IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No 2126 of 2002 For Approval and Signature: Hon'ble MR.JUSTICE KSHITIJ R.VYAS and Hon'ble MR.JUSTICE H.K.RATHOD ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgement? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : YES of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- ORIENTAL INSURANCE CO LTD. Versus CHINTHARBHAI SIBABHAI,GUARDIANOF MINOR BHARTIBEN -------------------------------------------------------------- Appearance: MS MEGHA JANI for appellant MR NIRZAR S DESAI for Respondent No. 1 None appears on behalf of respondents Nos.2 & 3 -------------------------------------------------------------- CORAM : MR.JUSTICE KSHITIJ R.VYAS and MR.JUSTICE H.K.RATHOD Date of Order: 10/10/2002 ORAL ORDER (Per : MR. JUSTICE H.K.RATHOD) The Apex Court has observed, in paragraph 12 of the decision in the case of R.D. Hattangadi v. M/s. Pest Control (India) Pvt. Ltd., reported in AIR 1995 SC 755 that : "12. In its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. But all the aforesaid elements have to be viewed with objective standards." 2. Heard learned Advocates Ms.Megha Jani appearing on behalf of the appellant and Mr.Nirzar Desai appearing on behalf of respondent No.1-claimant. 3. Admitted. Notice of admission is waived by Mr.Nirzar Desai appearing on behalf of respondent No.1. 4. At the time of hearing the application for condonation of delay in filing this appeal, we have considered the merits of the award passed by the Motor Accident Claims Tribunal (Aux.), Bhavnagar and therefore, with the consent of both the learned Advocates, this First Appeal is taken up for final disposal, today. 5. In this appeal, the appellant Insurance Company has challenged the award passed by the Motor Accident Claims Tribunal (Aux.), Bhavnagar, dated 22nd September 2000 passed in M.A.C.P. No.290 of 1997. 6. The brief facts of the present appeal are as under: Initially, the claimants had filed an application under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act' for short), which was filed by the father of deceased Ashokbhai Chitharbhai, on behalf of himself and his minor daughter, for claiming compensation in respect of the death of Ashokbhai in a motor accident on 12th February 1997. According to the case of the claimants, deceased Ashokbhai along with his father, the claimant-Chitharbhai was travelling in a truck on 12th February 1997 for going towards village Sanes. Some time in the morning hours, truck No. GRR 4761 met with an accident with another truck No. UP 14 1225. The two trucks collided on the road going from Bhavnagar to Tarapur near village Nari. According to the claimant, the said accident had occurred due to the negligence on the part of the drivers of both the trucks. Ashokbhai expired on the date of the accident. The main petition Exh. 1 was filed on 11th April 1997 and along with the main petition, the claimants had also filed an application Exh.15 praying for interim compensation of Rs.50,000/- apparently under Section 140 of the Act. The Tribunal has not passed any order upon the said application, though the claimants produced certain documents with regard to the factum of the accident. Opponent No.1 Mukeshbhai is the owner of truck No. GRR 4761, opponent No.2 is the owner of truck No. UP 14 1225 while opponent No.3 is Oriental Insurance Company, which incidentally, is the insurer of both the vehicles. The Insurance Company has filed the written statement at Exh.9 on 10th June 1997. During the pendency of the main petition under Section 166 of the Act, on behalf of the claimants, an application at Exh.172 has been filed under Section 163-A of the Act on 12th July 2000. Opponent No.3 Insurance Company has filed the reply at Exh.175 to the present application. The tenor of the reply at Exh.175 is that at the time of filing the main petition, an application was already filed for interim compensation under Section 140 of the Act and thereafter, after a long time, application under Section 163-A has been filed. Therefore, according to the Insurance Company, the said application is not maintainable. A further contention has been raised by the Insurance Company that the claimants shall have to decide, at the time of filing the main petition, whether they want to claim interim compensation either under Section 140 or under Section 163-A of the Act. The Insurance Company has also raised a contention that in case the application under Section 163-A is decided, the main petition will conclude. This contention has been examined by the Tribunal in light of various provisions made under the Act and after considering the relevant provisions of Section 158(6) and Section 166(4) of the Act which empower the Tribunal to consider suo motu the case sent by Police Station as a petition under the Act. This aspect has been considered by this Court in the case of New India Assurance Company v. Minor Sanjay Vajubhai, reported in 1999 (1) GLR 403 wherein it has been held that it is the legal obligation of the Tribunal to suo motu consider the matter for grant of interim compensation. The Tribunal has considered that this being the legal position, the Tribunal is empowered to determine the compensation which the claimants are entitled to under Section 163-A of the Act at any stage of the proceedings and even without any application by the claimant. In fact, it would be the duty of the Tribunal to proceed on its own to determine interim compensation under Section 163-A when the said provision is found applicable. Thereafter, the Tribunal has considered the decision of the Apex Court in the case of U.P.State Road Transport Corporation v. Trilok Chandra, reported in (1996) 4 SCC 362 and thereafter considered Schedule-II attached to Section 163-A and decided the