1

VS,J

MACMA_9 of 2022 & 530 of 2021

APHC010507512021

IN THE HIGH COURT OF ANDHRA PRADESH

AT AMARAVATI

(Special Original Jurisdiction)

[3333]

WEDNESDAY,THE FIRST DAY OF APRIL

TWO THOUSAND AND TWENTY SIX

PRESENT

THE HONOURABLE SMT JUSTICE V.SUJATHA

MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NOs: 9/2022 &

530/2021

MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 9/2022

Between:

1. KUNDURI PULLAMMA, W/O KUNDURI KRISHNA, AGED 36

YEARS,B.C. COLONY, OPP. TO RTC BUS STAND,

PULLALACHERUVU POST AND MANDAL, PRAKASAM DISTRICT.

2. KANDURI VENKATA LAKSHMI, D/O KRISHNA, AGED 7 YEARS,B.C.

COLONY, OPP. TO RTC BUS STAND, PULLALACHERUVU POST

AND MANDAL, PRAKASAM DISTRICT.

3. KANDURI SWATHI, D/O KRISHNA, AGED 5 YEARS,B.C. COLONY,

OPP. TO RTC BUS STAND, PULLALACHERUVU POST AND

MANDAL, PRAKASAM DISTRICT.

4. KANDURI KRISHNAVENI, D/O KRISHNA, AGED 3 YEARS,B.C.

COLONY, OPP. TO RTC BUS STAND, PULLALACHERUVU POST

AND MANDAL, PRAKASAM DISTRICT.

5. KUNDURI NAGAMMA, W/O CHINNA NARASIMHULU, AGED 65

YEARS,B.C. COLONY, OPP. TO RTC BUS STAND,

PULLALACHERUVU POST AND MANDAL, PRAKASAM DISTRICT.

PETITIONERS 2 TO 4 ARE BEING MINORS, REP. BY MOTHER (1ST

PETITIONER) AS THEIR NEXT FRIEND.

2

VS,J

MACMA_9 of 2022 & 530 of 2021

...APPELLANT(S)

AND

1. KATI ADAM, S/O YESAIAH, AGED 38 YEARS, SC MALA BY CASTE,

DRIVER OF THE AUTO BEARING NO. AP27TT8922, GOLLAVIDIPI

YERRAGONDAPALEM MANDAL, PRAKASAM DISTRICT.

2. KATI PRABHUDAS, S/O LAZAR, AGED 25 YEARS, GOLLAVIDIPI

VILLAGE, YERRAGONDAPALEM MANDAL, PRAKASAM DISTRICT,

OWNER OF THE AUTO BEARING NO. AP27T18922.

3. ICICI LOMBARD GENERAL INSURANCE COMPANY LIM ITED, REP.

BY ITS AUTHORIZED SIGNATORY, VASU PLAZA, OPP. TO K.B.

RESTAURANT, KURNOOL ROAD, ONGOLE TOWN, PRAKASAM

DISTRICT.

...RESPONDENT(S):

Appeal filed under Order 41 of CPC praying thet the Highcourt may be

pleased toappellants begs to prefer this memorandum of appeal being

aggrieved by the decree and judgment passed in M.V.O.P. 395/2017, dated

01-07-2021 on the file of Motor Accident Claims Tribunal -cum- VIII Additional

District Judge, Parkasam District at Ongole

Counsel for the Appellant(S):

1. NUTHALAPATI KRISHNA MURTHY

Counsel for the Respondent(S):

1. GUDI SRINIVASU

2.

MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 530/2021

Between:

1. ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED,, REP.

BY ITS AUTHORIZED SIGNATORY, VASU PLAZA, OPP. TO K.B.

RESTAURANT, KURNOOL ROAD, ONGOLE TOWN, PRAKASAM

3

VS,J

MACMA_9 of 2022 & 530 of 2021

DISTRICT.

