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 subsection (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. 7. 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 -7- MACA. No. 441 of 2015 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 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, -8- MACA. No. 441 of 2015 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 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 -9- MACA. No. 441 of 2015 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 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 -10- MACA. No. 441 of 2015 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 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 -11- MACA. No. 441 of 2015 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 contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation -12- MACA. No. 441 of 2015 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) 8. In view of the law laid down by the Apex Court in **Sunil Kumar's case (AIR 2017 SC 5710)** , there is absolutely no merits in the contentions raised in this appeal. 9. In the result, this appeal fails and the same is accordingly, dismissed. Consequentially, the interim order will stand vacated. The appellant/ insurer shall deposit the entire amount covered by the award before the Tribunal within two months from the -13- MACA. No. 441 of 2015 date of receipt of a certified copy of this judgment for payment to the respondents/claimants in terms of the directives issued by this Court in Circular No.3 of 2019 dated 06.09.2019. **Sd/ANIL K.NARENDRAN JUDGE** das