compensation in favour of the claimants. Ultimately, the Tribunal considered the evidence of the claimants that deceased was doing the work of polishing diamonds and was earning Rs.3000 to Rs.3500/- per month. Exh.74/1 is a certificate issued by one Jasmatbhai Patel indicating that deceased Ashokbhai was working in his factory for polishing diamonds in the year 1997. He has also certified in the certificate that in January 1997 the income of Ashokbhai was between Rs.3200/- to Rs.3500/-. After considering this evidence, the Tribunal has assessed the income of the deceased at Rs.2000/- per month which would work out to Rs.24,000/- per annum. Considering the age of the deceased to be in between 15 and 20 years, the Tribunal has applied a multiplier of 19 and a compensation of Rs.4,56,000/- has been awarded. The Tribunal has deducted 1/3rd amount, i.e. Rs.1,52,000/- towards the expenses which the deceased would have incurred towards maintaining himself, from the said amount of compensation of Rs.4,56,000/- and thus the amount comes to Rs.3,04,000/- which has been awarded. The Tribunal has added Rs.2000/- towards funeral expenses and an amount of Rs.2500/- has been awarded towards loss of estate. Thus, a total amount of Rs.3,08,000/- has been awarded as compensation with 12% interest from the date of application with proportionate costs. 7. Learned Advocate Ms.Megha Jani has raised only one contention before us that the Tribunal has decided application Exh.172 filed by the claimants on 12th July 2000 during the pendency of application under Section 166 of the Act. This being an application for interim compensation, the Insurance Company is not able to get any opportunity to challenge the income of the deceased and the application under Section 166 was pending before the Tribunal. She, therefore, submitted that the Tribunal has not given effective opportunity while deciding the application under Section 163-A of the Act and no oral evidence has been led by the claimants and no opportunity of cross examination has been given to the Insurance Company. She, therefore, submitted that in light of these facts, the matter may be remanded back to the Tribunal with a view to give reasonable opportunity to the Insurance Company to challenge the income of the deceased. However, it is made clear that Insurance Company has not requested to the Tribunal to give opportunity to cross-examination of claimant. No such application was filed by the Company. No effort was made to get chance of cross-examination of claimant to challenge the income of deceased. No submission was made before the Tribunal to that effect. Even in submission also, income of the deceased is not challenged. Even though, such contention was raised by the Company before us, it is for the first time. Inspite of the said facts, we are examining the said contention in light of object of Section 163-A and various decisions of the Apex Court on the said questions. 8. Learned Advocate Mr.Nirzar Desai appearing on behalf of respondent No.1 - claimant has submitted that the main application filed by the claimants under Section 166 of the Act was pending before the Tribunal, but he has no instructions from the counter part appearing before the Tribunal as to whether the said application has already been withdrawn by the concerned Advocate or not. He further states that in any case, the claimants now will not proceed in respect to the application under Section 166 of the Act. Therefore, according to his submission, the contention raised by learned Advocate Ms.Megha Jani that during the pendency of the application under Section 166, the application for interim compensation under Section 163-A has been decided by the Tribunal and in view of the decision of the Apex Court, the claimants are entitled to file application under Section 166 or under Section 163-A, being an alternative proceeding, does not survive. In view of the statement made by learned Advocate Nirzar Desai, the main petition appears to be withdrawn from the Tribunal and therefore, now only this application under Section 163-A is considered to be final. 9. Learned Advocate Ms.Megha Jani has raised a contention that the Insurance Company is not given a reasonable opportunity to cross examine the claimants with regard to the income of the deceased and that the application under Section 163-A has been decided by way of interim compensation without there being any evidence of income of the deceased. The Insurance Company has raised certain contention before the Tribunal in the written statement at Exh.175. The Tribunal has examined this question as to whether the claimants can be prevented from filing application for interim compensation under Section 163-A of the Act or not, if they are entitled to, otherwise. In light of the facts, the Tribunal has considered the approach of the claim Tribunal in such matter which was required to be clarified. The Motor Vehicles Act, 1988 is a benevolent Legislation conferring powers on the Claims Tribunal to award "just" compensation when a motor accident takes place. Section 163-A was introduced in the Act by an amendment of 1994. If the said provision is seen in proper perspective, Section 163-A confers a right on accident victims to claim compensation as per the Second Schedule. According to the provisions made in the Act, Section 158(6) provides that in case of accident involving death or bodily injury to any person, the Officer incharge of a Police Station shall forward a copy of any information regarding such an accident within 30 days from the date of recording of the information. Section 166(4) of the Act provides that the Claims Tribunal shall treat any report forwarded to it under Section 158(6) as an application for compensation under this Act. Therefore, even