...APPELLANT

AND

1. KUNDURI PULLAMMA, W/O. KUNDURI KRISHNA, AGED 36 YEARS,

2. KUNDURI VENKATA LAKSHMI, , D/O.KRISHNA, AGED 7 YEARS,

3. KUNDURI SWATHI, D/O. KRISHNA, AGED 5 YEARS,

4. KUNDURI KRISNAVENI, , D/O. KRISHNA, AGED 3 YEARS,

5. KUNDURI NAGAMMA, , W/O. CHINNA NARASIMHULU, AGED 65

YEARS, (PETITIONERS 2 TO 4 ARE BEING MINORS, REP. BY

MOTHER (1ST PETITIONER) AS THEIR NEXT FRIEND). ALL ARE

RESIDENTS OF B.C. COLONY, OPP. TO R.T.C. BUS STAND,

PULLALACHERUVU POST AND MANDAL, PRAKASAM DISTRICT.

6. KATI AADAM, S/O. YESAIAH, AGED 38 YEARS, SC MALA BY

CASTE, DRIVER OF THE AUTO BEARING NO. AP 27 TT 8922,

GOLLAVIDIPI VILLAGE, YERRAGONDAPALEM

MANCIAL,PRAKASAM DISTRICT

7. KATI PRABHUDAS, , S/O. LAZAR, AGED 25 YEARS, GOLLAVIDIPI

VILLAGE, YERRAGONDAPALEM MAND AL, PRAKASAM

DISTRICT,OWNER OF THE AUTO BEARING NO. AP 27 TT 8922.

...RESPONDENT(S):

Appeal filed under Order 41 of CPC praying thet the Highcourt may be

pleased topleased to allow this appeal by setting aside the judgment and

decree passed in M.V.O.P No,395 of 2017 on the file of the Motor Accidents

Claims Tribunal - cum - VI11 Additional District Judge, Prakasam at Ongole

dated 1st day of July, 2021

IA NO: 1 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated

in the affidavit filed in support of the petition, the High Court may be pleased

pleased to grant STAY of all further proceedings pursuant to the decree and

Judgment dated 1st day of July, 2021 passed in M.V.O.P No.395 of 2017 on

4

VS,J

MACMA_9 of 2022 & 530 of 2021

the file of the Motor Accidents Claims Tribunal—cum—VIII -Additional District

Judge Prakasam at Ongole, including execution proceedings, pending

disposal of the main M.A.C.M.A.

IA NO: 2 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated

in the affidavit filed in support of the petition, the High Court may be pleased

pleased to permit the petitioners to withdraw the amounts deposited by the 1st

respondent in pursuance of the order passed in IA No.1 of 21 in MACMA No.

530 of 2021 dated 01-11-2021 by this Honorable Court in MVOP No. 395 of

2017 on the file of MACT cum VIII Additional District Judge at Parkasam at

Ongole and to pass such other order or

Counsel for the Appellant:

1. GUDI SRINIVASU

Counsel for the Respondent(S):

1. NUTHALAPATI KRISHNA MURTHY

The Court made the following:

5

VS,J

MACMA_9 of 2022 & 530 of 2021

COMMON JUDGMENT:-

Both these appeals arise out of the award dated 01.07.2021, passed

by the Motor Accidents Claims Tribunal – cum – VIII Additional District

Judge, Prakasam District at Ongole in M.V.O.P.No.395 of 2017. As such,

I feel it appropriate to decide the issues by way of a common judgment.

2. The claimants filed an application before the Tribunal, initially

under Sections 166 and 168 of the Motor Vehicles Act and Rule 455 of

the Andhra Pradesh Motor Vehicle Rules, 1989which was subsequently

amended vide order dated 30.07.2019 in I.A.No.527 of 2019 to that of a

petition under Section 163-A and 168 of the Motor Vehicles Act, 1988 and

Rule 455 of the Andhra Pradesh Motor Vehicles Rules, 1989, claiming

compensation of Rs.15,00,000/- for the death of one Kunduri Krishna

(hereinafter referred to as ‗deceased‘) in a road accident that occurred on

20.08.2014 at Mudra School, Yerragondapalem. The Tribunal awarded a

compensation of Rs.9,77,000/- to the claimants. Aggrieved by the same,

the claimants filed M.A.C.M.A.No.9 of 2022 and the 3

rd

respondent/insurance company filed M.A.C.M.A.No.530 of 2021.

3. For the sake of convenience, the parties are referredto as they

are arrayed before the Tribunal.

