IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN TUESDAY, THE 15TH JULY 2008 / 24TH ASHADHA 1930 MACA.No. 1392 of 2008() ----------------------- OPMV.686/2004 of MOTOR ACCIDENT CLAIMS TRIBUNAL, THODUPUZHA .................... APPELLANT/ 3RD RESPONDENT: ------------------------------------------------- THE ORIENTAL INSURANCE CO.LTD, METRO PALACE, OPP.NORTH RAILWAY STATION, ERNAKULAM,REPRESENTED BY ITS ASSISTANT MANAGER. BY ADV. SRI.V.P.K.PANICKER RESPONDENTS: RESPONDENTS AND PETITIONERS: ------------------------------------------------------------------------------- 1. SHAJU JOSEPH, S/O.JOSEPH, NELLOOR HOUSE, VAZHAKULAM, MUVATTUPUZHA. 2. JACOB MATHEW, S/O.MATHEW, VATTAKUZHIYIL HOUSE, KALLOORKAD P.O, MUVATTUPUZHA. 3. CHERIAN MATHEW, SRAMBICKAL HOUSE, KADALIKKAD P.O, VAZHAKULAM. 4. THE BRANCH MANAGER, NATIONAL INSURANCE CO.LTD, THODUPUZHA. 5. PURUSHOTHAMAN, S/O.VAVACHAN, VETTAVANKATTIL HOUSE, KURUMBALAMATTOM KARA, KARIMANNOOR VILLAGE. 6. KALYANI, W/O.PURUSHOTHAMAN, DO. DO. 7. SAJINI, D/O.PURUSHOTHAMAN, DO. DO. 8. ANIL, S/O.PURUSHOTHAMAN, DO. DO. 9. SUNIL, S/O.PURUSHOTHAMAN, DO. DO. BY THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 15/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss J.B.KOSHY & P.N.RAVINDRAN, JJ. -------------------------------------- M.A.C.A.No.1392 OF 2008 ------------------------------------- Dated 15th July, 2008 JUDGMENT Koshy,J . This appeal is filed by the insurance company against the award of the Motor Accidents Claims Tribunal in a claim petition filed under section 163A of the Motor Vehicles Act (in short `the Act'). The son of the first and second claimants (respondents 5 and 6 in this appeal) sustained fatal injuries in a motor accident on 9.2.2004. According to the claimants, while the deceased was proceeding in a motor cycle bearing Reg. No.KL.7U/8423 from Thodupuzha to Vazhakulam for official purpose, a bus bearing Reg.No.KL.6/8647 stopped ahead of the motor cycle all on a sudden and thereby it hit on the left back side of the bus and he sustained fatal injuries and succumbed to the injuries. According to the claimants, the bus driver was negligent. The driver, owner and insurer of the bus were arrayed as respondents 1 to 3. The fourth respondent was the owner of the motor cycle and the fifth respondent was the insurer of the motor cycle in which the deceased was travelling. The Tribunal calculated compensation as per the structured formula. An award was passed directing payment of the sum of Rs.2,76,500/= with interest thereon at 8% per annum from the date of application as MACA.1392/2008 2 compensation. The insurer of the bus as well as insurer of the motor cycle were directed to pay the compensation in equal moieties. The insurer of the motor cycle did not file any appeal, but, the insurer of the bus has filed this appeal, challenging the said award. 2. The main contention of the insurance company is that the Tribunal erred in taking 17 as the multiplier considering the age of the motor accident victim, when the first claimant, father of the deceased, was aged 55 years and the second claimant, mother of the deceased, was aged 50 years. The sister and brothers of the deceased were aged between 25 and 28 years. According to the insurance company, even if the average age of father and mother is taken, only 11 can be taken as the multiplier and not 17. The deceased was aged 22 years at the time of accident. The age of the victim is not disputed. The Tribunal assessed Rs.2,000/= as the monthly income. The accident occurred when he was going for official purpose. Apart from the oral evidence of the claimants, no other evidence was adduced to prove that the deceased had an income of Rs.3,000/= per month as claimed by the claimants and the Tribunal has fixed only Rs.2,000/= as the monthly income considering the fact that the deceased was a young man aged 22 years and was employed. We are of the opinion that the monthly income fixed by the Tribunal needs no MACA.1392/2008 3 interference. As already stated, the major dispute is regarding the multiplier taken. 