National Insurance Co. Ltd. vs Suren Ch. Ray And 2 Ors

Heard Mr. R. Goswami, learned counsel for the appellant and Mr. M. Khan, learned counsel for respondent nos. 1-3.

This appeal under Section 173, Motor Vehicles Act, 1988 (the Act, for short) is directed against the judgment and award dated 31.03.2016 passed

by the learned Member, Motor Accident Claims Tribunal, Bongaigaon (the Tribunal, for short) in MAC Case no. 2/2014. By the said judgment and

award, the Tribunal has awarded an amount of Rs. 6,35,000/- as compensation to the claimants along with interest @ 6% per annum from the date of

filing of the claim application i.e. 04.01.2014 till realization.

Assailing the said judgment and award, the learned counsel for the appellant has submitted that the respondent no. 1 â€" claimant no. 1 was the

husband of the deceased and he was also the rider of the vehicle, a motor cycle bearing registration no. AS-19E/6329 (the subject-vehicle, for short),

when it met with an accident due to which the deceased, his wife sustained the injuries, resulting ultimately into her death and at the same time, it was

due to an act on his part the accident in question had happened. It is submitted by him that one who is at fault, cannot receive compensation which is

otherwise payable only to the legal representatives of the deceased. It is submitted by him that when the claim application was filed under Section

163A of the Act, the Tribunal could not have assessed the compensation in the manner contemplated under Section 166 of the Act. He further

submits that the Tribunal had erred in granting compensation under the heads of loss of consortium and loss of care and guidance for the minor

children. He submits that in such view of the matter, the impugned judgment and award is liable to be interfered with.

The learned counsel appearing for the claimants-respondent nos. 1-3 has submitted that the claim application was made on behalf of three

claimants. Apart from the husband of the deceased, who at the same time was the insured-owner of the subject-vehicle involved in the accident as

well as the rider of the subject-vehicle, the other two claimants are the minor children of the deceased. Even it is held that the husband of the

deceased, because of his multiple roles, indicated above, is not entitled to receive compensation, the other two legal representatives of the deceased

i.e. the minor children of the deceased cannot be deprived of the due compensation under the Act, a beneficial legislation. As the claim application

was made under Section 163A of the Act, the question of rash and negligent driving on the part of the rider of the motor cycle cannot be taken into

consideration as the same is only applicable in respect of a claim application filed under Section 166 of the Act. It is further submitted by him that even

if the respondent no. 1 as claimant no. 1 is held to be not entitled to receive compensation, the same will not have much bearing in view of the

structured formula envisaged under Section 163A of the Act. He fairly submits that the compensation assessed by the Tribunal may not be correct,

and the same may require reconsideration. But such reconsideration cannot result in complete denial of compensation.

I have considered the submissions of the learned counsel for the parties. I have also perused the materials available in the case record of MAC

Case no. 2/2014, in original.

In order to appreciate the issue involved in the case, it is apt to refer to the background facts, in brief, as follows :- the claim application in MAC

Case no. 2/2014 was preferred under Section 163A of the Act by three claimants, who are the husband, the minor daughter and the minor son of one

Deepamoni Ray @ Dipamoni Ray who died of injuries sustained in an accident that occurred on 27.06.2012 involving the subject-vehicle. On that day

at about 3-30 p.m., the deceased as a pillion rider of the subject-vehicle, with her husband as the rider i.e. the claimant no. 1, was proceeding from

Bakrapara towards Barpara. When it reached at Chitkagaon-Nayapara near Lakshimi Mandir on PWD Road under Bongaigaon Police Station,

District â€" Bongaigaon, the same met with an accident when all of a sudden, cows came running across the road by the front side of the subject-

vehicle. As a result, the rider lost control of the subject-vehicle and hit the cows for which the deceased was thrown away from the motor cycle. Due

to such impact, she sustained serious head injury. The deceased was immediately taken to and admitted at Swagat Hospital at Guwahati for treatment

and thereafter, she was referred for better treatment to Downtown Hospital, Guwahati where she died at about 4-10 a.m. on the next day,

28.06.2012. The post-mortem examination of the dead body was conducted at the Guwahati Medical College & Hospital (GMCH), Guwahati. With

regard to the said accident, a general diary entry being Bongaigaon Police Station G.D. Entry no. 807 dated 17.07.2012 was registered.

On registration of MAC Case no. 2/2014, notice was issued to the appellant-insurer as the sole opposite party. The insured-owner of the subject-

vehicle was also the claimant no. 1 in the claim application and he was the rider of the subject-vehicle too. On receipt of notice, the appellant as the

insurer of the subject-vehicle, appeared and contested the claim application by filing written statement by taking all the available pleas, thereby, putting

the claimants to the strict proof to prove their case.