4. The claimant No.1 is the wife, claimant Nos.2 to 4 are

daughters and the claimant No.5 is the mother of the deceased. The 1

st

respondent is the driver and the 2

nd

respondent is the owner of the auto

bearing No.AP-27-TT-8922 and the 3

rd

respondent is the insurer of the

auto. On 20.08.2014, the deceased, who is aged about 40 years, along

with his children went to Thripuranthakam and while returning to

Yerragondapalem, he got into an auto bearing No.AP-27-TT-8922 which

6

VS,J

MACMA_9 of 2022 & 530 of 2021

was driven by the 1

st

respondent. When the auto reached Mudra School,

Yerragondapalem, at about 11.00 a.m., the 1

st

respondent drove the

same in rash and negligent manner, which led to the fall of the deceased

out of the auto. The deceased sustained a head injury and was

immediately shifted to Government General hospital, Guntur where he

succumbed to injuries on 01.09.2014 at about 03.00 p.m., while he was

undergoing treatment.The incident was reported to Yerragondpalem

Police Station and accordingly a case was registered in Crime No.82 of

2014 against the 1

st

respondent under Section 304-A of the Indian Penal

Code.

5. The respondent Nos.1 and 2 remained exparte. The 3

rd

respondent – insurance company, filed its counter affidavit denying the

material allegations and contended that as per registration certificate,

permit and policy pertaining to the auto bearing No.AP-27-TT-8922, its

seating capacity is ‗3+1‘, which included the driver, but, as per the FIR,

nine members were travelling in the auto at the time of accident. It further

contended that the 1

st

respondent was not holding a valid license at the

time of accident, which is breach of the contract and as such, the 2

nd

respondent alone is liable to pay compensation to the claimants. It further

contended that the claim petition itself is not maintainable as it is filed

under Section 163-A, whereas the claimants have shown the income of

the deceased. A petition under Section 163-A has to be filed in

connection with II-Schedule of Motor Vehicles Act without admitting the

occupation and income of the deceased. It further contended that II-

Schedule applies only where the income of the deceased does not cross

Rs.40,000/- per annum, but, it is the version of the claimants that the

income of the deceased was more than Rs.40,000/-.

7

VS,J

MACMA_9 of 2022 & 530 of 2021

6. Basing on the above pleadings, the Tribunal framed the

following issues for trial:

1) Whether the death of the deceased Kunduri Krishna @Krishnudu

occurred at 11.00 a.m., on 20.08.2014 at Mudra School, Yerragondapalem

– Tripuranthakam Road due to the rash and negligent driving of the 1

st

respondent driver of the auto bearing No. AP 27 TT 8922 of the 2

nd

respondent?

2) Whether the petitioners are entitled for compensation, if so, to what

amount against whom?

3) To what relief?

7. During the course of trial, in support of their case, the claimants

got examined P.W.1 – wife of the deceased and got marked Exs.A1 to

A7. On behalf of the respondents, the 3

rd

respondent got examined

R.Ws.1 and 2, got marked Exs.X1 to X6.

8. The Tribunal, after considering the material available before it

and also the contentions putforth by either parties, came to a conclusion

that the claimants are liable to be paid Rs.9,77,000/- as compensation by

respondent Nos.1 to 3. Thus, the petition filed by the claimants was partly

allowed vide award dated 01.07.2021.

9. Heard Sri. N. Krishnamurthy, learned counsel for the claimants

and Sri. GudiSrinivasu, learned counsel for the respondents.

10. During the course of arguments, learned counsel for the

claimants reiterated the facts that led to filing of the present appeal and

further contended that though the claim petition was filed seeking

compensation of Rs.15,00,000/-, the Tribunal has only awarded a sum of

Rs.9,77,000/- as compensation to the claimants and that it failed to add

40% of the annual income towards future prospects though the deceased

is self employed and relied on several judgments delivered by this Court

8

VS,J

MACMA_9 of 2022 & 530 of 2021

to substantiate his claim for adding 40% of the annual income towards

future prospects. Hence, requested this Court to enhance the

compensation awarded by the Tribunal.

