Oriental Insurance Co.Ltd vs Dhanbai Kanji Gadhvi & Ors

ORIENTAL INSURANCE CO.LTD. Appellant(s)

VERSUS

DHANBAI KANJI GADHVI & ORS. Respondent(s)

O R D E R

Leave granted.

This appeal is directed against the judgment

dated 15.1.2010 rendered by the learned Single Judge of

the High Court of Gujarat at Ahmedabad in Special Civil

Application No.9400 of 2006 by which the order dated

23.12.2005 passed by the Motor Accident Claims Tribunal

(MACT) Bhuj, Kachchh in M.A.C.P. No.759/97 permitting

the respondents, who had already obtained compensation

under Section 163A of the Motor Vehicles Act 1988 (`the

Act' for short), to proceed with the application filed

under section 166 of the Motor Vehicles Act 1988, is

affirmed.

The respondents are the original claimants. On

17.6.97, the deceased viz. Kanji Keshavbhai Gadhvi was

riding his two wheeler i.e. Luna. When he reached near

IFFCO, the driver of taxi bearing No.GJ-12-C-9484 who

was coming from the opposite direction dashed the

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taxi with the Luna as result of which Kanjibhai lost his

life. Therefore, the respondents who are legal

heirs of the deceased respondent filed MACP No.759 of

1997 under Section 166 of the Motor Vehicles Act against

the driver and owner of the taxi as well as against the

petitioner who is insurer of the taxi and claimed

compensation of Rs.7,50,000/-. The respondents had

thereafter filed an application at Exhibit 6 under

section 163A of the Act and claimed compensation of Rs.

3,93,500/- on the principle of no fault liability.

The Tribunal had partly allowed the application

filed by the respondents under Section 163A of the Act

and ordered the petitioner to pay a sum of Rs.2,65,500/-

with 12% interest vide judgment dated 18.10.2000. The

case of the petitioner is that the petitioner had

deposited the said amount and the respondents have

already withdrawn and invested the amount of

compensation as directed by the Tribunal.

The present petitioner filed an application

with a prayer that the application filed under Section

166 which was pending be rejected in view of the

decision of this Court in Oriental Insurance Co. Ltd.

Vs. Hansrajbhai V. Kodala & Ors. (2001) 5 SCC 175.

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The Tribunal by order dated 25.6.2002 granted

stay of further proceedings of the petition filed under

Section 166 of the Act till further orders. In the

meanwhile, the petitioner challenged the award passed by

the Tribunal under Section 163A of the Act by filing

First Appeal No.3019 of 2007. The appeal was dismissed

on the ground of delay.

The respondents thereafter filed an application

with a prayer that they be permitted to proceed with the

petition filed under Section 166 of the Motor Vehicles

Act and they were ready to give undertaking to give

credit of the amount awarded to them as compensation in

the claim petition filed under Section 163A of the Act.

The Tribunal by an order dated 23.12.2005 permitted the

respondents to proceed with the petition filed under

Section 166 of the Act. The Tribunal also directed that

amount already disbursed in favour of the respondents

and invested by them, pursuant to the award made under

Section 163A shall be adjusted to the final award to be

passed under Section 166 of the Motor Vehicles Act.

Feeling aggrieved, the petitioner preferred

Special Civil Application No.9400 of 2006 before the

High Court.

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The learned Single judge of the High Court has

rejected the same by judgment dated 15.1.2010 giving

rise to the instant appeal.

This Court has heard the learned counsel for

the parties.

This Court has perused the impugned judgment of

the High Court. The reasons given by the High Court

for upholding permission granted by the Tribunal, to the

respondents to proceed further with the petition filed

under Section 166 of the Act, read as under.

"After hearing and on perusal of the record and from the scheme of the Act, it is clear that proceedings under Sections 163A and 166 of the Act i.e. both proceedings are permissible. In my view, claimant can file both the proceedings and opt for either of proceedings. The only condition is that application for proceeding under section 166 should be filed before the award is passed . Here, in this case, the proceedings were filed before the award is passed".

On consideration of the object of section 163A

of the Act which was inserted by Section 51 of the Act

54 of 1994 w.e.f. 14-11-1994, and the non-obstante

clause with which sub-section (1) of Sec. 163A

commences, it is manifest that the legislature did not

intend to prevent the claimant from getting

compensation as per the

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structured formula merely because in his original claim

petition he had prayed for compensation on the basis of

"fault liability" principle. There is no prohibition in

any provision of the Motor Vehicles Act 1988 against the

claimant praying for compensation as per the structured

formula after having filed a claim petition under

section 166 of the Act. Therefore, this Court finds

that the respondents were perfectly justified in making

an application at Exhibit 6 in MACP No.759 of 1997

which was filed under Section 166 of the Act and praying

the Tribunal to award compensation to them on the basis

of the structured formula mentioned in Section 163A of

the Act. This Court further finds that the Tribunal did

not commit any error in entertaining the said

application and awarding a sum of Rs.2,65,500/- as

compensation to the respondents under Section 136A of

the Act.

However, in Deepal Girishbhai Soni & Ors.Vs. United

India Insurance Co. Ltd., Baroda (2004) 5 SCC 385, the

question which was considered by a three Judge Bench of

this Court was whether a proceeding under Section 163A

of the Motor Vehicles Act, 1988 is a final proceeding,

by reason whereof, the claimant who has been granted

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compensation under Section 163A, is debarred from

proceeding with any further claims on the basis of fault

liability in terms of Section 166. After considering the

scheme envisaged by Section 163A of the Act, it is held

in the said case that Parliament intended to lay down 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. What is ruled therein is that the

compensation determined and paid under Section 163A of

the Act is final and not an interim one. The clear

proposition of law which emerges from the decision of

this Court in Deepal G. Soni (supra) is that the remedy

for payment of compensation both under Sections 163A and

166 being final and independent of each other as

statutorily provided, a claimant cannot pursue his

remedies thereunder simultaneously. As explained by this

Court in the said decision, a claimant, thus, must

opt/elect to go either for a proceeding under Section

163A or under Section 166 of the Act, but not under

both.

Applying the principle laid down in Deepal Soni

(supra) to the facts of the case, it will have to be

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held that the respondents having obtained compensation,

finally determined under Section 163A of the Act are

precluded from proceeding further with the petition

filed under Section 166 of the Act. The exception

mentioned by the learned Single Judge in the impugned

judgment that a petition under Section 166 of the Act

can be proceeded further if it is filed before passing

of an award passed under Section 163A of the Act is not

supported by the scheme envisaged under Sections 163A

and 166 of the Act and is contrary to the principle of

law laid down by this Court in Deepal Soni's case.

Therefore, this Court is of the opinion that the

impugned judgment of the High Court upholding the order

passed by the Tribunal to permit the respondents to

proceed further with the petition filed under Section

166 of the Act cannot be sustained and will have to be

set aside.

For the foregoing reasons, the appeal succeeds.

The order of the Tribunal dated 23.12.2005 allowing the

respondents to proceed with the petition filed under

Section 166 of the Motor Vehicles Act, 1988 on the

certain terms and conditions mentioned therein and the

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impugned judgment of the High Court upholding order of

the Tribunal are hereby set aside.

The appeal accordingly stands disposed of

.................J. (J.M. PANCHAL)

NEW DELHI .................J. JANUARY 17, 2011 (H. L. GOKHALE)