IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 1577 of 2008 Date of decision: May 26, 2008 Bajaj Allianz General Insurance Company Ltd. ..... Appellant Versus Surinder Kaur and Others ..... Respondents Present : Mr. P.M. Goyal, Advocate for the appellant. *** S.S. SARON, J. This appeal has been filed by the appellant-Bajaj Allianz General Insurance Company Ltd. against the award dated 02.04.2008 passed by the learned Motor Accident Claims Tribunal, Rupnagar (“Tribunal” - for short) whereby the claim petition filed by the claimants who are the legal heirs of Amandeep Singh (deceased), who was driving the motor cycle that was involved in the accident and had died in the same accident, has been accepted and an amount of Rs.2,66,000/- has been awarded as compensation. The claimants filed a petition under Section 163-A of the Motor Vehicles Act, 1988 ('Act' – for short) seeking compensation on account of the death of Amandeep Singh. On 8.1.2007, Amandeep Singh (deceased) and his cousin brother Ajay Singh, who also died in the same accident, had gone on motorcycle No. PB-41-C-0593 to get a gas cylinder refilled at Village Mahlan. Amandeep Singh (deceased) was driving the motorcycle at a slow speed and his cousin brother-Ajay FAO No. 1577 of 2008 -2- Singh was riding pillion. While returning when they reached near the curve of village Mazafat, then a stray cow came in front of the motorcycle. In order to save the cow, the motorcycle struck against a 'Jamun' tree and both the riders fell down. Ajay Singh died at the spot and Amandeep Singh received multiple grievous injuries and he succumbed to the injuries and died on the way to the hospital. The said accident was due to the use of the aforesaid motorcycle. It was, therefore, claimed that the respondents in the claim petition were jointly and severally liable to pay compensation to the claimants. In the written statement filed by Sh. Harmesh Singh (respondent No.3), the owner of the motor cycle, the manner in which the accident had occurred was admitted. It was, however, pleaded that the vehicle involved in the accident was insured with the appellant Insurance Company. As such, the liability to pay compensation to the claimants may be fastened on it. In the written statement filed by the appellant-Insurance Company, a preliminary objection was raised to the effect that the claim petition was not maintainable. Besides, the deceased - Amandeep Singh was not holding a valid and effective driving license at the time accident. As already noticed, the claim petition has been allowed and compensation awarded to the claimants. Aggrieved against the same, the appellant-Insurance Company has filed the present petition. Learned counsel appearing for the appellant-Insurance Company has contended that Section 163 -A of the Act is applicable to third party insurance claims as the provisions of Section 163-A of the Act FAO No. 1577 of 2008 -3- fall under Chapter XI of the Act, which provides for : “Insurance of Motor Vehicles against Third Party Risk”. In the present case, it is submitted that the victim himself was driving the motorcycle, which was involved in the accident and, therefore, the appellant Insurance Company is not liable for the payment of any compensation to the legal heirs of the victim. In other words the victim being the driver of the vehicle involved in the accident, his legal heirs have no right to claim compensation under Section 163-A of the Act. In support of his contention, learned counsel cites Appaji and anr. v. M. Krishna and anr., 2004 ACJ 1289 (DB), Karnataka. I have given my thoughtful consideration to the contentions of the learned counsel appearing for the appellant-Insurance Company. In order to appreciate the contentions of the learned counsel for the appellants, the provision of Section 163-A of the Act may be noticed, which read as under:- “163-A. Special provisions as to payment of compensation on structured formula 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 or 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 sub-Section, “permanent disability” shall have the same meaning and FAO No. 1577 of 2008 -4- extent as in the Workmen's Compensation Act, 1923. (2) In any claim for compensation under sub-Section (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.” (Emphasis added) A reading of the above Section 163-A (1) of the Act shows that it starts with a non-obstante clause. It is provided in terms thereof that the owner of the motor vehicle or 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. Therefore, the owner of the motor vehicle or the authorised insurer of the vehicle is liable to pay compensation in case of death or permanent disablement, as the case may be, due to an accident arising out of use of a motor vehicle. The amount is payable subject to notwithstanding anything contained in the Act or in any other law for the time being in force. The effect of the non- obstante clause has been considered in several