11. On the other hand, learned standing counsel appearing for the

3

rd

respondent strenuously contended that the rash and negligent driving

of the 1

st

respondent is not proved; that nine persons were travelling in

the subject auto though its maximum seating capacity is four including the

driver. He further contended that the 1

st

respondent had no valid driving

license and that the respondent Nos.1 and 2 have violated the terms and

conditions of the insurance policy. The claim petition filed by the

claimants is under Section 163A of the Motor Vehicles Act and that in

such petitions, the annual income of the injured/deceased cannot exceed

Rs.40,000/- to seek compensation. He contended that though the

claimants themselves have admitted that the deceased used to earn

more than Rs.1,20,000/- per annum, the Tribunal without considering the

same has awarded the sum of Rs.9,77,000/- as compensation treating

the petition as if it is filed under Section 166 of the Motor Vehicles Act. In

a petition under Section 163A of the Motor Vehicles Act, compensation

has to be granted to the claimants as per II Schedule of the Motor Vehicle

Act. Hence, learned counsel for the 3

rd

respondent requested this Court

to set-aside the impugned award passed by the Tribunal.

12. To prove that the accident occurred due to the rash and

negligent driving of the 1

st

respondent, the 1

st

claimant got examined

herself as P.W.1 and got marked Exs.A1 to A7 [ FIR, inquest report,

alteration memo, postmortem report, Motor Vehicle Inspector‘s report,

charge sheet, motor insurance cover]. Alleging that there is negligence on

the part of the deceased, the 3

rd

respondent got examined R.W.1, who is

9

VS,J

MACMA_9 of 2022 & 530 of 2021

its legal manager and got marked Exs.X1 to X6. It is evident from the

record that initially a case was registered against the 1

st

respondent for

the offence punishable under Section 337 of the Indian Penal Code and

subsequent to the death of the deceased, the Section of law was altered

to 304A of the Indian Penal Code. After completion of the investigation,

the Police have filed a charge sheet (Ex.A6) which discloses that the

accident occurred due to the rash and negligent driving of the 1

st

respondent. Furthermore, it can be seen from Ex.X3 – insurance policy

and Ex.X4 – driving license of the 1

st

respondent that as on the date of

accident, the 1

st

respondent holds a valid driving license and the

insurance cover of the subject vehicle is in force, thus, the Tribunal made

all the respondents jointly and severally liable to pay compensation to the

claimants. Thus, it can be safely drawn from the testimony of P.W.1

coupled with Exs.A1 to A7 that the accident in which the deceased died

was the result of rash and negligent driving of the 1

st

respondent. Taking

a similar view, the Tribunal had answered issue No.1 in favour of the

claimants and no adverse inference can be drawn against the same.

13. With regard to the quantum, the Tribunal, in the absence of any

evidence, took the income of the deceased as Rs.7,500/- per month,

deducted 1/4

th

of it towards personal expenses [Rs.7,500/- - Rs.2,500/-],

computed the annual income of the deceased as Rs.60,000/ - and

considering the age of the deceased as 40, applied the appropriate

multiplier of ‗15‘ and awarded Rs.9,00,000/- [Rs.60,000/- X 15] to the

claimants towards loss of dependency. In addition, it granted Rs.77,000/-

as compensation under conventional heads keeping in view the decision

of the Hon‘ble Supreme Court of India in National Insurance Company

10

VS,J

MACMA_9 of 2022 & 530 of 2021

Vs. PranaySethi

1

. In total, Rs.9,77,000/- was awarded to the claimants

vide the impugned award.

14. Undisputedly, the claim petition was initially filed by the

claimants under Section 166 and 168 of the Motor Vehicle Act and Rule

455 of the Andhra Pradesh Motor Vehicle Rules, 1989, but, the same was

subsequently amended to that of a petition under Section 163A and 168

of the Motor Vehicle Act, 1988 and Rule 455 of the Andhra Pradesh

Motor Vehicle Rules, 1989, vide orders in I.A.No.527 of 2019, dated

30.07.2019. Now the point that arises for consideration is whether the

claimants are entitled for the awarded amount of compensation under a

petition filed under Section 163A of the Motor Vehicles Act. For better

understanding of the case, Sections 163A and 166 of the Motor Vehicles

Act, 1988 are extracted hereunder:

―163A. 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 of 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

1

(2017) 16 SCC 680

11

VS,J

MACMA_9 of 2022 & 530 of 2021

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.

