First Appeal No.1207 of 2013

6th February, 2014.

Petitioner Counsel: Mr. SHYAM WALVE
Respondent Counsel: Ms. POONAM MITTAL

Cases Cited:
National Insurance Company Ltd. Vs. Sinitha & Ors., 2012 ALL SCR 414=(2012) 2 SCC 356 [Para 8,10,14,15]
Latabai Bhagwan Kakade & Ors. Vs. Mohammed Ismail Mohd. Saab Bagwan & Ors., 2002 ACJ 407 [Para 9,15,19]
Deepal Girishbhai Soni & Ors. Vs. United India Insurance Co. Ltd., 2004(5) ALL MR 674 (S.C.)=(2004) 5 SCC 385 [Para 9,15,19]
Ashok Sadarangani & Anr. Vs. Union of India & Ors., 2012 ALL MR (Cri) 1760 (S.C.)=(2012) 11 SCC 321 [Para 10]
Appaji (deceased) & Anr. Vs. M. Krishna and Anr., 2004 ACJ 1289 [Para 14]
HDFC Chubb General Insurance Co. Ltd. Vs. Shantidevi Rajbalsingh Thakur & Anr., 2008 ACJ 1280 [Para 14,19]
Ningamma & Anr. Vs. United India Insurance Company Ltd., 2010(1) ALL MR 441 (S.C.)=(2009) 13 SCC 710 [Para 14]
Guruanna Vadi & Anr. Vs. General Manager, Karnataka State Road Transport Corporation & Anr., 2001 ACJ 1528 [Para 15]
United India Insurance Company Ltd. Vs. Sunil Kumar, [Para 15,19]
Helen C. Rebello & Ors. Vs. Maharashtra State Road Transport Corporation & Anr., 1999(1) ALL MR 670 (S.C.)=1999 ACJ 10 [Para 16]

JUDGMENT

JUDGMENT :- Admit. By Consent of the parties, the appeal is taken for final hearing.

2. This Appeal is directed against the judgment and award dated 15th June, 2010 passed by the Motor Accident Claims Tribunal, Mumbai in M.A.C.P. No. 2554 of 1995 filed under section 163A of Motor Vehicle Act. The appellant is the original claimant, who has filed an appeal against the judgment and award passed by the Tribunal dismissing his application on the ground that the victim himself was negligent and the defence of wrongful act and neglect on the part of the victim adopted by the insurance company was fully accepted by the learned Member, Tribunal. Thus, the question involved in this appeal is whether the defence of fault liability of the victim/claimant is available to the insurance company or owner in the proceedings filed under Section 163A of the M.V. Act or not?

3. There is no dispute that the principle of no fault liability is in favour of the applicant against the owner/driver of the offending vehicle when application is filed under section 163A of the Act. The applicant is absolved from the burden of proving any negligence on the part of the driver or the owner of the vehicle concerned.

4. Section 163A itself is a complete code. This Section was added by Act No. 54 of 1994 and inserted in the Act of 1988 with effect from 14th November, 1994. Chapter X of the Motor Vehicles Act covers the case where the liability is without fault. Sections 140 to 144 take care of the cases covered under principle of No fault liability. Chapter XI pertains to insurance of motor vehicles against third party risks and under this Chapter, Section 163A is included. Undoubtedly, it covers a risk of third party and not the owner of the vehicle.

5. The new social issues crop up due to speedy technological development and new problems are faced by the people. The law needs to keep pace with this transition by making, adding, amending the law itself. Being a welfare State, the policies ensuring road safety and security are chalked out in the interest of public and Motor Vehicles Act is one of such social legislatures. To regulate and control the relationship and behaviour of the driver of the vehicle, owner of the vehicle and the pedestrians, the Act underwent various amendments and Section 163A is one of the additions. Every vehicle should be insured is a requirement of law, however, every vehicle is not going to meet with an accident. The purpose of the insurance is not narrow. The payment of premium by each vehicle owner is in fact a contribution towards common funds which is utilized for the purpose of accident caused to the victim or injured against any vehicle. Thus, the idea of beneficial legislation is enhanced and with a view to minimize the difficulties and hurdles of the victim/injured, section 163A is drafted.

