FA/1788/2003 1/17 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 1788 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE ANIL R. DAVE : HONOURABLE MR.JUSTICE KS JHAVERI : ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ========================================================= NEW INDIA ASSURANCE CO. LTD - Appellant(s) Versus MANIRAM SANTRAM KAPADI & 2 - Defendant(s) ========================================================= Appearance : MR S.C. SHAH for Defendant(s) : 1, MR MEHUL S SHAH for Defendant(s) : 1, DELETED for Defendant(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE ANIL R. DAVE and HONOURABLE MR.JUSTICE KS JHAVERI Date : 26/04/2007 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE KS JHAVERI) FA/1788/2003 2/17 JUDGMENT 1. By way of this appeal, the appellant – Insurance Company has challenged the judgment and award dated 26th June, 2002 passed by the Motor Accident Claims Tribunal [Main], Kachchh at Bhuj [for short, “the Tribunal”] in Motor Accident Claim Petition No. 76 of 2001 whereby, the said claim petition was partly allowed and opponents no. 2 & 3 in the said claim petition were held jointly and severally liable to pay an amount of Rs.5,27,000/- [Rupees Five lacs twenty seven thousand only] by way of compensation along with interest @ 12 % per annum from the date of the petition till the realization of the amount. 2.0 The facts in a nutshell are as under ; 2.1 On 12.02.2001 the respondent – claimant was traveling from Village Sapeda to Bhuj in a luxury Bus bearing registration No. GJ-17-W-1827 along with his wife. During the course of journey, the Driver of the said Bus, all of a sudden, lost control over the vehicle on account of which the Bus turned turtle and the passengers traveling therein sustained several bodily injuries. As a result of the said accident, the respondent – claimant suffered serious bodily injuries and his right leg had to be amputated below the knee joint. FA/1788/2003 3/17 JUDGMENT 2.2 The respondent - claimant, therefore, filed a petition u/s. 163-A of the Motor Vehicles Act, 1988 [for short, “the M.V. Act”] before the Motor Accident Claims Tribunal, Kachchh at Bhuj claiming compensation of Rs.11,00,000/-. It was averred in the said claim petition that the Driver of the said vehicle was driving the vehicle in a rash and negligent manner and without observing the traffic rules on account of which he lost control over it and the accident in question took place. 2.3 The Tribunal, after considering the documentary and other evidence on record, partly allowed the said claim petition by awarding an amount of Rs.5,27,000/- to the respondent – claimant by way of compensation along with interest @ 12% per annum from the date of the application till its realization. The appellant – Insurance Company and the Owner of the said Bus were held jointly and severally liable to satisfy the said amount of compensation with interest. The respondent – claimant was also awarded proportionate costs of the litigation. 3.0 Mr. S. C. Shah learned Advocate appearing on behalf of FA/1788/2003 4/17 JUDGMENT appellant – Insurance Company submitted that the claim petition preferred by the respondent – claimant u/s. 163-A of the M.V. Act is subject to the provisions contained in the Second Schedule appended thereto. He has submitted that the said Schedule suffers from several defects and, therefore, the Courts / Tribunals cannot use it as a ready reckoner and that it can be used only as a guide. He has, therefore, submitted that the said Schedule is not binding on the Tribunal and, therefore, the same ought not to have been considered while entertaining the application preferred u/s. 163-A of the Act. 3.1 Learned Advocate has relied upon a decision in the case of U.P. State Transport Corporation & ors. V/s. Trilok Chandra & ors. reported in [1996] 4 S.C.C. 362 wherein it has been observed that the calculation of compensation and the amount worked out in the Second Schedule, suffers from several defects and that the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. 4.0 Learned Advocate for the appellant – Insurance Company has next submitted that the Tribunal has erred in law in FA/1788/2003 5/17 JUDGMENT assessing the age of the claimant at 45 years and the monthly economic loss at Rs.3,000/- per month since there is nothing on record to substantiate the same. He has submitted that even if it is presumed that the Tribunal has powers to entertain the said application, then also, while awarding compensation u/s. 163-A of the M.V. Act, it has no jurisdiction to award an income more than Rs.40,000/- which is the statutory limit. 4.1 Learned Advocate has relied upon a decision in the case of Oriental Insurance Co. Ltd. & anr. V/s. Sushilaben Manubhai Valand & ors. reported in [2001] 2 G.L.R. 1336 wherein it has been held that though the person applying or claiming compensation u/s. 163-A of the Act can claim more compensation but, the Tribunal cannot award compensation beyond what is contemplated and prescribed in the Second Schedule. 4.2 Learned Advocate submitted that in the instant case the Tribunal has awarded compensation which is more than the prescribed statutory limit of Rs.40,000/- and, hence, the impugned award is illegal and improper and deserves to be reduced. FA/1788/2003 6/17 JUDGMENT 5.0 Learned Advocate for the appellant – Insurance Company further submitted that the application u/s. 163-A of the M.V. Act is maintainable only if the claimant has not filed an application claiming compensation u/s. 166 of the said Act. He has submitted that the claim petitions filed u/s. 163-A and 166 of the M.V. Act are in the nature of alternative remedies and that both the applications cannot be pursued simultaneously. 