IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No 7288 of 1999 With FIRST APPEAL No. 318 of 2000 For Approval and Signature: Hon'ble MR.JUSTICE H.R.SHELAT and Hon'ble MR.JUSTICE H.H.MEHTA ========================================================= 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO 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 Civil Judge? : FIRST APPEAL NO. 7288 OF 1999 --------------------------------------------------------- NEW INDIA ASSURANCE CO.LTD. Versus MUNA MAYA BASANT W/O SHER BAHADUR BASANT --------------------------------------------------------- Appearance: MR PV NANAVATI for the appellant. MR SURESH M SHAH for the Respondent No. 1 NOTICE UNSERVED on Respondent No. 2 --------------------------------------------------------- With FIRST APPEAL No. 318 of 2000 ---------------------------------------------------------- NEW INDIA ASSURANCE CO LTD Versus BHURABHAI VAGHABHAI HAVZARIA B/O LATE KARSHANBHAI ----------------------------------------------------------- Appearance: MS LILU K BHAYA for the Petitioner ------------------------------------------------------------ CORAM : MR.JUSTICE H.R.SHELAT and MR.JUSTICE H.H.MEHTA Date of decision: 9/02/2001 JUDGEMENT : (Per: H.R. Shelat, J.) These two appeals are directed against the orders passed by the Motor Accident Claims Tribunal at Bhuj awarding compensation as per structured formula under Sec. 163-A of the Motor Vehicles Act, 1988, (for short `the Act'). 2. In these two appeals, common questions of law & facts are raised. With a view to avoid waste of time, hardships to the parties, and conflicting judgments, we have preferred to hear the appeals together and dispose the same of by a common judgment. Accordingly, the appeals are heard and by this common judgment all the three appeals shall stand disposed of. 3. Vir Bahadur, the son of Sher Bahadur and opponent No.1, was going from Kandla to Indore driving the tanker No. GJ-12-T-7723. Tek Bahadur was the cleaner on the tanker. Vir Bahadur was driving the tanker cautiously remaining on the left side of the road and at the moderate speed. On 15th July 1996 at 1.30 p.m. he reached Ghatpir on Dahod-Godhra road. He was negotiating the curve on the bypass road. The tanker suddenly went off the southern side of the road and turned turtle. Vir Bahadur sustained serious injuries and succumbed to the same at the spot. Vir Bahadur was earning Rs. 5,500/= per month. He was aged 25 years. The opponent No.1, who is the mother of deceased Vir Bahadur, then filed M.A.C.P. No. 171 of 1997 in the Motor Accident Claims Tribunal, Kuchchh at Bhuj under Section 163-A of the Act for compensation as per structured formula. The then learned Chairman of the Tribunal hearing the parties on 15th September 1999 passed the order directing the appellant and opponent No.2 (the insurer and insured) to pay Rs. 4,12,500/= together with interest at the rate of 12% p.a. and costs in proportion against the total claim of Rs. 4,89,500/=. The Insurance Company has therefore preferred First Appeal No. 7288 of 1999. 4. Karsanbhai Vaghabhai aged about 30 years was serving as driver. He was earning Rs. 42,000/- p.a. On 4-9-1997 he was going from Kandla to Hyderabad driving the tanker No. GJ-12-V-5175 loaded with chemicals. The respondent No.3 was the owner of the tanker. At 18.00 hours Karsanbhai reached near the mile stone on Halvad-Dhrangadhara Road indicating that village Kavandia was 18 Kms. away. At that time a truck bearing No. GJ-12-U-6795 came from the opposite direction. The driver of that truck was rash & negligent in driving the truck. He went on the wrong side and collided against the tanker as a result Karsanbhai sustained injuries to which he succumbed at the spot. The brother and widow of the deceased Karsanbhai filed M.A.C.P. No. 810 of 1997 in M.A.C. Tribunal (Auxi.) Kachchh at Bhuj for compensation of Rs. 4,63,000/- as per second schedule under Sec. 163-A of the Act against respondent No.3 and the appellant (ori-opponents Nos. 1 & 2 respectively). The Tribunal on 22.12.99 passed the award for Rs. 4,12,500/- together with interest at the rate of 12% p.a. from the date of the petition and costs in proportion. The Insurance Company has therefore preferred First Appeal No. 318 of 2000 calling in question the legality & validity of the award passed. 5. It is the first & foremost contention of the learned advocates for the appellants that both the drivers losing their lives were the employees of their masters the insured, and in the discharge of their duties assigned by the insured when they met with the motor accident, the victims who are their heirs ought to have filed the claim petitions under the Workmen's Compensation Act and not under the Act. The contention is not acceptable. 