6. It is true that this Section is not mentioned under Chapter X where the cases of no fault liability are mentioned. If owner or insurer is allowed to take the defence of negligence where application under section 163A is made, then the victim or injured will have to defend himself. It is argued by the counsel of the insurance company that the Section does not burden the claimant/injured to prove the negligence of the driver of the other vehicle, however, it cannot be interpreted conversely that the defence of negligence is not available to the owner or insurance company especially when provision of Section 140(4) is absent in Section 163A. This argument can be tested on the basis of its consequence and whether the consequence defeats the object of Section 163A or not is the answer to this argument.

7. Every accident generally takes place due to rashness or negligence of either of the parties. Negligence is entirely a matter of fact. Under Section 163A claimant need not prove or establish that the driver of the offending vehicle was at fault or negligent. If the insurer or owner takes stand that victim himself was negligent, then is it permissible under section 163A or not? It is useful to reproduce Section 140(3) & (4) and Section 163A for clear understanding

"140(3) In any claim for compensation under subsection (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.

(4) A claim for compensation under subsection (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement."

"163-A. Special provisions as to payment of compensation on structured formuala 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 subsection, "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923.

(2) In any claim for compensation under subsection(1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim 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."

Thus, subsection(4) of Section 140 specifies that wrongful act, neglect or default of the victim cannot defeat the claim of the compensation. Subsection (2) of Section 163 is ad verbitim to Subsection 3 of section 140. Similar or parallel provision like subsection(4) of Section 140 is missing in Section 163A.

8. It was argued that Section 163A does not put total bar on fault liability and especially in the absence of such specific provision like Subsection(4) of Section 140, it can be construed that section definitely allows respondents to take defence of fault liability in respect of victim. No restriction is placed on the insurance company or the owner/driver of the offending vehicle to take stand that the deceased or the injured himself/herself was wrong or negligent. In the case of National Insurance Company Ltd. vs. Sinitha & Ors., reported in (2012) 2 SCC 356 : [2012 ALL SCR 414], the Division Bench of the Supreme Court has observed that if the legislature would have intended, then section 163A ought to have been covered under the principle of no fault liability, then section 140(4) would have been mentioned and Section 163A would have been added in Chapter X and not in Chapter XI of the M.V. Act.

9. The Division Bench of Bombay High Court in the case of Latabai Bhagwan Kakade & Ors. vs. Mohammed Ismail Mohd. Saab Bagwan & Ors. reported in 2002 ACJ 407 while considering the consequence of allowing such defence of negligence on the part of the victim by the insurance company or the respondents has observed that by way of rebuttal, the victim will have to take defence that the other party was negligent. The finding given by the Division Bench of the Bombay High Court is binding on this Court so also the law laid by the Supreme Court in the landmark judgment of Deepal Girishbhai Soni & Ors. vs. United India Insurance Co. Ltd., Baroda reported in (2004) 5 SCC 385 : [2004(5) ALL MR 674 (S.C.)] has laid down a law in favour of the claimant in respect of no fault liability under section 163A of M.V. Act. Thus, it was not a res integra. Thus, the denial of the Act of negligence involves an attack on the other side to show its not me but you were negligent.

