National Insurance Co. Ltd. vs Divakaran

K.M. Joseph, J.—The appellant is the second respondent in a petition filed u/s 163A of the Motor Vehicles Act (for short ''the Act''). Respondents 1 to 7 in the appeal are the claimants. The only question which is raised by the learned Counsel for the appellant is that the petition filed u/s 163A of the Act is not maintainable for the reason that the monthly wages of the deceased was Rs. 5,825/-. The Second Schedule prescribed u/s 163A clearly stipulates that it is intended only for those, whose annual income is not more than Rs. 40,000/-, it is submitted.

Heard the learned Counsel for the claimants as also the K.S.R.T.C.

The learned Counsel for the appellant would rely on the judgment of the Apex Court in Deepal Girishbhai Soni v. United India Insurance Co. Ltd. 2004 (2) KLT 395 (SC). Therein, a Bench of three learned Judges proceeded to consider the scheme of Section 163 of the Act. It was inter alia held in that judgment that:

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 Section 164-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 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.

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We, therefore, are of the opinion that Kodala (supra) has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163A, the annual income of Rs. 40,000/- per annum shall be treated as a cap. In our opinion, the proceeding u/s 163A being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs. 40,000/- can take the benefit thereof. All other claims are required to be determined in terms of Chap. XII of the Act.

A learned Single Judge of this Court has also taken the same view in the decision reported in National Insurance Co. Ltd. Vs. Jabbar, . The learned Counsel appearing on behalf of the claimants made a reference to para. 17 of the judgment in Sarala Verma v. Delhi Transport Corporation 2009 ACJ 121, where, no doubt, it was held that:

The Motor Vehicles Act, 1988 was amended by Act 54 of 1994, inter alia, inserting Section 163A and the Second Schedule with effect from 14/11/1994. Section 163A of the M.V. Act contains a special provision as to payment of compensation on structured formula basis, as indicated in the Second Schedule to the Act. The Second Schedule contains a Table prescribing the compensation to be awarded with reference to the age and income of the deceased. It specifies the amount of compensation to be awarded with reference to the annual income range of Rs. 3,000/- to Rs. 40,000/- It does not specify the quantum of compensation in case the annual income of the deceased is more than Rs. 40,000/- But it provides the multiplier to be applied with reference to the age of the deceased. The table starts with a multiplier of 15, goes upto 18, and then steadily comes down to 5. It also provides the standard deduction as one-third on account of personal living expenses of the deceased. Therefore, where the application is u/s 163A of the Act, it is possible to calculate the compensation on the structured formula basis, even where compensation is not specified with reference to the annual income of the deceased, or is more than Rs. 40,000/-, by applying the formula: (2/3 x A1 x M), that is two-thirds of the annual income multiplied by the multiplier applicable to the age of the deceased would be the compensation.

Section 163A was inserted by amendment in the year 1994. It dispensed with proof of negligence. Compensation is to be determined on a structured basis as prescribed under the Second Schedule. The Legislature intended a summary proceedings. However, the Legislature also intended that the benefit of the same should be limited to a class of claimants. The common characteristic of the class is determined with reference to the limit as to annual income, that is to say, only those persons who had an annual income upto Rs. 40,000/- could avail the benefit of this special provision. This purports to be the declaration of law made by the Apex Court, which we have already adverted to.

Take a case where a person is having an income of Rs. 1 crore. We find it difficult to imagine that such a person could claim the benefit of the ameliorative provision contained in Section 163A, which is brought on the Statute with the definite purpose of catering to the interest of a select class of claimants alone, the membership of which group is determined with reference to the income which they earn.

In view of the authoritative pronouncement of the Apex Court in the decision in Deepal Girishbhai Soni (supra), we would think that we must adhere to the same. No doubt, there is a passing reference in Sarala Verma''s case (supra) about Section 163A. In such circumstances, we follow the decision of the Apex Court as aforesaid and we uphold the contention of the appellant that the claim made by respondents 1 to 7 u/s 163A of the Act is not maintainable.

However, we make it clear that it shall be open for the claimants to seek amendment of the petition or file a fresh petition as they are advised. Subject to the same, this appeal is allowed and the impugned order is set aside.