NATIONAL INSURANCE COMPANY LIMITED Vs. J YELLAPPA

JUDGEMENT

(1.) The reference, as visualized by the learned single Judge, is on the question that when the claimants filed two claim applications, one under section 163-A and another under section 166 of the Motor Vehicles Act, 1988 ('the Act' for brevity), whether the first application has to be treated as the only claim application or the second application has to be treated as the claim application.

(2.) The necessity to refer the question to a Division Bench has arisen in the circumstances hereinafter discussed: The accident occurred on 21.5.1995 at 11.15 a.m. The deceased J. Sivanna was the owner of a tractor-trailer bearing registration No. AP 22-T-1683. He was taking his tractor from Kurnool to Sunkesula for getting sand. While the tractor was going on the left side near Sunkesula Cross, a lorry bearing registration No. AAQ 662, coming from the opposite side in a rash and negligent manner, dashed against the tractor. As a result, the deceased received injuries and breathed his last while on his way to the hospital. The claimants resorted to two remedies one by filing O.P. No. 396 of 1995 on 16.9.1995 under section 163-A of the Act and the other by filing O.P. No. 499 of 1995 on 25.9.1995 under section 166 of the Act. Under the first application, claimants prayed for being compensated on structured formula basis and under the second application, the claimants sought a total compensation of Rs. 4,50,000 since, according to the petitioners, death resulted from the accident because of the rash and negligent act of the lorry driver. The applications were dealt with jointly by the Claims Tribunal. In the first application under section 163-A of the Act as per the structured formula, the claimants were held entitled to a sum of Rs. 2,10,500. In the second application, the compensation was worked out at Rs. 2,22,000. But, in view of the findings recorded by the Tribunal that the accident had occurred due to contributory negligence of both the drivers of the tractor and the lorry, compensation was reduced to half and the claimants were thus held entitled to compensation of Rs. 1,11,000. The Tribunal was in a fix as to which of the two compensations the claimants would be entitled and it came to the conclusion that when two alternative claims are made by way of abundant caution and when two views are possible, the view favourable to the victims of the accident must be preferred. Therefore, the Tribunal proceeded to award Rs. 2,10,500 as compensation as determined in the petition filed under section 163-A of the Act. Appeal was preferred against the said order and during appeal, the learned standing counsel for Oriental Insurance Co. Ltd. has relied on the decision of the Supreme Court in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala, 2001 ACJ 827 (SC), wherein it was held that the compensation payable under section 163-a of the Act as per structured formula basis is an alternative to determination of compensation payable in pursuance of any right or the principle of fault liability and the said provision would exclude the determination of compensation on the principle of fault liability. Therefore, the aforementioned point was referred to the Bench as a guide principle to the Tribunals in such like situation where two claim petitions are filed.

(3.) Under the Act, no provision is made as to what should be the guiding factor when two applications are filed, one under section 163-A and the other under section 166 of the Act. Though section 167 makes a reference to the option regarding claim for compensation as to when compensation can be claimed under the provisions of the Workmen's Compensation Act, 1923 (Act 8 of 1923), where death or bodily injury to any person gives rise to a claim for compensation under the said Act and also when a claim can be lodged before the Motor Accidents Claims Tribunal, making it clear that notwithstanding anything contained in Workmen's Compensation Act, the person who is entitled to compensation may, without prejudice to the provisions of Chapter X, claim such compensation under either of those Acts, but not under both. The Supreme Court in Hansrajbhai's case (supra), also held that no specific mention is made in the Act that the remedy provided under section 163-A of the Act is in addition or in the alternative to the determination of compensation on the basis of fault liability. Section 163-A was not there in the original Act of 1988 and was inserted by Act 54 of 1994 with effect from 14.11.1994. After referring to the legislative intent and the history, as well as the objects and reasons for inserting the provision, the Supreme Court came to the conclusion that the object underlying the amendment is to pay compensation without there being any long-drawn litigation on a predetermined formula which is known as structured formula basis, which itself is based on relevant criteria for determining compensation and the procedure of paying compensation after determining the fault is done away. Compensation amount is paid without pleading or proof of fault, on the principle of social justice as a social security measure because of ever increasing motor vehicles accidents in a fast moving society. Further, the law before insertion of section 163-A was giving limited benefit to the extent provided under section 140 for no fault liability and determination of compensation amount on fault liability was taking long time. That mischief is sought to be remedied by introducing section 163- A and the disease of delay is sought to be cured to a large extent by affording benefit to the victims on structured formula basis. Further, if the question of determining compensation under fault liability is kept alive it would result in additional litigation and complications in case the claimants fail to establish liability of the owner of the defaulting vehicles.