Sec.163 - A , sec. 140 of M.V. Act - due to conflicte judgment over scope of sec. 163 -A in United India Insurance Company Ltd. v. Shila Datta and others [(2011) 10 SCC 509], and National Insurance Co. Ltd. v. Nicolletta Rohtagi [(2002) 7 SCC 456]. , it was referred to larger bench =
We are, therefore, of the view that
liability to make compensation
under Section 163-A is on the principle of no fault and,
therefore, the question as to who is at fault is immaterial and foreign to an enquiry
under Section 163-A.
Section 163-A does not make any provision for apportionment of the liability.
If the owner of the vehicle or the
insurance company is permitted to prove contributory negligence or default
or wrongful act on the part of the victim or claimant, naturally it would
defeat the very object and purpose of Section 163-A of the Act.
Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver.
Once it is established that death or
permanent disablement occurred during the course of the user of the
vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the
compensation, which is a statutory obligation.
9. We, therefore, find ourselves unable to agree with the reasoning of the Two-Judge Bench in Sinitha’s case (supra). Consequently, the matter is placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of Section 163- A of the Motor Vehicles Act, 1988, as well as the points no.(iii) to (v) referred to in Shila Datta’s case (supra)
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 9694 of 2013
(@Special Leave Petition (Civil) No.7586 of 2012)
United India Insurance Company Ltd. ... Appellant
Versus
Sunil Kumar & Anr. … Respondents
REFERENCE ORDER
K.S. Radhakrishnan, J.
1. Leave granted.
2. Heard learned counsel for the parties. Learned counsel appearing for
the Respondent submitted that
in view of the judgment of this Court in
United India Insurance Company Ltd. v. Shila Datta and others [(2011) 10 SCC 509], this matter will have to be referred to a larger Bench,
especially with regard to points no.(iii) to (v) referred to in the above-
mentioned judgment, which are in conflict with the judgment of this Court
in National Insurance Co. Ltd. v. Nicolletta Rohtagi [(2002) 7 SCC 456].
The impugned order, we notice, is based on the principle laid down in
Nicolletta Rohtagi’s case (supra), the correctness of which is doubted in
Shila Datta’s case (supra).
In the present case, the claim petition was
filed by the Respondent under Section 163-A of the Motor Vehicles Act,
1988, claiming compensation for the injury sustained by him in a road
accident occurred on 20.11.2006.
The Tribunal after recording the evidence
and after hearing the parties, vide its order dated 16.8.2011 passed an
award for a sum of Rs.3,50,000/- along with interest at the rate of 7% per
annum from the date of the filing of the petition till realization.
Aggrieved by the same, the Insurance Company filed an appeal before the
High Court of Delhi.
The High Court placing reliance on the judgment in
Nicolletta Rohtagi’s case (supra) dismissed the appeal since the Insurance
Company failed to comply with Section 170 of the Motor Vehicles Act and the
Insurance Company has come up with this appeal.
Learned counsel for the
Respondent contended that the question
whether permission is required or
not under Section 170 stands referred to a larger Bench.
3. We have yet another issue to be examined. As already indicated that
in the instant case,
claim petition was filed under Section 163-A of the
Motor Vehicles Act, which was resisted by the Insurance Company contending
that the same is not maintainable since the injured himself was driving the
vehicle and that no disability certificate was produced.
A Two-Judge Bench
of this Court in National Insurance Company Limited v. Sinitha and others
[(2012) 2 SCC 356] examined the scope of Section 163-A of the Motor
Vehicles Act and took the view that Section 163-A of the Act has been
founded under “fault liability principle”.
Referring to another judgment
of a co-equal Bench in Oriental Insurance Co. Ltd. v. Hansrajbhai V.
Kodala [(2001) 5 SCC 175], the learned Judges took the view that while
determining
whether Section 163-A of the Motor Vehicles Act, 1988 is
governed by the fault or the no-fault liability principle, Sections 140(3)
and (4) are relevant.
The Bench noticed under Section 140(3), the burden
of pleading and establishing whether or not wrongful act, neglect or
default was committed by the person (for or on whose behalf) compensation
is claimed under Section 140, would not rest on the shoulders of the
claimant.
