United India Ins.Co.Ltd. vs Sunil Kumar

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9694 OF 2013

UNITED INDIA INSURANCE CO. LTD. ...APPELLANT(S)

VERSUS

SUNIL KUMAR & ANR. ...RESPONDENT(S)

JUDGMENT

RANJAN GOGOI, J.

1. Unable to agree with the reasoning and

the conclusion of a two judge bench of

this Court in National Insurance Company

Limited vs. Sinitha and others1 a

coordinate bench of this Court by order

dated 29th October, 2013 has referred the

instant matter for a resolution of what

appears to be the following question of

law.

“Whether in a claim proceeding under Section 163 A of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”) it is 1 [(2012) 2 SCC 356] 2

open for the Insurer to raise the defence/plea of negligence?”

2. A second question as to what would be

the true scope and meaning of the

provisions contained in Section 170 of the

Act more specifically as set out in

Queries (iii) to (v) in paragraph 10 of

the report of United India Insurance

Company Limited versus Shila Datta and

others2, also arises. However, the

aforesaid Question stands referred to a

Larger Bench in Shila Datta(supra) itself.

We are told that answers to the questions

referred are awaited. In view of the

above, we would be required to answer only

the first question arising in the

reference which has been set out herein

above.

3. In Sinitha's case (supra), a two judge

bench of this Court understood the scope

of Section 163A of the Act to be enabling

an Insurer to raise the defence of

2 [(2011) 10 SCC 509] 3

negligence to counter a claim for

compensation. The principal basis on which

the conclusion in Sinitha's case (supra)

was reached and recorded is the absence of

a provision similar to sub-section (4) of

Section 140 of the Act in Section 163A of

the Act. Such absence has been understood

by the Bench to be a manifestation of a

clear legislative intention that unlike in

a proceeding under Section 140 of the Act

where the defence of the Insurer based on

negligence is shut out, the same is not be

the position in a proceeding under Section

163A of the Act.

4. We have considered the matter and have

heard the learned counsels for the

parties.

5. In Deepal Girishbhai Soni and others

vs. United India Insurance Co. Ltd.,

Baroda3 the issue before a three judge

bench of this Court was with regard to the

3 [(2004) 5 SCC 385] 4

mutual exclusiveness of the provisions of

Section 163A and Section 166 of the Act.

While dealing with the said question, this

Court had the occasion to go into the

reasons and objects for the incorporation

of Section 140 and 163A of the Act which

came in by subsequent amendments, details

of which are being noted separately herein

below. The Bench also took the view that

while Section 140 of the Act deals with

cases of interim compensation leaving it

open for the claimant to agitate for final

compensation by resort to the provisions

of Section 166 of the Act, Section 163A of

the Act provides for award of final

compensation on a structured formula

following the provisions of Second

Schedule appended to the Act. Both

Sections i.e. Sections 140 and 163A are

based on the concept of 'no fault

liability' and have been enacted as

measures of social security. It was

further noted that in a proceeding under 5 Section 163A of the Act the Tribunal may

be required to adjudicate upon various

disputed questions like age, income, etc.

unlike in a proceeding under Section 140

of the Act.

6. Deepal Girishbhai Soni's case

(supra), in fact, arose out of a reference

made for a decision on the correctness of

the view expressed in Oriental Insurance

Co. Ltd. vs. Hansrajbhai V. Kodala and

other4 that determination of compensation

in a proceeding under Section 163A of the

Act is final and further proceedings under

Section 166 of the Act is barred. The

opinion rendered in Hansrajbhai V. Kodala

(supra) contains an elaborate

recapitulation of the reasons behind the

enactment of Section 92A to 92E of the Old

Act (i.e. Motor Vehicles Act, 1939)

(corresponding to Sections 140 to 144 of

the present Act) introducing for the first

time the concept of 'no fault liability' 4 [(2001) 5 SCC 175 6

in departure from the usual common law

principle that a claimant should establish

negligence on the part of the owner or

driver of the motor vehicle before

claiming any compensation for death or

permanent disablement caused on account of

a motor vehicle accident. In the said

report, there is a reference to the

deliberations of the Committee constituted

to review the provisions of the Motor

Vehicles Act, 1988 and the suggestions of

the Transport Development Council on the

basis of which the draft Bill of 1994 was

enacted, inter alia, to provide for:

“(h) increase in the amount of compensation to the victims of hit-and-run cases;

(k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational.”