3. It is well settled law that if a claim is filed under section 166 of the Act, the multiplier fixed under section 163-A need be considered only for guidance and if the deceased is unmarried, normally, the age of the parents is to be looked into. It was held in various cases that even in claims filed under section 166, the second schedule framed for fixing compensation under section 163-A can be taken for guidance and in exceptional circumstances changes can be made (See three member bench decision of the Apex Court in Smt.Supe Dei and others v. M/s.National Insurance Company Ltd. and another (JT 2002 (Suppl.1) SC 451), Abati Bezbaruah v. Dy. Director General, Geological Survey of India and another ((2003) 3 SCC 148) and A.P.S.R.T.C. v. M.Pentaiah Chary (2007 AIR SCW 5689)). It was also held that if the motor accident victim is unmarried, for fixing the multiplier, the age of the claimants as well as motor accident victim can be looked into and the lowest multiplier can be adopted. (See Maqbool Pasha and another v. Irfan Ahammed and another (JT 2002 (5) SC 118)). The Supreme Court has also held that if a very high multiplicand is taken, a lower multiplier can be taken. The Supreme Court in United India MACA.1392/2008 4 Insurance Co. Ltd. v. Patricia Jean Mahajan and others (JT 2002 (5) SC 74) held that except in very rare cases, the multiplier shown in second schedule should not be deviated from. The other methods, which were in vogue prior to the introduction of the multiplier system, were held to be no more good. It was also held that though the second schedule is a safe guide for the purpose of calculation of the amount of compensation, in special circumstances, it can be changed and if the multiplicand is very high, a lower multiplier can be taken. In that case, the deceased was employed abroad. The income earned by him, considering the exchange value, was very high. Therefore, the Supreme Court adopted a slightly lower multiplier than that fixed under the second schedule. The question of taking the second schedule for guidance was considered in all these decisions where claims were filed under section 166. In case of section 163A, compensation amount is fixed in fatal case and the court is bound to take the age of the victim, the monthly income and award the fixed amount mentioned in the second schedule as compensation. It has no option. 4. Even though in Uttar Pradesh State Road Transport Corporation (U.P.SRTC) v. Trilok Chandra (1996 (2) KLT 218 (SC)) it was pointed out by the Supreme Court that there MACA.1392/2008 5 were some mistakes in the second schedule, those mistakes have not been corrected so far. The Hon'ble Supreme Court did not set aside the second schedule, but, held that table under second schedule cannot be used as a ready reckoner if claims are filed under section 166, but, only for guidance. If claims are filed under section 163-A, the Tribunal or court cannot deviate from the structured formula given in the second schedule. After considering Trilok Chandra's case (supra), the Apex Court in New India Assurance Company Ltd. v. Charlie ((2005) 10 SCC 720) held as follows: “21. In General Manager, Kerala State Road Transport Corporation v. Susamma Thomas ((1994) 2 SCC 176) it was noted that the normal rate of interest was about 10% and accordingly the multiplier was worked out. As the interest rate is on the decline, the multiplier has to consequentially be raised. Therefore, instead of 16 the multiplier of 18 as was adopted in Trilok Chandra case appears to be appropriate. In fact in Trilok Chandra case, after reference to the Second Schedule to the Act, it was noticed that the same suffers from many defects. It was pointed out that the same is to serve as a guide, but cannot be said to be an invariable ready reckoner. However, the appropriate highest multiplier was held to be 18. The highest multiplier has to be for the age group of 21 years to 25 years when an ordinary Indian citizen starts earning independently and the lowest would be in respect of a person in the age group of 60 to 70, which is the normal retirement age.” MACA.1392/2008 6 But, the above case also arose from a claim filed under section 166 and the above decision cannot therefore be relied on by the claimants to argue that the Tribunal ought to have taken 18 as the multiplier as the age of the deceased was between 20 and 25. 5. The differences between sections 163-A, 166 and 140 of the Motor Vehicles Act were considered in detail by a three member bench of the Supreme Court in Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., Baroda ((2004) 5 SCC 385). In the above case, the Hon'ble Supreme Court considered in detail the scope of claims under section 163-A and that is the only decision wherein the provisions of section 163-A were explained in detail after considering the legislative history and various other aspects. Paragraph 18 of the above judgment refers to the legislative history. At paragraphs 29 and 30 it was held as follows: “29. The Second schedule referred to in Section 140 of the Act provides for a structured formula for the purpose of grant of compensation to a third party involved in fatal accident/injury. By reason thereof a multiplier system is introduced pursuant whereto and in furtherance whereof the amount of compensation is required to be calculated having regard to the age of the victim and his MACA.1392/2008 7 annual income. However, in terms of the note appended to the said Schedule the amount of compensation so arrived at in the case of fatal accident, the claim is to be reduced by one- third, in consideration of the expenses which the victim would have incurred towards maintaining himself, had he been alive. 