decisions of the Supreme Court. The primary effect of it is that with a view to give the enacting part of the Section in case of a conflict an overriding effect over the provisions of the Act mentioned in the non-obstante clause. In Union of India v. FAO No. 1577 of 2008 -5- G.M. Kokil, AIR 1984, SC 1022 it was held that it is well known that a non-obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation and effect of all contrary provisions. Thus the non-obstante clause in Section 70 of the Bombay Act, namely, “notwithstanding anything in that Act”, it was observed, must mean notwithstanding anything to the contrary contained in that Act and as such it must refer to the exempting provisions which would be contrary to the general applicability of the Act. In other words, as all the relevant provisions of the Act are made applicable to a factory notwithstanding anything to the contrary contained in it, it must have the effect of excluding the operation of the exemption provisions. The non-obstante clause, therefore, gives an overriding effect to the other general provisions of the Act. The use of the expression “liable to pay” in Section 163-A of the Act would show that a liability is fastened on the owner of the vehicle or the Insurance Company in a case where death or permanent disablement , as the case may be, has occurred due to an accident arising out of the use of motor vehicle. Chapter XI of the Act relates to “Insurance Of Motor Vehicles Against Third Party Risks”. However, Section 145 (c) of the Act, which is also under Chapter XI defines the term 'liability' in the following manner :- “145. Definitions: I n this Chapter ,— ( c ) “liability”, wherever used in relation to the death of or bodily injury to any person, includes liability in respect thereof under Section 140;” FAO No. 1577 of 2008 -6- The definition of 'liability' in terms of Chapter XI of the Act, therefore, means that wherever used in relation to the death or bodily injury to any person, includes liability in respect thereof under Section 140. Section 140 of the Act falls under Chapter X which relates to “Liability Without Fault in Certain Cases”. Section 140 of the Act reads as follows:- “140. Liability to pay compensation in certain cases on the principle of no fault – (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section. (2)The amount of compensation which shall be payable under sub-Section (1) in respect of the death of any person shall be a fixed sum of (fifty thousand rupees) and the amount of compensation payable under that sub-Section in respect of the permanent disablement of any person shall be a fixed sum of (twenty-five thousand rupees). (3) In any claim for compensation under sub-Section (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 FAO No. 1577 of 2008 -7- any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. (3) A claim for compensation under sub-Section (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. (4) Notwithstanding anything contained in sub-Section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force: Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under Section 163-A.” A reading of Section 140(1) shows that where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, FAO No. 1577 of 2008 -8- as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of the said Section. However, for the purposes of Chapter XI relating to “insurance of motor vehicles against third party risks”, the 'liability' in relation to death or bodily injury to any person, includes liability in respect thereof under Section 140 as well. Therefore, the expression “shall be liable to pay” as used in Section 163-A (1) of the Act for the purposes of payment of compensation would mean liability which would include liability under Section 140 of the Act. In Appaji and anr. v. M. Krishna and anr., (supra), referred to by the learned counsel for the appellant, the definition of 'liability' as contained in Section 145 (c) under Chapter XI of the Act were not brought to the notice of the Hon'ble Karnataka High Court. Besides, the said case was in the context of the facts therein where the accident in question had occurred on account of the rash and negligent driving of Arun Kumar who was riding the scooter on his way from Maddur to Malavalli. In the present case, the accident occurred in order to save a stray cow, which had come in the way of the motor cycle being driven by Amandeep Singh-deceased. In the circumstances, the accident was not caused due to rash and negligent driving of the motorcyclist. Therefore, the contention of the learned counsel that only third party claims can be granted in terms of Section 163-A of the Act is in the facts and circumstances of the case, not tenable. A Division Bench of this Court in New India Assurance Company Ltd. v. Shyamo Chauhan & Ors., 2005 (1) CCC 618 (P & H) in a case under Section 163-A of the Act held that FAO No. 1577 of 2008 -9- deceased driver was owner of motor