http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 21

CASE NO.:

Appeal (civil) 3126 of 2002

PETITIONER:

Deepal Girishbhai Soni and Ors.

RESPONDENT:

United India Insurance Co. Ltd., Baroda

DATE OF JUDGMENT: 18/03/2004

BENCH:

CJI, S.B. Sinha & S.H. Kapadia.

JUDGMENT:

J U D G M E N T

with C.A. No. 3127 of 2002, R.P.

(C) No. 160 of 2002 in C.A. No.

2573 of 2001, R.P. (C) No. 161 of

2002 in C.A. No. 2572 of 2001 and

C.A. No.1680/2004 (arising out of

S.L.P. (C) No. 708 of 2003)

S.B. SINHA, J :

Leave granted in S.L.P. (C) No. 708 of 2003.

Reference to this Bench :

A Division Bench of this Court by an order dated

19.04.2002 doubting the correctness of 2-Judge Bench

decision in Oriental Insurance Co. Ltd. Vs. Hansrajbhai V.

Kodala and Others [(2001) 5 SCC 175] (Kodala) has referred

the matter to a 3-Judge Bench whereby and whereunder the

proceedings under Section 163-A of the Motor Vehicles Act,

1988 (hereinafter referred to and called for the sake of

brevity as "the Act") has been held to be a final

proceeding as a result whereof the claimants had been

debarred from proceeding with their further claims made on

the basis of fault liability in terms of Section 165

thereof.

Subject matter :

The appeals arise out of judgment and order dated

9.11.2000 passed by the High Court of Gujarat at Ahmedabad

in First Appeal No. 2272 of 2000 whereby and whereunder the

claims of the appellants have been calculated limiting

the income of the deceased at Rs.40,000/- per annum.. Two

review applications have also been filed seeking review of

the judgment and order passed in Kodala's case (supra).

An application under Article 136 of the Constitution of

India has also been filed marked as S.L.P. (C) No. 708 of

2003 arising out of the judgment and order dated 28.8.2002

passed by the High Court of Himachal Pradesh in F.A.O. [MVA]

No. 181 of 2001.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 21

Background Fact :

The fact of the matter may be noticed from C.A. No.

3126 of 2002. The parents of the appellants herein met

with an untimely death in an accident arising out of use of

a motor vehicle on or about 4.9.1998. The appellant No. 1

was at the relevant time a major and the other three

appellants were minors.

The appellants filed two claim petitions; one under

Section 163-A of the Act and the other under Section 166

thereof claiming compensation for a sum of Rs. 4,97,800/-

for the death of their mother, Ms. Prabhaben as also a sum

of Rs. 17, 30,900/- for the death of their father, Shri

Girishbhai Soni. Proceeding on the basis that in terms of

Section 163-A of the Act, merely an interim relief was to be

granted, the Motor Accidents Claim Tribunal in MAC Petition

No. 2133/1998 and M.A.C. Petition No. 2134/1998 vide its

order dated 24.3.2000 awarded a sum of Rs. 4,20,500/- and

Rs. 11,74,500/- respectively with interest at the rate of

12% per annum from the date of the application till

realisation. It is not in dispute that although while

passing the said order the learned Tribunal considered the

matter also on their own merits but directed that the

applications filed by the appellants herein purported to be

under Section 166 of the Act would be determined

separately.

The respondent - Insurance Company being aggrieved by

and dissatisfied with the said order dated 24.3.2000

preferred appeals before the High Court of Gujarat at

Ahmedabad. By reason of the impugned judgment, the High

Court having regard to the concession made at the bar to the

effect that in view of the cap of annual income of Rs.

40,000/- as contained in the Second Schedule appended to the

Act, the awarded amount should be reduced to Rs. 3,24,500/-

from Rs. 4,20,500/- and to Rs. 3,78,500 from Rs. 11,74,500/-

respectively.

While modifying the order of the Tribunal in each of

the said appeals, the High Court clarified that the said sum

would be paid to the appellants herein by way of interim

compensation observing:

"It is also observed that as has been

agreed between the parties this whole

amount as indicated above shall be

disbursed to the respondents at this

stage itself as per the apportionment

ordered by the Tribunal for respective

respondents and there is no need to

invest 70% of the amount in the fixed

deposit etc., as has been ordered by the

Tribunal and 100% of this amount i.e.,

Rs. 3,24,500/- in First Appeal No. 2272

of 2000 and Rs. 3,78,500 in First Appeal

No. 2273 of 2000, shall be disbursed to

the respondents in each of these two

matters respectively. It may also be

made very clear that in view of the

agreed position between the parties, we

have not embarked upon the question of

interpreting Section 163-A and the

Schedule and without entering into the

exercise of interpreting the relevant

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 21

provisions we have passed this order

only because both the sides have shown a

good gesture before us. At the time of

awarding of compensation under section

166 of the Act all the contentions

factual and legal as may be available to

the respective parties are open to be

agitated when the main petitions are

considered by the Tribunal."

