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Wednesday, October 30, 2013

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 = United India Insurance Company Ltd. ... Appellant Versus Sunil Kumar & Anr. … Respondents - Reported in http://judis.nic.in/supremecourt/filename=40914

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

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