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“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) No.6513 of 2007

National Insurance Company Ltd. …. Appellant

Versus

Sinitha & Ors. …. Respondents

J U D G M E N T

JAGDISH SINGH KHEHAR, J.

1. Shijo, aged 27 years, was riding a motorcycle bearing registration  

no.KL-8J-6528, on 3.3.1999 on the Wadakkanchery-Kunnamkulam Road.  

George K., also aged 27 years, was pillion-riding with Shijo.  While giving  

way  to  a  bus  coming  from  the  opposite  side  at  Kumaranelly,  the  

motorcycle hit a big laterite stone lying on the tar road.  On impact, the  

motorcycle  overturned.   Resultantly,  the  rider  as  also  the  pillion-rider  

suffered  injuries.   They  were  taken  to  Divine  Medical  Centre,  

Wadakkanchery, for treatment.  Thereafter, the rider Shijo, was taken to  

West  Fort  Hospital,  Thrissur.  The  pillion-rider  George  K.  was  taken  to  

Medical College Hospital, Thrissur.  Shijo succumbed to his injuries on the

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following day.  George K., survived.  The motorcycle was insured with the  

petitioner herein i.e. the National Insurance Company Limited.  A valid act  

only policy, at the time of the occurrence, is admitted.   

2. On 18.8.2000 the complainants, i.e. the wife, children and parents of  

Shijo,  filed  a  claim petition  before  the  Motor  Accident  Claims Tribunal,  

Thrissur, Kerala (hereinafter referred to as `the Tribunal’), under Section  

166 of the Motor Vehicles Act, 1988 (hereinafter referred to as `the Act’).  

Through  the  aforesaid  claim  petition,  the  claimants  prayed  for  

compensation  of  Rs.8,20,500/-.   The  claim  petition  was  subsequently  

amended, inasmuch as, the claim was sought under Section 163A of the  

Act.  A separate claim for compensation by George K., the pillion-rider,  

was  also filed.   The claim made by George K.,  is  not  relevant  for  the  

present  controversy,  inasmuch  as,  the  instant  petition  pertains  to  

compensation awardable to the claimants of deceased Shijo.

3. The Tribunal by its order dated 19.4.2005, allowed the claim petition  

filed by the wife, minor children and parents of Shijo.  They were awarded  

compensation  of  Rs.4,26,650/-.   The  instant  compensation  included  

Rs.2000/- towards funeral expenses, Rs.5000/- for loss of consortium to  

the  widow,  Rs.2500/-  as  loss  of  estate,  Rs.4150/-  towards  medical  

expenses  and  Rs.5000/-  as  compensation  for  pain  and  suffering.

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Additionally, interest at the rate of 6% per annum was awarded with effect  

from 18.8.2000 (i.e. the date of filing the claim petition), till realization.  The  

claimants were also awarded costs quantified at Rs.8000/-.   

4. Dissatisfied  with  the  determination  rendered  by  the  Tribunal,  the  

National Insurance Company Limited, i.e. the appellant herein, preferred  

MACA no.1569 of 2006 before the Kerala High Court.   The High Court  

decided the said appeal on 22.9.2006.  The High Court upheld one of the  

contentions of the appellant-Insurance Company by holding, that Rs.5000/-  

awarded for pain and suffering, was impermissible under Section 163A of  

the  Act.   Even  without  issuing  notice  to  the  claimants,  the  aforesaid  

amount was ordered to be deducted from the total compensation held as  

payable  to  claimants  (by  the  Tribunal).   Besides  the  aforesaid  

determination,  all  other  components  of  compensation  awarded  by  the  

Tribunal,  were upheld by the High Court.   Still  dissatisfied,  the National  

Insurance Company Limited has approached this Court by filing the instant  

petition, for special leave to appeal.

5. While  assailing  the  order  of  the  High  Court,  the  first  contention  

advanced at the hands of the learned counsel for the petitioner was, that  

the claimants are not entitled to raise any claim for compensation because  

the accident in question had occurred solely and exclusively on account of

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the negligence of the deceased Shijo.  Insofar as the instant contention is  

concerned,  reliance  was  placed  on  the  determination  rendered  by  the  

Tribunal, wherein in paragraph 8, based on the first information report, post  

mortem  certificate,  scene  mahazor,  report  of  inspection  of  the  vehicle,  

inquest report and the final report, the Tribunal had concluded that Shijo  

was “responsible” for the accident.  It was, therefore, the submission of the  

learned counsel for the petitioner, that no compensation was payable to  

the  claimants  on  account  of  the  death  of  Shijo,  who  was  himself,  

responsible for the accident.  It was the contention of the learned counsel  

for  the  petitioner,  that  it  was  not  just  and  appropriate  to  award  

compensation, wherein the claimants represented the person “responsible”  

for the accident.  Such a determination, according to the learned counsel  

for the petitioner,  would amount  to rewarding the representatives of the  

wrong doer.

6. In  order  to  repudiate  the  aforesaid  submission,  advanced  at  the  

hands  of  the  learned  counsel  for  the  petitioner,  learned  counsel  

representing  the  respondents,  was  satisfied  in  placing  reliance  on  the  

decision rendered by this Court  in  Oriental  Insurance Company Limited  

vs.   Hansrajbhai  V.  Kodala,  (2001)  5  SCC  175.   The  submissions  

advanced at the hands of the learned counsel for the respondents was,

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that  compensation  determined  under  Section  163A  of  the  Act,  was  

determined under the “no-fault” liability principle.  It was pointed out, that  

under the “no-fault” liability principle, the fault of the party is not a relevant  

consideration.  Accordingly, it was submitted, that the issue of “wrongful  

act”, “neglect” or “fault”, at the hands of the deceased Shijo were irrelevant  

for  the  determination  of  a  claim made  under  Section  163A of  the  Act.  

Learned counsel for the respondents had placed reliance on paragraph 15  

of the judgment.  We are, however, extracting paragraphs 15 to 19 of the  

judgment  hereunder,  so  as  to  examine  holistically  the  inferences  and  

conclusions recorded by this Court in Oriental Insurance Company Limited  

vs.  Hansrajbhai V. Kodala (supra):

“15. In this context  if  we refer to the Review Committee's report,  the  reason for enacting Section 163-A is to give earliest relief to the victims  of  the  motor  vehicle  accidents.  The  Committee  observed  that  determination of cases takes a long time and, therefore, under a system  of structural compensation, the compensation that is payable for different  classes of cases depending upon the age of the deceased, the monthly  income at the time of death, the earning potential in the case of a minor,  loss of income on account of loss of limb etc. can be notified and the  affected  party  can  then  have  option  of  their  accepting  lump-sum  compensation  under  the  Scheme  of  structural  compensation  or  of  pursuing  his  claim  through  the  normal  channels.  The  report  of  the  Review  Committee  was  considered  by  the  State  Governments  and  comments were notified. Thereafter, the Transport Development Council  made suggestions for  providing adequate  compensation  to  victims of  road  accidents  without  going  into  long-drawn  procedure.  As  per  the  objects and reasons, it is a new predetermined formula for payment of  compensation  to  road  accident  victims  on  the  basis  of  age/income,  which  is  more  liberal  and  rational.  On  the  basis  of  the  said  recommendation  after  considering  the  report  of  the  Transport  Development Council, the Bill was introduced with “a new predetermined