Submissions :

Mr. Gaurab Banerjee, learned senior counsel appearing

on behalf of the appellants and Mr. G.L. Sanghi, learned

senior counsel appearing on behalf of the review petitioners

would take us through the legislative history leading to

enactment of Section 163-A of the Motor Vehicles Act and

submit that the 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 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 out that the said Act

provides for exercise of an option limited only to filing of

a claim application under 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

identical 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 Kodala (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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 21

in Kodala (supra), the learned counsel would argue,

furthermore failed to consider the effect of the Act which

is beneficent in nature and, thus, was required to be

construed liberally. Right to prosecute a remedy under

common law must be barred either expressly or by necessary

implication and such a bar having not been provided as

regard a proceeding under Section 163-A of the Act, it is

inconceivable, the learned counsel would submit, that a

remedy provided for under the statute would not be made

available to the suitor.

The learned counsel would contend that the Bench

deciding Kodala (supra) misinterpreted and misconstrued the

expression "any other law" appearing in Sub-Section (5) of

Section 140 to mean "any other law for the time being in

force as, for example, the Workmen's Compensation Act,

1923". The said expression, the learned counsel would

contend, would embrace also the other provisions of the said

Act. According to the learned counsel, the expressions

"any other law" would by necessary implication include the

other provisions of the Motor Vehicles Act having regard to

the fact that the remedies provided for under Sections 163-A

and 166 are distinct and separate and are based on

different legal regimes. It was pointed out that whereas

under the former "adequate and rational compensation" is

provided for, the latter provides for "just compensation".

Mr. Jitendra Sharma, learned senior counsel appearing

on behalf of the respondents, on the other hand, would

submit that Section 163-A which was introduced by the

Parliament in the year 1994 carries absolutely a different

scheme vis-`-vis 'no-fault liability' introduced in the year

1982 in Motor Vehicles Act, 1939 which was in pari materia

with Section 140 in the 1988 Act. By enacting Section 163-

A, Mr. Sharma would contend, an exception to the provisions

of Section 166 was made out for the purpose of implementing

the principles of social justice.

Drawing our attention to the Second Schedule appended

to the Act, the learned counsel would submit that the very

fact that in terms thereof, one-third of the total income is

to be excluded from the total amount of compensation and

further certain provisions relevant for computation of total

amount of compensation payable thereunder have been provided

for, is not itself suggestive of the fact that thereby the

payment directed thereunder is not by way of an interim or

on account payment but is a final one.

LEGISLATIVE HISTORY:

A claim for damages owing to injuries suffered by

reason of negligence on the part of the driver of a motor

vehicle used to be governed only by law of tort. The Indian

Motor Vehicles Act, 1914 is the first enactment relating to

motor vehicles. The Motor Vehicles Act, 1939 which replaced

the 1914 Act consolidated and amended the law relating to

motor vehicles in India. Under the 1939 Act as also the

Fatal Accidents Act, 1855 compensation was solely based on

law of tort. The civil courts had the jurisdiction to try a

suit claiming compensation by the plaintiffs for injuries or

damages suffered by them by a party whose action had

inflicted the injury. In the year 1956, the Motor Vehicle

Accidents Claims Tribunals were established to deal with

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 21

such claims purported to be for providing speedy trial.

However, proof of negligence was a condition precedent for

grant of compensation under the 1939 Act.

The 85th Law Commission in its report submitted in

May, 1980, proposed two new measures, i.e. (i) introduction

of Section 92-A in the Motor Vehicles Act, 1939 by which the

doctrine of liability without fault was to be introduced

and, (ii) the imposition of strict liability as regard death

or bodily injury caused by the accident or nature specified

in Section 110(1) thereof. Recommendations were also made

by the Law Commission to the effect that claim on fault

basis should be barred but the same had not been accepted by

the Parliament.

While making the aforementioned recommendations, the

Commission referred to the following observations made by

this Court in Bishan Devi and others Vs. Sirbaksh Singh and

Anr. [(1980) 1 SCC 273]:

"the law as it stands requires that the

claimant should prove that the driver of

the vehicle was guilty of rash and

negligent driving."

