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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.2499­2500 OF 2018 (Arising out of SLP (Civil) Nos.28141­42 of 2017)

Mangla Ram  …Appellant(s)  

:Versus:

The Oriental Insurance Co. Ltd. & Ors.         ….Respondent(s)

J U D G M E N T

A.M. Khanwilkar, J.

1. In the present appeals, the appellant/claimant has

challenged the judgment dated 5th January, 2017 passed by

the High Court of Judicature for Rajasthan, Jodhpur Bench,

in SB Civil Miscellaneous Appeal Nos.273 of 2001 and 290

of 2001, which set aside the award of the Motor Accident

Claims Tribunal [‘the Tribunal’] granting compensation to

the  appellant  at the instance  of respondent  Nos.2  and 3

(driver and owner of the offending vehicle, respectively) as

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also negatived the appellant’s prayer for enhancement of the

compensation amount.  

2. The appellant alleges that on or about 10th  February,

1990, while he was riding his motorcycle, bearing No. RJ­

19­6636, he was hit by jeep No. RST­4701, owned by

respondent No.3 and purportedly being driven by

respondent No.2 at the time, resulting in serious   injuries

and ultimately, amputation of his right leg above the knee.

The appellant subsequently filed an application before the

Tribunal, Jodhpur, seeking compensation against the

respondents, including the respondent No.1 insurance

company. He claimed 40% permanent disability and 100%

functional disability, contending that his primary livelihood

of driving heavy transport vehicles (HTVs) had been

curtailed on account of his amputation, and sought

compensation to the tune of Rs. 11,17,000/­. Respondent

Nos.2 and 3 denied the accident and the involvement of the

jeep in question. The respondent No.1 insurance company

argued that the cover note purportedly taken for the jeep in

question  was fraudulent.  The  cover  note  had  been  given

unauthorisedly by its then Development Officer, no

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premium  had been deposited  with the company and  no

policy had been issued in that regard. Thus, the jeep was

not validly insured.

3. In its judgment dated 22nd  November, 2000, the

Tribunal discussed the evidence on record  in detail.  PW2

(Chainaram) and PW4 (Thanaram), who had taken the

appellant to  the hospital  after the accident,  deposed that

after the accident, the jeep which caused the accident

stopped ahead and they noted the jeep number in the

backlight and further, they heard the driver’s name being

called out by the passengers in the jeep. The Tribunal,

however, found that their version of having noted the jeep

number and heard the driver’s name seemed to be

unnatural.  The Tribunal also discarded the version of the

appellant (PW1) about the details of the vehicle as being not

reliable. The Tribunal then noted the evidence of the defence

witnesses, that the jeep in question was nowhere near the

area of the accident.   The Tribunal,  however, opined that

the accident had been caused by the jeep in question, based

on the investigation report filed by  the  police  mentioning

that when they seized the jeep after one  month of the

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accident, the jeep bore a scratch on the mudguard of the

tyre on the upper footboard on the left side. The Tribunal

also relied on the charge sheet (Exh.1) filed by the police,

wherein it has been stated that the accident was caused by

the jeep in question on the basis of statements made by the

appellant and other witnesses (Roopram, Thanaram and

Pratap Singh). The Tribunal held that there was no reason

to disagree with the conclusion of the police. In short, the

Tribunal disbelieved the evidence of the appellant’s

witnesses, regarding the commission of accident by the jeep

in question, as unreliable but nevertheless relied upon the

investigation report  as  also the  charge  sheet filed  by  the

police in that regard  which  was  supported  by two  other

witnesses who did not depose before the Tribunal.

4. The Tribunal then referred to the site  map of the

accident (Exh.2), to conclude that the appellant was riding

his motorcycle one foot on wrong side from the middle of the

road and hence, had contributed to the accident by being

negligent. The Tribunal also accepted the plea of the

respondent No.1 insurance company that the cover note  as

regard the offending jeep was fraudulent. The Tribunal

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accepted the evidence of witness DW4, the branch manager

of the respondent No.1 insurance company, that the

company did not receive any premium under the relevant

cover note and had not issued any insurance policy in that

regard.  DW 4  had  deposed that the cover  note  was  not

deposited with the company. Further, the concerned

development officer, whose signature was on the cover note,

had been removed from the respondent No.1 insurance

company  but  had in  his possession certain cover  notes,

including the relevant cover note. DW  4 stated that no

insurance policy was issued on the basis of the said cover

note. The Tribunal then found that it was possible that the

Development Officer had backdated the cover note and had

not deposited the money for issuing a policy with the

company. The Tribunal thus held that the vehicle was not

insured by the company and, therefore, the company was

not liable.

5. Based on the aforesaid observations, the Tribunal took

into account the injuries caused to the appellant and

calculated compensation of Rs. 1,27,000/­ but, owing to the

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purported negligence of the appellant, reduced the amount

by half and finally awarded a sum of Rs. 63,500/­ to the

appellant payable by the respondent Nos. 2 and 3 jointly.  

6. The appellant filed an appeal (SB Civil  Misc.  Appeal

No.273 of 2001) for enhancement whereas respondent Nos.

2 and 3 (driver and owner of the jeep, respectively)

challenged the Tribunal’s award (by way of SB Civil Misc.