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

12

VS,J

MACMA_9 of 2022 & 530 of 2021

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 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.‖

15. Section 163A of the Motor Vehicles Act, 1988 introduces a

special provision for the payment of compensation on a structured

formula basis, creating a no-fault liability regime. Under this provision, the

owner of the motor vehicle or the authorised insurer becomes liable to

pay compensation to the victim or to the legal heirs of a deceased in

cases of death. In a petition filed under this provision, the claimant is not

required to establish negligence, wrongful act, or default on the part of the

owner or any other person and compensation shall be determined strictly

in accordance with the II Schedule prescribed under the Act.This

provision is intended to provide speedy and predetermined compensation

to victims of motor accidents or their dependents.

16. Section 166 of the Motor Vehicles Act, 1988 provides the

substantive mechanism for filing an application for compensation arising

out of a motor accident before the Motor Accidents Claims Tribunal.

Under this provision, a claim petition may be instituted by the person who

has sustained injury, by the owner of the damaged property, by the legal

representatives of the deceased in case of death, or by any person duly

authorised by them. A claim under Section 166 is upon the principle of

fault liability, and therefore the claimant is required to establish that the

accident occurred due to the rash or negligent act of the driver or owner

of the offending vehicle. The Tribunal, upon appreciation of the pleadings

and evidence adduced by the parties, determines the quantum of

13

VS,J

MACMA_9 of 2022 & 530 of 2021

compensation which appears to be just and reasonable, having regard to

the nature of injuries, loss of dependency, medical expenses, and other

attendant circumstances.

17. The Second Schedule to the Motor Vehicles Act contains a

table prescribing the compensation to be awarded with reference to the age

and income of the deceased. It specifies the amount of compensation to be

awarded with reference to the annual income range of Rs.3,000/- to

Rs.40,000/-. It does not specify the quantum of compensation in case the

annual income of the deceased is more than Rs.40,000/-, however, it

provides the multiplier to be applied with reference to the age of the

deceased. The table starts with a multiplier of 15, goes up to 18 and then

steadily comes down to 5. It also provides the standard deduction as one-

third on account of personal living expenses of the deceased. As such,

where an application is under Section 163A of the Motor Vehicles Act, it is

possible to calculate the compensation on the structured formula basis,

even where the compensation is not specified with reference to the annual

income of the deceased or is more than Rs.40,000/- by applying the

formula: Two-thirds of the annual income multiplied by the multiplier

applicable to the age of the deceased. Several principles of tortious liability

are excluded when the claim is under Section 163A of the Motor Vehicles

Act. It has to be noted that where the annual income of the deceased

exceeds Rs.40,000/-, a claim under Section 163A of the Motor Vehicles Act

is not maintainable as the said provision is restricted to a specified income

group; in such cases, the appropriate remedy lies under Section 166 of the

Act.

14

VS,J

MACMA_9 of 2022 & 530 of 2021

18. The Hon‘ble Supreme Court of India, in Deepal Girishbhai

Soni and ors., Vs. United India Insurance Company Limited

2

, while

dealing with Section 163A of the Motor Vehicles Act, 1988 held as under:

―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.‖

19. Chapter XI of the Act was enacted to provide immediate relief

to a limited class of victims whose annual income does not exceed

Rs.40,000/- as compensation under Section 163-A and it is determined

on a structured formula basis, as discussed above and is intended to be a

full and final settlement without the need to prove negligence. Therefore,

persons having an income above Rs.40,000/- are not entitled to file a

2

2004 (5) SCC 385

15

VS,J

MACMA_9 of 2022 & 530 of 2021

petition under Section 163-A. In the present case, though the claimants

themselves have contended that the deceased used to earn Rs.400/- to

Rs.500/- per day, in which case the annual income exceeds Rs.40,000/-,

the Tribunal considered the same despite the claim being filed under

Section 163-A, which is contrary to the very scheme and intent of the

provision.