By reason of Section 92-A, 92-B in Motor Vehicles Act,

1939 inserted in the year 1982, a sum of Rs. 15,000/- was to

be provided in case of death and a sum of Rs. 75,000/- in

respect of permanent disablement by introducing the concept

of "no-fault liability". The amount of compensation,

however, had been revised from time to time.

The Law Commission furthermore recommended for laying

of a scheme in terms whereof the victims of 'hit and run

accident' could claim compensation where the identity of the

vehicle involved in the accident was unknown. Yet again,

the 199th Law Commission in its report submitted in 1987

stated the law as it stood then in the following terms:

"the law as it stands present, save the

provisions in chapter VIIA inserted by

the Motor Vehicles (Amendment) Act,

1982, enables the victim or the

dependants of the victim in the event of

death to recover compensation on proof

of fault of the person liable to pay the

compensation and which fault caused the

harm."

The present Act came into force thereafter in terms

whereof inter alia Sections 92-A to 92-E of the 1939 Act

were replaced by Sections 140 to 144 whereby and whereunder

the amount of compensation in case of death was raised to

Rs. 50,000/- and for permanent disablement to Rs.25,000/-.

However, having regard to number of representations received

from various quarters, a review committee was constituted by

the Government of India in the year 1990 to examine the same

and review such provisions of the said Act, as may be found

necessary. In terms of the recommendations of the Review

Committee as also the Transport Development Council, the Act

was thereafter amended in the year 1994 in terms whereof a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 21

new pre-determined formula in the form of Section 163-A for

payment of compensation to road accident victims on the

basis of age and income on a no-fault basis was provided.

STATUTORY PROVISIONS:

Chapter X of the said Act provides for liability

without fault in certain cases. Section 140 provides for

liability upon the owner of the vehicle to pay compensation

on the principle of no fault. The said provision reads

thus:

"140. Liability to pay compensation in

certain cases on the principle of no

fault. - (1) Where 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.

(2) The 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 thousand rupees.

(3) In 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.

(4) A 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.

(5) 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 :

Provided that the amount of such

compensation to be given under any other

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 21

law shall be reduced from the amount of

compensation payable under this section

or under Section 163-A."

Sections 141 and 142 of the said Act read as under:

"141. Provisions as to other right to

claim compensation for death or

permanent disablement. - (1) The 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 163-A (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.

(2) A 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.

(3) 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 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;

(b) if 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 second-mentioned compensation.

142. Permanent disablement. -For the

purposes of this Chapter, permanent

disablement of a person shall be deemed

to have resulted from an accident of the

nature referred to in sub-section (1) of

section 140 if such person has suffered

by reason of the accident, any injury or

injuries involving:-

(a) permanent privation of the sight

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 21

of either eye or the hearing of

either ear, or privation of any

member or joint; or

(b) destruction or permanent

impairing of the powers of any

member or joint; or

(c) permanent disfiguration of the

head or face."

Section 144 provides for a non-obstante clause.

Section 163-A was inserted by Act 54 of 1994 which came

into force from 14.11.1994. The said provision has been

inserted to provide for a new pre-determined structured

formula for payment of compensation to road accident victims

on the basis of age/ income of the deceased or the person

suffering permanent disablement.

Sections 163-A and 163-B read thus:

"163-A. Special provisions as to

payment of compensation on structured-

formula basis. - (1) Notwithstanding

anything contained in this Act or in any

other 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 or the

victim, as the case may be.

Explanation. - For the purposes of this

sub-section, 'permanent disability'

shall have the same meaning and extent

as in the Workmen's Compensation Act,

1923 (8 of 1923).

(2) 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.

(3) 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.

163-B. Option to file claim in certain

cases. - Where a person is entitled to

claim compensation under Section 140 and

Section 163-A, he shall file the claim

under either of the said sections and

not under both."

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 21

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 claims is to be reduced by one-third, in

consideration of the expenses which the victim would have

incurred towards maintaining himself, had he been alive.

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 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 had also been specified.