if the present application at Exh.172 was not filed by the claimants for compensation, the Tribunal was empowered to treat the report of the accident under Section 158(6) of the Act as an application for compensation and proceed suo motu to determine the amount of compensation payable to the victims. The Tribunal, in such a situation, award compensation under Section 163-A or under Section 166 of the Act. In such situation, the approach of the Tribunal has been examined by this Court and indicated in the judgment in the case of Ramdevsingh v. Hansrajbhai, reported in 1999 (1) GLR 631. In paragraph 45 of the said judgment, this Court has held that a Claims Tribunal can suo motu consider the matter for grant of interim compensation to the claimants under Section 163-A of the Act on receipt of report of Police under Section 158(6) of the Act. In respect to application for interim compensation under Section 140 of the Act, this Court has also considered the same aspect in the case of New India Assurance Co. v. Minor Sanjay Vajubhai, reported in 1999(1) GLR 403 wherein this Court has held that it is the legal obligation of the Tribunal to suo motu consider the matter for grant of interim compensation. This principle would apply with equal force to powers of the Tribunal to determine the compensation which the claimants are entitled to under Section 163-A of the Act. This being the legal position, the Tribunal is empowered to determine the compensation which the claimants are entitled to under Section 163-A of the Act at any stage of the proceedings and even without any application by the claimants. On the contrary, it was the duty of the Tribunal to proceed on its own to determine the interim compensation under Section 163-A when the said provision is found applicable. 10. In light of the above legal position, the application was required to be decided by the Tribunal. Section 163-A of the Act provides that the owner of the motor vehicle or the authorised insurer shall be liable to pay in case of death or permanent disability on account of 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. It is further provided in sub-section (2) of Section 163-A that in any claim for compensation under Section 163-A, the claimant is not 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. In other words, this compensation is to be awarded on the principle of "no fault liability". Similarly, Section 163-A is also similar to Section 140 of the Act with the difference being with regard to the quantum of compensation. Whereas Section 140 provides for compensation of Rs.25,000/- in case of permanent disablement and Rs.50,000/- in case of death, compensation under Section 163-A is to be awarded as per the structured formula contained in the Second Schedule. 11. Recently the Division Bench of Bombay High Court has examined the scope of Section 163-A of the M.V. Act in case of Latabhai Bhagwan Kakate v. Mohmad Ismail Mohd. Saab Bhagwan reported in 2002 ACJ 407. The relevant paragraphs are quoted as under: "6. It seems that the legislature has accepted the recommendation of the Law Commission of India in its 119th Report that the liability to pay compensation in every motor accident must be on no fault liability. It was observed that in the event of death of a victim of a motor accident and the consequent harm caused to his dependents, the question whether the person responsible for the action causing harm had committed a fault or it was an inevitable accident, is hardly relevant from the point of view of the victim or his/her dependents. The expanding notions of social security and social justice envisaged that the liability to pay compensation must be on no fault liability. The Law Commission's report came in the wake of the recommendation made by the Apex Court that the compensation for motor vehicle accidents should be on no fault basis and the determination of the quantum must be liberal, since law values life and limb in a free country. The plight of the victims of motor vehicle accidents was highlighted by Chandrachud, C.J. in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC), wherein his Lordship observed: "The victims of road accidents or their dependents are driven to wage a long and unequal battle against the insurance companies, which deny their liability on every conceivable variety of factual disputations from 'who was driving the vehicle' to 'whose negligence was the sine qua non of the accident'. The delay in the final disposal of motor accident compensation cases, as in all other classes of litigation, takes the sting out of the laws of compensation because, an infant child who seeks compensation as a dependant of his deceased father has often to await the attainment of majority in order to see the colour of the money. Add to that the monstrous inflation and the consequent fall in the value of the rupee: Compensation demanded say, ten years ago, is less than quarter of its value when it is received today. We do hope that the Government will apply itself seriously and urgently to this problem and find a satisfactory method of ameliorating the woes of victims of road accidents." A similar view was also expressed by the Supreme Court in State of Haryana v. Darshana Devi, 1979 ACJ 205 (SC) and Gujarat State Road Transport Corporation v. Ramanbhai Prabhatbhai, 1987 ACJ 561 (SC). 