Appeal No.290 of 2001), before the High Court of Rajasthan,

Jodhpur Bench. In its judgment dated 5th  January, 2017,

the High Court concluded that the Tribunal’s findings were

incorrect, unconvincing and not supported by evidence.

Further, the Tribunal’s reasoning, that it did not believe the

oral evidence of the parties but had nevertheless answered

the issue in favour of the claimant solely on the basis of the

police report, on the ground that there was no reason not to

believe the conclusion arrived at by the police, was flawed

and incorrect. The High Court noted that the Tribunal was

not convinced about the involvement of the vehicle, despite

which it held that involvement was proved. Furthermore, no

finding regarding negligence of the driver of the  jeep had

been recorded by the Tribunal rather it found that the

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appellant  was negligent  while riding his  motorcycle. The

High Court took the view that mere filing of a charge­sheet,

without any finding of conviction, was insufficient to prove

negligence  by  respondent  Nos.  2  and 3.  Additionally, the

High Court also held that the statement of the appellant,

wherein he claimed that the bumper of the jeep had hit the

rear of his motorcycle, was contradicted by the investigation

report of the jeep which recorded that it did not bear out

that the jeep had been involved in an accident. The High

Court, therefore,  was  pleased to set  aside the  Tribunal’s

award and allowed the appeal filed by the driver and owner

of the jeep (respondent  Nos. 2 and  3 respectively)  while

dismissing the appeal filed by the appellant.

7. We have heard Mr. Rishabh Sancheti, learned counsel

appearing for the appellant. He contends that the evidence

on record clearly indicates that the accident was caused due

to the rash and negligent driving of Jeep No. RST­4701 by

respondent  No.2,  which  fact  has  been established by  the

eye­witnesses.  The respondent  No.2 failed to  adduce  any

cogent evidence in his defence. He also contends that the

vehicle in question was seized by the police but there was a

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strong possibility that it had been repaired in the

interregnum creating a discrepancy between the accounts of

the witnesses who were present at the time of the accident

and the actual condition of the vehicle at the time of seizure.

Further, the Tribunal’s reliance on the site map to infer that

the appellant was riding his motorcycle on the wrong side of

the road is erroneous as the site map merely reflected the

position of the motorcycle after the accident and not at the

time of the accident. The High Court, contends the learned

counsel, erroneously decided the matter on the principle of

‘beyond reasonable doubt’  whereas proceedings under the

Motor Vehicles Act were required to be decided on the basis

of  preponderance of  probabilities  and  thus, the degree of

proof required was much less.  Additionally, the proceedings

under the Motor Vehicles Act were not adversarial and in

that regard, the evidence on record was sufficient to reach

at the conclusion that respondent No.2’s negligence led to

the accident and that the appellant  was entitled to full

compensation. Finally, the appellant suffered 40%

permanent disability and 100% functional disability and on

that basis, the Tribunal erred by not granting higher

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compensation to the appellant.  He also contends that the

courts below erred in absolving the respondent No.1

insurance  company from  its liability.  The following  cases

were cited by the learned counsel in support of the

submissions:  Kaushnuma Begum & Ors. vs.  The  New

India Assurance Co. Ltd. and Ors.1,  Dulcina Fernandes

and Ors. vs. Joaquim Xavier Cruz and Anr.2, Bimla Devi

and Ors. vs. Himachal Road Transport Corporation and

Ors.3,  Ravi Kapur v State of Rajasthan4,  National

Insurance Co. Ltd. v Pranay Sethi  & Ors.5,  Kishan

Gopal & Anr. v Lala & Ors.6,  Harbans Lal v Harvinder

Pal7,  New India Assurance Co. Ltd. v Pazhaniammal &

Ors.8,  United India Insurance Co. Ltd. v Deepak Goel9,

Manisha v  Umakant  Marotrao  Kolhe10  and  Mahawati

Devi v Branch Manager11.  

1 (2001) 2 SCC 9 2 (2013) 10 SCC 646 3 (2009) 13 SCC 530 4 (2012) 9 SCC 284 5 AIR 2017 SC 5157  6 (2014) 1 SCC 244 7 2015 SCC OnLine P& H 9926 8 2011 SCC OnLine Ker 1881 9 2014 SCC OnLine Del 362 10 2015 SCC OnLine Bom 4613 11 2017 SCC OnLine Pat 1145

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8. We have also heard  Ms. Aishwarya Bhati, learned

counsel for respondent Nos.2 and 3 [in SLP (Civil) No. 28141

of 2017 and respondent Nos.1 and 2 in SLP (Civil) No.28142

of 2017] the driver and owner, respectively, of the offending

jeep and  Mr. K.K. Bhat, learned counsel appearing for

respondent  No.1 Insurance  Company. They contend that

the appellant did not have a valid driving licence at the time

of the accident and was negligently driving on the wrong

side of the road. Even the driving licence produced by the

appellant was for a different class of vehicles and not for a

motorcycle, which he was riding at the time of the accident.