10. However, suddenly this issue has become debatable and again argued before the Courts as the Division Bench of the Supreme Court in the case of Sinitha, [2012 ALL SCR 414] (supra) has held that defence of fault liability is available to the insurance company and the respondents against the victim though victim is not required to prove negligence or default on the part of the owner or driver of the vehicle concerned. This issue is again deliberated and pondered over in the Court as the judgment in Sinitha, [2012 ALL SCR 414] (supra) is referred to the larger Bench and the said issue is still pending before the Supreme Court. The present matter involves the same issue which is required to be decided in the light of conflicting views taken by the Hon'ble Supreme Court and various High Courts. As the issue is pending before the Supreme Court, I think that it is my duty to contribute my view on record and not to keep this matter pending till the decision is given in the Reference. In support of this, I rely on the ratio laid down in Ashok Sadarangani & Anr., vs. Union of India & Ors., reported in (2012) 11 SCC 321 : [2012 ALL MR (Cri) 1760 (S.C.)] in which the Supreme Court while discussing Article 141 of the Constitution has observed that the pendency of reference to a larger Bench does not mean that all other proceedings involving same issue would remain stayed till the Reference is decided.

11. I have thought over the object of the amendment of Section 163A which is available for the persons having annual income less than Rs.40,000/-.The section enables speedy disposal and quick justice to the claimants to recover from the financial crises faced by them due to either untimely death of the earning member in the family or due to disablement. No fault liability is legally recognized though is a departure from the basic principles of burden of proof in law of torts on the point of negligence, as the claimants are not burdened to prove the wrongful act, default or neglect of the owner/driver of the vehicle concerned or any other person stated under section 163(2) of M.V. Act.

12. The submissions of the learned counsel for the insurance company that subsection(2) thus only absolves the claimant from its liability to prove the fault of the owner of the vehicle or of any other person and the Section does not render the defence of fault liability nonavailable to the insurance company or the respondent/owner of the vehicle; though apparently found logical; on close scrutiny of the Act and its object, these submissions do not stand to reason.

13. If such defence is allowed to be taken by the owner of the vehicle or insurance company, then by way of denial, the victim may have to take a stand that the driver or the owner of the driver was negligent. A defence may involve attack in such situation. A shield of rebuttal automatically gets converted into a sword of attack. While taking stand of rebuttal, one cannot just block the attack and while arresting the attack, in most of the situations it would lead in proving the fact of negligence or default of the driver or owner of the offending vehicle. If by way of rebuttal a claimant is required to prove wrongful act or negligence of the driver/owner of the vehicle concerned, then that particular defence can be restricted as it is crossing a border of no fault liability which is a privileged area of the claimant protected under section 163A of the Act. There may be a very few instances that a rebuttal may not lead to prove neglect of the owner/driver of the other vehicle, however, they are minor aberrations for which purposive interpretations of the statute cannot be sacrificed. Thus, I am of the view that under section 163A, unlike subsection (4) of Section 140 of the Act, there is no express bar on the respondents to take defence of default or neglect of the victim. However, there is an implied bar due to principle of no fault liability which runs in favour of the victim and against the respondents. Therefore, by virtue of this implied bar, the defence of neglect or default available against the victim to the insurance company or the owner is nonavailable as the claimant in rebuttal is required to prove a default or wrongful act of the owner or driver of the vehicle concerned.

14. On the issue of "fault liability" or "no fault liability" under section 163A of the Act, the learned counsel for the insurance company and the respondent/claimants relied on catena of judgments. The High Court of various states, the Hon'ble Supreme Court have taken conflicting views whether liability under section 163A of the Act is No Fault or Fault Liability in respect of the fault of the victim or the injured. The ratio of the various decisions can be culled out as follows:

i) In the Judgment of the Division Bench of Karnataka High Court in the case of Appaji (deceased) & Anr. vs. M. Krishna and Anr., reported in 2004 ACJ 1289 it is held that the "non obstante clause in section 163A dispenses with proof of fault by the claimants against the driver or the owner of the vehicle involved in the accident. So, there is no liability on the claimant to prove the negligence or rashness of the other party. However, if at all the accident is caused on account of his own rashness and negligent driving, he can nevertheless make the insurance company pay for the same.

ii) The Single Bench of Bombay High Court in the case of HDFC Chubb General Insurance Co. Ltd. vs. Shantidevi Rajbalsingh Thakur & Anr. reported in 2008 ACJ 1280 has taken a view that in Section 163A "victim" means a third party and it would also not include a person himself who is negligent.