5.1 Learned Advocate has relied upon a decision in the case of Deepal Girishbhai Soni & ors. V/s. United India Insurance Co. Ltd., Baroda reported in [2004] 5 S.C.C. 385 wherein it has been held that the remedy for payment of compensation, both under Sections 163-A and 166 being final and independent of each other as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. A claimant must either opt for a proceeding u/s. 163-A or under Section 166 of the Act, but not under both. The observations made in Paras 42 & 67 of the said decision are relevant, which reads as under; “42. Section 163-A was, thus, 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 fact that in terms of Section 163-A of the FA/1788/2003 7/17 JUDGMENT 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 facts 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 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 herself had he been alive. This together with the other heads of compensation as contained in columns 2 to 6 thereof leaves no manner of doubt that 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. 67. We, therefore, are of the opinion that Kodala has correctly been decided. However, we do not agree with the findings in Kodala that if a person invokes provisions of Section 163-A, the annual income of Rs.40,000/- per annum shall be treated as a cap. In our opinion, the proceeding under Section 163-A being a social security provision, providing for a distinct scheme, only those whose annual income is up to Rs.40,000/- can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act”. 6. Learned Advocate for the appellant – Insurance Company next submitted that assuming even if the Tribunal has FA/1788/2003 8/17 JUDGMENT powers to entertain application u/s. 163-A of the M.V. Act, prima facie, the factors with regard to the age, income, injuries sustained by the claimant, involvement of the vehicle in question in the alleged accident etc. are not proved beyond reasonable doubt and, therefore, the impugned award passed by the Tribunal cannot be sustained and deserves to be quashed and set aside. 7. Mr. Mehul Shah learned Advocate for the respondent – claimant has supported the award of the Tribunal and has submitted that the Tribunal was completely justified in passing the impugned award. Hence, no interference is required by this Court in this appeal. He has, however, submitted that if the Court is inclined to follow the principle laid down by the Apex Court in Deepal Girishbhai Soni's case (supra), the matter may be remanded to the Tribunal for adjudication afresh. 8. Heard learned counsel for the parties and perused the documents on record. It is not in dispute that the respondent – claimant sustained permanent disablement of the body on account of the accident in question. The said fact is supported by the Medical Certificate issued to the respondent - claimant as also the FA/1788/2003 9/17 JUDGMENT Affidavit Exhibit - 20 filed by the Doctor of the Government Hospital. The impugned judgment and award passed by the Tribunal is on an application preferred by the claimant u/s. 163-A of the M.V. Act. The said Section reads 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 authorized 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 extent as in the Workmen’s Compensation Act, 1923 [8 of 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”. FA/1788/2003 10/17 JUDGMENT 7.1 On a plain reading of the above Section, it is very clear that the said Section provides for special provisions as to the payment of compensation on a structured-formula basis. The legislative intent behind the enactment of the said Section was to provide for the making of an award consisting of a predetermined sum ,without insisting on a long-drawn-out trial or without proof of negligence in causing the accident. The said Section is subject to the Second Schedule appended thereto and provides for the grant of immediate relief to a section of the people whose annual income is not more than Rs.40,000/-. 7.2 Undisputedly, the respondent – claimant had also filed an application u/s. 166 of the M.V. Act claiming compensation of Rs.17,00,000/-. However, the claimant filed a Purshis at Exhibit-15 before the Tribunal stating that the application u/s. 163-A of the M.V. Act be treated as final and that liberty be granted to him to apply at appropriate time. 7.3 It is now well settled that for the purpose of interpretation of a statute, the same is to be read in its entirety. The scheme envisaged u/s. 163-A leaves no manner of doubt that by FA/1788/2003 11/17 JUDGMENT reason thereof, the rights and obligations of the parties are to be determined finally. In view of the principle laid down by the Apex Court in Deepal Girishbhai Soni's case (supra), an award made under this Section is in full and final settlement of the claim. The remedy for payment of compensation both u/s. 163-A and u/s. 166 being final and independent of each other as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. He has, therefore, to choose as to whether a proceeding u/s. 163-A or u/s. 166 is to be filed. Thus, the proceedings u/s. 166 of the M.V. Act shall automatically stand terminated when an award is passed in an application u/s. 163-A. 8.0 Further, by reason of Section 163-A, the compensation is required to be determined by applying the multiplier method, as provided in the Second Schedule. Apart from that factors like, reduction of one-third of the amount in consideration of the expenses which the victim would have incurred towards his maintenance, general damages in case of death as also in the case of injuries / disabilities, disability in non-fatal accidents etc., are required to be considered, which indicate that the amount of compensation so awarded under this Section, is final and not an FA/1788/2003 12/17 JUDGMENT interim one. 8.1 While assessing the amount of compensation u/s. 163- A, the Tribunal is required to adjudicate upon the disputed question as regards the age and income of the deceased or the victim, as the case may be. In the present case, the Tribunal has assessed the age of the claimant as 45 years. The said finding has been arrived at on the basis of the Affidavit Exhibit-16 filed by the claimant himself, the statement made in the F.I.R. and the Medical Certificate issued by the Doctor of a Government Hospital. 