Further, the  Tribunal  sans  examination  of the  witnesses

whose statement were recorded by the police in furtherance

of the FIR filed in relation to the subject accident could not

have based its conclusion merely due to filing of a charge

sheet in that regard and without any information as to any

conviction. Mere filing of the charge sheet by the police is

not enough. That is not a legal evidence, much less

sufficient to record a finding of fact that either that the jeep

in question was involved in the accident or that respondent

No.2 was negligently driving the said vehicle. The High

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Court has also categorically opined that no finding on the

factum of negligence on the part of respondent No.2 driver

of the jeep has been recorded by the Tribunal; and that the

selfsame police report indicates that the jeep was not

involved in the accident in question.  

9. On the issue of whether the jeep was validly insured,

Ms. Bhati  contends that  the respondent No.3 owner took

insurance for the jeep and even paid premium for the same

and  hence, any objection taken by the respondent  No.3

insurance company that such insurance was fraudulently

obtained, is untenable.   Reliance is placed on the decision

in  New India Assurance Co. Ltd. Vs. Rula & Ors12,  to

buttress this submission.  Mr.  Bhat,  however,  argues that

the jeep was not insured and that the official of the

company who had issued the cover note had fraudulently

issued the  same. It is  possible that the  said  official  had

backdated certain cover notes, for which he had been

expelled from the company. The evidence in that regard is

conclusive and there  is a finding by the Tribunal on that

count. Mr. Bhat relies upon the decisions in  Oriental

12 (2000) 3 SCC 195

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Insurance Co. Ltd. v Meena Variyal13,  Minu B Mehta &

Anr. v Balakrishna Ramachandra Nayan & Anr.14 and

Surender  Kumar  Arora  & Anr. v  Dr.  Manoj  Bisla  &

Ors.15.  

10. The moot question which arises for our consideration

in these appeals is about the justness of the decision of the

High Court in reversing the finding of fact recorded by the

Tribunal on the factum of involvement of Jeep No.RST­4701

in the accident occurred on 10th  February, 1990 at about

8.00­8.30 P.M. and also on the factum of negligence of the

driver of the jeep causing the accident in question.  On the

first  aspect, the  High Court  has  noted that the  Tribunal

having discarded the oral evidence adduced by the appellant

(claimant) could not have based its  finding merely on the

basis of the FIR and the charge­sheet filed against the driver

of the offending vehicle  and also because the mechanical

investigation report (Exh.5) merely indicated that on the left

side of the offending vehicle a scratch mark was noticed on

the mudguard of the left tyre which contradicted the

13 (2007) 5 SCC 428 14 (1977) 2 SCC 441 15 (2012) 4 SCC 552

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statement of the claimant and the Police Investigation

Report much less showing involvement of the vehicle in the

accident.  As  regards the  second aspect  on  the factum of

negligence, the High Court noted that the Tribunal did not

record any finding about the negligence of the driver of the

jeep and the site  map (Exh. 2)  would indicate that the

appellant/claimant himself was negligent in driving the

motorcycle in the middle of the road.  

11. As the judgment of the High Court has been assailed

in the appeal filed by the appellant (claimant) for

enhancement of compensation, including the finding of the

Tribunal in discarding the evidence of PW­1, PW­2 and PW­

4 on the factum of involvement of the offending vehicle in

the accident and also on the factum of the said vehicle being

driven rashly and negligently by the driver (respondent

No.2), we have been called upon to examine even the

correctness of the approach of the Tribunal. We are

conscious of the fact that in an appeal under Article 136 of

the Constitution, ordinarily this Court will not engage itself

in re­appreciation of the evidence as such but can certainly

examine the evidence on record to consider the challenge to

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the findings recorded by Tribunal or the High Court, being

perverse or replete with error apparent on the face of the

record and being manifestly wrong.  

12. From the evidence  which has come on record, the

finding recorded by  the Tribunal  that  the appellant  while

riding his motorcycle on 10th February, 1990 between 8.00

P.M. and 8.30 P.M., met with an accident when a jeep being

driven rashly and negligently, struck his motorcycle

resulting in falling down and suffering severe injuries on his

right leg, which was required to be amputated from above

the knee level at MGH Hospital, seems to us to be a possible

view. That position is established from the oral evidence of

PWs­1, 2 and 4 and the charge sheet and its accompanying

documents filed  by the  police.  Even the  High  Court  has

broadly agreed with this finding recorded by the Tribunal.

13. The debatable issue is about the factum of

involvement of Jeep No.RST­4701 allegedly driven by

respondent No.2 and whether it was driven rashly and

negligently as a result of which the accident occurred.

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14.  Indeed,  the Tribunal  did not  accept the version of

PW­1, PW­2 and PW­4 about the involvement of Jeep

No.RST­4701, but has not discarded their version in toto.

The evidence  of these  witnesses to the extent they  have

consistently stated that when the appellant was riding on

his motorcycle bearing No.RJ 19­6636 at the relevant time,

going to Basni from Panwara Phanta and when he reached

near Siviya Nada, a green jeep coming at a high speed from

Salawas side, hit the motorcycle from back side, as a result

of which the appellant fell down and suffered severe injuries

including to his right leg which was eventually amputated

from above the knee level, has not been doubted.

Pertinently, besides mentioning the description of the

offending vehicle as a “jeep” they have also spoken about its

colour (green) and that it was displaying the Congress Party

flags and banners on the side of the jeep. In other words,

their version limited to having noted the jeep number, has

not  been accepted.  Besides, the  Tribunal  relied upon the

evidence of respondent No.2 Chail Singh (DW­1) and

Bhanwar Singh (DW­2) who had stated that the jeep was

deployed in the election campaign of Sarpanch of Somdar

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Village on the Salawas Road and thus denied the

involvement of the vehicle in the accident in question.