iii) In the Judgment of the Division Bench of Supreme Court in case of Ningamma & Anr. vs. United India Insurance Company Ltd. reported in (2009) 13 SCC 710 : [2010(1) ALL MR 441 (S.C.)] the Supreme Court held that when a deceased was driving a vehicle which was borrowed from its real owner, in that circumstances, the deceased stepped into the shoes of the owner of the vehicle, then Section 163A does not apply wherein the owner of the vehicle himself is involved. Thus, the legal representatives of such deceased cannot claim compensation under section 163A of the Motor vehicle Act.

iv) In the case of National Insurance Company Ltd. vs. Sinitha & Ors., reported in (2012) 2 SCC 356 : [2012 ALL SCR 414] the Division Bench compared Section 140 with Section 163A and highlighted that subclause (4) of Section 140 exempting the victim or injured from any fault while deciding compensation. Under Section(4) the party concerned i.e. the owner or the insurer is precluded from defeating a claim by pleading and establishing wrongful act, negligence, default on the part of victim or injured. The absence of such specific bar manifests the intention of the legislature that under Section 163A the insurance company is not precluded from taking defence of negligence against the victim. The Division Bench held that it is difficult to accept that the legislature would fasten such a prodigious liability under the "nofault" liability principle without reference to the "fault" grounds and concluded that Section 163A of the Act is founded under the "fault" liability principle.

15. The reliance is placed on the following cases by the learned counsel for the appellants/original claimants:

i) In the case of Deepal Girishbhai Soni & Ors. vs. United India Insurance Co. Ltd., Baroda reported in (2004) 5 SCC 385, [2004(5) ALL MR 674 (S.C.)] the three Judges of the Supreme Court held that Section is to be constructed purposively and statute to be read in its entirety and purport and object of the Act to be given its full effect. Right to claim compensation under section 163A is on the principle of "no fault" liability.

ii) Full Bench judgment of the Karnataka High Court in Guruanna Vadi & Anr. vs. General Manager, Karnataka State Road Transport Corporation & Anr. reported in 2001 ACJ 1528 is on the same line and wherein it is held that Section163A takes away the right of the owner or the insurer to defend the claim and creates an obligation to pay the compensation fixed under under the structured formula under section 163A of the Act.

iii) In the case of Latabai Bhagwan Kakade & Ors. vs. Mohammed Ismail Mohd. Saab Bagwan & Ors. reported in 2002 ACJ 407 the Division Bench of the Bombay High Court observed that if the owner or the insurance company is permitted to prove contributory negligence or default of victim/injured, the claimant will have to lead evidence in rebuttal to prove the negligence on the part of the driver and it would defeat the very object of introducing the provisions of Section163A conferring a cheap, efficacious and speedy remedy to the claimants. Thus, it is held that Section 163A is based on "nofault" principle.

iv) In the case of United India Insurance Company Ltd. vs. Sunil Kumar & Anr. the Division Bench of the Supreme Court found it difficult to accept the reasoning given by the Division Bench of the Supreme Court in case of Sinitha, [2012 ALL SCR 414] (supra) and followed the ratio laid done in the case of Deepal Girishbhai Soni, [2004(5) ALL MR 674 (S.C.)] (supra). It is held that Section 163A has an overriding effect and provides for special provisions as to payment of compensation on structured formula basis. It has expressed that ThreeJudge Bench judgment of Deepal Girishbhai Soni, [2004(5) ALL MR 674 (S.C.)] (supra) was not placed before the Division Bench who decided the Sinitha's case and concluded that the liability to make compensation under section 163A is on the principle of nofault and, therefore, the question as to who is at fault is immaterial and foreign to an enquiry under section 163A. Section 163A does not make any provision for apportionment of the liability. In Sunil Kumar's case (supra) which was decided on 29th October, 2013, the Division Bench referred the judgment of Sinitha's, [2012 ALL SCR 414] case (supra) to a Larger Bench for correct interpretation of Section 163A of the Act. Thus, as on today, the view taken in Deepal Girishbhai Soni, [2004(5) ALL MR 674 (S.C.)] (supra) and Sunil Kumar's case holds the field.