Chapter XII deals with constitution of claims

tribunals, application for compensation, option regarding

claims for compensation in certain cases, award of the

claims tribunal etc. Sections 166, 167 and 168 read thus:

"166. Application for compensation. -

(1) An application for compensation

arising out of an accident of the nature

specified in sub-section (1) of section

165 may be made-

(a) by the person who has sustained the

injury; or

(b) by the owner of the property; or

(c) where death has resulted from the

accident, by all or any of the legal

representatives of the deceased; or

(d) by any agent duly authorised by the

person injured or all or any of the

legal representatives of the

deceased, as the case may be:

Provided that where all the legal

representatives of the deceased have not

joined in any such application for

compensation, the application shall be

made on behalf of or for the benefit of

all the legal representatives of the

deceased and the legal representatives

who have not so joined, shall be

impleaded as respondents to the

application.

(2) Every application under sub-section

(1) shall be made, at the option of the

claimant, either to the Claims Tribunal

having jurisdiction over the area in

which the accident occurred or to the

Claims Tribunal within the local limits

of whose jurisdiction the claimant

resides or carries on business or within

the local limits of whose jurisdiction

the defendant resides, and shall be in

such form and contain such particulars

as may be prescribed:

Provided that where no claim for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 21

compensation under section 140 is made

in such application, the application

shall contain a separate statement to

that effect immediately before the

signature of the applicant.

(3) ***

(4) The Claims Tribunal shall treat any

report of accidents forwarded to it

under sub-section (6) of section 158 as

an application for compensation under

this Act.

167. Option regarding claims for

compensation in certain cases. -

Notwithstanding anything contained in

the Workmen's Compensation Act, 1923 (8

of 1923) where the death of, or bodily

injury to, any person gives rise to a

claim for compensation under this Act

and also under the Workmen's

Compensation Act, 1923, the person

entitled to compensation may without

prejudice to the provisions of Chapter X

claim such compensation under either of

those Acts but not under both.

168. Award of the Claims Tribunal. -On

receipt of an application for

compensation made under section 166, the

Claims Tribunal shall, after giving

notice of the application to the insurer

and after giving the parties (including

the insurer) an opportunity of being

heard, hold an inquiry into the claim

or, as the case may be, each of the

claims and, subject to the provisions of

section 162 may make an award

determining the amount of compensation

which appears to it to be just and

specifying the person or persons to whom

compensation shall be paid and in making

the award the Claims Tribunal shall

specify the amount which shall be paid

by the insurer or owner or driver of the

vehicle involved in the accident or by

all or any of them, as the case may be:

Provided that where such application

makes a claim for compensation under

section 140 in respect of the death or

permanent disablement of any person,

such claim and any other claim (whether

made in such application or otherwise)

for compensation in respect of such

death or permanent disablement shall be

disposed of in accordance with the

provisions of Chapter X.

(2) The Claims Tribunal shall arrange

to deliver copies of the award to the

parties concerned expeditiously and in

any case within a period of fifteen days

from the date of the award.

(3) When an award is made under this

section, the person who is required to

pay any amount in terms of such award

shall, within thirty days of the date of

announcing the award by the Claims

Tribunal, deposit the entire amount

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 21

awarded in such manner as the Claims

Tribunal may direct."

Section 176 provides for the rule making power. The

State of Gujarat in exercise of the said power made rules

known as Gujarat Motor Vehicle Rules. Rule 211 provides for

the procedure regarding compensation arising out of

accident. Sub-rule (1) of the said rule reads thus:

"(1) An application for compensation

under sub-section (1) of section 166

shall be made to the Claims Tribunal in

Form Comp. A, and shall contain the

particulars specified in that form."

The rules framed by the State of Gujarat also provide

for the forms in terms whereof the applications for claim

are required to be filed. Form Comp. A is the format for

filing application for compensation arising out of the use

of motor vehicles. The following columns inter alia are

required to be filled up:

"10. Brief particulars of the

accident... ... ... ...

11. Quantum of compensation claimed and

basis thereof ... ... ..."

However, Rule 231 provides for procedure regarding

compensation on the principle of no-fault which is in the

following terms:

"231. Procedure regarding compensation

on the principal of no fault:-

Notwithstanding anything contained in

rules 211 to 230 and 232 in the case of

a claim for compensation under Chapter X

of the Act, the procedure shall be as

follows, namely:-

(1) An application for compensation

shall be made to the Claims Tribunal in

Form CWF, in triplicate, and shall

contain the particulars specified in

that form.

(2) The application shall be accompanied

by a fee of ten rupees in the form of

Court fee stamps, and the following

documents, namely:

(i) First Information Report;

(ii) Injury certificate or Post-

mortem report in case of death;

(iii) Heirship certificate in case of

death;

(iv) Certificate from the registering

authority regarding ownership of

the vehicle involved in the

accident;

(v) Particulars of insurance of the

vehicle involved in the

accident.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 21

(3) No fees shall be charged for process

of application for compensation made

under this rule.