7. As observed in Hansrajbhai V. Kodala

(supra) one of the suggestions made by the 7

Transport Development Council was “to

provide adequate compensation to victims

of road accidents without going into long

drawn procedure.” As a sequel to the

recommendations made by the Committee and

the Council, Section 140 was enacted in

the present Act in place of Section 92A to

92E of the Old Act. Compensation payable

thereunder, as under the repealed

provisions, continued to be on the basis

of no fault liability though at an

enhanced rate which was further enhanced

by subsequent amendments. Sections 140 and

141 of the present Act makes it clear that

compensation payable thereunder does not

foreclose the liability to pay or the

right to receive compensation under any

other provision of the Act or any other

law in force except compensation awarded

under Section 163A of the Act.

Compensation under Section 140 of the Act

was thus understood to be in the nature of

an interim payment pending the final award 8

under Section 166 of the Act. Section

163-A, on the other hand, was introduced

in the New Act for the first time to

remedy the situation where determination

of final compensation on fault basis under

Section 166 of the Act was progressively

getting protracted. The Legislative intent

and purpose was to provide for payment of

final compensation to a class of claimants

(whose income was below Rs.40,000/- per

annum) on the basis of a structured

formula without any reference to fault

liability. In fact, in Hansrajbhai V.

Kodala (supra) the bench had occasion to

observe that:

“Compensation amount is paid without pleading or proof of fault, on the principle of social justice as a social security measure because of ever-increasing motor vehicle acci- dents in a fast-moving society. Further, the law before insertion of Section 163-A was giving limited benefit to the extent provided un- der Section 140 for no-fault lia- bility and determination of compen- sation amount on fault liability was taking a long time. That mis- chief is sought to be remedied by introducing Section 163-A and the 9

disease of delay is sought to be cured to a large extent by afford- ing benefit to the victims on structured-formula basis. Further, if the question of determining com- pensation on fault liability is kept alive it would result in addi- tional litigation and complications in case claimants fail to establish liability of the owner of the de- faulting vehicles.”

8. From the above discussion, it is clear

that grant of compensation under Section

163-A of the Act on the basis of the

structured formula is in the nature of a

final award and the adjudication

thereunder is required to be made without

any requirement of any proof of negligence

of the driver/owner of the vehicle(s)

involved in the accident. This is made

explicit by Section 163A(2). Though the

aforesaid section of the Act does not

specifically exclude a possible defence of

the Insurer based on the negligence of the

claimant as contemplated by Section

140(4), to permit such defence to be

introduced by the Insurer and/or to 10

understand the provisions of Section 163A

of the Act to be contemplating any such

situation would go contrary to the very

legislative object behind introduction of

Section 163A of the Act, namely, final

compensation within a limited time frame

on the basis of the structured formula to

overcome situations where the claims of

compensation on the basis of fault

liability was taking an unduly long time.

In fact, to understand Section 163A of the

Act to permit the Insurer to raise the

defence of negligence would be to bring a

proceeding under Section 163A of the Act

at par with the proceeding under Section

166 of the Act which would not only be

self-contradictory but also defeat the

very legislative intention.

9. For the aforesaid reasons, we answer

the question arising by holding that in a

proceeding under Section 163A of the Act

it is not open for the Insurer to raise

any defence of negligence on the part of 11

the victim.

10. The appeal will now be listed before

regular Bench for disposal on merits,

after the opinion of the larger Bench on

the true scope and meaning of the

provisions contained in Section 170 of the

Motor Vehicles Act, 1939 is rendered.

11. As the final disposal of the appeal

may take some time, we are of the view

that 50 % of the compensation that is

presently lying in deposit in the Registry

in terms of the Order dated 24-02-2012

should be released to the claimant on due

identification.

....................,J.

(RANJAN GOGOI)

....................,J.

(ADARSH KUMAR GOEL)

....................,J.

(NAVIN SINHA)

NEW DELHI NOVEMBER 24, 2017