20. It is the case of the claimants that the deceased used to earn

Rs.400/- to Rs.500/- per day per day by working as a tailor and some

additional works in the surrounding villages. However, no evidence was

adduced by the appellants to elicit the income of the deceased. Thus, as

the claim petition was filed under Section 163A of the Motor Vehicles Act,

the annual income of the deceased can be considered as Rs.40,000/-

and as the deceased was aged about 40 years, as can be seen from the

inquest report (Ex.A2) and postmortem certificate (Ex.A4), the

compensation can be computed by using the formula ―2/3

rd

of the annual

income multiplied by applicable multiplier‖. Now, 2/3

rd

of Rs.40,000/- is

Rs.26,667/- and the relevant multiplier is ‗16‘. Thus, the claimants are

entitled for a total amount of Rs.4,26,672/- [Rs.26,667/- X 16]. It is

predetermined in the Second Schedule that in case of death, in addition

to the amount already awarded under loss of income, Rs.2,000/- is to be

awarded towards funeral expenses, Rs.5,000/- towards loss of

consortium (to spouse alone), Rs.2,500/- towards loss of estate and

Rs.15,000/- (if supported by medical bills). Keeping in view the same, the

claimants are entitled to a sum of Rs.4,51,172/-.

21. It is the contention of learned counsel for the claimants that

they are entitled for adding 40% of the annual income towards future

prospects though the claim petition is filed under Section 163A of the Act

16

VS,J

MACMA_9 of 2022 & 530 of 2021

as per National Insurance Company Limited Vs. Pranay Sethi and

Others (1

st

supra). It is observed in the said judgment that the

determination of income while computing compensation has to include

future prospects so that the method will come within the ambit and sweep

of just compensation as postulated under Section 168 of the Motor

Vehicles Act. Admittedly, compensation to be computed under Section

163 of the Motor Vehicles Act is based on a structured formula as it is

based on no fault liability, as discussed earlier. Once a claimant invokes

the provisions of Section 163A, the question of inclusion of pecuniary

compensation for non-tangibles and future prospects does not arise. The

Hon‘ble Division Bench of Sikkim High Court in The Branch Manager,

Shriram General Insurance Company Limited Vs. Dilu Rai and other

3

,

while dealing with a similar issue whether future prospects or any other

additional non-pecuniary heads finds place in a petition filed under

Section 163A of the Motor Vehicles Act, held as under:

―It needs no reiteration that the Supreme Court has clearly spelt out as

evident from the decisions cited supra that compensation to be computed

under Section 163 of the M.V. Act is on the structured formula as it is

based on no fault liability. Once a person invokes the provisions of Section

163A, the question of inclusion of pecuniary compensation for non-

tangibles and future prospects does not arise.

20. ….under Section 163A future prospects or any other

additional non-pecuniary heads finds no place and compensation in a

Claim Petition under Section 163A of the M.V. Act is to be strictly

computed on the structured formula provided in the Second Schedule to

the Act.‖

3

M.A.C.A.No.10 of 2018

17

VS,J

MACMA_9 of 2022 & 530 of 2021

22. Learned counsel for the claimants relied on several judgments

passed by a single bench of this Court, but, however, the Apex Court in

Deepal Girishbhai Soni and ors., Vs. United India Insurance

Company Limited (2

nd

supra), has already held that chapter XI of the

Motor Vehicles Act was enacted to provide immediate relief to a limited

class of victims whose annual income does not exceed Rs.40,000/- as

compensation under Section 163A and the same is determined on a

structured formula basis. The Apex Court further held that in a petition

under Section 163A of the Motor Vehicles Act, compensation has to be

granted to the claimants as per II Schedule of the Motor Vehicle Act,

which does not refer to awarding compensation under the head of future

prospects. Hence, it can be safely concluded that the claimants are not

entitled for compensation under any non-pecuniary heads except the

ones mentioned in the II Schedule of the Motor Vehicles Act.

23. In the result, M.A.C.M.A.No.9 of 2022 filed by the claimants is

hereby dismissed and M.A.C.M.A.No.530 of 2021, filed by the 3

rd

respondent/insurance company is partly allowed and the amount of

compensation awarded by the Tribunal is restricted to Rs.4,51,172/- from

Rs.9,77,000/-. There shall be no order as to costs.

Consequently, miscellaneous applications pending, if any, shall

stand closed.

___________________

JUSTICE V. SUJATHA

Date:01.04.2026

Gss