(4) The Claims Tribunal shall dispose of

the application for compensation within

six weeks from the date of receipt of

such application.

(5) For the purpose of adjudicating and

awarding the claim, the Claims Tribunal

shall follow the procedure of summary

trial as contained in Chapter XXI of the

Code of Criminal Procedure, 1973.

(6) The Claims Tribunal shall not reject

any application made under this rule on

the ground of any technical defect, but

shall give notice to the applicant and

get the defect rectified.

(7) For the purpose of adjudicating and

awarding the claim, the Claims Tribunal

shall obtain whatever information and

document considered necessary by it from

the police, medical and other

authorities.

(8) On receipt of the application for

compensation, the Claims Tribunal shall

give notice to the owner, and the

insurer, if any, of the vehicle involved

in the accident, directing them to

appear on a date not later than ten days

from the date of issue of such notice.

The date so fixed for such appearance

shall also be not later than fifteen

days from the receipt of the application

for compensation. The Claims Tribunal

shall state in such notice that, in case

they fail to appear on such appointed

date, the Tribunal shall proceed exparte

on the presumption that they have no

contention to make against the award of

compensation.

(9) The Claims Tribunal shall proceed

with the application for compensation,

on the basis of -

(i) First Information Report;

(ii) Injury certificate or Post-

mortem report in case of death;

(iii) Registration certificate of the

motor vehicle involved in the

accident;

(iv) Cover note, certificate of

insurance or the policy,

relating to the insurance of the

vehicle against third party

risks;

(v) The nature of the treatment

given by the medical officer who

has treated the victim.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 21

(10) The Claims Tribunal, in passing the

orders, shall make an award of

compensation of twenty five thousand

rupees in respect of the death, and of

twelve thousand rupees in respect of the

permanent disablement, to be paid by the

owner or insurer, of the vehicle

involved in the accident.

(11) Where compensation is awarded to

two or more persons, the Claims Tribunal

shall also specify the amount payable to

each of them.

(12) The Claims Tribunal, in passing the

orders, shall also direct the owner or

insurer, of the vehicle involved in the

accident, to pay the amount of

compensation to the claimant within

thirty days from the date of the said

orders.

(13) Where the Claims Tribunal thinks

that the actual payment to the claimant

is likely to take time because of the

identification and the fixation of the

legal heirs of the deceased, the Claims

Tribunal may call for the amount of

compensation awarded, to be deposited

with the Tribunal and then proceed with

the identification of the legal heirs

for deciding the payment of compensation

to each of the legal heirs."

In terms of the aforementioned rule, an application for

compensation in respect of liability without fault is

required to be filed without any particular as regard the

accident having regard to the fact that by reason thereof,

fault on the part of the driver of the motor vehicle is

required to be pleaded or proved.

ANALYSIS OF THE RELEVANT PROVISIONS:

The relevant provisions of the Act are beneficial in

nature. The Act indisputably is in the nature of a social

welfare legislation.

The provisions as regard no fault liability evidently

were inserted having regard to the fact that the road

accidents in India had touched a new height and at least in

some of the cases it was found that rash or negligent

driving causing death or injury to the innocent persons

could not be proved. Whereas in terms of Section 140 of the

Act a statutory liability has been cast upon the owner in

case of death or permanent disablement; both under Section

163-A as also Section 166 of the Act, the insurer had been

made responsible.

It is true that in terms of Section 163-B of the Act an

option had been provided for so as to enable a person to lay

a claim for compensation either under Section 140 or Section

163-A and not under both but having regard to the scheme of

the Act, the same was not necessary.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 21

Section 163-A was introduced in the Act by way of a

social security scheme. It is a code by itself. It appears

from the Objects and Reasons of the Motor Vehicles

(Amendment) Act, 1994 that after enactment of the 1988 Act

several representations and suggestions were made from the

State Governments, transport operators and members of public

in relation to certain provisions thereof. Taking note of

the observations made by the various Courts and the

difficulties experienced in implementing the various

provisions of the Motor Vehicles Act, the Government of

India appointed a Review Committee. The Review Committee in

its report made the following recommendations:

"The 1988 Act provides for enhanced

compensation for hit and run cases as

well as for no fault liability cases.

It also provides for payment of

compensation on proof-of-fault basis to

the extent of actual liability incurred

which ultimately means an unlimited

liability in accident cases. It is

found that the determination of

compensation takes a long time.