Upon consideration of the pleadings of the parties, the Tribunal framed the following issues :

i) Whether motor vehicle accident took place on 27.06.2012 as alleged and, if so, whether vehicle no. AS-19/E-6329 was involved in the said

accident?

ii) Whether the accident in question took place due to rash and negligent driving of the driver of the said vehicle?

iii) Whether the death of Deepamoni Ray was caused in the accident in question due to use of the vehicle no. AS-13/E-6329?

iv) Whether the claimant is entitled to get compensation for the death of deceased Deepamoni Ray, if so, to what extent and by whom it should be

paid?

In the proceeding before the Tribunal, the claimant no. 1 examined himself as a witness, who was also cross-examined by the appellant-insured.

The appellant-insured did not adduce any evidence. The claimant’s side exhibited 8 nos. of documents including Ext. 1 â€" Extract copy of G.D.

Entry; Ext. 2 â€" copy of Police Report; Ext. 3 â€" Post-Mortem Examination Report of the deceased; Ext. 4 â€" Death Certificate of the deceased;

and Ext. 5 â€" Discharge Certificate. Vide Ext. 6 â€" 8, the claimants’ side submitted money receipts amounting to Rs. 15,857/- as regards the

expenses borne by them for the treatment of the deceased.

Upon appreciation of the evidence brought on record, the Tribunal had decided all the issues in the affirmative in favour of the claimants. The

Tribunal reached a finding that the accident involving the subject-vehicle took place on 27.06.2012 and the deceased died of injuries sustained in the

said accident. While assessing the calculation, the Tribunal took note of the fact that the deceased had left behind two minor children, aged about 13

years and 5 years respectively, besides her husband. In the Post-Mortem Examination Report (Ext. 3), the age of the deceased was mentioned as 34

years whereas in the claim application, the age of the deceased was mentioned as 39 years. The Tribunal adopted a multiplier ‘16’ for

calculating loss of dependency, on the basis of the age recorded in the Post-Mortem Examination Report (Ext.-3). As the deceased was found to be a

housewife, the income of the deceased was taken as Rs. 3,000/- per annum for her role as a home maker. Taking into consideration the fact that the

deceased had left behind her husband and two minor children, one-third of the income of the deceased was deducted towards her living and personal

expenses. On that basis, the annual income of the deceased was assessed at Rs. 36,000/-(Rs. 3,000 X 12) and after deduction of one-third of the

income of the deceased, the annual dependancy was calculated at Rs. 24,000/- (=Rs. 36,000/- â€" Rs. 12,000/-) and accordingly, the total loss of

dependency was calculated at Rs. 3,84,000/- (=Rs. 24,000 X 16). An amount of Rs. 1,00,000/- was added towards the head of loss of consortium and

another Rs. 1,00,000/- was added for loss of care and guidance for the minor children. Additionally, Rs. 26,000/- was taken as expenses incurred

towards medical treatment and Rs. 25,000/- as funeral expenses. The Tribunal observed that the policy in question was a package policy covering

liability of owner-driver, unnamed passenger and pillion rider in view of the payment of additional premium on those counts.

Section 163A of the Act was originally inserted to provide for a pre-determined formula for payment of compensation to victims of motor

vehicular accidents on the basis of age/income of the deceased or the person suffering permanent disablement. It contains a non obstante clause and

the owner of the motor vehicle involved in the accident or the authorised insurer is liable to pay compensation in the case of death or permanent

disablement due to accident arising out of the use of the motor vehicle, in terms of the Second Schedule, to the legal representatives of the victim or

the victim. In a claim application filed under Section 163A of the Act, 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. The comprehensive scheme has been formulated for the purpose of grant of compensation of adequate

compensation without the burden to prove that the accident occurred due to negligence, etc. on the part of the driver of the motor vehicle or any other

fault arising out of the motor vehicle involved in the accident. On the other hand, if the claim application is filed under Section 166 of the Act the

burden of proof remains on the claimant to prove that the accident had occurred due to an act of rash and negligent driving of the motor vehicle. In

case of a claim application preferred under Section 166 of the Act, the Tribunal is required to assess just compensation. Thus, the victim of an

accident has or his dependents have an option either to proceed under Section 166 of the Act or under Section 163A of the Act.

In so far as the position of law in respect of a pillion rider in a two wheeler is concerned, the Supreme Court in Oriental Insurance Company

Limited vs. Sudhakaran K.V. and others, (2008) 7 SCC 428 after discussing a number of earlier decisions, has observed as follows : -

The law which emerges from the said decisions, is : (i) the liability of the insurance company in a case of this nature is not extended to a pillion

rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk; (ii) the legal obligation arising under Section 147 of

the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated

as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another

vehicle.