Nevertheless, the Tribunal then adverted to the FIR and the

charge­sheet filed in respect of the accident naming

respondent No.2 as accused. The Tribunal placed reliance

upon the copy of challan (Exh.1), copy of FIR (Exh.32), Site

Map (Exhs.3 & 4), Jeep Seizure Report (Exh.5), X­Ray

(Exh.6)  and Injury Report (Exh.7), to opine that these police

records gathered during the investigation of the crime not

only confirmed that an accident had occurred but also

indicated the involvement of the offending Jeep  No.RST­

4701, which was driven by respondent No.2 at the relevant

time. The Tribunal went on to conclude that there was no

reason to disagree  with the opinion of the Investigating

Agency in that behalf. The charge­sheet was accompanied

by the statements of the appellant and the witnesses

Rooparam, Thanaram and Pratap Singh. On the basis of the

entirety of the evidence, the Tribunal  had held that  Jeep

No.RST­4701 which was driven by respondent No.2 at the

relevant time was involved in the accident in question,

causing severe injuries to the appellant.

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15. The High Court, however, reversed this finding of fact

rendered by the Tribunal essentially on two counts: First,

that the Tribunal having discarded the oral evidence about

the involvement of Jeep  No.RST­4701 in the  accident in

question, allegedly  driven  by respondent  No.2, could  not

and ought not to have recorded the finding on the relevant

issue against respondent Nos.2 & 3 merely by relying on the

documents forming part of the police charge sheet.  Second,

the jeep seizure report (Exh. 5) indicated that only a scratch

on the mudguard of the left tyre of the vehicle was noticed,

which contradicted the claim of the appellant about the

involvement of the vehicle.  16. The  question is:  whether this  approach  of the  High

Court can be sustained in law?  While dealing with a similar

situation, this Court in  Bimla Devi  (supra) noted the

defence of the driver and conductor of the bus which inter

alia was to cast a doubt on the police record indicating that

the person standing at  the rear side of the bus,  suffered

head injury when the bus was being reversed without

blowing any horn.   This Court observed that while dealing

with the claim petition in terms of Section 166 of the Motor

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Vehicles Act, 1988, the Tribunal stricto sensu  is not bound

by the pleadings of the parties, its function is to determine

the amount of fair compensation. In paragraphs 11­15, the

Court observed thus:  

“11. While dealing with a claim petition in terms of Section 166 of the Motor Vehicles Act, 1988, a tribunal stricto sensu is not bound by the pleadings of the parties; its function being to determine the amount of fair compensation in the event an accident has taken place by reason of negligence of that driver of a motor vehicle. It is true that occurrence of an accident having regard to the provisions contained in Section 166 of the Act is a sine qua non for entertaining a claim petition but that would not mean that despite evidence to the effect that death of the claimant’s predecessor had taken place by reason of an accident caused by a  motor vehicle, the same would be ignored only on the basis of a post­mortem report vis­à­vis the averments made in a claim petition.

12. The deceased was a constable. Death took place near a police station. The post­mortem report clearly suggests that the  deceased  died  of  a  brain injury.  The  place  of accident is not far from the police station. It is, therefore, difficult to believe the story of the driver of the bus that he slept in the bus and in the morning found a dead body wrapped in a blanket. If the death of the constable had taken  place  earlier, it is  wholly  unlikely that  his  dead body in a small town like Dharampur would remain undetected throughout the night particularly when it was lying at a bus­stand and near a police station. In such an event, the court can presume that the police officers themselves should have taken possession of the dead body.

13. The learned Tribunal, in our opinion, has rightly proceeded on the basis that apparently there was absolutely no reason to falsely implicate Respondents 2 and 3. The claimant was not at the place of occurrence.

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She,  therefore,  might not  be aware of the details as  to how the accident took place  but the  fact that the  first information report had been lodged in relation to an accident could not have been ignored.

14. Some discrepancies in the evidence of the claimant’s witnesses  might have occurred but the core question before the Tribunal and consequently before the  High Court was as to whether the bus in question was involved in the accident or not. For the purpose of determining the said issue, the Court was required to apply the principle underlying the burden of proof in terms of the provisions of Section 106 of the Evidence Act, 1872 as to whether a dead body wrapped in a blanket had been found at the spot  at such an early  hour,  which  was required  to  be proved by Respondents 2 and 3.

15.  In a situation  of this  nature, the  Tribunal  has rightly taken  a  holistic view  of the  matter. It  was necessary to be borne in mind that strict proof of an accident  caused  by  a  particular  bus in  a  particular manner may not be possible to be done by the claimants. The claimants  were  merely to establish their case on the touchstone of preponderance of probability. The standard of proof beyond reasonable doubt could not have been applied. For the said purpose, the High Court should have taken into consideration the respective stories set forth by both the parties.”

(emphasis supplied)

17. The Court restated the legal position that the

claimants were merely to establish their case on the

touchstone of preponderance of probability and standard of

proof  beyond  reasonable  doubt  cannot  be  applied  by the

Tribunal while dealing with the motor accident cases. Even

in that case, the view taken by the High Court to reverse

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similar findings, recorded by the  Tribunal  was set  aside.