30. Clause (2) of the said Second Schedule provides that the amount of compensation shall not be less than Rs.50,000/-. It also provides for grant of compensation under several heads, namely (3) general damages in case of death, (4) general damages in case of injuries and disabilities, (5) disability in non-fatal accidents, and (6) notional income for compensation to those who had no income prior to accident. However, the maximum amount which is to be paid under the different heads has also been specified.” The Hon'ble Supreme Court also held that fault of the driver of the offending vehicle need not be proved. It is further held that in view of section 163-B of the Act, an option had been provided to enable the claimants to claim compensation either under section 140 or section 163-A. If a claim under section 140 is filed, another claim under section 163-A will not lie, even though sections 163-A and 140 are based on strict liability (liability without fault) principle formulated in Rylands v. Fletcher (1861-73 All ER (Reprint) 1 ) referred to in Kaushnuma Begum and others v. New India Assurance Co. Ltd. (AIR 2001 S.C 485). But, now, the Hon'ble Supreme Court has in MACA.1392/2008 8 Deepal's case (supra) also noticed the differences between sections 140 and 163-A because an award under section 140 is only an interim measure and the claimants can claim full compensation under section 166 with set off against the amount awarded under section 140. But, a claimant cannot file a claim for compensation under sections 163A and 166 simultaneously. Both are independent claims and that should be looked into independently. Section 163A deals with application for granting final award and not an award as an interim measure. The Supreme Court after considering the objects and reasons of the Motor Vehicles Amendment Act, 1994 which introduced section 163-A held that Section 163-A was introduced in the Act by way of a social security scheme. It is a code by itself. It was also held that claims under section 163-A can be filed only if the annual income is below Rs.40,000/=. At paragraph 42 it was held as follows: “42. Chapter XI was, thus, enacted for grant of immediate relief to a section of people whose annual income is not more than Rs.40,000/= having regard to the fact that in terms of S.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 factors relevant therefor. An award made thereunder, therefore, shall be in full and final settlement of the claim as would appear from the different columns contained in the Second Schedule appended to the Act. The MACA.1392/2008 9 same is not interim in nature. The note appended to column 1 which deals with fatal accidents makes the position furthermore clear stating that from the total amount of compensation one-third thereof is to be reduced in consideration of the expenses which the victim would have incurred towards maintaining himself had he been alive. This together with the other heads of compensation as contained in column Nos.2 to 6 thereof leaves no manner of doubt that the Parliament intended to lay a comprehensive scheme for the purpose of grant of adequate compensation to a section of victims who would require the amount of compensation without fighting any protracted litigation for proving that the accident occurred owing to negligence on the part of the driver of the motor vehicle or any other fault arising out of use of a motor vehicle.” At paragraph 46 the Hon'ble Supreme Court held as follows: “46. S.163-A which has an overriding effect provides for special provisions as to payment of compensation on structured formula basis. Sub-s.(1) of S.163-A contains non-obstante clause in terms whereof the owner of the motor vehicle or the authorised 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 of the victim, as the case may be, Sub-s. (2) of S.163-A is in pari materia with sub-s.