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formula for payment of  compensation to road accident victims on the  basis of age/income, which is more liberal and rational” i.e. Section 163- A. It is also apparent that compensation payable under Section 163-A is  almost based on relevant criteria for determining the compensation such  as  annual  income,  age  of  the  victim and multiplier  to  be  applied.  In  addition to the figure which is arrived at on the basis of the said criteria,   the Schedule also provides that amount of compensation shall not be  less than Rs 50,000. It provides for fixed amount of general damage in  case of death such as (1) Rs 2000 for funeral expenses, (2) Rs 5000 for  loss of consortium, if beneficiary is the spouse, (3) Rs 2400 for loss of  estate,  (4)  for  medical  expenses  supported  by  the  bills,  voucher  not  exceeding Rs 15,000. Similarly, for disability in a non- fatal accident para  5 of the Schedule provides for determination of compensation on the  basis of permanent disability.  Para 6 provides for notional income for  those who had no income prior to an accident at Rs 15,000 per annum.  There is also provision for reduction of 1/3rd amount of compensation on  the  assumption  that  the  victim would  have incurred the  said  amount  towards  maintaining  himself  had  he  been  alive.  The  purpose  of  this  section and the Second Schedule is to avoid long-drawn litigation and  delay in payment of compensation to the victims or his heirs who are in  dire need of relief. If such affected claimant opts for accepting the lump- sum compensation based on structured formula, he would get relief at  the earliest. It also gives vital advantage of not pleading or establishing  any wrongful  act  or  neglect  or  default  of  the  owner  of  the  offending  vehicle  or  vehicles.  This  no-fault  liability  appears  to  have  been  introduced on the basis of the suggestion of the Law Commission to the  effect  that  the expanding notions of  social  security  and social  justice  envisage that liability to pay compensation must be “no-fault liability” and  as observed by this Court  in    Ramanbhai case   (1987) 3 SCC 234 “in    order  to  meet  to  some extent  the responsibility  of  the society  to  the  deaths and injuries caused in road accidents”. However, this benefit can  be availed of by the claimant only by restricting his claim on the basis of  income at a slab of Rs 40,000 which is the highest slab in the Second  Schedule which indicates that the legislature wanted to give benefit of   no- fault liability to a certain limit.  This would clearly indicate that the  Scheme is in alternative to the determination of compensation on fault  basis under the Act. The object underlining the said 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  vehicle  accidents  in  a  fast-moving

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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 a 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 on fault liability is  kept alive it would result in additional litigation and complications in case  claimants fail to establish liability of the owner of the defaulting vehicles. Use of specific words “also” and “in addition” in Sections 140 and 141  

16. The aforesaid conclusion gets support  from the language used in  Sections 140,  141,  161  and 163-A.  Sections  140  to  143  provide  for  liability  of  the  owner  of  the  vehicle  in  case  of  death  or  permanent  disablement of any person resulting from an accident arising out of use  of a motor vehicle or motor vehicles,  to pay compensation without any  pleading or establishing that death or permanent disablement was due to  any wrongful act, neglect or default of the owner or owners of the vehicle  or  vehicles.  By way of  earliest  relief,  the victim is  entitled to  get  the  amount of compensation of Rs 50,000 in case of death and Rs 25,000 in  case of permanent disablement.  It  is further provided that such claim  shall not be defeated by reason of any wrongful act, neglect or default of  the person in respect  of  whose death or permanent  disablement has  occurred. Sub-section (5) of Section 140 upon which much reliance is  placed by learned counsel for the Insurance Companies as well as the  claimants  requires  consideration  and  interpretation,  which  inter  alia  provides that owner of  the vehicle is also liable to pay compensation  under any other law for the time being in force. The word “also” indicates  that  the  owner  of  the  vehicle  would  be  additionally  liable  to  pay  compensation  under  any  other  law  for  the  time  being  in  force.  The  proviso  to  sub-section  (5)  further  clarifies  that  the  amount  of  compensation payable under any other law for the time being in force is  to  be reduced from the amount  of  compensation payable  under sub- section (2) or under Section 163-A. This is further crystallised in Section  141 which provides that right to claim compensation under Section 140  is in addition to any other right to claim compensation on the principle of  fault liability and specifically excludes the right to claim compensation  under  the  Scheme  referred  to  in  Section  163-A.  Section  163-B  also  provides that where a person is entitled to claim compensation under  Section 140 and Section 163-A, he can file the claim under either of the  said  sections,  but  not  under  both.  Similarly,  Section  141(1)  also  crystallises  that  right  to  claim compensation  under  Section  140  is  in  addition to the right to claim compensation in respect thereof under any  other provision of the Act or any other law for the time being in force.

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Sub-section  (2)  further  provides  that  if  the  claimant  has  filed  an  application for compensation under Section 140 and also in pursuance  of any right on the principle of fault liability, the claim for compensation  under Section 140 is to be disposed of in the first place and as provided  in sub-section (3) the amount received under sub-section (2) of Section  140 is to be adjusted while paying the compensation on the principle of  fault liability. On the basis of fault liability if additional amount is required  to be paid then the claimant is entitled to get the same but there is no  provision for refund of the amount received under Section 140(2), even if  the Claims Tribunal arrives at the conclusion that the claimant was not  entitled to get any compensation on the principle of fault liability. Further,  Section  144  gives  overriding  effect  to  the  provisions  made  under  Chapter X by providing that  the provisions of the Chapter shall  have  effect notwithstanding anything contained in any provision of the Act or  of any other law for the time being in force. From the aforesaid sections,  one aspect is abundantly clear that right to claim compensation on the  basis of no-fault liability under Section 140 is in addition to the right to  claim  compensation  on  the  principle  of  fault  liability  or  right  to  get  compensation  under  any  other  law.  Such  amount  is  required  to  be  reduced  from  the  amount  payable  under  the  fault  liability  or  compensation which may be received under any other law. If nothing is  payable under the Act then the claimant is    not   required to refund the    amount received by him. As against this, there is specific departure in  the Scheme envisaged for paying compensation under Section 163-A.  Section 163-A nowhere provides that this payment of compensation on  no-fault liability on the basis of structured formula is in addition to the  liability  to  pay  compensation  in  accordance  with  the  right  to  get  compensation  on  the  principle  of  fault  liability  and  unless  otherwise  provided for the same cause, compensation cannot be paid again.

Provisions for refund of compensation if compensation is received under   any other law or under the Act  

17. Further, as the legislature has not provided for refund or adjustment  of  compensation received “under the Act”  and compensation payable  under  Section 163-A,  it  would  mean that  the  Scheme of  payment  of  compensation under Section 163-A, is in alternative to determination of  compensation under Section 168. As stated above, Sections 140(5) and  141(3)  make  provisions  for  reduction  of  compensation  paid  under  Section  140.  Under  proviso  to  sub-section  (5)  of  Section  140,  the  amount of such compensation which the claimant is entitled to receive  under  any  other  law  is  required  to  be  reduced  from  the  amount  of  compensation payable under Section 140 or under Section 163-A. Under  Section 141(3), if a person gets the compensation on principle of fault  

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liability,  then  also  provision  is  made  for  adjustment  of  compensation  received under Section 140. There is no such provision for adjustment of  compensation  received  under  Section  163-A  from  the  compensation  receivable “under the Act” on the principle of fault. Similarly, Section 161  provides for  payment  of  compensation  in  case of  “hit-and-run”  motor  accidents. Under Section 161(3), in cases in respect of the death of any  person resulting from a “hit-and-run” motor accident, a fixed sum of Rs  25,000 is to be paid as compensation and in case of grievous hurt, the  amount fixed is Rs 12,500. Thereafter, under Section 162, the legislature  has provided for refund of compensation paid under Section 161 on the  principle of “hit-and-run motor accident” by providing that the payment of  compensation under Section 161 shall be subject to the condition that if  any compensation is awarded “under any other provision of this Act” or  “any  other  law”  or  “otherwise”,  so  much  amount  as  is  equal  to  the  compensation  paid  under  Section  161  is  required  to  be  adjusted  or  refunded  to  the  insurer.  Under  Section  162(2),  duty  is  cast  on  the  tribunal, court or other authority awarding such compensation to verify as  to whether in respect of such death or bodily injury, compensation has  already  been  paid  under  Section  161  and  to  make  adjustment  as  required  thereunder.  Result  is,  the  claimant  is  not  entitled  to  have  additional compensation but at the same time he can proceed by filing  application under Section 165 or under the Workmen's Compensation  Act, 1923 (i.e. other law) and if he gets compensation under either of the  said provisions, the amount paid under Section 161 is to be refunded or  adjusted.