The Court also noticed that Section 140(4) of the Motor Vehicles
Act further reveals that a claim for compensation under Section 140 of the
Act cannot be defeated because of any of the fault grounds (wrongful act,
neglect or default).
4. The Division Bench in Sinitha’s case (supra), then took the view that
under Section 140 of the Act so also under Section 163-A of the Act,
it is not essential for a claimant seeking compensation to plead or establish
that the accident out of which the claim arises suffers from wrongful act or neglect or default of the offending vehicle. The Bench then expressed
the view that the legislature designedly included the negative clause
through Section 140(4) of the Motor Vehicles Act, but consciously omitted
the same in the scheme of Section 163-A of the Act intentionally and
purposefully.
The Court also concluded, on a conjoint reading of Sections
140 and 163-A, the legislative intent is clear, namely, that a claim for
compensation raised under Section 163-A of the Act need not be based on
pleadings or proof at the hands of the claimants showing absence of
wrongful act, being neglect or default, but the Bench concluded that it is
not sufficient to determine whether the provision falls under the fault
liability principle.
The Court held that to decide whether the provision
is governed by the fault liability principle, the converse has to be
established i.e. whether a claim raised thereunder can be defeated by the
party concerned (the owner or the insurance company) by pleading and
proving wrongful act, neglect or default.
Interpreting Section 163-A of
the Act, the Judges in Sinitha’s case (supra) held that it is open to the
owner or the insurance company, as the case may be, to defeat a claim under
Section 163-A of the Act by pleading and establishing through cogent
evidence a fault ground (wrongful act or neglect or default). The Court
concluded that Section 163 of the Act is founded under the fault liability
principle.
5. We find difficult to accept the reasoning expressed by the Two-Judge
Bench in Sinitha’s case (supra).
In our view, the principle laid down in
Hansrajbhai V. Kodala’s case (supra) has not been properly appreciated or
applied by the Bench. In fact, another Division Bench of this Court vide
its order dated 19.4.2002 had doubted the correctness of the judgment in
Hansrajbhai V. Kodala’s case (supra) and referred the matter to a Three-
Judge Bench to examine the question whether claimant could pursue the
remedies simultaneously under Sections 166 and 163-A of the Act.
The Three-
Judge Bench of this Court in Deepal Girishbhai Soni & Ors. v. United India
Insurance Co. Ltd., Baroda [(2004) 5 SCC 385] made a detailed analysis of
the scope of Sections 166 and 163-A and held that
the 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.
The Court also extensively examined the
scope of Section 163-A and held that Section 163-A was introduced in the
Act by way of a social security scheme and is a Code by itself.
The Court
also held that Section 140 of the Act deals 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
Court noticed that Section 163-A was inserted making a deviation from the
common law liability under the Law of Torts and also in derogation of the
provisions of the Fatal Accidents Act.
The Three-Judge Bench also held
that Section 163-A has an overriding effect and provides for special
provisions as to payment of compensation on structured formula basis.
Sub-
section (1) of Section 163-A contains a non-obstante clause, in terms
whereof the owner of the motor vehicle or the authorized 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.
The
Court also held that the scheme of the provisions of Section 163-A and
Section 166 are distinct and separate in nature.
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.
The above-mentioned Three-Judge Bench judgment was not placed before the
learned Judges who decided the Sinitha’s case (supra).
6. We find, both Sections 140 and 163-A deal with the case of death and
permanent disablement.
The expression “permanent disablement” has been
defined under Section 142, so far as Section 140 is concerned.
So far as
Section 163-A is concerned, the expression "permanent disability" shall
have the same meaning and extent as in the Workmen's Compensation Act,
1923.
Both Sections 140 and 163-A deal with cases of no fault liability.
In
order to prefer a claim under Section 140(2), claimant need not plead or
establish that death or permanent disablement, in respect of which claim
has been made, was due to any wrongful act, neglect or default of the
deceased or the disabled person. Similarly, under Section 163-A also,
claimant shall not be required to plead or establish that death or
permanent disablement, in respect of which claim has been made, was due to
any wrongful act, neglect or default of the deceased or the injured, as the
case may be. In other words, an enquiry as to who is at fault is foreign to
the determination of a claim under Section 140 as well as Section 163-A.