(3) of S.140 of the Act.” MACA.1392/2008 10 Again, at paragraph 48, it was held that while granting compensation, the Tribunal is required to adjudicate only the question as regards the age and income, if disputed. At paragraph 51 it was held as follows: “51. The scheme envisaged under S.163-A, in our opinion, leaves no manner of doubt that by reason thereof the rights and obligations of the parties are to be determined finally. The amount of compensation payable under the aforementioned provisions is not to be altered or varied in any other proceedings. It does not contain any provision providing for set off against a higher compensation unlike S.140. In terms of the said provision, a distinct and specified class of citizens, namely, persons whose income per annum is Rs.40,000/= or less is covered thereunder whereas Ss.140 and 166 cater to all sections of society.” The above three member bench decision clearly shows that section 163-A read with the second schedule is a complete machinery for awarding compensation. The object behind introduction of section 163-A is to prevent long drawn out litigation and the statutorily provided formula cannot be altered by the Tribunal or court when claims are filed under section 163A, provided the annual income of the victim is below Rs.40,000/=. As the claim for compensation under both sections are final and independent as statutorily provided, a claimant cannot pursue his or her remedies thereunder MACA.1392/2008 11 simultaneously. Once a claim is filed under section 163-A, while awarding compensation, the Tribunal need only look into the following questions; whether injury was sustained in an accident arising out of the use of motor vehicle of the respondent, the age of the accident victim and the percentage of permanent disability in case the injury is not fatal. Section 163-A provides a multiplier method for payment of compensation in case of personal injuries and consolidated amount in case of death. Apart from the above, general damages to be awarded in case of injuries and disabilities are also mentioned under section 163-A which are as follows: “4. General Damages in case of injuries and Disabilities: (i) Pain and sufferings (a) Grievous injuries Rs.5,000/= (b) Non-grievous injuries Rs.1,000/= (ii) Medical Expenses-actual expenses incurred supported by bills/vouchers but not exceeding as one time payment Rs.15,000/= 5. Disability in non-fatal accidents: The following compensation shall be payable in case of disability to the victim arising out of non-fatal accidents: Loss of income, if any, for actual period of disablement not exceeding fifty two weeks. PLUS either of the following: (a) In case of permanent total disablement the amount payable shall be arrived at by MACA.1392/2008 12 multiplying the annual loss of income by the Multiplier applicable to the age on the date of determining the compensation, or (b) In case of permanent partial disablement such percentage of compensation which would have been payable in the case of permanent total disablement as specified under item (a) above. Injuries deemed to result in Permanent Total Disablement/Permanent Partial Disablement and percentage of loss of earning capacity shall be as per Schedule I under Workmen's Compensation Act,1923.” In a claim under section 166, compensation for pain and sufferings can be awarded by the Tribunal without any limitation depending upon the injuries and the sufferings. But, here, under section 163-A, even if the injuries are grievous, the maximum compensation payable for pain and sufferings is only Rs.5,000/=. For medical expenses, the maximum amount payable is Rs.15,000/=, that too only if supported by bills and vouchers. But, in section 166 claims, actual medical expenses, even if it amounts to Rs.1,00,000/= or more, can be granted. With regard to fatal accidents, Section 163-A provides that amount of compensation shall not be less than Rs.50,000/= and for general damages the following are mentioned: “3. General Damages (in case of death): The following General Damages shall be MACA.1392/2008 13 payable in addition to compensation outlined above: (i) Funeral expenses Rs.2,000 (ii) Loss of Consortium, if beneficiary is the spouse Rs. 5,000 (iii) Loss of Estate Rs.2,500 (iv)Medical expenses-actual expenses incurred before death supported by bills/ vouchers but not exceeding Rs.15,000“ It is to be noted that for funeral expenses the maximum amount payable is only Rs.2,000/=, for loss of consortium Rs.5,000/= etc.. and no other amount can be awarded. Further, in the case of fatal accidents, the amount payable is also fixed. For example, if the income is Rs.18,000/= per year for a person aged between 20 and 25, the compensation fixed is Rs.3,24,000/=. From that, one third has to be deducted for personal expenses and the compensation payable will be Rs.2,16,000- and general damages as fixed