18. The  contention  of  the  learned  counsel  for  the  claimants  that  compensation  payable  under  Section  163-A  is  in  addition  to  the  determination  of  compensation  on  the  basis  of  fault  liability  and  thereafter it could be adjusted on similar lines provided under Section  140 read  with  Section  141  or  Section  162  cannot  be  accepted.  The  legislature  has  specifically  provided  Scheme  of  adjustment  of  compensation under Section 140 read with Section 141 and Section 162  if the claimants get compensation under the Act, while there are no such  provisions under Section 163-A. Addition or introduction of such scheme  in provisions would be impermissible.

Use of different words such as — “any other law, under this section”,   “any other law for the time being in force”, “provisions of this Act” or “any   other provision of this Act” in different sections  

19. The learned counsel for the claimants submitted that the proviso to  sub-section (5)  of  Section 140 would mean that  even in  case where  compensation is determined under the structured-basis formula under

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Section 163-A,  the claimant  is  entitled to  claim compensation on the  basis of fault liability and if he gets higher amount on the basis of fault   liability then from that amount compensation which is paid under Section  163-A is to be reduced. At the first blush the argument of the learned  counsel  appears to  be attractive  as the proviso  to  sub-section (5)  of  Section 140 is to some extent ambiguous and vague. It may mean that  amount  of  compensation given under  any other  law may include the  amount payable on the basis of fault liability,  therefore, in view of the  said proviso compensation amount payable under any other law is to be  reduced from the compensation payable under Section 140 or 163-A.  For  appreciating  this  contention  and  for  ascertaining  appropriate  meaning of the phrase “  compensation under any other law for the time    being  in  force  ”,  the  proviso  to  sub-section  (5)  is  required  to  be    considered along with other provisions. The Scheme of other provision in  Section  167  indicates  that  the  aforesaid  phrase  is  referable  to  compensation payable under the Workmen's Compensation Act, 1923 or  any other  law which may be in force but  not to the determination of  “compensation under the Act”, and would not include the compensation  which is determined “under the provision of the Act”. Thus Section 167 in  terms provides that where death of, or bodily injury to, any person gives  rise to claim compensation under the Act and also under the Workmen's  Compensation Act, 1923, such person cannot claim compensation under  both the Acts. Further, in Section 140(5), the legislature has used the  words “under any other law for the time being in force” and “under any  other law”. In Section 141(1), the legislature has used the phrase “under  any other provision of this Act or of any other law for the time being in  force”. In sub-section (2), the legislature has specifically provided that a  claim  for  compensation  under  Section  140  shall  be  disposed  of  as  expeditiously as possible and where compensation is also claimed in  pursuance of any right on principle of fault, the application under Section  140  is  to  be  disposed  of  in  first  place.  Whereas,  there  is  no  such  reference for payment of compensation under Section 163-A. Further, in  Section 161(2), the legislature has used the phrase “any other law for  the time being in force” and “provisions of this Act”. Similarly, in Section  162, the legislature has used the words “under any other provisions of  this Act” or “any other law or otherwise”. As against this, in Section 163- A,  the  legislature  has  used  the  phrase  “notwithstanding  anything  contained in this Act or in any other law for the time being in force” .  When  the  legislature  has  taken  care  of  using  different  phrases  in  different sections, normally different meaning is required to be assigned  to  the  language  used  by  the  legislature,  unless  context  otherwise  requires.  However,  in  relation  to  the  same subject-matter,  if  different  words  of  different  import  are  used  in  the  same  statute,  there  is  a  presumption that they are not used in the same sense (Member, Board

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of  Revenue v.  Arthur  Paul  Benthall,  AIR  1956  SC  35.  In  this  light,  particularly Section 141 which provides for right to claim compensation  “under any other provision of this Act” or of “any other law for the time  being in force”, proviso to sub-section (5) of Section 140 would mean  that  it  does not  provide for deduction or adjustment  of  compensation  payable under the Act, that is, on the principle of fault liability which is to  be determined under Section 168.

Specific language of Section 163-A including its heading  ”  .                                     (emphasis is   

ours)

7. It is apparent from the observations extracted herein above, that this  

Court had drawn the following inferences and conclusions:  

Firstly,  that  compensation  was  payable  under  Section  140  of  the  Act,  

without the necessity of pleading or establishing, that death or permanent  

disablement  was due to any “wrongful  act”,  “neglect”  or “default”  of  the  

offending vehicle or vehicles.  It was also concluded, that a claim under  

Section 140 of the Act cannot be defeated “…..by reason of any wrongful  

act, neglect or default of the offending vehicle/person responsible for death  

or permanent disablement…..”. (from paragraph 15 extracted above)   

Secondly, that the word “also” used in sub-section (5) of Section 140 of the  

Act, and the proviso to sub-section (5) of Section 140 clarifies,  that the  

amount of compensation payable under “any other law” for the time being  

in  force,  was  separate  and  distinct  from  the  amount  of  compensation  

payable under sub-section (2) of Section 140 or Section 163A of the Act. It  

was however clarified, that the amount of compensation held as payable

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under  any  other  law  would  have  to  be  reduced  from  the  amount  of  

compensation  payable  under  Sections 140(2)  or  163A of  the Act  (from  

paragraph 16 extracted above)   

Thirdly, sub-section (2) of Section 141 of the Act provides, that in cases  

where compensation is sought both under Section 140 of the Act, as also,  

under a provision governed by the “fault” liability principle under the Act,  

then the claim raised under Section 140 would be decided first.  And the  

compensation so awarded under Section 140 aforementioned, would be  

adjusted while paying compensation determined under the “fault” liability  

principle. (from paragraph 16 extracted above)

Fourthly,  Section  141  of  the  Act  provides,  that  the  right  to  claim  

compensation on the basis of the “no-fault” liability principle under Section  

140, was in addition to the right to claim compensation “under any other  

provision of this Act”.  There are some exceptions.  Compensation under  

Section 140 would not be in addition to the compensation contemplated  

under  the schemed Section 163 of  the Act.   Compensation determined  

under Section 140 of the Act, would be deducted from the compensation  

found payable, under any other provision under the Act governed by the  

“fault” liability principle. (from paragraph 16 extracted above)  

Fifthly,  Section  163A  nowhere  provides,  that  payment  of  compensation  

under the “fault” liability principle, would be in addition to the right to claim

13

compensation thereunder (under Section 163A of the Act).  Accordingly,  

the scheme of payment of compensation under Section 163A provides an  

alternative right, from the one provided under Section 168 of the Act. (from  

paragraph 16 extracted above)   

Sixthly, while referring to the phrase “compensation under any other law  

for the time being in force” contained in the proviso to sub-section (5) of  

Section 140 of the Act (in its un-amended format), it was concluded, that  

the  scheme  of  Section  167  indicated,  that  the  aforesaid  phrase  was  

referable to compensation payable under the Workmen’s Compensation  

Act,  1923  or  any  other  law  in  force  i.e.,  other  than  compensation  

contemplated under the Act. (from paragraph 17 extracted above)   

Seventhly, the question whether compensation determined under Section  

163A of the Act would be in addition to the compensation receivable under  

the “fault” liability principle was answered in the negative.  Accordingly, the  

contention that the compensation determined under Section 163A of the  

Act would be adjustable from the compensation found payable under any  

other provision governed by the “fault” liability principle, was also rejected.  