Following the enunciation in Bimla Devi’s case (supra), this

Court in Parmeswari  (supra) noted that when filing of the

complaint  was not  disputed, the decision of the  Tribunal

ought not to have been reversed by the High Court on the

ground that nobody came from the office of the SSP to prove

the complaint.   The Court appreciated the testimony of the

eye­witnesses in paragraphs 12 & 13 and observed thus:

“12. The other ground on which the High Court dismissed the case  was by  way of disbelieving the testimony of Umed Singh, PW 1. Such disbelief of the High Court is totally conjectural. Umed Singh is not related to the appellant but as a good citizen, Umed Singh extended his help to the appellant by helping her to reach the doctor’s chamber in order to ensure that an injured woman gets medical treatment. The evidence of Umed Singh cannot be disbelieved  just because he did not file  a complaint himself.  We are constrained to repeat our observation that the total approach of the High Court, unfortunately, was not sensitised enough to appreciate the plight of the victim.

13. The other so­called reason in the High Court’s order was that as the claim petition was filed after four months of the accident, the same is “a device to grab money from the insurance company”. This finding in the absence of any material is certainly perverse. The High Court appears to be not cognizant of the principle that in a road accident claim, the strict principles of proof in a criminal case are not attracted…….”

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18. It will be useful to advert to the dictum in N.K.V. Bros.

(P) Ltd. Vs. M. Karumai Ammal and Ors.16, wherein it was

contended by the vehicle owner that the criminal case  in

relation to the accident had ended in acquittal and for

which reason the claim under the Motor Vehicles Act ought

to be rejected.   This Court negatived the said argument by

observing that the nature of proof required to establish

culpable rashness, punishable under the IPC, is more

stringent  than negligence sufficient under the law of tort to

create liability.  The observation made in paragraph 3 of the

judgment would throw some light as to what should be the

approach  of the Tribunal in  motor accident cases.   The

same reads thus:  

“3.  Road accidents are one of the top killers in our country, specially  when truck  and  bus  drivers operate nocturnally. This proverbial recklessness often persuades the courts, as has been observed by us earlier in other cases, to  draw an initial  presumption in  several cases based on the doctrine of res ipsa loquitur. Accidents Tribunals  must take special care to see that innocent victims do not suffer and drivers and owners do not escape liability  merely  because of some  doubt  here or some obscurity there. Save in plain cases, culpability must be inferred from the circumstances where it is fairly reasonable.  The court  should  not succumb to niceties, technicalities and  mystic  maybes.  We are emphasizing this aspect because we are often distressed by transport operators getting away with  it thanks to  judicial laxity, despite the fact that they do not exercise sufficient

16 (1980) 3 SCC 457

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disciplinary control over the drivers in the  matter of careful  driving.  The heavy economic  impact  of  culpable driving of public transport must bring owner and driver to their responsibility to their neighbour. Indeed, the State must seriously consider no­fault liability by legislation. A second aspect which pains us is the inadequacy of the compensation or undue parsimony practised by tribunals. We must remember that judicial tribunals are State organs and Article 41 of the Constitution lays the jurisprudential foundation for State relief against accidental disablement of citizens. There is no justification for  niggardliness in compensation.  A third factor which is harrowing is the enormous delay in disposal of accident cases resulting in compensation, even if awarded, being postponed by several years. The States must appoint sufficient number of tribunals and the High Courts should  insist  upon quick disposals  so that the trauma and tragedy already sustained may not be  magnified  by the injustice of  delayed justice.  Many States are unjustly indifferent in this regard.”

19. In  Dulcina Fernandes  (supra),  this  Court  examined

similar situation where the evidence of claimant’s eye­

witness was discarded by the Tribunal and that the

respondent in that case was acquitted in the criminal case

concerning the accident. This Court, however, opined that it

cannot  be  overlooked  that  upon  investigation of the  case

registered against the respondent,  prima facie,  materials

showing  negligence  were found to  put  him  on trial.  The

Court restated the settled principle that the evidence of the

claimants ought to  be examined  by the  Tribunal on the

touchstone of preponderance of probability and certainly the

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standard of proof beyond reasonable doubt could not have

been applied as noted in Bimla Devi (supra).  In paragraphs

8 & 9, of the reported decision, the dictum in United India

Insurance Co. Ltd. Vs. Shila Datta17, has been adverted

to as under:  

“8. In United India Insurance Co. Ltd. v. Shila Datta while considering the nature of a claim petition under the Motor Vehicles Act, 1988 a three­Judge Bench of this Court has culled out certain propositions of which Propositions (ii), (v) and (vi) would be relevant to the facts of the present case and, therefore, may be extracted hereinbelow: (SCC p. 518, para 10)

‘10. (ii)  The rules of the pleadings do not  strictly apply as the claimant is required to make an application in a form prescribed under the Act. In fact, there is no pleading where the proceedings are suo motu initiated by the Tribunal. * * * (v) Though the Tribunal adjudicates on a claim and determines the compensation, it does not do so as in an adversarial litigation. … (vi) The Tribunal is required to follow such summary procedure as it thinks fit. It may choose one or more persons possessing special knowledge of and matters relevant to  inquiry,  to assist  it in holding the enquiry.’