6. Under more than one Acts in force, if the party has the remedy for his claim arising out of the same cause of action and separate Forums for the same are constituted under different Acts he has to prefer the permissible remedial measures, and if the option is to be exercised, he is free to opt for the remedy out of more than one available under different Acts. Section 163-A starts with non-obstante clause and refers both, the Act and Workmen's Compensation Act, 1963. As per Section 163-A notwithstanding any thing contained in the Act or in any other law for the time being in force, the owner and insurer of the motor vehicle are made liable to pay the compensation as per the structured formula given in Second Schedule. The words "in any other law for the time being in force" in their sweep certainly cover the Workmen's Compensation Act 1923. Sec. 163-A therefore permits the employee who is the victim of motor accident in the discharge of his duty or his heirs to claim compensation despite the fact that likewise remedy is available under Workmen's Compensation Act, 1923. The employee has his remedy under both the Acts namely M.V. Act and Workmen's Compensation Act. We shall now refer Sec. 167 which clarifies further course of action to be adopted. Sec. 167 of the Act in clear terms & unambiguously provides that without prejudice to the provisions of Chapter X (Sec. 140 to 144), it is open to the victim having the remedy for claim under both the Acts to exercise option either to file the claim petition in M.A.C. Tribunal constituted under the Act or before the Commissioner under the Workmen's Compensation Act, 1923. Sec. 163-A does not fall within Chapter X of the Act. The respondents victims having the right to claim under both the Acts were therefore free to make the choice. When they have as per their right opted to claim under the Act and thereby preferred to have permissible remedial measures available, they cannot be directed to prefer the claim before the Commissioner under Workmen's Compensation Act. To do so would be highly unjust, impropoer and illegal. The contention therefore fails. 7. Mr. P.V. Nanavati, the learned advocate representing the appellant, contends that in this case no petition under Section 166 of the Motor Vehicles Act is filed, with the result the insurance company did not get the chance to challenge the claim or putforth its case which it desired. When the appellant is thus deprived of the valuable right this appeal on that count may be admitted and allowed. It is also the contention that the provisions regarding the compensation introduced in Motor Vehicles Act, 1988 envisage fault liability, namely tortious liability. The concept of non-tortious liability is foreign to the Motor Vehicles Act, 1988. The tortfeasor therefore cannot take the advantage of the provisions of the Motor Vehicles Act and claim compensation. 8. The Motor Vehicles Act, 1939, contained the provision for the award of compensation on the principle of fault only. In Smt. Manjushri Raha And Others v. B.L. Gupta And Others & B.L. Gupta Vs. Smt. Manjushri Raha And Others - (1977) 2 Supreme Court Cases 174 and in several other decisions rendered subsequently, the Supreme Court emphasised much about the provision to provide compensation on no fault liability because while dealing with several cases depicting hazards of vehicular accidents increasing alarmingly day by day and looking to the tragedy, plight, miseries & woes as well as helplessness of the victims, it found that the Act was lacking of necessary provision to help the victims, compelling the State to discharge its social obligation. As & when occasion arose, the Supreme Court went on reiterating the need for necessary change in the Act for providing compensation to the victims of motor accidents on the principle of no-fault also. The Law Commission of India also in its 85th Report recommended the introduction of the provision to award compensation on "no fault liability", the concept foreign to tortious liability. The Motor Vehicles Act of 1939 was then amended vide Motor Vehicles Amendment Act 1982 incorporating Section 92-A to 92-E so as to provide for the first time payment of compensation on the principle of no fault. Later on the Motor Vehicles Act, 1939, which was amended in 1982 was repealed and the new Act came into force with effect from 14th October 1988. In the new Act, Sections 140 to 144 corresponding to Sections 92-A to 92-E under the repealed Act were enacted. The Act also provided for the compensation resulting from an accident arising out of the use of the motor vehicle in three cases, namely, (1) hit and run motor accident (Section 161), (2) just compensation on the principle of fault liability (Section 166 to 168), and (3) compensation on the principle of no fault liability (Sections 140 to 144). The Act was again amended by the Amendment Act 54 of 1994 and the amended provisions came into force from 14th November 1994. Because of the amendment Section 163-A and Section 163-B have been introduced in Chapter XI so as to provide for payment of compensation in motor accident case on a pre-determined formula given in the Second Schedule. Section 163-A is titled as "special provision as to payment of compensation on structured formula basis", while Section 140 of the Act is captioned as Liability to pay compensation in certain cases on the principle of "no fault liability". As per Section 163-B, the option is given to the claimant to file the application for compensation either under Section 140 or under Section 163-A. Under Section 140, the amount of compensation to be awarded is fixed, i.e., Rs. 50,000/= in case of death, and Rs. 25,000/= in case of permanent disablement, whereas under Section 163-A the compensation has to be awarded as per the Structured Formula in second schedule. 9. The historical background leading the Parliament to enact the provision of Section 163-A is, referring several decisions of the Supreme Court and commentaries of different learned authors on the Books on Tort, stated by this Court in the case of R.V. Chudasma Vs. H.B. Godala 1999(1) G.L.H. 278 = [1999 (1)] 40 (1) GLR 631. We, therefore, do not restate the same. Suffice it to say at this stage that the Government, because of the direction given and hope expressed by the Supreme Court and recommendation made by the Law Commission found that compensation on the ground of fault liability was not effectively assuaging the miseries, distress and woes being suffered by several victims of the motor accident as several victims had to retreat or feel dejected by losing the legal battle; and by passage of time when the concept of social obligation of the State to help the subject in case of need or exigencies in life developed which was also the voice echoed by the Supreme Court in several decisions referred to in the above referred case, the Parliament thought it fit to introduce necessary provision. With the result, Section 163-A came to be introduced expanding the frontiers of the liability and making the room for the principle of no-fault liability. It contemplates the principle of no-fault liability making the owner, driver and insurer of the vehicle or vehicles involved in the accident liable to pay the compensation on predetermined formula nevertheless fault-liability, and non-obstante clause by which Sec. 163-A begins indicates that regardless of other provisions in the Act about fault liability compensation to the victim shall be paid on the principle of no-fault. Section 163-A is therefore the provision based on no fault liability and not on tortious liability for the aforesaid object. In short, by introduction of Section 163-A, the ambit of liability under the Act is expanded covering non-tortious liability also. 10. This Court, in R.V. Chudasma's case (Supra), has with regard to liability on no-fault principle, made it clear that the application under Section 163-A is a substantial application for compensation under the two heads i.e. pecuniary and general damages only for which the ceiling is provided under Schedule II of the Act. If the general damages are to be claimed in excess of the amounts awardable under structured formula, or not covered by the said formula, a separate petition under Section 166 for full-fledged hearing and determination, has to be filed, otherwise not. In the said decision different decisions of Apex Court throwing light on the history and object of introduction of Section 163-A are referred to. By passage of time pressing need to have a scheme for compensation to make the loss good at the earliest on adhoc basis without undergoing arduous long drawn procedure, u/s. 166 M.V. Act or meeting with any challenge or risk of losing fully or partly found necessary to be fulfilled, so that the victim may have some amount conclusively and irrevocably as solatium from the opposite parties viz, driver, owner and insurer of the vehicle involved in vehicular accident on ex-gratia-help-principle or adhoc basis arose, as a result of which Section 163-A by way of soothing provision came to be inserted. Under the said provision vide Sch. II "structured formula" for making payment of certain amounts on adhoc basis is provided. As per that formula without entering into the fault of any party or merits of the rival cases, ex-gratia payment on adhoc basis is to be finally made