(from paragraph 18 extracted above)

Eighthly, on a conjunctive examination of the phrase “compensation under  

any other law for the time being in force” occurring in the proviso to sub-

section (5) of Section 140 of the Act, with the scheme of Section 167 of the

14

Act,  it  was  concluded,  that  the  aforesaid  phrase  was  referable  to  

compensation  payable  under  the  Workmen’s  Compensation  Act,  1923.  

Therefore, it was concluded that a claim cannot be raised under both the  

Acts i.e., the Motor Vehicles Act, 1988, and the Workmen’s Compensation  

Act, 1923.  (from paragraph 19 extracted above).   

Ninthly, from the use of the words “under any law for the time being in  

force”  used in  Section  140(5)  of  the  Act  ;  the  words  “under  any  other  

provision of this Act or of any other law for the time being in force”, used in  

Section 141(1) of the Act ;   the   stipulation contained in Section 141(2) of  

the  Act,  that  a  claim  under  Section  140  is  to  be  disposed  of  “as  

expeditiously as possible” and before compensation is determined under  

the “fault” liability provisions (and noticing that there was no such provision  

in Section 163A of the Act) ; the phrase “any other law for the time being in  

force” and “provisions of this Act” used in Section 161(2) of the Act ; the  

use of the words “under any other provision of this Act” and “any other law  

or otherwise” used in Section 162 of the Act ; the words “notwithstanding  

anything contained in this Act or in any other law for the time being in  

force”, used in Section 163A of the Act ; it was held that all these phrases  

were to be examined together.  When examined together it was concluded,  

that the compensation payable under Section 140 of the Act was not liable  

to deduction or adjustment out of the compensation determinable under

15

the  “fault”  liability  principle  i.e.,  under  Section  168  of  the  Act.   (from  

paragraph 19 extracted above).

On a collective analysis  of  the inferences and conclusions summarized  

above, this Court in Oriental Insurance Company Limited  vs.  Hansrajbhai  

V. Kodala (supra) held, that compensation payable under Section 163A of  

the  Act  was  not  as  an  interim  measure,  but  was  final.   Therefore,  

compensation determined under Section 163A could not be in addition to a  

claim for further compensation under a separate provision governed by the  

“fault” liability principle.  It would be relevant to notice here, that we have  

intentionally  and  deliberately  drawn  inferences  as  have  been  extracted  

hereinabove,  from  the  observations  made  by  this  Court  in  Oriental  

Insurance Company Limited  vs.   Hansrajbhai  V. Kodala (supra).   This  

exercise has been ventured,  so as to obviate  the possibility  of  missing  

something  which  did  not  find  place  in  paragraph  22  of  the  aforesaid  

judgment, wherein, reasons for having arrived at the eventual conclusion in  

the  matter  were  recorded.   This  exercise  was  essential  because  the  

learned counsel for the respondents had primarily placed reliance only on  

paragraph 15 (extracted above) of the said judgment, during the course of  

hearing.  At times it is seen, that conclusions may have been recorded  

keeping in mind, the pointed controversy dealt with.  

16

8. A thorough analysis of the observations of the Bench in addition to  

the conclusions drawn by the Court in paragraph 22 of the judgment relied  

upon by the learned counsel for the respondents, we hope, would lead us  

to an appropriate conclusion on the matter in hand.  In addition to having  

recorded  the  inferences  and  conclusions  drawn  in  the  judgment  relied  

upon  by  the  learned  counsel  for  the  respondents,  it  would  also  be  

necessary for us to extract hereunder the reasons recorded by this Court  

while rendering its judgment in  Oriental Insurance Company Limited  vs.  

Hansrajbhai  V.  Kodala (supra).   The aforesaid  conclusions  recorded  in  

paragraph 22 of the judgment are being extracted herein :

“22. In  the  result,  the  contention  of  the  claimants  that  right  to  get  compensation under Section 163-A is additional to claim compensation on  no-fault liability is rejected for the following reasons:

(1)  There is  no specific  provision in  the Act  to  the effect  that  such  compensation is in addition to the compensation payable under the Act.  Wherever  the  legislature  wanted  to  provide  additional  compensation,  it  has done so (Sections 140 and 141).

(2)  In  case  where  compensation  is  paid  on  no-fault  liability  under  Sections  140  and  161  in  case  of  “hit-and-run  motor  accidents”,  the  legislature has provided adjustment or refund of the said compensation in  case where compensation is determined and payable under the award on  the basis of fault liability under Section 168 of the Act. There is no such  procedure  for  refund  or  adjustment  of  compensation  paid  where  the  compensation is paid under Section 163-A.

(3) The words “under any other law for the time being in force” would  certainly have different meaning from the words “under this Act” or “under  any other provision of this Act”.

(4)  In  view  of  the  non  obstante  clause  “notwithstanding  anything  contained  in  this  Act”  the  provisions  of  Section  163-A  would  exclude  determination of compensation on the principle of fault liability.

(5)  The  procedure  of  giving  compensation  under  Section  163-A  is  inconsistent with the procedure prescribed for awarding compensation on

17

fault liability. Under Section 163-A compensation is awarded without proof  of any fault while for getting compensation on the basis of fault liability the  claimant is required to prove wrongful act, neglect or default of the owner  of the vehicle or the vehicle concerned.

(6) Award of compensation under Section 163-A is on a predetermined  formula for payment of compensation to road accident victims and that  formula itself is based on criteria similar to determining the compensation  under  Section  168.  The object  was  to  avoid  delay in  determination  of  compensation.”

Having collectively analysed all  that has been noticed by us in the instant  

paragraph, and the reasons extracted from paragraph 22 hereinabove, we  

must  conclude  that  no  categorical  determination  emerges  therefrom,  that  

section 163A of the Act has (or has not) been founded under the “no-fault”  

liability principle.

9. In  order  to  demonstrate,  that  the  judgment  relied  upon  by  the  

learned counsel for the respondents was inapplicable to the controversy in  

hand, learned counsel for the petitioner contended, that the issue which  

arose for consideration before this Court in  Oriental Insurance Company  

Limited  vs.  Hansrajbhai V. Kodala (supra) was delineated in paragraph 2  

thereof.  Paragraph 2 aforesaid is being extracted herein :

“2. The common question involved in  these appeals is whether  the  compensation payable under Section 163-A of the Motor  Vehicles Act,  1988 (hereinafter referred to as “the Act”) as per the structured-formula  basis  is  in  addition  or  in  the  alternative  to  the  determination  of  the  compensation  on  the  principle  of  fault  liability,  after  following  the  procedure prescribed under the Act.”

