National Insurance Company Ltd. vs Devaki Paswan and Others

Jyoti Saran, J.—Heard Mr. Ashok Priyadarshi, learned counsel appearing for the petitioner. Though notice has been validly served on the claimant opposite party Nos. 1 to 4 but they have not chosen to appear before this Court. Again though served and having appeared through counsel, there is no representation on behalf of the opposite party Nos. 5 and 6. This civil revision application is directed against the award passed by the learned District Judge-cum-Motor Vehicles Accident Claim Tribunal, Nalanda at Biharsharif dated 12.12.2007 in Claim Case No. 95 of 2004, whereby the learned tribunal while allowing the claim has quantified the compensation at Rs. 1,89,500/- payable to the claimants and issued directions for payment thereof.

Mr. Priyadarshi, learned counsel appearing for the petitioner-Insurance Company has questioned the award only to the extent that the deductions towards the personal expenses as found in the second schedule to the Motor Vehicles Act, 1988 (hereinafter referred to as ''the Act'') requiring a deduction by one-third on the computation of the compensation towards the personal expenses of the deceased has not been taken note of by the learned tribunal while making the award. Mr. Priyadarshi has candidly submitted that the petitioner does not question the award on any other aspect except that no deduction has been made towards persona) expenses of the deceased, had she been alive.

The facts of the case is in a very narrow compass. The wife of opposite party No. 1/mother of opposite party Nos. 2 to 4, was run over by a bus bearing registration No. BR-13P-2020 while she was crossing the road near Jagdamba Petrol Pump at Raitar in the district of Nalanda. The claimants which include the husband and sons of the deceased filed an application u/s 166 of the Act setting up a claim of rupees two lacs by way of compensation together with 9% interest. The age of the deceased was stated to be 60 years and who was stated to be engaged in the business of sale of milk and curd for which the claimants stated that she had an earning of Rs. 1,500/- per month. The insurance company who are petitioner before this Court contested the matter and adduced oral and documentary evidence which included investigation report proved by the solitary witness led by the Insurance company.

The learned tribunal having deliberated upon the rival contentions found the claim admissible and while accepting the Income of the deceased to be Rs. 1,500/- per month which comes to Rs. 18,000/- per annum, the tribunal by applying the multiplier of 10 computed the compensation amount at Rs. 1,80,000/-. In addition to the compensation, an amount of Rs. 5,000/- was awarded towards loss of consortium, Rs. 2,500/- towards the loss of estate and Rs. 2,000/- towards funeral expenses and thus the total compensation came to Rs. 1,89,500/-. The claimants were further found entitled to interest at the rate of 9% which was to be calculated from the date of filing of the application which was 17.12.2004 until the date of its recovery.

On query, Mr. Priyadarshi has informed that except for an amount of Rs. 50,000/- paid u/s 140 of the Act as also recorded in the award impugned, no other payment has been made, it is the contention of Mr. Priyadarshi with reference to a judgment of the Supreme Court reported in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, that the tribunal has erred in not deducting any amount towards personal expenses in terms of the statutory requirement provided under the Second Schedule to the Act and which deductions are necessarily to be made as upheld by the Supreme Court. Mr. Priyadarshi has relied upon the observations of the Supreme Court made in paragraphs 18 and 25 to 32 of the judgment rendered in the case of Sarla Verma (supra) to submit that the circumstances as set forth in the judgment would be relevant for the consideration on the issue.

From the pleadings and arguments advanced by learned counsel it is clear that the contest is limited to the non-deductions towards the personal living expenses of the deceased from the compensation amount in terms of the Second Schedule. Whether such deductions are mandatory in all forms of claims or is limited to claims arising u/s 163A of the Act is a matter which falls for consideration in the present case.

I have heard Mr. Priyadarshi, learned counsel appearing for the petitioner and have perused the award impugned in this application. The only issue which requires consideration is, whether or not the tribunal has erred in not making any deductions towards the personal living expenses of the deceased and whether the deductions being statutory in nature and the tribunal being a creature of the statute was legally bound by the statutory provisions providing for deductions as present in the note to the Second Schedule of the Act.

The claim application was filed by the claimants u/s 166 of the Act and not u/s 163A of the Act which makes reference to the Second Schedule. The award u/s 168 of the Act on an application filed u/s 166 of the Act is distinct from an Award u/s 140 or Section 163A of the Act and empowers the tribunal to determine the compensation which is just and proper and while doing so the tribunal shall take into consideration whether any amount has been paid u/s 140 of the Act. The claim u/s 166 of the Act does not require the claimants to provide any information regarding the expenses nor the provisions of Section 168 of the Act under which an award is pronounced on a claim filed u/s 166, makes any reference to the Second Schedule but then the tribunal and the courts have been referring to the Second Schedule by way of a guideline, for arriving at a just compensation.