by the opposite parties. If the party claiming compensation is not satisfied with the amounts awardable under structured formula, it is for him to decide whether he should file the petition for compensation under section 166 and face the woven risk. He cannot be compelled to file the petition under section 166 of the Act. The provision therefore does not contemplate filing of another application under Section 166 and have compensation after meeting with the challenge of the opposite party. The opposite parties in other words have no right to challenge the claim under Section 163-A on any ground except on the ground of involvement of the vehicle or any limitation or grounds recognised by Section 163-A, namely income of the victim, deduction to be made, age, locus-standi, no insurance or cessation of insurance, ownership of vehicle, mode of assessment as per structured formula, and the like, or to seek the order directing the victim to prefer the application under Section 166 for full-fledged hearing. The provision of Section 163-A, to put differently makes the opposite parties liable to pay the lump-sum amount as ex-gratia payment to be calculated as per structured formula with no right to challenge on the grounds available in the petition filed under Section 166 of the Act; and payment under Section 163-A is not made subject to the inquiry contemplated under Section 166 of the Act. The appellant therefore cannot be allowed to lament on the ground that it does not get a right to challenge or defend putting forth a case it desires to, or contend that the application under Section 166 when not filed and ordered to pay under Section 163-A of the Act, its right to defend is jeopardised. In view of such law and position of Section 163-A, the compensation under no fault liability on pre-determined formula has to be awarded and for such award of compensation, petition under Section 166 of the Act is not a condition precedent. Irrespective of one's own stand except permissible as aforesaid, the party liable has to pay as per predetermined formula u/s. 163-A of the Act so as to assuage the miseries and woes or distress of the victims of the motor accident. The contention raised in this regard therefore cannot sustain. 11. Mr. Nanavati, the learned advocate for the appellant, drawing our attention to the decision in the case of United India Insurance Co. Ltd. v. Jagatsinh Valsinh & Ors. - 27 (2) G.L.R. 1423 contends that the tortfeasor cannot take advantage of his own wrong and cannot claim damages for injuries sustained by him resulting from his own wrongful act. In the case on hand, deceased Vir Bahadur was himself driving the tanker and because of a wrong on his part i.e. his negligence, the incident happened and he died. The opponent No.1 mother of the deceased therefore cannot take the advantage of the wrong done by the deceased and claim compensation u/s 163-A of the Act also. 12. In the case cited this Court has, considering the provisions of Sections 95, 96 and 97 of the then Motor Vehicles Act, 1939, held that the claimant being a tortfeasor cannot claim compensation for the tortious act committed by him. In other words, it is held that if the claimant is found negligent he cannot come forward and say pay me the compensation for my own negligence. Such principle is beyond the purview of the Act. But this decision cannot be pressed into the services of the appellant because it is rendered qua the old provision. Section 163-A, the new provision about no fault liability, came to be introduced from 14-11-1994. When the decision was rendered by this Court on 14th October 1985, Sec. 163-A introducing the concept of no-fault liability was absent, and the principle to claim compensation on no-fault liability was foreign to the then Act in force. The decision rendered keeping old law in mind is, therefore, not applicable. Sec. 163-A has brought drastic change in the concept of tortious liability prevailing prior to it. It by non-obstante clause permits even the tortfeasor to claim compensation on the principle of no-fault liability which otherwise he is (if employee and has done wrong in the discharge of his duty) entitled to under Workmens' Compensation Act, 1923; or under the contract of insurance. The contention therefore fails. The Insurance Company who is the appellant can challenge the claim only on the ground of no-contract at all i.e., no insurance, or on the abovestated grounds. It may be stated that it is not the case of the appellant that the vehicle in question was not insured with it or that the insurance was not in force at the time of accident. 