It was also pointed out, that the reasons recording the answer posed in  

paragraph 2 (extracted above), contained in paragraph 22 (also extracted

18

above)  clearly  demonstrate,  that  the  answer  and  the  reasons  thereof  

clearly  reveal,  that  the controversy  adjudicating  upon therein,  pertained  

only  to  the  issue  whether  a  claimant  was  entitled  to  claim  further  

compensation (under a separate provision governed by the “fault” liability  

principle) after the claimant has sought and obtained compensation under  

Section 163A of the Act.  It was submitted, that the issue in hand in the  

present  case,  is  separate  and  distinct,  namely,  whether  a  claim  for  

compensation made under Section 163A of the Act, can be defeated either  

by the owner or by the insurance company, by pleading and establishing,  

that  the  accident  in  question  was  based  on  the  “negligence”  of  the  

offending vehicle.  Secondly, it was the contention of the learned counsel  

for the appellant, that while adjudicating upon the controversy in  Oriental  

Insurance  Company  Limited   vs.   Hansrajbhai  V.  Kodala  (supra),  the  

attention of this Court was not invited to sub-section (4) of Section 140, nor  

the effect thereof, on the interpretation of Section 163A of the Act.  In this  

behalf, it is sought to be contended, that the interpretation of sub-section  

(4) of Section 140 was wholly irrelevant to the issues raised and decided,  

in  Oriental  Insurance  Company  Limited   vs.   Hansrajbhai  V.  Kodala  

(supra), whereas, it is of extreme significance in the present controversy.  

Thirdly, it was the contention of the learned counsel for the appellant, that  

the use of words “Notwithstanding anything contained in this act or any

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other  law for  the time being in force  or  instrument  having the  force of  

law…..”,  not  only  on  account  of  the  non  obstinate  clause  contained  in  

Section 163A of the Act, but also on account of the overriding effect of the  

provision  envisaged  therein,  nothing  contained  in  any  of  the  Sections  

referred to by this  Court  while  deciding in  Oriental  Insurance Company  

Limited  vs.  Hansrajbhai V. Kodala  (supra), can be deemed to have the  

effect of negating anything contained in Section 163A of the Act.  As such,  

it  is  sought  to be asserted that  the judgment  rendered by this Court  in  

Oriental Insurance Company Limited  vs.  Hansrajbhai V. Kodala (supra),  

cannot  have any determinative  effect  on the controversy  arising in  this  

case.

10. We find merit in the aforesaid contention of the learned counsel for  

the appellant, insofar as the first aspect of this matter is concerned.  There  

can  be  no  dispute  whatsoever,  that  the  issues  of  law  arising  for  

consideration in the present controversy as against the matter adjudicated  

upon  by  this  Court  in  Oriental  Insurance  Company  Limited   vs.  

Hansrajbhai V. Kodala (supra), are separate and distinct.  In fact, there is  

hardly any grey area which may be considered as common between the  

issues  involved.   We  are  also  satisfied  that  the  second  contention  

advanced at the hands of the learned counsel for the petitioner cannot be

20

brushed aside.  Sub-section (4) of Section 140 of the Act was not referred  

to, nor taken into consideration, while adjudicating upon the controversy  

arising in Oriental Insurance Company Limited  vs.  Hansrajbhai V. Kodala  

(supra).  Absence of reference to sub-section (4) of Section 140 of the Act  

was  because  the  same  was  wholly  irrelevant  for  the  purpose  of  the  

controversy settled in the aforesaid case.  We also find merit in the last  

contention advanced at the hands of the learned counsel for the petitioner,  

namely,  the overriding  effect  of  Section 163A by the use of  the words  

“Notwithstanding anything contained in this act or any other law for the  

time being in force or  instrument  having the force of  law …..”.   In this  

behalf, it would be pertinent to mention, that Section 163A was introduced  

into the Motor Vehicles Act, 1988 by way of an amendment carried out with  

effect  from  14.11.1994.   As  against  the  aforesaid,  it  is  necessary  to  

mention  that  Section  144  of  the  Act  was  incorporated  into  the  Motor  

Vehicles  Act,  1988  from  the  very  beginning.   Section  144,  it  may  be  

pointed out, is a part of Chapter X of the Motor Vehicles Act, 1988, which  

includes Section 140.  Section 144 of the Act is being extracted herein :

“144.  Overriding effect. – The provisions of this Chapter shall have  effect notwithstanding anything contained in any other provision of  this act or of any other law for the time being in force.”            

Even  though,  Section  144  of  the  Act  mandates,  that  the  provisions  of  

Chapter  X  (which  includes  Section  140)  have  effect  notwithstanding

21

anything to the contrary contained in any other provision of the Act or in  

any other law for the time being in force.   Section 144 of the Act would not  

override the mandate contained in Section 163A, for the simple reason that  

Section 144 provided for such effect over provisions “for the time being in  

force”, i.e., the provisions then existing, but Section 163A was not on the  

statute  book  at  the  time  when  Section  144  was  incorporated  therein.  

Therefore the provisions contained in Chapter X, would not have overriding  

effect, over Section 163A of the Act.  As against the aforesaid, at the time  

of incorporation of Section 163A of the Act, Sections 140 and 144 of the  

Act,  were  already  subsisting,  as  such,  the  provisions  of  Section  163A  

which also provided by way of a non-obstante clause, that it would have by  

a legal fiction overriding effect over all existing provisions under the Act, as  

also, any other law or instrument having the force of law “for the time being  

in  force”,  would  have  overriding  effect,  even  over  the  then  existing  

provisions  in  Chapter  X  of  the  Act  because  the  same  was  already  in  

existence when Section 163A was introduced into the Act.  The importance  

of the instant aspect of the matter is, that Section 163A of the Act has  

overriding effect over all the provisions/sections taken into consideration by  

this Court while deciding the controversy in  Oriental Insurance Company  

Limited  vs.  Hansrajbhai V. Kodala (supra).  It is therefore clear, that none  

of the provisions taken into consideration, in the decision relied upon by

22

the learned counsel for the respondents can override, the legal effect of  

the  mandate  contained  in  Section  163A  of  the  Act.  We are,  therefore,  

satisfied that it would be incorrect to hold, that the controversy raised in the  

instant case can be deemed to have been settled by this Court in Oriental  

Insurance Company Limited  vs.  Hansrajbhai V. Kodala (supra).  We have  

delineated the inferences drawn by us from the observations recorded in  

Oriental Insurance Company Limited  vs.  Hansrajbhai V. Kodala (supra),  

in  extenso  hereinabove.   We  have  also  reproduced,  hereinabove,  

paragraph 22 of the judgment in Oriental Insurance Company Limited  vs.  

Hansrajbhai  V. Kodala  (supra),  so as to determine with  some sense of  

exactitude the conclusions drawn in the aforesaid judgment.  It cannot be  

stated that the issue arising in the present controversy, has been dealt with  

or  adjudicated  upon  in  Oriental  Insurance  Company  Limited   vs.  

Hansrajbhai V. Kodala (supra).  Additionally, the contentions advanced at  

the hands of the learned counsel for appellant, more particularly reliance  

placed by him on sub-section (4) of Section 140 has certainly not been  

dealt with Oriental Insurance Company Limited  vs.  Hansrajbhai V. Kodala  

(supra).  Thus, viewed, it is not possible for us to conclude that the issue  

arising in this case can be stated to have been settled.   The assertion  

made by the learned counsel for the respondents, that the issue raised in

23

the instant case, by the learned counsel of the petitioner, is  no longer res  

integra, can therefore not be accepted.         