Claim under Section 140 as well as Section 163-A shall not be defeated by
the Insurance Company or the owner of the vehicle, as the case may be, by
reason of any wrongful act, neglect or default of the person in respect of
whose death or permanent disablement claim has been made.
So also, the
quantum of compensation recoverable in respect of such death or permanent
disablement be reduced on the basis of share of such person in the
responsibility for his death or permanent disablement.
7. We find, in Sinitha’s case (supra), one of the factors which weighed
with the learned Judges was the absence of a similar provision like sub-
section (4) of Section 140 in Section 163-A which, according to the learned
Judges, has been intentionally and purposefully done by the legislature.
We find it difficult to accept that view.
We are of the view that if such
an interpretation is given, the very purpose and object of Section 163-A
would be defeated and render the provision otiose and a claimant would
prefer to make a claim under Section 140, rather than under Section 163-A
of the Act by exercising option under Section 163-B of the Act.
Because,
if a claim under Section 140, is raised because of Section 140(4), such a
claim would not be defeated by the owner of the vehicle or the insurance
company, as the case may be, and the claimant may get a fixed sum
prescribed under Section 140(2).
Sub-section (4) of Section 140 has been
introduced by the legislature since claim under Section 140 would be
followed by Section 166.
So far as Section 163-A is concerned, claim is
restricted on the basis of pre-determined formula, unlike in the case of
application under Section 166.
8. We are, therefore, of the view that
liability to make compensation
under Section 163-A is on the principle of no fault and,
therefore, the question as to who is at fault is immaterial and foreign to an enquiry
under Section 163-A.
Section 163-A does not make any provision for apportionment of the liability.
If the owner of the vehicle or the
insurance company is permitted to prove contributory negligence or default
or wrongful act on the part of the victim or claimant, naturally it would
defeat the very object and purpose of Section 163-A of the Act.
Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver.
Once it is established that death or
permanent disablement occurred during the course of the user of the
vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the
compensation, which is a statutory obligation.
9. We, therefore, find ourselves unable to agree with the reasoning of the Two-Judge Bench in Sinitha’s case (supra). Consequently, the matter is placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of Section 163- A of the Motor Vehicles Act, 1988, as well as the points no.(iii) to (v) referred to in Shila Datta’s case (supra)
……..……………………..J.
(K.S. Radhakrishnan)
……………………………J.
(A.K. Sikri)
New Delhi,
October 29, 2013
We are, therefore, of the view that
liability to make compensation
under Section 163-A is on the principle of no fault and,
therefore, the question as to who is at fault is immaterial and foreign to an enquiry
under Section 163-A.
Section 163-A does not make any provision for apportionment of the liability.
If the owner of the vehicle or the
insurance company is permitted to prove contributory negligence or default
or wrongful act on the part of the victim or claimant, naturally it would
defeat the very object and purpose of Section 163-A of the Act.
Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver.
Once it is established that death or
permanent disablement occurred during the course of the user of the
vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the
compensation, which is a statutory obligation.
9. We, therefore, find ourselves unable to agree with the reasoning of the Two-Judge Bench in Sinitha’s case (supra). Consequently, the matter is placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of Section 163- A of the Motor Vehicles Act, 1988, as well as the points no.(iii) to (v) referred to in Shila Datta’s case (supra)
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 9694 of 2013
(@Special Leave Petition (Civil) No.7586 of 2012)
United India Insurance Company Ltd. ... Appellant
Versus
Sunil Kumar & Anr. … Respondents
REFERENCE ORDER
K.S. Radhakrishnan, J.
1. Leave granted.
2. Heard learned counsel for the parties. Learned counsel appearing for
the Respondent submitted that
in view of the judgment of this Court in
United India Insurance Company Ltd. v. Shila Datta and others [(2011) 10 SCC 509], this matter will have to be referred to a larger Bench,
especially with regard to points no.(iii) to (v) referred to in the above-
mentioned judgment, which are in conflict with the judgment of this Court
in National Insurance Co. Ltd. v. Nicolletta Rohtagi [(2002) 7 SCC 456].
The impugned order, we notice, is based on the principle laid down in
Nicolletta Rohtagi’s case (supra), the correctness of which is doubted in
Shila Datta’s case (supra).
In the present case, the claim petition was
filed by the Respondent under Section 163-A of the Motor Vehicles Act,
1988, claiming compensation for the injury sustained by him in a road
accident occurred on 20.11.2006.
