United India Insurance Company Limited vs Laxmin Bai and Others

Hon''ble Mr. N.K. Agarwal, J.—This is insurer''s appeal against no fault award dated 3-2-2012 passed by the Additional Motor Accidents Claims Tribunal, Sarangarh in Claim Case No. 03/2011, awarding Rs. 50,000/- as no fault compensation to the respondents/claimants. Facts necessary for disposal of this appeal are as under:--

(i) The respondent Nos. 1 to 3/claimants have preferred an application for grant of compensation u/s 163-A of the Motor Vehicles Act, 1988 (for short ''the Act of 1988'') claiming Rs. 19,70,000/- as compensation for the death of her husband-Santosh Khunte in the motor accident on 2-4-2010.

(ii) Along with claim petition, the respondents have also filed an application u/s 140 of the Act of 1988.

(iii) The Tribunal, vide impugned order, awarded Rs. 50,000/- as no fault compensation u/s 140 of the Act of 1988 to the respondent Nos. 1 to 3/claimants against the appellant/Insurance Company. Hence, this appeal.

The core question, therefore, arises for determination of this Court is whether the claimants are entitled to claim compensation u/s 140 as well as Section 163-A of the Act ?

Sections 140, 163-A and 166 of the Act, read as under:--

Liability to pay compensation in certain cases on the principle of no fault.--

(1) Where death or permanent disablement of any person has resulted I from an accident arising out of the use of a motor vehicle or motor vehicles, the 1 owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, I jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.

(2) The amount of compensation, which shall be payable under subsection (1) in respect of the death of any person shall be a fixed sum of fifty thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twenty five thousand rupees.

(3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.

(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.

(5) Notwithstanding anything contained in sub-section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force :

Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this Section or u/s 163-A.

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 authorised 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.

Application for compensation.--

(1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of Section 165 may be made--

(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be :

Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.

(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed:

Provided that where no claim for compensation u/s 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.

(4) The Claims Tribunal shall treat any report of accidents forwarded to it, under sub-section (6) of Section 158 as an application for compensation under this Act.

The scheme envisaged u/s 163-A of the Act leaves no manner in doubt that by reason thereof the rights and obligations of the parties are to be determined finally. The amount of compensation payable u/s 163-A 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 Section 140. In terms of the said provisions, a distinct and specified class of citizens namely, persons whose income per annum is Rs. 40,000/- or less is covered thereunder, whereas Sections 140 and 166 cater to all sections of society.

Right to claim compensation u/s 140, having regard to the provisions contained in Section 141 is in addition to any other right to claim compensation on the principle of fault liability, i.e., u/s 166 of the Act. Section 163-A, on the other hand, nowhere provides that the payment of compensation of no-fault liability in terms of the structured formula is in addition to the liability to pay compensation in accordance with the right to get compensation on the principle of fault liability.

The remedy for payment of compensation both under Sections 163-A and 166 of the Act being final and independent of each other as statutorily provided, a claimant cannot pursue his remedies thereunder simultaneously. One, thus, must opt/elect to go either for a proceeding u/s 163-A or u/s 166 of the Act, but not under both. [Please see : Deepal Girishbhai Soni and Others Vs. United India Insurance Co. Ltd., Baroda,

Section 163-B of the Act reads as under:--

163-B. Option to file claim in certain cases.--

Where a person is entitled to claim compensation u/s 140 and Section 163-A, he shall file the claim under either of the said sections and not under both.

Section 163-B provides for an option to a claimant to either go for a claim u/s 140 or Section 163-A of the Act, as the case may be. But, he is not entitled to claim compensation under both the provisions.

Therefore, when the claimants have opted to claim compensation u/s 163-A of the Act in terms of structured formula as provided under Second Schedule annexed to Section 163-A of the Act, then, they are not entitled to claim compensation u/s 166, and consequently, u/s 140 of the Act.

For the reasons mentioned herein above, the Tribunal was not correct in awarding compensation u/s 140 of the Act in a case, where claimants have opted to claim compensation u/s 163-A of the Act.

In the result, the appeal is allowed. The award impugned is set aside. However, the amount deposited by the appellant/Insurance Company shall not be required to be refunded to it by the Tribunal and the Tribunal shall pass appropriate order with regard to above amount while passing final award.

Record of the Tribunal be sent back forthwith. Parties are directed to appear before the concerned Tribunal on 8th October, 2012. No order as to costs.