From the above observations, it is evident that in case the two wheeler is covered by an Act Policy, the pillion rider is not entitled to receive

compensation in terms of Section 147 of the Act in the event of rash and negligent act of driving on the part of the rider of the two wheeler as such a

pillion rider does not come within the scope and ambit of third party.

The matter of comprehensive policy / package policy has been elaborately discussed in the decision of the Supreme Court in National Insurance

Co. Ltd. vs. Balakrishnan and another, reported in (2013) 1 SCC 731. It is observed therein that the comprehensive policy / package policy covers the

liability of the insured for payment of compensation to the occupant in a motor vehicle. The Supreme Court has taken note of the clarification provided

by the Insurance Regulatory and Development Authority (IRDA) as regards a comprehensive policy / package policy wherein it is held that the

insured liability in respect of occupants carried in a private vehicle or pillion rider carried on a two wheeler is covered under the standard motor

package policy, which is also inter-changeably referred as comprehensive policy / package policy. It has been observed as under :-

In view of the aforesaid factual position, there is no scintilla of doubt that a ""comprehensive/package policy"" would cover the liability of the insurer

for payment of compensation for the occupant in a car. There is no cavil that an ""Act Policy"" stands on a different footing from a

comprehensive/package policy"". As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has

commanded the insurance companies stating that a ""comprehensive/package policy"" covers the liability, there cannot be any dispute in that regard. We

may hasten to clarify that the earlier pronouncements were rendered in respect of the ""Act Policy"" which admittedly cannot cover a third party risk of

an occupant in a car. But, if the policy is a ""comprehensive/package policy"", the liability would be covered. These aspects were not noticed in the case

of Bhagyalakshmi vs. United India Insurance Co. Ltd., (2009) 7 SCC 14 8and, therefore, the matter was referred to a larger Bench. We are disposed

to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified

the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same.

In view of the aforesaid legal position, the question that emerges for consideration is : whether in the case at hand, the policy is an ""Act Policy"" or

comprehensive/package policy""?. There has been no discussion either by the Tribunal or the High Court in this regard. True it is, before us, Annexure

P-1 has been filed which is a policy issued by the insurer. It only mentions the policy to be a ""comprehensive policy"" but we are inclined to think that

there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a ""package policy"" to cover the liability of an

occupant in a car.

Therefore in a case of death, the legal representatives of a pillion rider carried on a two-wheeler like in the instant case i.e. a motor cycle, if the

same is covered by a valid package policy, are entitled to receive compensation either under Section 166 or Section 163A of the Act as per the terms

of the policy. The Tribunal has already observed that the policy in question was a package policy covering liability of owner-driver, unnamed

passenger and pillion rider in view of the payment of additional premium on those counts. Thus, for the case in hand, there is no dispute to the fact that

the policy issued in the instant case was a package policy and the same was valid at the time of occurrence of the accident. No dispute has been

raised in this regard on behalf of the appellant.

The question that could arise is whether due to the act of the claimant no. 1, who is also the insured-owner; the husband of the deceased and the

rider of the subject-vehicle, the matter of grant of compensation will have any effect. In an application under Section 163A of the Act, the question of

finding fault does not arise as the same is based on the principle of no fault. Irrespective of the fact whether the accident had occurred for rash and

negligent driving on the part of the rider of the two wheeler or otherwise a victim pillion rider in case of permanent disablement or the legal

representatives of the pillion rider in case of death in an accident involving a two wheeler, if covered under a valid package policy of insurance, is/are

entitled to receive compensation. The appellant has not disputed that the motor vehicular accident took place on 27.06.2012 with the involvement of

the subject-vehicle and the death of the deceased had occurred as a result of the injuries sustained in the said accident. Nothing has been urged on

behalf of the appellant-insurer to the effect that the compensation amount has to be limited to a particular amount in terms of the coverage under the

package policy.

In view of specific mandate contained in Section 163A of the Act for grant of the compensation as per the structured formula in terms of the

Second Schedule to the Act, the Tribunal, in my considered opinion, has erred in assessing the compensation in terms of Section 166 of the Act when

the claim application was preferred under Section 163A of the Act.

It is found that after delivery of the impugned judgment and award dated 31.03.2016 of the Tribunal and during the pendency of the appeal, the

Central Government has amended the Second Schedule in exercise of the power conferred by sub-section (3) of Section 163A of the Act, which has

replaced the earlier Second Schedule to the Act. The amended Second Schedule has come into effect from 22.05.2018. The amended Second

Schedule has provided for a lumpsum amount of Rs. 5,00,000/- (Rupees five lakhs) as compensation in case of death. The amended Second Schedule

has not provided for any other formula for calculation or any slab of income for claiming compensation under Section 163A of the Act. In the case in

hand, even if it is held that the claimant no. 1 is not entitled to receive compensation, the other two claimants cannot be denied of the compensation as

the Act is a beneficial and social security legislation. Further, such disentitlement of the claimant no. 1 compensation will not bring any change in the

amount of compensation.