vehicle. Therefore, owner and Insurance Company were liable to pay compensation under “no fault liability” where accident takes place “arising out of the use of motor vehicle”. It may also be noticed that in Deepal Girishbhai Soni and Others v. United India Insurance Co. Ltd., Baroda, (2004) 5 SCC 385 it was observed by the Hon'ble Supreme Court while considering the provisions of Section 163-A of the Act that the said provisions as incorporated by the amendment are beneficial in nature and the Act indisputably is in the nature of a social welfare legislation. It was observed that Section 163-A was introduced in the Act by way of a social security scheme and that it is a code by itself. A reference was made to the Objects and Reasons of the Motor Vehicles (Amendment) Act, 1994 that after enactment of the 1988 Act several representations and suggestions were received from the State Governments, transport operators and members of the public in relation to certain provisions thereof. Taking note of the observations made by the various Courts and the difficulties experienced in implementing the various provisions of the Motor Vehicles Act, the Government of India appointed a Review Committee which made various recommendations. It was observed that Section 163-A of the Act was enacted for grant of immediate relief to a section of the people whose annual income is not more than Rs.40,000/- having regard to the facts that in terms of Section 163-A of the Act read with the Second Schedule appended thereto, compensation is to be paid on a structured formula not only having regard to the age of the victim and his income but also the other FAO No. 1577 of 2008 -10- factors relevant therefor. In Rita Devi and others v. New India Assurance Co. Ltd. and another, (2000) 5 SCC 113 one Dasarath Singh was driver of an auto- rickshaw owned by Lalit Singh. The auto-rickshaw was registered as a public carrier used for hire by passengers. It was insured with the Insurance Company. On 22.3.1995, some unknown persons hired the auto-rickshaw which was stolen and the dead body of Dasarath Singh the driver was recovered. The auto-rickshaw was never recovered and the claim of the owner for the loss of the auto-rickshaw was accepted by the Insurance Company and the amount of loss paid. The claimants through their power of attorney being legal representatives of the deceased filed a petition under Section 163-A of the Act claiming damages for the death of Dasarath Singh caused during the course of his employment under the said auto-rickshaw as a death caused in an accident arising out of the use of the motor vehicle. The Claims Tribunal allowed the petition against the owner of the auto- rickshaw and also fastened legal and statutory liability on the Insurance Company. The appeal of the Insurance Company was allowed by the High Court on the ground that it was a case of murder and not that of an accident. Before the Supreme Court, the legal representatives of the deceased contended that the death of Dasarath Singh falls within words. “death due to accident arising out of the use of motor vehicle” as provided under Section 163-A(1) of the Act. It was held by the Supreme Court that the death of Dasarath Singh was caused accidentally in the process of committing theft of the auto-rickshaw. Therefore, the trial Court rightly came to the conclusion that the claimants were entitled to compensation as claimed by FAO No. 1577 of 2008 -11- them and the High Court was wrong in coming to the conclusion that the death of Dasarath Singh was not caused by an accident involving the use of motor vehicle. Reliance was placed on the case of Shivaji Dayanu Patil v. Vatschala Uttam More, (1991) 3 SCC 530, wherein while pronouncing on the interpretation of Section 92-A of the Motor Vehicles Act, 1939 it was held as follows :- “Section 92-A was in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a 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 beneficent purpose underlying the enactment in preference to a construction which tends to defeat that purpose”. It may, therefore, be noticed that Section 163-A of the Act being in the nature of a social welfare legislation and by way of a social security scheme, the benefit of the same is to be extended to the victims of the legal heirs where a death or to the victim where a permanent disablement occurs due to accident arising out of the use of motor vehicle by way of payment of compensation. Besides, the said provision starting with a non-obstante clause, has overriding effect over the other provisions of the Act or anything contained in any other law. As such, the claim petition filed by the legal heirs of Amandeep Singh (deceased) is valid and the Insurance Company would be liable to pay the amount of compensation as has been FAO No. 1577 of 2008 -12- assessed by the learned Tribunal. Consequently, there is no merit in this appeal and the same is accordingly dismissed. (S.S. SARON) JUDGE May 26, 2008 amit