13. The anxiety is also expressed in the next contention submitting what the insurance company should do if it is made liable to pay under Section 163-A though in fact it may not be liable to pay because the driver of the vehicle involved in the accident may not have the licence or might have driven the heavy vehicle though having the licence for a light vehicle, or what the insurance company should do if it is made liable to pay more under the pre-determined formula than the limits of the liability fixed in the policy because under Section 163-A insurance company will have no scope to challenge on such grounds, while under Section 166 if the petition is filed it will have the scope to challenge putting forth its defence and may avoid to pay more than its contractual liability otherwise a question of recovery may arise and insurance company will have to, if ordered to pay more, sustain loss. 14. Under the Act, the liability of the Insurance Company is statutory and that can be spelt out from Sec. 147. Charging extra premium, the Insurance Company may prefer to cover higher liability or risk or unlimited liability. In any case, therefore, the contractual liability will not be less than the statutory liability. It may be stated that by introduction of Sec. 163-A, the liability arising there under must now be deemed to have been covered under statutory liability regardless of the pecuniary limit in that regard is specified in policy, or premium charged. In other words, the limits of statutory liability should be deemed to have been extended or enlarged appropriately so as to cover the liability that arises under Sec. 163-A. For the said liability, extra premium is not to be charged or specific contract is not required to be entered into. When that is so, it cannot be said that the Insurance Company will have to pay more. However, in some cases, where third party does not come in picture if the Court directs the Insurance Company to pay more than its statutory or contractual liability, as the case may be, it would be open to the Insurance Company under the terms of the contract to recover, from the insured, the excess amount paid pursuant to the order or in execution and discharge of the order of the Court/Tribunal. In case the Insurance Company has to pay more than its liability or risk covered under the policy, to a third party, it can invoke Sec. 147 & 149 (4) or (5) of the Act for the recovery of the amounts paid in excess of the liability. Regarding licence the scheme of the provisions of Sec.163-A does not provide a scope to raise a plea in defence so as to challenge the claim on the ground of no licence or category thereof being different because under Sec.163-A as stated earlier the sums on adhoc-basis under social obligation has to be paid notwithstanding other provisions. The contention therefore gains no ground to stand upon. 15. In this case, the heir of Vir Bahadur the respondent No.1 could have claimed the compensation preferring the petition before the Commissioner under Workmens' Compensation Act, 1923 as the remedy under that Act is also available. She may in order to have double gain prefer an application before the Commissioner after getting compensation under the Motor Vehicles Act. To curb such mischief this appeal may be admitted & allowed is the contention raised. 16. In order to check the mischief of double gain, or earning the premium the Parliament has in its wisdom enacted Section 167 which lays down that if the claimant has a right to claim compensation under both the Acts, namely Motor Vehicles Act and Workmens' Compensation Act, 1923, it would be open to him to claim the compensation under one of the two Acts and not under both. If the victim therefore prefers to claim the compensation under the Motor Vehicles Act, he will be debarred from claiming the compensation under the Workmens' Compensation Act, or if he claims under Workmens' Compensation Act, he will be debarred from claiming the compensation under the Motor Vehicles Act. In the case on hand, when the respondent No.1, the mother of the deceased has preferred to claim the compensation under the Motor Vehicles Act, she will be debarred from claiming the compensation under Workmens' Compensation Act, and if at all she prefers to claim, it will be open to the insurance company to challenge the claim invoking the Section 167 of the Motor Vehicles Act. 17. Faced with such situation Mr. Nanavati contends that even if the Insurance Company has to pay u/s. 163-A, it cannot be compelled to pay as per structured-formula. The victim was the employee of the insured and so whatever is awardable as per Table under Workmens' Compensation Act, 1923 which provides lesser amounts than under structured formula u/s. 163-A of the Act, can at the most be awarded. In other words,