Case: Eshwarappa @ Maheshwarappa &amp;Anr Vs. C.S. Gurushanthappa

1. A certain Basavaraj was the driver of a privately owned car. In the night of October 28, 1992 he took out the car for a joyride and along with five persons, who were his neighbours, proceeded for the nearby Anjaneya temple for offering pooja. On way to the temple the car met with a fatal accident in which Basavaraj and four other occupants of the car died; the fifth passenger sustained injuries but escaped death. One of the persons dying in that motor accident was Nagaraj, whose parents are the appellants before this Court.2. The heirs and legal representatives of the deceased driver, Basavaraj filed a claim for compensation under the Workmens Compensation Act, 1923. They got nothing. The Commissioner under the Workmens Compensation Act found and held that the accident did not take place in course of employment and rejected the claim for compensation.3. The heirs of the four occupants of the car, dying in the accident (including the present appellants) and the fifth passenger suffering injuries in the accident sought compensation before the Motor Accidents Claims Tribunal. Their claims proved to be equally barren.4. The appellants took the matter in appeal before the High Court where they were equally unsuccessful. They are now in appeal before this Court by special leave.

Court's reasoning:
12. Coming back to the order passed by the Tribunal, we are completely unable to appreciate the reasons assigned for denying the appellants the `no fault compensation as provided under section 140 of the Act. The Tribunal was gravely in error in taking the view that a claim for compensation under section 140 of the Act can succeed only in case it is raised at the initial stage of the proceedings and further that the claim must fail if the accident had taken place by using the car without the consent or knowledge of its owner. Section 140 is the first section of chapter X of the Act. It is a small chapter consisting of only five sections (from 140 to 144) and has the marginal heading "Liability without Fault in Certaina plain reading of the provisions it is evident that all that is required to attract the liability under section 140 is an accident arising out of the use of a motor vehicle(s) leading to the death or permanent disablement of any person.(2) provides for a fixed amount as compensation. [In case of death, currently it is rupees fifty thousand (Rs.50,000.00) only; at the time the accident from which the appeal arises took place the fixed amount in case of death was rupees twenty five thousand (Rs.25,000.00) only]. Subsection (3) provides that even though the death or permanent disablement resulting from the motor accident might not be due to any wrongful act, neglect or default of the owner of the vehicle, it would have no effect either on his liability or on the amount of compensation.(4) conversely provides that the motor accident resulting in the death or permanent disablement might be entirely due to the wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim is made but that too would have no effect either on the right to receive the compensation or the amount of compensation.(5) which begins with a non obstante clause makes it further clear that the liability under section 140 is independent of the liability of the owner of the vehicle to pay compensation under any other law for the time being in force. The proviso to(5), of course, provides that the amount of compensation under any other law would be reduced from the amount of compensation payable under section 140 or under section 163A of the(1) of section 141 makes the compensation under section 140 independent of any claim of compensation based on the principle of fault under any other provision of the Motor Vehicles Act or under any other law but subject to any claim of compensation under section 163A of the(2) and (3) further provide that even while claiming compensation under the principle of fault (under section 166) one may claim no fault compensation under section 140 and in that case the claim of no fault compensation shall be disposed of in the first place and the amount of compensation paid under section 140 would be later adjusted if the amount payable as compensation on the principle of fault is higher than it.Seen in isolation the above provisions might appear harsh, unreasonable and arbitrary in as much as these create the liability of the vehicle(s) owner(s) even where the accident did not take place due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned but entirely due to the wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made but the above provisions must be seen along with certain provisions of Chapter XI. Section 146 forbids the use of the vehicle in a public place unless there is in force, in relation to the use of the vehicle, a policy of insurance complying with the provisions of that chapter. Section 147 contains the provisions that are commonly referred to as `Act only insurance. The provisions of sections 146 and 147 are meant to create the large pool of money for making payments of no fault compensation. Thus the liability arising from section 140 would almost invariably be passed on to the insurer to be paid off from the vast fund created by virtue of sections 146 and 147 of the Act unless the owner of the vehicle causing accident is guilty of some flagrant violation of the law.16. Seen thus, the provisions of chapter X together with sections 146 and 147 would appear to be in furtherance of the public policy that in case of death or permanent disablement of any person resulting from a motor accident a minimum amount must be paid to the injured or the heirs of the deceased, as the case may be, without any questions being asked and independently of the compensation on the principle of fault.17. The provisions of section 140 are indeed intended to provide immediate succour to the injured or the heirs and legal representatives of the deceased. Hence, normally a claim under section 140 is made at the threshold of the proceeding and the payment of compensation under section 140 is directed to be made by an interim award of the Tribunal which may be adjusted if in the final award the claimants are held entitled to any larger amounts. But that does not mean, that in case a claim under section 140 was not made at the beginning of the proceedings due to the ignorance of the claimant or no direction to make payment of the compensation under section 140 was issued due to theof the Tribunal, the door would be permanently closed. Such a view would be contrary to the legal provisions and would be opposed to the public policy.