According to information available, in

Delhi alone there are 11214 claims

pending before the Motor Vehicle

Accidents Tribunals, as on 31.3.1990.

Proposals have been made from time to

time that the finalisation of

compensation claims would be greatly

facilitated to the advantage of the

claimant, the vehicle owner as well as

the Insurance Company if a system of

structured compensation can be

introduced. Under such a system of

structured compensation that is payable

for different clauses of cases depending

upon the age of the deceased, the

monthly income at the time of death, the

earning potential in the case of the

minor, loss of income on account of loss

of limb etc., can be notified. The

affected party can then have the option

of either accepting the lump sum

compensation as is notified in that

scheme of structured compensation or of

pursuing his claim through the normal

channels.

The General Insurance Company with

whom the matter was taken up, is

agreeable in principle to a scheme of

structured compensation for settlement

of claims on "fault liability" in

respect of third party liability under

Chapter XI of M.V. Act, 1988. They have

suggested that the claimants should

first file their Claims with Motor

Accident Claims Tribunals and then the

insurers may be allowed six months time

to confirm their prima facie liability

subject to the defences available under

Motor Vehicles Act, 1988. After such

confirmations of prima facie liability

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 21

by the insurers the claimants should be

required to exercise their option for

conciliation under structured

compensation formula within a stipulated

time."

The recommendations of the Review Committee and

representations from public were placed before the Transport

Development Council for seeking their views pursuant whereto

several sections were amended. Section 163-A was inserted

in the Act to provide for payment of compensation in motor

accident cases in accordance with the Second Schedule

providing for the structured formula which may be amended by

the Central Government from time to time.

Section 140 of the Act dealt with interim compensation

but 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 long-drawn 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. The Act and

the Rules framed by the State in no uncertain terms suggest

that a new device was sought to be evolved so as to grant a

quick and efficacious relief to the victims falling within

the specified category. The heirs of the deceased or the

victim in terms of the said provisions were assured of a

speedy and effective remedy which was not available to the

claimants under Section 166 of the Act.

Chapter XI was, thus, 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; compensation is to be paid on a

structured formula not only having regard to the age of the

victim and his income but also the other factors relevant

therefor. An award made thereunder, therefore, shall be in

full and final settlement of the claim as would appear from

the different columns contained in the Second Schedule

appended to the Act. The same is not interim in nature.

The note appended to column 1 which deals with fatal

accidents makes the position furthermore clear stating that

from the total amount of compensation one-third thereof is

to be reduced in consideration of the expenses which the

victim would have incurred towards maintaining himself had

he been alive. This together with the other heads of

compensation as contained in column Nos. 2 to 6 thereof

leaves no manner of doubt that the Parliament intended to

lay a comprehensive scheme for the purpose of grant of

adequate compensation to a section of victims who would

require the amount of compensation without fighting any

protracted litigation for proving that the accident occurred

owing to negligence on the part of the driver of the motor

vehicle or any other fault arising out of use of a motor

vehicle.

The submission of learned counsel appearing on behalf

of the appellants to the effect that Sections 140 and 163-A

provide for similar scheme cannot be accepted for more than

one reason. Payment of the amount in terms of Section 140

of the Act is ad hoc in nature. A claim made thereunder, as

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 21

has been noticed hereinbefore, is in addition to any other

claim which may be made under any other law for the time

being in force. Section 163-A of the Act does not contain

any such provision.

Section 163-A of the Act is interlinked with several

sections of Chapters XI and XII thereof. Section 140

imposes a liability upon the owner of the vehicle to pay

compensation where death or permanent disablement of any

person has resulted from accident arising out of the use of

a motor vehicle. By reason of the said provision a fixed

sum is to be paid.

Sub-Section (4) of Section 140 provides that the claim

for compensation under sub-section (1) thereof 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 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. Sub-section (5) of Section 140 of

the Act categorically provides that the obligation of the

owner of the vehicle shall not be in derogation of any

statutory law cast upon the owner of the vehicle to pay

compensation under any other law for the time being in force

subject, however, to the condition as has been laid down in

the proviso appended thereto that the amount of such

compensation to be given under any other law should be

reduced from the amount of compensation payable thereunder

or Section 163-A.

Section 163-A which has an overriding effect provides

for special provisions as to payment of compensation on

structured formula basis. Sub-Section (1) of Section 163-A

contains non-obstante clause in terms whereof the owner of

the motor vehicle or the authorised insurer is 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 or the victim, as the case may be. Sub-Section

(2) of Section 163-A is in pari materia with Sub-Section (3)

of Section 140 of the Act.