9. The following further observation available in para 10 of the  Report  would require specific  note: (Shila  Datta case, SCC p. 519)

‘10. … We have referred to the aforesaid provisions to show that an award by the Tribunal cannot be seen as an adversarial adjudication between the litigating parties to a dispute, but a statutory determination of  compensation on the occurrence of an  accident, after due enquiry, in accordance with the statute.’ ”

17 (2011) 10 SCC 509

24

In paragraph 10 of the reported decision [Dulcina

Fernandes and Ors.  (supra)], the Court opined that non­

examination of witness per se cannot be treated as fatal to

the claim set up before the Tribunal. In other words, the

approach of the Tribunal should be holistic analysis of the

entire pleadings and evidence by applying the principles of

preponderance of probability.    20. In the above conspectus, the appellant is justified in

contending that the High Court committed manifest error in

reversing the holistic view of the Tribunal in reference to the

statements of  witnesses  forming part of the charge­sheet,

FIR,  Jeep Seizure Report in particular, to  hold that  Jeep

No.RST­4701 driven by respondent No.2 was involved in the

accident in question. Indeed, the High Court was impressed

by the Mechanical Investigation Report (Exh. 5) which

stated that only a scratch mark on the mudguard of the left

tyre of the vehicle had been noted. On that basis, it

proceeded to observe that the same was in contradiction to

the claim of the appellant (claimant), ruling out the

possibility of involvement of the vehicle in the accident.

25

This conclusion is based on surmises and conjectures and

also in disregard of the relevant fact that the vehicle was

seized by the police after investigation, only after one month

from the date of the accident and the possibility of the same

having been repaired in the meantime could not be ruled

out.   In other words, the reasons which weighed with the

High Court for reversing the finding of fact recorded by the

Tribunal upon holistic analysis of the entire evidence, about

the involvement of Jeep No.RST­4701 in the accident,

cannot be countenanced. For, those reasons do not affect

the other overwhelming circumstances and evidence which

has come on record and commended to the Tribunal about

the involvement of the subject jeep in the accident in

question.  This being the main edifice, for which the High

Court allowed the appeal preferred by respondent Nos.2 &

3, it must necessarily follow that the finding of fact recorded

by the Tribunal on the factum of involvement of Jeep No.

RST­4701 in the accident in question will have to be

restored for reasons noted hitherto.  

21. Another reason which weighed with the High Court to

interfere in the First Appeal filed by respondent Nos.2 & 3,

26

was absence of finding by the Tribunal about the factum of

negligence of the driver of the subject jeep.   Factually, this

view is untenable. Our understanding of the analysis done

by the  Tribunal is to  hold that Jeep  No.  RST­4701  was

driven rashly and negligently by respondent No.2 when it

collided with the motorcycle of the appellant leading to the

accident.   This can be discerned from the evidence of

witnesses and the contents of the charge­sheet filed by the

police, naming respondent  No.2. This Court in a recent

decision in Dulcina Fernandes (supra), noted that the key

of negligence on the part of the driver of the offending

vehicle as set up by the claimants was required to be

decided by the Tribunal on the touchstone of preponderance

of probability and certainly not by standard of proof beyond

reasonable doubt.   Suffice it to observe that the exposition

in the judgments already adverted to by us, filing of charge­

sheet against  respondent No.2  prima facie  points towards

his complicity in driving the vehicle negligently and rashly.

Further, even when the accused were to be acquitted in the

criminal case, this Court opined that the same may be of no

effect on the assessment of the liability required in respect

27

of motor accident cases by the Tribunal.   Reliance placed

upon the decisions in Minu B Mehta (supra)  and    Meena

Variyal    (supra), by the respondents, in our opinion, is of

no avail.  The dictum in these cases is  on the matter  in

issue in the concerned case.  Similarly, even the dictum in

the case of  Surender Kumar Arora  (supra) will  be of no

avail.   In the present case, considering the entirety of the

pleadings, evidence and circumstances on record  and in

particular the finding recorded by the Tribunal on the

factum of negligence of the respondent No.2, the driver of

the offending jeep, the High Court committed manifest error

in taking a contrary view which, in our opinion, is an error

apparent on the face of record and manifestly wrong.   22. In Kaushnuma Begum (supra), whilst dealing with an

application under Section 163A of the Motor Vehicles Act,

1988, this Court expounded that negligence is only one of

the species for compensation in respect of the accident

arising out  of the  use  of  motor  vehicles.  There  are  other

premises for such cause of action. After observing this, the

Court adverted to the principle expounded in  Rylands Vs.

28

Fletcher18.  It may be useful to reproduce paragraphs 12­14

which read thus:  

“12.  Even if there is  no  negligence  on the  part  of the driver or owner of the motor vehicle, but accident happens  while the vehicle  was in  use, should  not the owner  be  made liable for  damages to the  person  who suffered on account of such accident? This question depends upon how far the rule in Rylands v. Fletcher  can apply in motor accident cases. The said rule is summarised by Blackburn, J., thus:

‘[T]he true rule of law is that the person who, for his own purposes, brings on his land, and collects and keeps there anything likely to do  mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie answerable for all the damage  which is the  natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff’s default, or, perhaps,  that the escape was the consequence of vis major, or the act of God; but, as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient.’