8.2 It is pertinent to note that the claimant has not produced on record any Certificate of Birth / Document issued by a competent Authority under the law in order to prove his age. In our opinion, in the absence of any such Certificate / Document referred to hereinabove and keeping in mind the fact that the application preferred by the claimant was one u/s. 163-A of the M.V. Act, the Tribunal ought not to have assessed the age of the claimant on the basis of the said documents. Proper care is required to be taken while entertaining applications preferred u/s. 163-A since the amount of compensation payable under the said Section is a final FA/1788/2003 13/17 JUDGMENT one. The said Section also does not contain any provision providing for set-off against a higher compensation unlike Section 140 of the said Act. 9.0 As discussed hereinabove, Section 163-A of the M.V. Act r/w. the Second Schedule appended thereto, provides for the grant of immediate relief to a section of the people whose annual income is not more than Rs.40,000/-. Though a person applying or claiming compensation u/s. 163-A of the Act can claim more compensation than the said amount but, the Tribunal cannot award compensation beyond what is contemplated and prescribed in the Second Schedule. 9.1 In the case on hand, evidently, the Tribunal has assessed the annual income of the victim to be beyond Rs.40,000/- per annum. In our opinion, the Tribunal has committed serious error in law by awarding compensation which is of a higher amount than what is prescribed under Section 163-A r/w. the Second Schedule appended thereto. Here, it is beneficial to note that adequate compensation awarded under this Section is not to be equated with the actual compensation to be awarded in the main FA/1788/2003 14/17 JUDGMENT claim petition. Of course, the jurisdiction of the Tribunal is widened while deciding the main petition and the Tribunal can take into consideration the actual income of the victim and can proceed to determine the actual compensation payable to the victim. However, in an application u/s. 163-A, the Tribunal cannot award compensation which is more than the prescribed statutory limit. 10. At this juncture, it would be relevant to refer to a decision of the High Court of Karnataka in the case of Oriental Insurance Co. Ltd. V/s. N. Kunhappu & ors. reported in 2007 A.C.J. 30 wherein it has been held that where the claimants' evidence show annual income of more than Rs.40,000/-, then the case may be remitted back for fresh adjudication. 10.1 In the present case, it transpires that the annual income of the claimant is more than Rs.40,000/-, which is the outer limit, as provided in Section 163-A r/w. the Second Schedule appended thereto. Apart from that the documents relied upon by the Tribunal for assessing the age of the respondent – claimant also cannot be said to be conclusive. These two factors being relevant for entertaining an application preferred u/s. 163-A of the M.V. Act, in FA/1788/2003 15/17 JUDGMENT the interest of justice, it would be appropriate to remand the matter back to the Tribunal concerned for adjudication afresh. 11. In view of the above discussion and keeping in mind the principle laid down in Oriental Insurance Co. Ltd., & Deepal Girishbhai Soni's cases (supra), we have no hesitation to hold that the judgment and award of the Tribunal is contrary to law and is liable to set aside and the matter is required to be adjudicated afresh. 12.0 In the result, the appeal is partly allowed. The impugned judgment and award dated 26th June, 2002 passed by the Motor Accident Claims Tribunal [Main], Kachchh at Bhuj in Motor Accident Claim Petition No. 76 of 2001 is quashed and set aside. The matter is remanded to the Motor Accident Claims Tribunal [Main], Kachchh at Bhuj for adjudication afresh. This Court has passed the aforesaid order in view of the fact that the Tribunal has not followed the procedure established by law. The amount invested in Fixed Deposit, as directed by this Court, shall be continued in Fixed Deposit and the respondent - claimant shall be entitled for the periodical interest on the said Deposit only up to the FA/1788/2003 16/17 JUDGMENT date of this judgment and order. It is, however, made clear that interest accruing on the said Fixed Deposit shall be accumulated and the same will be adjusted at the time of the final award. The amount awarded & already withdrawn by the claimant pursuant to the impugned award will be adjusted at the time of the final award. 12.1 All the parties concerned shall be at liberty to adduce further evidence, if they so desire. Since the matter is of the year 2001, we observe that either of the parties shall be at liberty to move an application before the Tribunal for early disposal of the case and, if such application is moved, the Tribunal is directed to dispose of the case as expeditiously as possible. It is observed that this Court has not entered into the merits of the matter and the Tribunal shall consider the same afresh, without being influenced by the fact that this Court has quashed its earlier judgment and award. The appeal stands disposed of accordingly. R & P to be sent to the Tribunal forthwith. [Anil R. Dave, J.] [K. S. Jhaveri, J.] FA/1788/2003 17/17 JUDGMENT pravin/*