Section 163-A does not contain any provision identical

to Sub-Section (5) of Section 140 which is also indicative

of the fact that whereas in terms of the latter, the

liability of the owner of the vehicle to give compensation

or relief under any other law for the time being in force

continues subject of course to the effect that the amount

paid thereunder shall be reduced from the amount of

compensation payable under the said Section or Section

163-A.

By reason of the Section 163-A, therefore, the

compensation is required to be determined on the basis of a

structured formula whereas in terms of Section 140 only a

fixed amount is to be given. A provision of law providing

for compensation is presumed to be final in nature unless a

contra indication therefor is found to be in the statute

either expressly or by necessary implication. While

granting compensation, the Tribunal is required to

adjudicate upon the disputed question as regard age and

income of the deceased or the victim, as the case may be.

Unlike Section 140 of the Act, adjudication on several

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 21

issues arising between the parties is necessary in a

proceeding under Section 163-A of the Act.

Decisions rendered by this Court are galore where

computation as regard the amount of compensation has been

related to multiplier method involving ascertainment of loss

of dependency and capitalizing the same by appropriate

multiplier. (See General Manager, Kerala State Road

Transport Corporation, Trivandurm Vs. Mrs. Susamma Thomas

and others, (1994) 2 SCC 176). The structured formula

provided for in the Second Schedule also provides for

similar concept as regard determination of the amount of

compensation.

Apart from the fact that compensation is to be paid by

applying multiplier method under the Second Schedule other

relevant factors, namely, reduction of one-third in

consideration of the expenses which the victim would have

incurred towards maintaining himself, general damages in

case of death as also in the case of injuries and

disabilities as also the disability in non-fatal accidents,

a notional income for compensation to those who had no

income prior to accident are provided for, are required to

be considered which is also a clear pointer to the fact that

thereby the Parliament intended to provide for a final

amount of compensation and not an interim one.

The scheme envisaged under Section 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 Section 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 Sections 140 and 166

cater to all sections of society.

It may be true that Section 163-B provides for an

option to a claimant to either go for a claim under Section

140 or Section 163-A of the Act, as the case may be, but the

same was inserted 'ex-abundanti cautela' so as to remove any

misconception in the mind of the parties to the lis having

regard to the fact that both relate to the claim on the

basis of no-fault liability. Having regard to the fact that

Section 166 of the Act provides for a complete machinery for

laying a claim on fault liability, the question of giving an

option to the claimant to pursue their claims either under

Section 163-A or Section 166 does not arise. If the

submission of the learned counsel is accepted the same would

lead to an incongruity.

Although the Act is a beneficial one and, thus,

deserves liberal construction with a view to implementing

the legislative intent but it is trite that where such

beneficial legislation has a scheme of its own and there is

no vagueness or doubt therein, the court would not travel

beyond the same and extend the scope of the statute on the

pretext of extending the statutory benefit to those who are

not covered thereby. (See Regional Director, Employees'

State Insurance Corporation, Trichur Vs. Ramanuja Match

Industries, [AIR 1985 SC 278 : (1985) 1 SCC 218].

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 21

The decision of this Court in Kunal Singh Vs. Union of

India and Another [(2003) 4 SCC 524] relied upon by Mr.

Banerjee cannot be said to have any application whatsoever

in the instant case as therein this Court while considering

the provisions of Section 47 of the Persons with

Disabilities (Equal Opportunities, Protection of Rights and

Full Participation) Act, 1995 held that the language thereof

is plain and certain statutory obligation on the employer

was cast to protect an employee acquiring disability during

service and only in that situation, it was observed:

"9...In construing a provision of a

social beneficial enactment that too

dealing with disabled persons intended

to give them equal opportunities,

protection of rights and full

participation, the view that advances

the object of the Act and serves its

purpose must be preferred to the one

which obstructs the object and paralyses

the purpose of the Act..."

It is also not a case where an exception or exclusion

clause in a beneficial legislation has been provided for

and, therefore, the decision of this Court in State of

Tripura and Another Vs. Roopchand Das and Others [(2003) 1

SCC 421] cannot also be said to have any application.

It is now well-settled that for the purpose of

interpretation of statute, same is to be read in its

entirety. The purport and object of the Act must be given

its full effect. [See High Court of Gujarat & Anr. Vs.