Perusal of the award impugned demonstrates that the insurance company had neither questioned the earning of the deceased by leading any evidence nor had cross-examined the witnesses nor had raised the issue of dependency. That being the position the question posed before this Court is whether a deduction from the compensation is an inflexible rule or is a mere guideline, which is directory in nature insofar as the claim u/s 166 of the Act is concerned. There is no contest that such a deduction finds mention in the Second Schedule provided u/s 163A of the Act and although different opinions have been found in the judgments of this Court as well as the Supreme Court as to the quantum of deduction ranging in between one-third and one-tenth but then the opinion is upon judicial review of a finding on this aspect given by the tribunal. The issue yet remains that, is such deduction mandatory in a claim application filed u/s 166 of the Act and if not, whether there is any error in exercise of jurisdiction by the tribunal in not making such a deduction, i.e. towards the personal living expenses of the deceased. There is no contest, on the legal position that claim u/s 163A of the Act and u/s 166 of the Act are based on distinct principles. Whereas the claim u/s 163A of the Act is based on the principles of no-fault liability, a claim set up u/s 166 of the Act is based on the principle of fault liability and the claimant is required to establish by evidence that the accident in question was due to negligence of the insured. This aspect has been suitably dealt in a judgment of the Supreme Court reported in The Oriental Insurance Company Limited Vs. Meena Variyal and Others, and I am tempted to refer to paragraph 27 of the judgment in support thereof:--

We think that the taw laid down in Minu B. Mehta vs. Balkrishna Ramchandra Nayan was accepted by the legislature while enacting the Motor Vehicles Act, 1988 by introducing Section 163A of the Act providing for payment of compensation notwithstanding anything contained in the Act or in any other law for the time being in force that the owner of a 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 the motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be, and in a claim made under sub-section (1) of 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 concerned. Therefore, the victim of an accident or his dependants have an option either to proceed u/s 166 of the Act or u/s 163A of the Act. Once they approach the Tribunal u/s 166 of the Act, they have necessarily to take upon themselves the burden of establishing the negligence of the driver or owner of the vehicle concerned. But if they proceed u/s 163A of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependants to establish any negligence or default on the part of the owner of the vehicle or the driver of the vehicle.

The distinctive nature of the two claims is also discernible from the judgment relied upon by Mr. Priyadarshi rendered in the case of Sarla Verma (supra) and which is manifest from the observation made at paragraph 37 of the judgment which is being reproduced hereinbelow:--

The principles relating to determination of liability and quantum of compensation are different for claims made u/s 163A of the M.V. Act and claims u/s 166 of the M.V. Act. (See Oriental Insurance Co. Ltd. vs. Meena Variyal.) Section 163A and the Second Schedule in terms do not apply to determination of compensation in applications u/s 166. In Trilok Chandra this Court, after reiterating the principles stated in Susamma Thomas, however, held that the operative (maximum) multiplier, should be increased as 18 (instead of 16 indicated in Susamma Thomas), even in cases u/s 166 of the M.V. Act, by borrowing the principle underlying Section 163A and the Second Schedule.

The Supreme Court in the case of Sarla Verma (supra) has clearly held that the provisions of Section 163A of the Act and the Second Schedule do not apply to a determination of compensation in an application filed u/s 166 of the Act.

In view of the statutory provisions underlying section 166 of the Act which neither mandates any deduction towards personal living expenses of the deceased in the matter of computation of compensation nor makes any reference to the Second Schedule to the Act and in view of the opinion of the Supreme Court as expressed in the case of Meena Variyal (supra) and Sarla Verma (supra) it is more than manifest that a claimant is entitled to a compensation u/s 166 of the Act only and only in circumstances where he is able to establish the negligence of the driver or the owner of the vehicle and upon his failure to do so his claim shall be negated. There is no such risk involved in a claim u/s 163A of the Act where the claimant is awarded compensation on the structured formula without being required to establish any negligence. The distinctive nature of the two claims is manifest from a bare reading of the two statutory provisions. The legislative intent in so far as deductions towards personal living expenses are concerned, is limited to computations u/s 163A only. Even when the tribunal(s) while entertaining application u/s 166 of the Act have been allowing deductions towards personal living expenses of the deceased, the requirement apparently is not mandatory under the Act rather the same is being followed as a rule of practice. Having held as such this Court would find no error in exercise of jurisdiction by the tribunal in not making any deduction towards the personal living expenses of the deceased while considering the application u/s 166 of the Act. That the deductions towards personal living expenses of the deceased were being made from the compensation amount computed u/s 166 of the Act for arriving at a just figure by the Tribunal, in past cases by relying upon the Second Schedule is neither supported by statutory provisions, nor is warranted under the legislative intendment governing claims set up u/s 166 of the Act and thus an omission to do so by a claim tribunal as in the present case, cannot render the order either statutorily fallible or contrary to the settled legal principles or in violation of the statutory provisions or a jurisdictional abdication. For the reasons aforesaid, I am not persuaded to interfere with the order impugned and this civil revision application is dismissed but without any order as to costs.