11. Having arrived at the conclusion that the issue in hand has to be  

decided independently, we will now venture to determine whether a claim  

made under Section 163A of the Act is a claim under the “fault” liability  

principle, or under the “no-fault” liability principle.  We are satisfied, that if a  

claim for compensation under a provision, is not sustainable for reason of  

a “fault” on account of any one or more of the following i.e., “wrongful act”,  

“neglect” or “default”, the provision in question would be governed by the  

“fault” liability principle.  Stated differently, where the claimant in order to  

establish his right to claim compensation (under a particular provision) has  

to establish, that the same does not arise out of “wrongful act” or “neglect”  

or  “default”,  the  said  provision  will  be  deemed  to  fall  under  the  “fault”  

liability  principle.   So  also,  where  a  claim  for  compensation  can  be  

defeated on account of any of the aforesaid considerations on the basis of  

a “fault” ground, the same would also fall under the “fault” liability principle.  

On the contrary, if under a provision, a claimant does not have to establish,  

that his claim does not arise out of “wrongful act” or “neglect” or “default”;   

and conversely,  the claim cannot be defeated on account of any of the

24

aforesaid considerations; then most certainly, the provision in question will  

fall under the “no-fault” liability principle.  

12. For determination of the issue under consideration, namely, whether  

Section 163A of the Act is governed by the “fault” or the “no-fault” liability  

principle, it is first relevant for us to examine Section 140 of the Act, so as  

to determine whether it has any bearing on the interpretation of Section  

163A of the Act.  Section 140 aforesaid is being extracted hereunder :

“140. Liability  to  pay  compensation  in  certain  cases  on  the  principle of no fault. – (1) Where death or permanent disablement  of any person has resulted from an accident arising out of the use of  a motor vehicle or motor vehicles, the owner of the vehicle shall, or,  as the case may be,  the owners  of  the vehicles shall  jointly and  severally, be liable to pay compensation in respect of such death or  disablement in accordance with the provisions of this section.

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

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

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

25

the basis of the share of such person in the responsibility for such  death or permanent disablement.

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

Provided  that  the  amount  of  such  compensation  to  be  given  under  any  other  law  shall  be  reduced  from  the  amount  of  compensation payable under this section or under section 163A.”

For the instant determination, only sub-sections (3) and (4) are relevant.  A  

perusal  of  sub-section  (3)  reveals,  that  the  burden  of  “pleading  and  

establishing”,  whether  or  not  “wrongful  act”,  “neglect”  or  “default”  was  

committed by the person (for or on whose behalf) compensation is claimed  

under Section 140, would not rest on the shoulders of the claimant.   In  

other words the onus of proof of “wrongful act”, “neglect” or “default” is not  

on the claimant.  The matter however does not end with this.  A perusal of  

sub-section (4) of Section 140 of the Act further reveals, that the claim of  

compensation under Section 140 of the Act cannot be defeated because of  

any  of  the  “fault”  grounds  (“wrongful  act”,  “neglect”  or  “default”).   This  

additional negative bar, precluding the defence from defeating a claim for  

reasons of a “fault”, is of extreme significance, for the consideration of the  

issue in hand.   It  is apparent,  that both sides are precluded in a claim  

raised under Section 140 of the Act from entering into the arena of “fault”  

(“wrongful act” or “neglect” or “default”).  There can be no doubt, therefore,

26

that the compensation claimed under Section 140 is governed by the “no-

fault” liability principle.

13. In the second limb of the present consideration, it is necessary to  

carry out a comparison between Sections 140 and 163A of the Act.  For  

this, Section 163A of the Act is being extracted hereunder:  

“Section 163A. Special provisions as to payment of  compensation  on  structured  formula  basis  –  (1)  Notwithstanding anything contained in this Act or in any  other  law  for  the  time  being  in  force  or  instrument  having the force of law, the owner of the motor vehicle  or  the authorized insurer  shall  be liable to pay in the  case  of  death  or  permanent  disablement  due  to  accident  arising  out  of  the  use  of  motor  vehicle,  compensation, as indicated in the Second Schedule, to  the legal heirs or the victim, as the case may be.   

Explanation –  For  the  purposes  of  this  sub-section,  “permanent disability” shall have the same meaning and  extent as in the Workmen’s Compensation Act, 1923 (8  of 1923).

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

(3) The Central Government may, keeping in view  the cost of living by notification in the Official Gazette,  from time to time amend the Second Schedule.”  

A perusal of Section 163(A) reveals that sub-section (2) thereof is in pari  

materia  with  sub-section (3)  of  Section 140.   In other  words,  just  as in

27

Section 140 of the Act, so also under Section 163A of the Act, it  is not  

essential for a claimant seeking compensation, to “plead or establish”, that  

the accident out of which the claim arises suffers from “wrongful act” or  

“neglect”  or  “default”  of  the  offending  vehicle.   But  then,  there  is  no  

equivalent of sub-section (4) of Section 140 in Section 163A of the Act.  

Whereas,  under  sub-section (4)  of  Section 140,  there is a specific bar,  

whereby the concerned party (owner or insurance company) is precluded  

from defeating a claim raised under Section 140 of the Act, by “pleading  

and establishing”, “wrongful act”, “neglect” or “default”, there is no such or  

similar  prohibiting  clause  in  Section  163A  of  the  Act.   The  additional  

negative bar, precluding the defence from defeating a claim for reasons of  

a  “fault”  (“wrongful  act”,  “neglect”  or  “default”),  as  has  been  expressly  

incorporated in Section 140 of the Act (through sub-section (4) thereof),  

having  not  been  embodied  in  Section  163A of  the Act,  has  to  have a  

bearing on the interpretation of Section 163A of the Act.  In our considered  

view the legislature designedly included the negative clause through sub-

section (4) in Section 140, yet consciously did not include the same in the  

scheme of Section 163A of the Act.  The legislature must have refrained  

from providing such a negative clause in Section 163A intentionally and  

purposefully.  In fact, the presence of sub-section (4) in Section 140, and  

the absence of a similar provision in Section 163A, in our view, leaves no

28

room for any doubt, that the only object of the Legislature in doing so was,  

that the legislature desired to afford liberty to the defence to defeat a claim  

for compensation raised under Section 163A of the Act, by pleading and  

establishing “wrongful act”, “neglect” or “default”.  Thus, in our view, it is  

open  to  a  concerned party  (owner  or  insurer)  to  defeat  a  claim raised  

under Section 163A of the Act, by pleading and establishing anyone of the  

three “faults”,  namely,  “wrongful  act”,  “neglect”  or  “default”.   But for  the  

above reason, we find no plausible logic in the wisdom of the legislature,  

for  providing  an  additional  negative  bar  precluding  the  defence  from  

defeating  a  claim  for  compensation  in  Section  140  of  the  Act,  and  in  

avoiding to include a similar negative bar in Section 163A of the Act.  The  

object for incorporating sub-section (2) in Section 163A of the Act is, that  

the burden of pleading and establishing proof of “wrongful act”, “neglect” or  

“default” would not rest on the shoulders of the claimant.  The absence of a  

provision similar to sub-section (4) of Section 140 of the Act from Section  

163A  of  the  Act,  is  for  shifting  the  onus  of  proof  on  the  grounds  of  

“wrongful  act”,  “neglect”  or  “default”  onto  the  shoulders  of  the  defence  

(owner or the insurance company). A claim which can be defeated on the  

basis of  any of  the aforesaid considerations,  regulated under the “fault”  

liability  principle.   We  have  no  hesitation  therefore  to  conclude,  that  

Section 163A of the Act is founded on the “fault” liability principle.