in the schedule. Whereas in non-fatal accidents, no deduction of personal expenses is necessary. Compensation to be granted based on the income will be Rs.18,000 x 17(multiplier) x Percentage of disability as certified by the doctor and accepted by the Tribunal. So, as far as fatal accidents are concerned, in claim under section 163-A, the amount payable is fixed, if the age of the victim and income are known. In the case of non-earning persons, notional annual income is also fixed as Rs.15,000/=. In claims under section 166, the negligence of the MACA.1392/2008 14 driver of the offending vehicle has to be proved by the claimants as the claim is based on tortious liability. But, considering the present cost of medical treatment, the claimant can claim actual medical expenses incurred, a high amount for pain and sufferings and various other claims like attendant expenses, transport expenses etc. which are not allowable under section 163-A. Even though the second schedule can be taken as a guide for calculating compensation under section 166, both claims are independent. The courts and Tribunals have no option, if a claim under section 163-A is filed by a person whose annual income is below Rs.40,000/=, but to award compensation strictly as per the second schedule in the light of the three member bench decision of the Hon'ble Supreme Court. The three member bench decision of the Hon'ble Supreme Court is binding on us. Differences between section 163A and 166 of the Motor Vehicles Act are given in a chart as follows: Table 1: Difference Between Section 163-A and Section 166 Sl.No. Section 163-A Section 166 1 The victims are not required to prove negligence under this section. The victims are compulsorily required to prove negligence. 2 Claim under this section is based on `no fault liability'. Claim under this section is based on `tortious liability' MACA.1392/2008 15 Table 1: Difference Between Section 163-A and Section 166 3 Only evidence regarding the factum of accident and vehicle involved in the accident, age of the motor accident victim, income of the claimant etc. need be proved. A long drawn out trial is not contemplated. Evidence regarding negligence, various other aspects regarding claim for compensation etc. are to be established by the claimant by a long drawn out trial. 4 Only general damages limited by schedule can be awarded. Special damages can also be claimed. 5 Income at the time of accident is taken into consideration. Not only income at the time of accident but also future prospects certain to take shape may be taken into consideration. 6 In an application under section 163-A, in case of fatal accident, amount is fixed and in case of negligence, multiplier is fixed on the basis of age group as stated in schedule II a part of section. It is the tribunal which has to adjudicate and come to the conclusion as to which multiplier will be applicable. 7 The age of the victim alone is relevant to arrive at the number of multiplier. There are number of factors which the tribunal have to take into consideration. For example – who are the dependants, either heirs or parents and their age. 8 Age of heirs and parents is not taken into consideration while deciding the multiplier under Section 163-A. The age of heirs and age of parents has to be considered in deciding the multiplier in application under Section 166 when accident victim is unmarried. 9 If claimant is not an earning person, Section 163-A provides for a minimum notional income. The tribunal is required to adjudicate and decide the minimum income may be on presumptions. 10 On furnishing the data as to age of the victim, schedule provides a ready reckoner to calculate the award amount under Section 163-A. Such schedule is not available for claims under Section 166, but, second schedule shall be taken only for guidance. In this case, Tribunal has calculated compensation strictly in accordance with the claims under section 163-A. In Section 163-A MACA.1392/2008 16 claims, age of the victim (22 years) alone is considered in fixing the multiplier and calculating compensation. Age of the parents (here it is above 50 years) is of no relevance for calculating compensation. Considering the increase in life span in Kerala which is 70, whether a high multiplier should be taken especially considering the low rate of interest etc. need not be considered in this claim filed under section 163-A as compensation is awarded strictly as per the structured formula as mandated by the legislative provision. We see no ground to interfere with the impugned award. The appeal is dismissed. J.B.KOSHY JUDGE P.N.RAVINDRAN JUDGE tks