Gujarat Kishan Mazdoor Panchayat & Ors. [JT 2003 (3) SC 50],

Indian Handicrafts Emporium and Others vs. Union of India

and Others [(2003) 7 SCC 589], Ameer Trading Corporation

Ltd. vs. Shapoorji Data Processing Ltd. [JT 2003 (9) SC 109

= 2003 (9) SCALE 713 and Ashok Leyland Vs. State of Tamil

Nadu and Anr. [2004 (1) SCALE 224]. The object underlying

the statute is required to be given effect to by applying

the principles of purposive construction.

We, therefore, are of the opinion that remedy for

payment of compensation both under Sections 163-A and 166

being final and independent of each other as statutorily

provided, a claimant cannot pursue his remedies thereunder

simultaneously. One, thus, must opt/elect to go either for

a proceeding under Section 163-A or under Section 166 of the

Act, but not under both.

In Kodala (supra) the contention of the claimant that

right to get compensation is in addition to the no-fault

liability was, thus, rightly rejected. In agreement with

Kodala (supra) we are also of the opinion that unlike

Sections 140 and 141 of the Act the Parliament did not want

to provide additional compensation in terms of Section 163-A

of the Act.

The question may be considered from different angles.

As for example, if in the proceedings under Section 166 of

the Act, after obtaining compensation under Section 163-A,

the awardee fails to prove that the accident took place

owing to negligence on the part of the driver or if it is

found as of fact that the deceased or the victim himself was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 21

responsible therefor as a consequence whereto the Tribunal

refuses to grant any compensation; would it be within its

jurisdiction to direct refund either in whole or in part the

amount of compensation already paid on the basis of

structured formula? Furthermore, if in a case the Tribunal

upon considering the relevant materials comes to the

conclusion that no case has been made out for awarding the

compensation under Section 166 of the Act, would it be at

liberty to award compensation in terms of Section 163-A

thereof.

The answer to both the aforementioned questions must be

rendered in the negative. In other words, the question of

adjustment or refund will invariably arise in the event if

it is held that the amount of compensation paid in the

proceedings under Section 163-A of the Act is interim in

nature.

It is, therefore, evident that whenever the Parliament

intended to provide for adjustment or refund of the

compensation payable on the basis of no-fault liability, as

for example, Sections 140 and 161 in case of hit and run

motor accident, from the amount of compensation payable

under the award on the basis of fault liability under

Section 168 of the Act, the same has expressly been provided

for and having regard to the fact that no such procedure for

refund or adjustment of compensation has been provided for

in relation to the proceedings under Section 163-A of the

Act, it must be held that the scheme of the provisions under

Sections 163-A and 166 are distinct and separate in nature.

It is also not of much relevance that in terms of

Section 140 of the Act, the owner of the vehicle has been

fastened with the statutory liability and in Section 163-A

thereof both the owner as also his authorised insurer has

been made so liable.

In Sub-Section (5) of Section 140 of the Act the

expression "also" has been used which is indicative of the

fact that the owner of the vehicle would be additionally

liable to pay compensation under any other law for the time

being in force. Proviso appended to Sub-Section (5) of

Section 140 states that the amount of compensation payable

under any other law for the time being in force is to be

reduced from the amount of the compensation payable under

Sub-Section (2) thereof or under Section 163-A of the Act.

Right to claim compensation under Section 140, having regard

to the provisions contained in Section 141 is in addition to

any other right to claim compensation on the principle of

fault liability. Such a provision does not exist in Section

163-A. If no amount is payable under the fault liability or

the compensation which may be received from any other law,

no refund of the amount received by the claimant under

Section 140 is postulated in the Scheme. Section 163-A, on

the other hand, nowhere provides that the payment of

compensation of no-fault liability in terms of the

structured formula is in addition to the liability to pay

compensation in accordance with the right to get

compensation on the principle of fault liability. It is

also not correct to contend that the expression "any other

law for the time being in force" used in Section 140(5)

would include any other provisions of the Motor Vehicles

Act. Had the intention of the Parliament been to include

the other provisions of Motor Vehicles Act within the

meaning of the expression "any other law for the time being

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 21

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 law other than the provisions of the Motor Vehicles Act.

The proviso appended to Sub-Section (5) of Section 140 of

the 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.

In 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

XII 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 (1) 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 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 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 Kodala (supra)

has correctly been decided. However, we do not agree with

the findings in Kodala (supra) that if a person invokes

provisions of Section 163-A, the annual income of Rs.

40,000/- per annual 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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 21

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 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 their 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 Act 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.