The Tribunal after recording the evidence
and after hearing the parties, vide its order dated 16.8.2011 passed an
award for a sum of Rs.3,50,000/- along with interest at the rate of 7% per
annum from the date of the filing of the petition till realization.
Aggrieved by the same, the Insurance Company filed an appeal before the
High Court of Delhi.
The High Court placing reliance on the judgment in
Nicolletta Rohtagi’s case (supra) dismissed the appeal since the Insurance
Company failed to comply with Section 170 of the Motor Vehicles Act and the
Insurance Company has come up with this appeal.
Learned counsel for the
Respondent contended that the question
whether permission is required or
not under Section 170 stands referred to a larger Bench.
3. We have yet another issue to be examined. As already indicated that
in the instant case,
claim petition was filed under Section 163-A of the
Motor Vehicles Act, which was resisted by the Insurance Company contending
that the same is not maintainable since the injured himself was driving the
vehicle and that no disability certificate was produced.
A Two-Judge Bench
of this Court in National Insurance Company Limited v. Sinitha and others
[(2012) 2 SCC 356] examined the scope of Section 163-A of the Motor
Vehicles Act and took the view that Section 163-A of the Act has been
founded under “fault liability principle”.
Referring to another judgment
of a co-equal Bench in Oriental Insurance Co. Ltd. v. Hansrajbhai V.
Kodala [(2001) 5 SCC 175], the learned Judges took the view that while
determining
whether Section 163-A of the Motor Vehicles Act, 1988 is
governed by the fault or the no-fault liability principle, Sections 140(3)
and (4) are relevant.
The Bench noticed under Section 140(3), the burden
of pleading and establishing whether or not wrongful act, neglect or
default was committed by the person (for or on whose behalf) compensation
is claimed under Section 140, would not rest on the shoulders of the
claimant.
The Court also noticed that Section 140(4) of the Motor Vehicles
Act further reveals that a claim for compensation under Section 140 of the
Act cannot be defeated because of any of the fault grounds (wrongful act,
neglect or default).
4. The Division Bench in Sinitha’s case (supra), then took the view that
under Section 140 of the Act so also under Section 163-A of the Act,
it is not essential for a claimant seeking compensation to plead or establish
that the accident out of which the claim arises suffers from wrongful act or neglect or default of the offending vehicle. The Bench then expressed
the view that the legislature designedly included the negative clause
through Section 140(4) of the Motor Vehicles Act, but consciously omitted
the same in the scheme of Section 163-A of the Act intentionally and
purposefully.
The Court also concluded, on a conjoint reading of Sections
140 and 163-A, the legislative intent is clear, namely, that a claim for
compensation raised under Section 163-A of the Act need not be based on
pleadings or proof at the hands of the claimants showing absence of
wrongful act, being neglect or default, but the Bench concluded that it is
not sufficient to determine whether the provision falls under the fault
liability principle.
The Court held that to decide whether the provision
is governed by the fault liability principle, the converse has to be
established i.e. whether a claim raised thereunder can be defeated by the
party concerned (the owner or the insurance company) by pleading and
proving wrongful act, neglect or default.
Interpreting Section 163-A of
the Act, the Judges in Sinitha’s case (supra) held that it is open to the
owner or the insurance company, as the case may be, to defeat a claim under
Section 163-A of the Act by pleading and establishing through cogent
evidence a fault ground (wrongful act or neglect or default). The Court
concluded that Section 163 of the Act is founded under the fault liability
principle.
5. We find difficult to accept the reasoning expressed by the Two-Judge
Bench in Sinitha’s case (supra).
In our view, the principle laid down in
Hansrajbhai V. Kodala’s case (supra) has not been properly appreciated or
applied by the Bench. In fact, another Division Bench of this Court vide
its order dated 19.4.2002 had doubted the correctness of the judgment in
Hansrajbhai V. Kodala’s case (supra) and referred the matter to a Three-
Judge Bench to examine the question whether claimant could pursue the
remedies simultaneously under Sections 166 and 163-A of the Act.
The Three-
Judge Bench of this Court in Deepal Girishbhai Soni & Ors. v. United India
Insurance Co. Ltd., Baroda [(2004) 5 SCC 385] made a detailed analysis of
the scope of Sections 166 and 163-A and held that
the 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.
