National Insurance Co. Ltd. vs Kaku Devi and Others

G. P. Mittal, J.—The Appellant National Insurance Company Limited impugns the judgment dated 18.02.2009 passed by the Motor Accident Claims Tribunal (The Tribunal) whereby the compensation of Rs. 7,61,000/- was awarded for the death of Babu Lal, who was aged about 30 years on the date of the accident.

The Petition was filed u/s 163-A of the Motor Vehicles Act (the Act) for grant of compensation on the basis of structured formula as given in the second Schedule to the Act. The Tribunal relied on Ved Prakash and Ors. v. Gurmit Singh and Ors., 1992 ACJ 1147 and deducted one-third of the deceased''s income to assess the loss of dependency.

Learned counsel for the Appellant Insurance Company argues that where a petition is filed u/s 163-A of the Act, the Tribunal was bound to grant compensation in accordance with the structured formula including the amount under the head of non pecuniary damages. The Tribunal erred in taking the deceased''s income to be Rs. 41,640/- per annum while there is a limit of Rs. 40,000/- to a Claimant who approaches the Tribunal for grant of compensation u/s 163-A of the Act.

It is well settled that petitions filed u/s 163-A and 166 of the Act are two alternative remedies. If a person wants to claim compensation under structured formula without proving negligence on the part of the driver of the offending vehicle, there is a cap of Rs. 40,000/- for the annual income. If a person wants to claim a compensation of higher income he has to approach the Court u/s 166 of the Act.

In Deepal Girishbhai Soni and Others Vs. United India Insurance Co. Ltd., Baroda, , it was held as under:-

We, therefore, are of the opinion that The Oriental Insurance Co. Ltd. etc. Vs. Hansrajbhai V.Kodala and Others etc. etc., has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163-A, the annual income of Rs. 40,000/- per annual shall be treated as a cap. In our opinion, the proceeding u/s 163-A 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 Chapter XII of the Act.

The Respondents/Claimants themselves had given the deceased''s income to be Rs. 40,000/- per annum which is near the income of a unskilled worker on the basis of the minimum wages.

The deductions and non pecuniary damages were also required to be made in accordance with the second Schedule. The compensation on the basis of the structured formula is reassessed as Rs. 4,53,333/- (i.e. Rs. 40,000/- minus one-third x 17).

The Tribunal erred in granting a sum of Rs. 1,00,000/- towards loss of love and affection and Rs. 10,000/- towards loss of estate .

In addition, the Respondents Claimants were entitled to a sum of Rs. 5,000/- towards loss of consortium, Rs. 2,000/- towards funeral expenses and Rs. 2,500/- towards loss of estate u/s 163-A of the Act. The overall compensation comes to Rs. 4,62,833/-.

The amount of compensation shall carry interest @ 7.5% per annum from the date of filing of the petition till the date of deposit. 40% of the award amount shall be payable to Respondent No. 1 Smt. Kaku Devi. 8% to Respondents No. 2 to 6 and 10% each to Respondents No. 7 and 8 along with the proportionate interest.

The amount awarded shall be held in fixed deposits in UCO Bank, Delhi High Court Branch, New Delhi and shall be released as per the Tribunal''s order.

The excess amount deposited along with the interest earned, if any, during the pendency of the Appeal, as also the statutory amount of Rs. 25,000/- if deposited, shall be returned to the Appellant Insurance Company.

The Appeal is allowed in above terms.