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14. There  is  also  another  reason,  which  supports  the  aforesaid  

conclusion.  Section 140 of the Act falls in Chapter X of the Motor Vehicles  

Act, 1988.  Chapter X of the Motor Vehicles Act, 1988 is titled as “Liability  

Without Fault in Certain Cases”.  The title of the chapter in which Section  

140 falls,  leaves  no  room for  any doubt,  that  the  provisions  under  the  

chapter have a reference to liability “… without fault …”, i.e., are founded  

under  the “no-fault”  liability  principle.  It  would,  however,  be pertinent  to  

mention, that Section 163A of the Act, does not find place in Chapter X of  

the Act.  Section 163A falls in Chapter XI which has the title “Insurance of  

Motor Vehicles Against Third Party Risks”.  The Motor Vehicles Act, 1988  

came into force with effect from 1.7.1989 (i.e., the date on which it was  

published in the Gazette of India Extraordinary Part II).  Section 140 of the  

Act was included in the original enactment under chapter X.  As against  

the aforesaid, Section 163A of the Act was inserted therein with effect from  

14.11.1994 by way of an amendment.   Had it been the intention of the  

legislature to provide for  another  provision (besides Section 140 of  the  

Act), under the “no-fault” liability principle, it would have rationally added  

the same under Chapter X of the Act.  Only because it was not meant to  

fall within the ambit of the title of Chapter X of the Act “Liability  Without  

Fault in Certain Cases”, it was purposefully and designedly not included  

thereunder.  

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15. The  heading  of  Section  163A  also  needs  a  special  mention.   It  

reads, “Special Provisions as to Payment of Compensation on Structured  

Formula Basis”.   It  is  abundantly  clear  that  Section 163A, introduced a  

different  scheme  for  expeditious  determination  of  accident  claims.  

Expeditious  determination  would  have reference  to  a  provision  wherein  

litigation was hitherto before (before the insertion of Section 163A of the  

Act) being long drawn.   The only such situation (before the insertion of  

Section 163A of the Act) wherein the litigation was long drawn was under  

Chapter  XII  of  the  Act.   Since  the  provisions  under  Chapter  XII  are  

structured  under  the  “fault”  liability  principle,  its  alternative  would  also  

inferentially be founded under the same principle.  Section 163A of the Act,  

catered  to  shortening  the  length  of  litigation,  by  introducing  a  scheme  

regulated  by  a  pre-structured  formula  to  evaluate  compensation.   It  

provided  for  some  short-cuts,  as  for  instance,  only  proof  of  age  and  

income,  need  to  be  established  by  the  claimant  to  determine  the  

compensation in case of death.  There is also not much discretion in the  

determination of other damages, the limits whereof are also provided for.  

All in all, one cannot lose sight of the fact, that claims made under Section  

163A can result  in substantial  compensation.   When taken together the  

liability may be huge.   It  is difficult  to accept,  that the legislature would  

fasten  such  a  prodigious  liability  under  the  “no-fault”  liability  principle,

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without reference to the “fault” grounds.  When compensation is high, it is  

legitimate that the insurance company is not fastened with liability when  

the  offending  vehicle  suffered  a  “fault”  (“wrongful  act”,  “neglect”,  or  

“defect”)  under  a  valid  Act  only  policy.   Even  the  instant  process  of  

reasoning, leads to the inference, that Section 163A of the Act is founded  

under the “fault” liability principle.   

16. At the instant juncture, it is also necessary to reiterate a conclusion  

already  drawn  above,  namely,   that  Section  163A  of  the  Act  has  an  

overriding effect on all other provisions of the Motor Vehicles Act, 1988.  

Stated in other words, none of the provisions of the Motor Vehicles Act  

which is in conflict with Section 163A of the Act will negate the mandate  

contained therein (in Section 163A of the Act).  Therefore, no matter what,  

Section 163A of the Act shall stand on its own, without being diluted by any  

provision.  Furthermore, in the course of our determination including the  

inferences and conclusions drawn by us from the judgment of this Court in  

Oriental Insurance Company Limited  vs.  Hansrajbhai V. Kodala (supra),  

as also, the statutory provisions dealt  with by this Court in its aforesaid  

determination, we are of the view, that there is no basis for inferring that  

Section 163A of the Act is founded under the “no-fault” liability principle.  

Additionally, we have concluded herein above, that on the conjoint reading

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of Sections 140 and 163A, the legislative intent is clear, namely,  that a  

claim for compensation raised under Section 163A of the Act, need not be  

based  on  pleadings  or  proof  at  the  hands  of  the  claimants  showing  

absence of  “wrongful  act”,  being “neglect”  or  “default”.   But  that,  is  not  

sufficient  to  determine  that  the  provision  falls  under  the  “fault”  liability  

principle.  To decide whether a provision is governed by the “fault” liability  

principle  the converse has also to be established,  i.e.,  whether a claim  

raised  thereunder  can  be  defeated  by  the  concerned  party  (owner  or  

insurance company) by pleading and proving “wrongful act”, “neglect” or  

“default”.   From the preceding paragraphs (commencing from paragraph  

12), we have no hesitation in concluding, that it is open to the owner or  

insurance company, as the case may be, to defeat a claim under Section  

163A of the Act by pleading and establishing through cogent evidence a  

“fault”  ground (“wrongful  act”  or  “neglect”  or  “default”).   It  is,  therefore,  

doubtless, that Section 163A of the Act is founded under the “fault” liability  

principle.   To this effect, we accept the contention advanced at the hands  

of the learned counsel for the petitioner.

17. Having recorded our conclusions herein above, it is essential for us  

to  determine  whether  or  not  the  compensation  awarded  to  the  

claimants/respondents in the present controversy, by the Tribunal, as also,

33

by the High Court,  is liable to be set aside on the plea of “negligence”  

raised at the hands of the petitioner.  The award rendered by the Tribunal,  

as  also,  the  decision  of  the  High  Court  in  favour  of  the  

claimants/respondents  is,  therefore,  liable  to  be reappraised  keeping  in  

mind the conclusions recorded by us.  In case, the petitioner can establish  

having pleaded and proved negligence at the hands of the rider Shijo, the  

petitioner would succeed. The pleadings filed before the Tribunal at the  

hands of the petitioner, are not before us.  What is before us, is the award  

of  the Tribunal  dated 19.4.2005.   We shall  endeavour to determine the  

plea of negligence advanced at the hands of the learned counsel for the  

petitioner from the award.  The Tribunal  framed the following issues for  

consideration :

“1) Who are responsible for the accident?

2) What, if any is the compensation due and who are  liable?

3) What is the annual income of the deceased?

4)  Whether  the  OP  (2280/00)  is  maintainable  under  Section 168A of the N.V. Act?”                    

It is difficult to understand the true purport of the first issue framed by the  

Tribunal.  A person may be “responsible” for an act, yet he may not be  

“negligent”.  Illustratively, a child who suddenly runs onto a road may be  

“responsible” for an accident.  But was the child negligent? The answer to

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this  question would  emerge by unraveling  the factual  position.   A child  

incapable of fending for himself would certainly not be negligent, even if he  

suddenly runs onto a road.  The person in whose care the child was, at the  

relevant juncture, would be negligent, in such an eventuality.  The driver at  

the wheels at the time of the accident is responsible for the accident, just  

because he was driving the vehicle, which was involved in the accident.  