The Court also extensively examined the
scope of Section 163-A and held that Section 163-A was introduced in the
Act by way of a social security scheme and is a Code by itself.
The Court
also held that Section 140 of the Act deals 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
Court noticed that Section 163-A was inserted making a deviation from the
common law liability under the Law of Torts and also in derogation of the
provisions of the Fatal Accidents Act.
The Three-Judge Bench also held
that Section 163-A has an overriding effect and provides for special
provisions as to payment of compensation on structured formula basis.
Sub-
section (1) of Section 163-A contains a non-obstante clause, in terms
whereof the owner of the motor vehicle or the authorized 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.
The
Court also held that the scheme of the provisions of Section 163-A and
Section 166 are distinct and separate in nature.
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.
The above-mentioned Three-Judge Bench judgment was not placed before the
learned Judges who decided the Sinitha’s case (supra).
6. We find, both Sections 140 and 163-A deal with the case of death and
permanent disablement.
The expression “permanent disablement” has been
defined under Section 142, so far as Section 140 is concerned.
So far as
Section 163-A is concerned, the expression "permanent disability" shall
have the same meaning and extent as in the Workmen's Compensation Act,
1923.
Both Sections 140 and 163-A deal with cases of no fault liability.
In
order to prefer a claim under Section 140(2), claimant need not plead or
establish that death or permanent disablement, in respect of which claim
has been made, was due to any wrongful act, neglect or default of the
deceased or the disabled person. Similarly, under Section 163-A also,
claimant shall not be required to plead or establish that death or
permanent disablement, in respect of which claim has been made, was due to
any wrongful act, neglect or default of the deceased or the injured, as the
case may be. In other words, an enquiry as to who is at fault is foreign to
the determination of a claim under Section 140 as well as Section 163-A.
Claim under Section 140 as well as Section 163-A shall not be defeated by
the Insurance Company or the owner of the vehicle, as the case may be, by
reason of any wrongful act, neglect or default of the person in respect of
whose death or permanent disablement claim has been made.
So also, the
quantum of compensation recoverable in respect of such death or permanent
disablement be reduced on the basis of share of such person in the
responsibility for his death or permanent disablement.
7. We find, in Sinitha’s case (supra), one of the factors which weighed
with the learned Judges was the absence of a similar provision like sub-
section (4) of Section 140 in Section 163-A which, according to the learned
Judges, has been intentionally and purposefully done by the legislature.
We find it difficult to accept that view.
We are of the view that if such
an interpretation is given, the very purpose and object of Section 163-A
would be defeated and render the provision otiose and a claimant would
prefer to make a claim under Section 140, rather than under Section 163-A
of the Act by exercising option under Section 163-B of the Act.
Because,
if a claim under Section 140, is raised because of Section 140(4), such a
claim would not be defeated by the owner of the vehicle or the insurance
company, as the case may be, and the claimant may get a fixed sum
prescribed under Section 140(2).
Sub-section (4) of Section 140 has been
introduced by the legislature since claim under Section 140 would be
followed by Section 166.
So far as Section 163-A is concerned, claim is
restricted on the basis of pre-determined formula, unlike in the case of
application under Section 166.
8. We are, therefore, of the view that
liability to make compensation
under Section 163-A is on the principle of no fault and,
therefore, the question as to who is at fault is immaterial and foreign to an enquiry
under Section 163-A.
Section 163-A does not make any provision for apportionment of the liability.
If the owner of the vehicle or the
insurance company is permitted to prove contributory negligence or default
or wrongful act on the part of the victim or claimant, naturally it would
defeat the very object and purpose of Section 163-A of the Act.
Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver.
Once it is established that death or
permanent disablement occurred during the course of the user of the
vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the
compensation, which is a statutory obligation.
9. We, therefore, find ourselves unable to agree with the reasoning of the Two-Judge Bench in Sinitha’s case (supra). Consequently, the matter is placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of Section 163- A of the Motor Vehicles Act, 1988, as well as the points no.(iii) to (v) referred to in Shila Datta’s case (supra)
……..……………………..J.
(K.S. Radhakrishnan)
……………………………J.
(A.K. Sikri)
New Delhi,
October 29, 2013