16. On the point of interpretation of statute, reliance is placed on judgment of the Division Bench of the Supreme Court in the case of Helen C. Rebello & Ors. vs. Maharashtra State Road Transport Corporation & Anr. reported in 1999 ACJ 10 : [1999(1) ALL MR 670 (S.C.)] wherein it is stated that whenever there are two possible interpretations of a beneficial statute, then the one which subserves the object of legislation or beneficial to the claimant should be accepted. Therefore, principle of no fault is to be made applicable to Section 163A.

17. Thus considering the ratio laid down by the Supreme Court and various High Courts, I am of the view that Section 163A is based on no fault liability and defence of 'fault' is not available to the owner/insurance company against the claimant.

18. In the present case, the deceased was driving a car no. MRW4607 rashly and negligently and carrying contraband illicit liquor at the time of accident. He dashed into the truck bearing no. MVW1495 which was stationary at that time. The claim for compensation upto Rs.4,62,832/- was preferred by the dependents of the deceased under section 163A of M.V. Act. The owner of the vehicle did not file written statement, however, the respondent/insurance company filed written statement wherein the insurance company has taken a stand that the deceased was earning salary of Rs.60,000/- p.a., therefore, the claim under provisions of Section 163A of M.V. Act is not maintainable as the salary is more than Rs.40,000/-p.a. Similarly, it was contended that the deceased himself was negligent, as he dashed on the truck which was stationary and, therefore, the insurance company is not liable to pay any compensation.

19. The learned Member of the Tribunal after considering the submissions in the claim and the defence taken by the insurance company, formulated an issue whether the deceased was driving the vehicle rashly and negligently and caused the said accident by going on the wrong side. The finding given to it is affirmative. The learned Member has relied on the FIR and panchnama wherein it was stated that the deceased was driving rashly and negligently due to which an accident was caused. While deciding issue no. 6 i.e. Whether the applicants are entitled to claim compensation, the learned Member of the Tribunal has answered it in negative. While holding so, the learned Member has relied on the judgment of the Single Bench of Bombay High Court in case of HDFC Chubb General Insurance Co. Ltd. (supra) wherein it was held that "a tortfeasor who because of his own negligence met with death cannot be equated with a victim of the accident". In the said ruling it was held that under Section 163A of M.V. Act, a person, who is himself negligent, cannot get the benefit under section 163A. Thus, it appears that the judgment of Hon'ble Supreme Court in Deepal G. Soni (supra) was not placed before the learned Member of the Tribunal. Similarly, though there is a reference of the case of Latabai Bhagwan Kakade (supra), the learned Member of the Tribunal has not properly taken into account the ratio laid down in the said case by holding that section 163A is based on No fault liability. Moreover, in view of further judgment of Hon'ble Supreme Court in the case of United India Insurance Company Ltd. vs. Sunil Kumar & Anr. (supra) and as law discussed about, the judgment of the trial Court is required to be set aside.

20. The total amount of compensation payable to the applicants are as follows:

Annual Income of the deceased	40,000.00
The age of deceased is considered as 26 years and so as per the structural formula II schedule of Section 163A, between 25 to 30 age group, the highest multiplier factor 18 is applied i.e. 40,000 X 18	7,20,000.00
Less.: Personal Expenses @1/3rd	2,40,000.00
Add: i) Loss of Estate	20000.00
ii) Loss of Consortium	25000.00
iii) Funeral Expenses	5000.00
	50,000.00
TOTAL	5,30,000.00

21. Appeal is allowed.

22. The claimants are entitled to get an amount of Rs.5,30,000/- with an interest @7.5% p.a. from the date of filing of the application. If any excess amount is deposited by the insurance company, that amount be returned to the insurance company.

Appeal allowed.