But considering the limited facts disclosed in the illustration can it be said  

that  he  was  negligent?   Applying  the  limited  facts  depicted  in  the  

illustration,  it  would  emerge  that  he  may  not  have  been  negligent.  

Negligence is a factual issue and can only be established through cogent  

evidence.  Now the case in hand.  In the present case also, the negligence  

of Shijo shall  have to be determined from the factual  position emerging  

from  the  evidence  on  record.   Issue  no.(1)  framed  by  the  Tribunal  

therefore,  may not provide an appropriate answer  to the issue in hand.  

Besides  there  being  no  issue  framed  by  the  Tribunal  for  adjudicating  

“negligence”  in  the  accident  under  reference,  it  is  also  clear  that  the  

petitioner-Insurance Company did not seek the courts intervention on such  

a plea.  It is also relevant to mention, that no witness was produced by the  

petitioner-Insurance Company before the Tribunal.  During the course of  

hearing, learned counsel for the petitioner only relied upon the conclusions  

drawn by the Tribunal on issue no.(1).  For this, our attention was drawn to

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paragraph  8  of  the  award  rendered  by  the  Tribunal  which  is  being  

extracted hereunder :

“8. Issue No.1 : This issue arises now only in O.P. 2281/2000.  PW1 admitted that she has seen the accident.  Exhibits A1 to A5  and  Exhibit  A10  are  records  from  the  connected  criminal  case  charge sheeted under Sections 279, 337 and 304A, IPC as against  the deceased Shijo.  They are the copies of the FIR, post mortem  certificate, scene mahazor, report of inspection of the vehicle, final  report and the inquest report, respectively.  In the absence of contra  evidence  I  find  that  the  deceased  Shijo  was  responsible  for  the  accident.”   

The  Tribunal  in  holding,  that  the  rider  Shijo  was  responsible  for  the  

accident, had placed reliance on copies of the first information report, post  

mortem certificate, scene mahazor, report of inspection of vehicle, inquest  

report  and  final  report.   Neither  of  these  in  our  considered  view,  can  

constitute  proof  of  “negligence”  at  the hands of  Shijo.   Even if  he was  

responsible for the accident, because the motorcycle being ridden by Shijo  

had admittedly struck against a large laterite stone lying on the tar road.  

But  then,  it  cannot  be  overlooked  that  the  solitary  witness  who  had  

appeared  before  the  Tribunal  had  deposed,  that  this  has  happened  

because the rider of the motorcycle had given way to a bus coming from  

the opposite side.  Had he not done so there may have been a head-on  

collusion.  Or it may well be, that the bus coming from the opposite side  

was  being  driven  on  the  wrong  side.   This  or  such  other  similar  

considerations would fall in the realm of conjectural determination.  In the

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absence of concrete evidence this factual jumble will remain an unresolved  

tangle.  It has already been concluded hereinabove, that in a claim raised  

under Section 163A of the Act, the claimants have neither to plead nor to  

establish  negligence.   We  have  also  held,  that  negligence  (as  also,  

“wrongful  act”  and  “default”)  can  be  established  by  the  owner  or  the  

insurance company (as the case may be) to defeat a claim under Section  

163A of the Act.  It was therefore imperative for the petitioner-Insurance  

Company to have pleaded negligence, and to have established the same  

through  cogent  evidence.   This  procedure  would  have  afforded  an  

opportunity  to the claimants  to  repudiate  the same.   Has the petitioner  

discharged  this  onus?   In  the  present  case,  only  one  witness  was  

produced before  the Tribunal.   The aforesaid  witness  appeared for  the  

claimants.  The witness asserted, that while giving way to a bus coming  

from opposite side, the motorcycle being ridden by Shijo, hit a large laterite  

stone lying on the tar road, whereupon, the motorcycle overturned, and the  

rider  and  the  pillion-rider  suffered  injuries.   The  petitioner  insurance-

company herein did not produce any witness before the Tribunal.  In the  

absence of evidence to contradict the aforesaid factual position, it is not  

possible for us to conclude, that Shijo was “negligent” at the time when the  

accident occurred.  Since no pleading or evidence has been brought to our  

notice (at  the hands of  the learned counsel  for  the petitioner),  it  is  not

37

possible for us to conclude, that the inverse onus which has been placed  

on  the  shoulders  of  the  petitioner  under  Section  163A  of  the  Act  to  

establish negligence, has been discharged by it.  We, therefore, find no  

merit in the first contention advanced at the hands of the learned counsel  

for the appellant.

18. The  second  contention  advanced  at  the  hands  of  the  learned  

counsel for the petitioner was, that Shijo being the rider of the motorcycle,  

cannot be treated as a third party.  It was pointed out, that the claim under  

Section 163A can only be raised at the behest of a third party.  It seems,  

that the instant determination raised at the hands of the learned counsel  

for the petitioner, is based on the determination rendered by this Court in  

Oriental Insurance Company Limited  vs.  Jhuma Saha, (2007) 9 SCC 263,  

wherein, this Court held as under :

“10. The deceased was the owner of the vehicle. For the reasons  stated in the claim petition or otherwise, he himself was to be blamed for  the accident. The accident did not involve motor vehicle other than the  one which he was driving. The question which arises for consideration is  that  the  deceased  himself  being  negligent,  the  claim  petition  under  Section 166 of the Motor Vehicles Act, 1988 would be maintainable.”  

According to the learned counsel for the petitioner, since the rider of the  

vehicle involved in the accident was Shijo himself, he would stand in the  

shoes of the owner, and as such, no claim for compensation can be raised  

in an accident caused by him, under Section 163A of the Act.

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19. To substantiate his second contention, it would be essential for the  

petitioner to establish, that Shijo having occupied the shoes of the owner,  

cannot be treated as the third party.  Only factual details brought on record  

through reliable evidence, can discharge the aforesaid onus.  During the  

course of hearing, despite our queries, learned counsel for the petitioner  

could not point out the relationship between Shijo and the owner of the  

motorcycle involved in the accident.  Shijo is not shown to be the employee  

of the owner.  He was not even shown as the representative of the owner.  

In order to establish the relationship between the Shijo and the owner, the  

petitioner-Insurance  Company  could  have  easily  produced  either  the  

owner  himself  as  a  witness,  or  even  the  claimants  themselves  as  

witnesses.  These, or other witnesses, who could have brought  out the  

relationship  between  the  owner  and  Shijo,  were  not  produced  by  the  

petitioner herein,  before the Tribunal.   The petitioner has, therefore,  not  

discharged the onus which rested on its shoulders.  Since the relationship  

between  the  Shijo  and  the  owner  has  not  been  established,  nor  the  

capacity in which he was riding the vehicle has been brought out, it is not  

possible for us to conclude, that Shijo while riding the motorcycle on the  

fateful day, was an agent, employee or representative of the owner.  It was  

open to the petitioner to defeat the claim for compensation raised by the  

respondents by establishing, that the rider Shijo represented the owner,

39

and as such, was not a third party, in terms of the judgment rendered by  

this  Court  in  Oriental  Insurance  Company  Limited case  (supra).   The  

petitioner failed to discharge the said onus.  In view of the above, it is not  

possible for us to accede to the second contention advanced at the hands  

of the learned counsel for the petitioner.

20. For  the  reasons  recorded  herein  above,  we  find  no  merit  in  the  

instant Special Leave Petition.  The same is, accordingly, dismissed.  

…………………………….J. (Asok Kumar Ganguly)

…………………………….J. (Jagdish Singh Khehar)

New Delhi; November 23, 2011.