13. The House of Lords considered it and upheld the ratio with the following dictum:

‘We think that the true rule of law is that the person who, for  his  own purposes,  brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff’s default, or, perhaps, that the escape was the consequence of  vis  major,  or the act  of  God; but, as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient.’

14. The above rule eventually gained approval in a large number of decisions rendered by courts in England and

18 (1861­73) All ER Rep 1

29

abroad.  Winfield on Tort has brought out even a chapter on the “Rule in Rylands v. Fletcher”. At p. 543 of the 15th Edn. of the celebrated work the learned author has pointed out that

‘over the years  Rylands  v.  Fletcher    has been applied to a remarkable variety of things: fire, gas, explosions,  electricity,  oil,  noxious  fumes, colliery spoil, rusty wire from a decayed fence, vibrations, poisonous vegetation’.

He has elaborated seven defences recognised in common law against action brought on the strength of the rule in Rylands v. Fletcher. They are:

(1) Consent of the plaintiff i.e. volenti non fit injuria. (2)  Common benefit i.e.  where the source  of the danger is maintained for the common benefit of the plaintiff and the  defendant, the  defendant is  not liable for its escape. (3) Act of stranger i.e. if the escape was caused by the unforeseeable act of a stranger, the rule does not apply. (4) Exercise of statutory authority i.e. the rule will stand excluded either when the act was done under a statutory duty or when a statute provides otherwise. (5) Act of God or vis major i.e. circumstances which no human foresight can provide against and of which human prudence is not bound to recognise the possibility. (6) Default of the plaintiff i.e. if the damage is caused solely by the act or default of the plaintiff himself, the rule will not apply. (7) Remoteness of consequences i.e. the rule cannot be applied ad infinitum, because even according to the formulation of the rule made by Blackburn, J., the defendant is answerable only for all the damage ‘which is the natural consequence of its escape’. ”

And again, the  Court,  after  adverting to the  decisions in

Charan Lal Sahu Vs. Union of India19,  Union Carbide

19 (1990) 1 SCC 613

30

Corpn. Vs. Union of India20  and  Gujarat SRTC Vs.

Ramanbhai Prabhatbhai  21,   in paragraphs 19 & 20,

observed thus:    

“19.  Like any other common law principle, which is acceptable to our  jurisprudence, the rule in  Rylands  v. Fletcher  can be followed at least until any other new principle which excels the former can be evolved, or until legislation provides differently. Hence, we are disposed to adopt the rule in claims for compensation made in respect of motor accidents.

20. ‘No fault liability’ envisaged in Section 140 of the MV Act is distinguishable from the rule of strict liability. In the former, the compensation amount is fixed and is payable even if any one of the exceptions to the rule can be applied. It is a statutory liability created without which the claimant should not get any amount under that count. Compensation on account of accident arising from the use of motor vehicles can be claimed under the common law even without the aid of a statute. The provisions of the MV Act permit that compensation paid under “no fault liability” can be deducted from the final amount  awarded by the  Tribunal.  Therefore, these two are resting on two different premises. We are, therefore, of the opinion that even apart from Section 140 of the MV Act, a victim in an accident which occurred while using a motor vehicle, is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. The Tribunal  and the High Court  have,  therefore,  gone into error in divesting the claimants of the compensation payable to them.”

23. Be that as  it  may,  the next  question  is whether the

Tribunal was justified in concluding that the appellant was

also negligent and had contributed equally,  which finding

20 (1991) 4 SCC 584 21 (1987) 3 SCC 234

31

rests only on the site map (Exh. 2) indicating the spot where

the motorcycle was lying after the accident? We find

substance in the  criticism of the  appellant that the  spot

where the motor vehicle was found lying after the accident

cannot  be the  basis to assume that it  was  driven in or

around that spot at the relevant time.   It can  be safely

inferred that after the accident of this nature in which the

appellant suffered severe injuries necessitating amputation

of his right leg above the knee level, the motorcycle would be

pushed forward after the collision and being hit by a high

speeding jeep. Neither the Tribunal nor the High Court has

found that the spot noted in the site map, one foot wrong

side on the  middle of the road  was the spot  where the

accident actually occurred. However, the finding is that as

per the site map, the motorcycle was  found lying at  that

spot. That cannot be the basis to assume that the appellant

was driving the motorcycle on the wrong side of the road at

the relevant time. Further, the respondents did not produce

any contra evidence to indicate that the  motorcycle  was

being driven on the wrong side of the road at the time when

the offending vehicle dashed it.   In this view of the matter,

32

the finding of the Tribunal that the appellant contributed to

the occurrence of the accident by driving the motorcycle on

the wrong side of the road, is manifestly wrong and cannot

be sustained. The High Court has not expressed any

opinion on this issue,  having already answered the  issue

about the non­involvement of the offending vehicle in favour

of respondent Nos.2 & 3.  

24. In other words, we are inclined to hold that there is no

tittle of evidence about the motorcycle being driven

negligently by the appellant at the time of accident.   The

respondents did not produce any such evidence.  That fact,

therefore, cannot be assumed.  Resultantly, the argument of

the respondents that the appellant did not possess a valid

motorcycle driving licence at the time of accident, will be of

no significance.   Thus, we hold that there is no legal

evidence to answer the issue of contributory negligence

against the appellant.    