A question that naturally arises is whether in the case in hand, the compensation is required to be assessed in terms of the Second Schedule that

existed on the date of filing of the claim application or the amended Second Schedule will become applicable. The question has been decided by a co-

ordinate bench of this Court in National Insurance Company Limited vs. Bijaya Bhuyan and others, reported in (2018) 5 GLT 72. Taking into view the

basic object of introducing Section 163A and also amendment of the Second Schedule which is held to be a procedural matter and the social welfare

object of the legislation itself as well as the context in which the amendment has occurred, the Court has observed that the amended Second Schedule

has to be taken into account in the pending proceeding under Section 163A for deciding the quantum of compensation. Since the appeal is a

continuation of the proceeding, the Court has held that the amended Second Schedule has to be taken into account in case of a pending appeal also in

deciding the claim under Section 163A of the Act.

It has come to the notice that Chapter XI containing Sections 145 to 163, 163A, 163B and 164 of the Motor Vehicles Act, 1988 has, in the

meantime, been substituted by the Motor Vehicles Act (Amendment) Act, 2019 (32 of 2019) w.e.f. 01.09.2019. Section 164 has substituted Section

163A which was inserted by Act 54 of 1994 in the Motor Vehicles Act. The Second Schedule which had come into effect from 22.05.2018, has also

been omitted by Act 32 of 2019. At present, Section 164 of the Motor Vehicles Act, 1988, as amended, reads as under:

Payment of compensation in case of death of grevious hurt, etc.

(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 authorized insurer shall be liable to pay in the case of death or grievous hurt due to any accident arising out of the use of

motor vehicle, a compensation, of a sum of five lakh rupees in case of death or of tow and a half lakh rupees in case of grievous hurt to the legal heirs

or the victim, as the case may be.

(2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or grievous hurt 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 of the vehicle or of the

vehicle concerned or of any other person.

(3) Where, in respect of death or grievous hurt due to an accident arising out of the use of motor vehicle, compensation has been paid under any other

law for the time being in force, such amount of compensation shall be reduced from the amount of compensation payable under this section.

20) Despite substitution of Section 163A with the present Section 164 and the omission of the Second Schedule, the interpretation given by this Court

in National Insurance Company Limited vs. Bijaya Bhuyan and others (supra) that the provision contained therein is a procedural one is found

applicable to the case in hand. It may be iterated that the claim application was filed under Section 163A of the Act and the compensation awarded by

the Tribunal was not determined in terms of the Second Schedule. Thus, in the light the above discussion and in the fact situation obtaining in the

present case, the amount of compensation needs to be modified in terms of present Section 164 to the amended Act which has provided for an amount

of compensation of Rs. 5,00,000/- (Rupees five lakhs) in case of death. Under a policy of insurance for motor vehicle, it is the owner-insured who is

indemnified by the insurer as per the terms and conditions laid down in the policy. The liability under the then Section 163A or under the present

Section 164 of the Act is on the owner-insured of the motor vehicle who is ordinarily indemnified by the insurer as per the contract of insurance. Thus,

in the case in hand, the claimant no. 1 who was also the owner-insured, cannot be a recipient of compensation. Consequently, the direction contained

in impugned judgment and award dated 31.03.2016 regarding payment of compensation to the claimants is required to be modified. Thus, in the above

facts and circumstance obtaining in the case in hand, the appeal is allowed in part and the amount of compensation is accordingly modified by directing

the insurer to pay an amount of Rs. 5,00,000/- (Rupees five lakhs) to the claimant no. 2 and the claimant no. 3 along with interest @ 6% per annum

from the date of filing of the claim application i.e. 04.01.2014 till the date of deposit.

By order dated 08.04.2019, this Court directed the appellant-insurer to deposit 50% of the amount awarded by the Tribunal before the Registry

within a period of 6 (six) weeks therefrom. It is submitted that the said amount has been deposited by the appellant-insurer in the meantime with the

Registry. The appellant-insurer shall, therefore, deposit the balance amount of compensation, indicated above, along with the interest thereon within a

period of 4 (four) months from today. On the date of institution of the claim application i.e. 04.01.2014, the claimant no. 2 and the claimant no. 3 were

minors, aged about 13 years and 5 years respectively. While the claimant no. 2 has attained majority in the meantime, the claimant no. 3 is still a

minor. It is ordered that an amount of Rs. 2,00,000/- shall be kept in fixed deposit in a nationalized bank in the name of the claimant no. 2 for a period

of 5 (five) years. The balance amount shall be released in favour of the claimant no. 2. After such disbursal, the appellant-insurer shall be allowed to

withdraw the statutory deposit made in connection with the instant appeal.

With the observations made and directions given above, this appeal is partly allowed.

No order as to costs.