7. In March 1990, a Committee to review the provisions of the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989 was set up by the Government of India and the said Review Committee in its report suggested several changes in the Act. The Review Committee considered that determination of the claim cases pending before the Claims Tribunal takes a long time. To obviate such delay, a proposal was made that early finalisation of compensation claims would greatly facilitate to the advantage of claimants, the vehicle owners as well as the insurance companies, if a system of structured compensation can be introduced. Under such scheme the affected party can have the option of his accepting the lump sum compensation as is notified in that scheme of structured compensation or of pursuing his claim through the normal channels. The Review Committee felt that determination of cases takes long time and, therefore, under a system of structured compensation, the compensation that is payable for different classes of cases depending upon the age of the deceased, the monthly income at the time of death, the earning potential in the case of minor, loss of income on account of loss of limb, etc., can be notified and the affected party can then have option of accepting lump sum compensation under the scheme of structural compensation or of pursuing his claim through the normal channels. The report of the Review Committee was considered by the State Governments and comments were notified. The Transport Development Council also made recommendations for providing adequate compensation to the victims of road accidents without going into long drawn procedure, on the basis of age/income which is more liberal and rational. On the basis of the said recommendations, after considering the report of the Transport Development Council and the Review Committee the provision of Section 163-A was enacted for payment of compensation to road accident victims on the basis of a new predetermined structured formula. xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx 17. The only other question which now remains to be considered is when section 163-A clearly stipulates that it is not necessary for the claimants to plead and prove negligence, would it be open for the owners of the vehicles/insurance companies to establish that the accident occurred due to negligence of the victim or he has contributed to the negligence. It is evident from the legislative history of section 163-A that the section is in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment as per structured formula by way of compensation to the victims of accidents arising out of the use of motor vehicle on the basis of no fault liability. In the matter of interpretation of a beneficial legislation the approach of the courts is to adopt a construction which advances the beneficial purpose underlying the enactment in preference to a construction which tends to defeat the purpose. The object or purpose of introducing section 163-A is to give compensation to the victims of the motor vehicles accidents or to their relatives, i.e., a fixed compensation on the basis of Table/Second Schedule without going into a long drawn trial. A combined reading of sub-sections (1) and (2) of section 163-A shows that the victim or his heirs are entitled to claim from the owners/insurance companies compensation for the death or permanent disablement suffered due to the accident arising out of the use of the motor vehicle without proof of any fault or negligence in contrast to section 166 providing for getting compensation on the basis of fault liability where the claimant is required to prove wrongful act, neglect or default of the owner of the vehicle or vehicles concerned. Thus section 163-A lays down that if it is established by the claimants that the death or disablement was caused due to accident arising out of the use of the motor vehicle, then they will be entitled to receive compensation as per the Second Schedule as a matter of right without a long drawn trial. If we accept the interpretation suggested by the insurance companies it would mean that the claimants will have to necessarily prove the element of negligence on the part of the driver of the vehicle although the legislature has clearly stipulated that it is not necessary for the claimants to plead or prove negligence on the part of the driver of the motor vehicle because if the owner of the vehicle or the insurance company is permitted to prove contributory negligence or default on the part of the victim or claimants, naturally the claimants will have to lead evidence in rebuttal to prove the negligence on the part of the driver of the motor vehicle. Surely the legislature did not intend to create such a situation as it would defeat the very object of introducing the provision of section 163-A conferring a cheap, efficacious and speedy remedy on the claimants to claim compensation on the basis of no fault liability as per the structured formula contained in the Second Schedule. We are of the view that since the owner of the vehicle or insurance company is made liable to pay compensation irrespective of the fact whether the driver of the vehicle is at fault, there is no question of owners of vehicles or insurance companies being allowed to lead any evidence to prove the negligence and/or contributory negligence on the part of the victim. 18. The object of enacting section 163-A and the Second Schedule is to avoid long drawn litigation and inordinate delay in payment of compensation to the victim or his heirs who are in dire need of relief. If such affected claimant opts for accepting the lump sum compensation based on structured formula, instead of a higher compensation to which he may consider himself entitled, he would get relief at the earliest. This no fault liability has been introduced on the basis of the suggestion of the Law Commission to the effect that the expanding notions of social security and social justice envisage that liability to pay compensation must be on 'no fault liability' as observed by the Apex Court in Ramanbhai Prabhatbhai's case, 1987 ACJ 561 (SC), i.e. "in order to meet to some extent the responsibility of the society to the deaths