25. The next question is about the quantum of

compensation  amount to  be paid to the  appellant.   The

Tribunal noted the claim of the appellant that he was

getting Rs.1500/­ per month towards his salary and

33

Rs.600/­ per month towards food allowance from Bhanwar

Lal. The fact that the appellant had possessed heavy

transport motor vehicle driving licence has not been

doubted. The  driving licence on record  being valid for a

limited period, cannot be the basis to belie  the claim of the

appellant duly supported by Bhanwar Lal, that the

appellant was employed by him on his  new truck.   Besides

the said income, the appellant claimed to have earning of

Rs.1000/­ per month from farming fields.   In other words,

we find that the Tribunal has not analysed this evidence in

proper perspective. The Tribunal, however, pegged the loss

of monthly income to the appellant at Rs.520/­ per month

while computing the compensation amount on the finding

that there was no convincing evidence about complete non­

employability of the  appellant. Further,  no  provision  has

been made by the Tribunal towards future prospects.   The

Tribunal, therefore, should have computed the loss of

income on that basis.  Additionally, the appellant because of

amputation of his right leg would be forced to permanently

use prosthetic leg during his  life time.   No provision has

been made by the Tribunal in that regard. On these heads,

34

the appellant is certainly entitled for enhanced

compensation.  

26. The next question is about the liability of insurer to

pay the compensation amount.   The Tribunal has absolved

the insurance company on the finding that no premium was

received by the insurance company nor any insurance

policy was ever issued by the insurance company in relation

to the offending vehicle.   The respondents no.2 and 3 had

relied on a Cover Note which according to respondent No.1 –

Insurance Company  was fraudulently obtained from the

then Development Officer, who was later on sacked by

respondent  No.1   Insurance  Company. The  possibility of

misuse  of  some cover  notes lying  with  him could  not  be

ruled out.  The respondent Nos.2 & 3 have relied on the

decision of this Court in Rula (supra).  That decision will be

of no avail to respondent Nos.2 & 3.  In that case, the Court

found  that the insurance  policy  was  already  issued after

accepting the cheque; whereas in the present case, the

respondent No.1 Insurance Company has been able to show

that no payment was received by the company towards the

35

insurance premium nor any insurance policy had been

issued  in respect of the offending vehicle  (jeep).  However,

the claim of respondent Nos.2 & 3 to the extent that they

possessed  a cover  note issued  by the then  Development

Officer of the Oriental Insurance Company (respondent

No.1)  will  have to be accepted coupled with the  fact  that

there is no positive evidence to indicate that the said Cover

Note is  ante  dated.  Pertinently, the  Cover  Note  has  been

issued by the then Development Officer at a point of time

when he was still working with respondent No.1 Insurance

Company. It must follow that the then Development Officer

was acting on behalf of the Insurance Company, even

though  stricto sensu  the respondent No.1 Insurance

Company may not be liable to pay any compensation as no

insurance policy has been issued in respect of the offending

vehicle,  much less a valid insurance policy.  But for the

Cover Note issued by the Development Officer of respondent

No.1 Insurance Company at a point of time when he was

still working with respondent No.1, to do substantial justice,

we may invoke the principle of   “pay and recover”,   as has

36

been enunciated by this  Court in the case of  National

Insurance Co. Ltd. Vs. Swaran Singh & Ors.22  

27. Reverting to the calculation of compensation amount,

taking the loss of monthly income due to permanent

disability of 40%,   the appellant will be entitled to

Rs.2,25,792/­  [Rs.840 per month (i.e. 40 % of Rs.2,100/­)

+ 40% future prospects [as per Pranay Sethi (supra)] x 12 x

16,  i.e. (840 + 336) x 12 x 16.   We uphold the amounts

quantified by the Tribunal  towards the heads  for medical

treatment after the accident, motorcycle repair, mental and

physical problem, as  it is.  However, the appellant, in our

opinion, is additionally entitled to  medical expenses for

procurement of a prosthetic leg, which is quantified at

Rs.25,000/­ (Rupees twenty five thousand only). In

summation, the appellant would be entitled to the following

compensation: (i) Medical treatment after accident  : Rs.       5,000/­ (ii) Motorcycle repair : Rs.       2,000/­ (iii) Mental and physical problem : Rs.     20,000/­ (iv) Loss of income due to       40% permanent disability : Rs.  2,25,792/­

(v) Cost of prosthetic leg  : Rs.    25,000/­ Total: Rs. 2,77,792/­

22 (2004) 3  SCC 297 (para 110)

37

(Rupees Two Lakh Seventy Seven Thousand Seven Hundred Ninety Two only)

28. The appellant would also be entitled to interest on the

total amount of compensation at the rate of 9% per annum

from the date of filing of the claim application i.e. 11th June,

1990  till the  date  of realization.  The respondents  will  be

entitled for adjustment of amount already paid to the

appellant, if any.

29.  The appeals are allowed in the above terms with costs.

 ……………………………...CJI.        (Dipak Misra)

…..…….…………………..….J.            (A.M. Khanwilkar)

New Delhi; April  06, 2018.